[Federal Register Volume 79, Number 249 (Tuesday, December 30, 2014)]
[Proposed Rules]
[Pages 78362-78365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30322]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[DOD-2014-HA-0133]
RIN 0720-AB62


TRICARE; Revision of Nonparticipating Providers Reimbursement 
Rate; Removal of Cost Share for Dental Sealants; TRICARE Dental Program

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: The Department of Defense (DoD) proposes several amendments to 
the TRICARE Dental Program (TDP) regulation. Specifically, this 
proposed rule revises the benefit payment provision for 
nonparticipating providers to more closely mirror industry practices by 
requiring TDP nonparticipating providers to be reimbursed (minus the 
appropriate cost-share) at the lesser of billed charges: or the network 
maximum allowable charge for similar services in that same locality 
(region) or state. This rule also updates the regulatory provisions 
regarding dental sealants to clearly categorize them as a preventive 
service and, consequently, eliminate the current 20 percent cost-share 
applicable to sealants to conform the language in the regulation to the 
statute.

DATES: Written comments received at the address indicated below by 
March 2, 2015 will be accepted.

ADDRESSES: You may submit comments, identified by docket number and or 
Regulatory Information Number (RIN) number and title, by any of the 
following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: Federal Docket Management System Office, 4800 Mark 
Center Drive, 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: Col Gary C. Martin, Defense Health 
Agency, telephone (703) 681-0039.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

 1. Purpose of Regulatory Actions

a. Need for Regulatory Actions
(1) Revision of Nonparticipating Providers' Reimbursement Rate
    Prior to 2006, TRICARE Dental Program (TDP) participating and 
nonparticipating providers were reimbursed at the equivalent of not 
less than 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. Over 
time, the Department discovered that this provision placed an 
unnecessary burden on contractors with already established, high 
quality provider networks with reimbursement rates below the 50th 
percentile that were of sufficient size to meet the access requirements 
of the TDP. Consequently, the Department of Defense published a final 
rule in the Federal Register on January 11, 2006 (71 FR 1695), revising 
the participating provider's reimbursement rate for the TDP that has 
resulted in significant cost savings to the TDP enrollees and the 
Government. Since over 80 percent of all TDP care was provided by 
network dentists, the need to also change the reimbursement rate for 
nonparticipating dentists was overlooked and not included in the 2006 
rule change. However, over the past eight years this has created an 
incentive for some network providers to leave the TDP network and for 
other providers not to become network providers. As the rule is 
currently written, depending on the geographic location, some non-
network providers are actually reimbursed at a higher amount than they 
would have been had they been a participating provider and receiving 
the negotiated network rate. Specifically, the revision will require 
TDP nonparticipating providers to be reimbursed (minus the appropriate 
cost-share) at the lesser of (1) billed charges:

[[Page 78363]]

or (2) the network maximum allowable charge for similar services in 
that same locality (region) or state. This revision will increase the 
number of network providers and provide cost savings to enrollees and 
the Government.
(2) Removal of Cost-Share for Dental Sealants
    Sealants are currently separately defined in the TDP regulation at 
Sec.  199.13(b)(24), and specifically identified as a covered non-
preventive service subject to a 20 percent cost-share. The cost share 
for dental sealants was originally put in place when there was minimal 
evidence as to the effectiveness of dental sealants preventing tooth 
decay. The scientific evidence is now overwhelming that dental sealants 
are effective in preventing tooth decay and the vast majority of 
commercial dental insurance plans cover this procedure with no cost 
shares. Further, the American Dental Association's Council on Dental 
Care Programs Code on Dental Procedures and Nomenclature classifies 
dental sealants as a preventive procedure. Additionally, the Department 
currently recognizes sealants as a preventive service under the TRICARE 
Retiree Dental Program per Sec.  199.22(f)(1)(ii)(C). The proposed 
regulatory revisions regarding dental sealants will delete the separate 
definition of dental sealants, specifically include sealants as a 
category of preventive service under Sec.  199.13(e)(2)(i)(B), delete 
any possible inconsistency in the definition of preventive service in 
Sec.  199.13(b)(20) and (e)(2)(i), and update the cost-share table in 
Sec.  199.13(e)(3)(i) to delete the specific line item reference to 
sealants being subject to a 20 percent cost-share in order to conform 
with the requirement in 10 U.S.C. 1076a(e)(1)(A) that TDP enrollees pay 
no charge for preventive services.
 b. Legal Authority for the Regulatory Action
    This regulation is proposed under the authority of 10 U.S.C. 1076a 
which authorizes the Secretary of Defense to establish a voluntary 
enrollment dental plan for eligible dependents of members of the 
uniformed services who are on active duty for a period of more than 30 
days, members of the Selected Reserve of the Ready Reserve, members of 
the Individual Ready Reserve, and eligible dependents of members of the 
Ready Reserve of the reserve components who are not on active duty for 
more than 30 days.

