[Federal Register Volume 82, Number 188 (Friday, September 29, 2017)]
[Rules and Regulations]
[Pages 45438-45461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20392]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[Docket ID: DOD-2017-HA-0039]
RIN 0720-AB70


Establishment of TRICARE Select and Other TRICARE Reforms

AGENCY: Office of the Secretary, Department of Defense (DoD).

ACTION: Interim final rule.

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SUMMARY: This interim final rule implements the primary features of 
section 701 and partially implements several other sections of the 
National Defense Authorization Act for Fiscal Year 2017 (NDAA-17). The 
law makes significant changes to the TRICARE program, especially to the 
health maintenance organization (HMO)-like health plan, known as 
TRICARE Prime; to the preferred provider organization (PPO) health 
plan, previously called TRICARE Extra which is to be replaced

[[Page 45439]]

by TRICARE Select; and to the third health care option, known as 
TRICARE Standard, which will be terminated as of December 31, 2017, and 
also replaced by TRICARE Select. The statute also adopts a new health 
plan enrollment system under TRICARE and new provisions for access to 
care, high value services, preventive care, and healthy lifestyles. In 
implementing the statutory changes, this interim final rule makes a 
number of improvements to TRICARE.

DATES: This interim final rule is effective October 1, 2017. Comments 
will be received by November 28, 2017.

ADDRESSES: You may submit comments, identified by docket 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: Department of Defense, Office of the Deputy Chief 
Management Officer, Directorate for Oversight and Compliance, 
Regulatory and Advisory Committee Division, 4800 Mark Center Drive, 
Mailbox #24, Suite 08D09B, Alexandria, VA 22350-1700.
    Instructions: All submissions received must include the agency 
name, docket number, or title 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: Mr. Mark Ellis, Defense Health Agency, 
TRICARE Health Plan, (703) 681-0063.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose of the Interim Final Rule

    In implementing section 701 and partially implementing several 
other sections of NDAA-17, this interim final rule advances all four 
components of the Military Health System's quadruple aim of improved 
readiness, better care, better health, and lower cost. The aim of 
improved readiness is served by reinforcing the vital role of the 
TRICARE Prime health plan to refer patients, particularly those needing 
specialty care, to military medical treatment facilities (MTFs) in 
order to ensure that military health care providers maintain clinical 
currency and proficiency in their professional fields. The objective of 
better care is enhanced by a number of improvements in beneficiary 
access to health care services, including increased geographical 
coverage for the TRICARE Select provider network, reduced 
administrative hurdles for TRICARE Prime enrollees to obtain urgent 
care services and specialty care referrals, and promotion of high value 
services and medications. The goal of better health is advanced by 
expanding TRICARE coverage of preventive care services, treatment of 
obesity, high-value care, and telehealth. And the aim of lower cost is 
furthered by refining cost-benefit assessments for TRICARE plan 
specifications that remain under DoD's discretion and adding 
flexibilities to incentivize high-value health care services.

B. Legal Authority for the Regulatory Action

    This interim final rule is required to implement or partially 
implement several sections of NDAA-17, including 701, 706, 715, 718, 
and 729. The legal authority for this rule also includes chapter 55 of 
title 10, United States Code.

C. Summary of Major Provisions of the Interim Final Rule

    The major provisions of the interim final rule are:
    [rtarr8] The establishment of TRICARE Select as a self-managed, PPO 
option under the TRICARE program. TRICARE Select replaces the TRICARE 
Extra and Standard programs and adopts a number of improvements, 
including fixed copayments rather than cost shares for covered benefits 
provided by a civilian network provider. TRICARE Select beneficiaries 
can choose any provider for their healthcare; however, they will enjoy 
lower out-of-pocket costs if they choose preferred providers within the 
TRICARE civilian network.
    [rtarr8] The continuation of TRICARE Prime as a managed care, HMO-
like option under the TRICARE program. TRICARE Prime adopts a number of 
changes to conform to specifications in the new law, including 
categories of health care services applicable to the determination of 
copayment amounts (such as primary care, specialty care, emergency 
care).
    [rtarr8] Improved access to care, including a codified requirement 
that the TRICARE Select health care plan is available in all locations 
and at least 85% of the U.S. beneficiary TRICARE Select population is 
covered by the TRICARE network. Also, for TRICARE Prime enrollees, 
there are new procedures to ensure timely appointments for health care 
services and to authorize some or all urgent care visits without the 
need for referral from a primary care manager.
    [rtarr8] Promotion of high value services and medications, 
telehealth services, preventive health care, and healthy lifestyles.
    [rtarr8] A new design for the health care enrollment system, 
including mandatory enrollment to maintain TRICARE coverage, an annual 
open season enrollment period, and hassle-free enrollment procedures.
    [rtarr8] Other features include preservation of benefits for active 
duty dependents and TRICARE-for-Life beneficiaries, and changes to the 
TRICARE Young Adult (TYA), TRICARE Reserve Select (TRS), TRICARE 
Retired Reserve (TRR), Continued Health Care Benefit Program (CHCBP), 
and TRICARE Retiree Dental Program (TRDP) to conform with new statutory 
requirements.

II. Provisions of Interim Final Rule

A. Establishment of TRICARE Select

    The rule implements the new law (section 701 of NDAA-17) that 
establishes TRICARE Select as a self-managed, PPO program. It allows 
beneficiaries to use the TRICARE civilian provider network, with 
reduced out-of-pocket costs compared to care from non-network 
providers, as well as military treatment facilities (when space is 
available). Similar to the long-operating ``TRICARE Extra'' and 
``TRICARE Standard'' plans, which TRICARE Select replaces, a major 
feature is that enrollees will not have restrictions on their freedom 
of choice with respect to health care providers. TRICARE Select is 
based primarily on 10 U.S.C. 1075 (as added by section 701 of NDAA-17) 
and 10 U.S.C. 1097. With respect to beneficiary cost sharing, the 
statute introduces a new split of beneficiaries into two groups: One 
group (which the rule refers to as ``Group A'') consists of sponsors 
and their family members who