 2. Summary of Major Provisions of the Regulatory Action

    In this rule, the proposed regulatory language changes 
nonparticipating provider (e.g. non-network or out-of-network) 
reimbursement at Sec.  199.13(g)(2)(i) to be on an equivalent basis 
with network reimbursement, in order to serve as an incentive for both 
providers to participate in the network and for beneficiaries to 
utilize network providers in order to avoid additional out-of-pocket 
costs for balance billing. The proposed rule includes several technical 
revisions for clarification and consistency sake in defining 
beneficiary liability, nonparticipating provider and participating 
provider in the context of the TDP. The proposed rule also amends 
several provisions within Sec.  199.13 to eliminate the separate 
definition of sealants, specifically include sealants as a covered 
preventive service, and remove beneficiary cost sharing by covering 
sealants at 100 percent of allowable charge as authorized by law.

 3. Summary of the Costs and Benefits

    This proposed rule is not anticipated to have an annual effect on 
the economy of $100 million or more, making it not economically 
significant and non-major under the Executive Order and the 
Congressional Review Act. The proposed amendment to transition 
nonparticipating provider reimbursement to be on an equivalent basis 
with network reimbursement, will result in (1) a lower allowed-to-
billed ratio and a decrease in TDP claim payments, (2) premium 
decreases for beneficiaries; (3) a corresponding increase in enrollment 
by eligible beneficiaries as a result of these premium changes; (4) 
resultant cost savings to the government through reduced premium 
subsidies; and (5) increased out-of-pocket costs for beneficiaries who 
opt to use a nonparticipating provider who may balance bill for the 
difference in contractor payment at the current rates and the new, 
lower network agreement rates. While the requirements for sealant 
coverage will not change, the removal of beneficiary cost sharing for 
sealants will result in (1) a marginal increase in sealant utilization, 
as we anticipate most beneficiaries requiring sealants are currently 
receiving these services since they remain a relatively inexpensive 
procedure and are typically viewed as beneficial; (2) a minimal premium 
increase for beneficiaries; and (3) an increase in government costs as 
a result of both the direct effect of the waived cost sharing on 
current sealant services and the full cost of the additional 
utilization. We estimate that the net effects of the TDP provisions 
that would be implemented by this rule would result in a net premium 
decrease for TDP beneficiaries and corresponding cost savings to the 
government that do not reach the $100 million threshold to be deemed 
economically significant.

II. Background

    The TRICARE Dental Program (TDP) allows the Secretary of Defense to 
offer comprehensive premium based indemnity dental insurance coverage 
to qualified individuals. The funds used by the TDP are appropriated 
funds furnished by Congress through annual appropriation acts and funds 
collected as premium shares from beneficiaries. TDP is delivered 
through a competitively procured contract awarded by the Director, 
Defense Health Agency, or designee. TDP enrollees are required to pay 
all or a portion of the premium cost depending on their status. For 
those eligible for premium sharing, including active duty dependents 
and certain Selected Reserve and Individual Reserve members, the 
portion of premium share to be paid by them is no more than forty (40) 
percent of the total premium. For those entitled to premium sharing, 
the Government pays the remaining sixty (60) percent of the premium. 
Additional information regarding the TDP is available at 
www.tricare.mil/tdp.
    The amendments to Sec.  199.13 are being proposed with the 
understanding that the changes are being considered for incorporation 
into the next TDP contract. As such, the implementation date for any 
changes adopted through this rulemaking process is expected to be 
effective with the start health care delivery date (on or after 
February 1, 2017) of the next awarded TDP contract.

III. Explanation for Proposed Provisions

A. Revision of Nonparticipating Providers Reimbursement Rate

    Currently, Sec.  199.13(g)(2)(i) requires the TRICARE Dental 
Program (TDP) contractor to reimburse nonparticipating providers at the 
equivalent of not less than 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. The Department of Defense published 
a final rule in the Federal Register on January 11, 2006 (71 FR 1695), 
revising the participating provider's reimbursement rate for the TDP 
that has resulted in significant cost savings to the TDP enrollees and 
the

[[Page 78364]]

Government. The reimbursement rates that have been negotiated over the 
life of the dental contract represent the general market rates for 
dental insurance reimbursement. Since over 80 percent of all TDP care 
was provided by network dentists, the need to also change the 
reimbursement rate for nonparticipating dentists was overlooked at that 
time and not included in the 2006 rule change. However, over the past 
eight years this has created an incentive for some network providers to 
leave the TDP network and for other providers not to become network 
providers. While the contractor's negotiated rates for network 
providers are proprietary in nature and vary quite a bit based on 
geographic location, an examination of the allowed to billed ratio for 
network versus non-network care demonstrates that the TDP contractor's 
network delivers considerably lower rates for network care. The 
revision will require TDP nonparticipating providers to be reimbursed 
(minus the appropriate cost-share) at the lesser of (1) billed charges: 
or (2) network maximum allowable charge for similar services in that 
same locality (region) or state. The network maximum allowable charge 
is the maximum negotiated fee between the dental contractor and any TDP 
participating provider for similar services covered by the dental plan 
in that same locality (region) or state. This reimbursement change 
would only apply to areas where the network is compliant; there is no 
proposed change to the exception in Sec.  199.13(g)(2)(i) for non-
compliant areas subject to the requirements in Sec.  199.13(e)(3)(ii). 
We believe this revision is consistent with current industry practice 
and will bring DoD's TDP reimbursement provisions into line with the 
broader insurance market, but invite comments on any alternative 
approaches to better aligning TDP nonparticipating provider 
reimbursement rates with network negotiated rates and current industry 
practice. Elimination of the 50th percentile of prevailing charges 
requirement affords the Government and enrollees significant cost 
savings through lower provider reimbursement costs by the contractor. 
These cost savings are passed on in the form of lower premiums for all 
enrolled beneficiaries. The Department also anticipates the proposed 
change will increase the number of network providers.
    Under this proposed rule, enrollees maintain freedom of choice to 
see either a participating or nonparticipating provider. Cost shares 
are established by statute and do not vary between network and non-
network care. Beneficiaries will, however, be incentivized to seek care 
from a participating provider who has agreed to not balance bill the 
beneficiary any amount in excess of the maximum payment allowed by the 
dental plan contractor for covered services. For those beneficiaries 
that elect to seek care from a nonparticipating provider, they may be 
balance-billed amounts in excess of the dental plan contractor's 
network maximum allowable charge. As with other commercial dental 
plans, TDP enrollees and nonparticipating dentists can call the TDP 
contractor's toll free customer service to inquire as to what the 
network maximum allowable charge is for their service in a specific 
locality (region) or state.
    This proposed rule also makes several technical amendments to Sec.  
199.13(b) and (f) for clarification and consistency sake in defining 
and discussing beneficiary liability, nonparticipating provider and 
participating provider in the context of the TDP. With the proposed 
revision to nonparticipating providers' reimbursement rate, the 
definition of beneficiary liability that discusses the prevailing fee 
determination must be revised to reference the network maximum 
allowable charge. Additionally, revisions are required to clarify that 
participating providers are participating in the contractor's network 
as a network provider and are reimbursed in accordance with the 
contractor's network agreements. Nonparticipating providers are 
considered non-network, or out-of-network, providers.

B. Removal of Cost-Share for Dental Sealants

    The cost share for dental sealants was originally put in place when 
there was minimal evidence as to the effectiveness of dental sealants 
preventing tooth decay. The scientific evidence is now overwhelming 
that dental sealants are effective in preventing tooth decay and the 
vast majority of commercial dental insurance plans cover this procedure 
with no cost shares. Further, the American Dental Association's Council 
on Dental Care Programs Code on Dental Procedures and Nomenclature, 
recognizes dental sealants as a preventive service. Consequently, the 
Department believes dental sealants should be reclassified as a 
preventive service under the TDP. In order to do so, this rule proposes 
to eliminate the separate definition of sealants found at Sec.  
199.13(b)(24) in favor of including it as a category of preventive 
service under Sec.  199.13(e)(2)(i)(B). Finally, as a result of clearly 
classifying dental sealants as a preventive service, the proposed rule 
eliminates the current 20 percent cost-share to conform with the 
requirement in 10 U.S.C. 1076a(e)(1)(A) that TDP enrollees pay no 
charge for preventive services. As the cost share has prevented some 
beneficiaries from receiving this needed treatment, we also anticipate 
the oral health of TDP beneficiaries will improve with the elimination 
of this cost-share.

IV. Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and E.O. 
13563, ``Improving Regulation and Regulatory Review''

    It has been determined that his proposed rule is not a significant 
regulatory action. This rule does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy; productivity; completion; jobs; the environment; public health 
or safety; or State, local, or tribunal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Orders.

Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)

    It has been determined 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.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that this proposed rule is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. Set forth in this proposed rule are minor revisions 
to the existing regulation. The DoD does not anticipate a significant 
impact on the Program.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been determined that this proposed rule does not impose 
reporting

[[Page 78365]]

or recordkeeping requirements under the Paperwork Act of 1995.

Executive Order 13132, Federalism

    It has been determined that this proposed rule does not have 
federalism implications, as set forth in Executive Order 13132. This 
rule does not have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 199

    Claims, Dental health, Health care, Health insurance, Dental 
sealants, Military personnel.

    Accordingly, 32 CFR part 199 is proposed to be amended as follows:

PART 199--[AMENDED]

0
1. The authority citation for part 199 continues to read as follows:


    Authority:  5 U.S.C. 301; 10 U.S.C. chapter 55.

0
2. Section 199.13 is proposed to be amended by:
0
a. Revising paragraphs (b)(4), (14), (17) and (20).
0
b. Removing paragraph (b)(24).
0
c. Revising paragraph (e)(2)(i).
0
d. Adding new paragraph (e)(2)(i)(B)(5).
0
e. Revising the table following paragraph (e)(3)(i) to delete the 
fourth line item entry entitled ``Sealants.''
0
f. Revising paragraphs (f)(5) and (g)(2)(i).
    The revisions and additions read as follows:


Sec.  199.13  TRICARE Dental Program.

* * * * *
    (b) * * *
    (4) Beneficiary liability. The legal obligation of the beneficiary, 
his or her estate, or responsible family member to pay for the costs of 
dental care or treatment received. Specifically, for the purposes of 
services and supplies covered by the TDP, beneficiary liability 
including cost-sharing amounts or any amount above the network maximum 
allowable charge where the provider selected by the beneficiary is not 
a participating provider or a provider within an approved alternative 
delivery system. In cases where a nonparticipating provider does not 
accept assignment of benefits,
* * * * *
    (14) Nonparticipating provider. A dentist or dental hygienist that 
furnished dental services to a TDP beneficiary, but who has not agreed 
to participate in the contractor's network and accept reimbursement in 
accordance with the contractor's network agreement. A nonparticipating 
provider looks to the beneficiary or active duty, Selected Reserve or 
Individual Ready Reserve member for final responsibility for payment of 
his or her charge, but may accept payment (assignment of benefits) 
directly from the insurer or assist the beneficiary in filing the claim 
for reimbursement by the dental plan contractor. Where the 
nonparticipating provider does not accept payment directly from the 
insurer, the insurer pays the beneficiary or active duty, Selected 
Reserve or Individual Ready Reserve member, not the provider.
* * * * *
    (17) Participating provider. A dentist or dental hygienist who has 
agreed to participate in the contractor's network and accept 
reimbursement in accordance with the contractor's network agreement as 
the total charge (even though less than the actual billed amount), 
including provision for payment to the provider by the beneficiary (or 
active duty, Selected Reserve or Individual Ready Reserve member) or 
any cost-share for covered services.
* * * * *
    (20) Preventive services. Traditional prophylaxis including scaling 
deposits from teeth, polishing teeth, and topical application of 
fluoride to teeth, as well as other dental services authorized in 
paragraph (e) of this section.
* * * * *
    (e) * * *
    (2) * * *
    (i) Diagnostic and preventive services. Benefits may be extended 
for those dental services described as oral examination, diagnostic, 
and preventive services when performed directly by dentists and dental 
hygienists as authorized under paragraph (f) of this section. These 
include the following categories of service:
* * * * *
    (B) * * *
    (5) Sealants.
* * * * *
    (f) * * *
    (5) Participating provider. An authorized provider may elect to 
participate as a network provider in the dental plan contractor's 
network and any such election will apply to all TDP beneficiaries. The 
authorized provider may not participate on a claim-by-claim basis. The 
participating provider must agree to accept, within one (1) day of a 
request for appointment, beneficiaries in need of emergency palliative 
treatment. Payment to the participating provider is based on the 
methodology specified in paragraph (g)(2)(ii) of this section. The fee 
or charge determinations are binding upon the provider in accordance 
with the dental plan contractor's procedures for participation in the 
network. Payment is made directly to the participating provider, and 
the participating provider may only charge the beneficiary the 
applicable percent cost-share of the dental plan contractor's allowable 
charge for those benefit categories as specified in paragraph (e) of 
this section, in addition to the full charges for any services not 
authorized as benefits.
* * * * *
    (g) * * *
    (2) * * *
    (i) Nonparticipating providers (or the Beneficiaries or active 
duty, Selected Reserve or Individual Ready Reserve members for 
unassigned claims) shall be reimbursed at the lesser of (1) the 
provider's actual charge: or (2) the network maximum allowable charge 
for similar services for that same locality (region) or state, 
whichever is lower, subject to the exception listed in paragraph 
(e)(3)(ii) of this section, less any cost-share amount due for 
authorized services. The network maximum allowable charge is the 
maximum negotiated fee between the dental contractor and any TDP 
participating provider for similar services covered by the dental plan 
in that same locality (region) or state.
* * * * *

    Dated: December 22, 2014.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2014-30322 Filed 12-29-14; 8:45 am]
BILLING CODE 5001-06-P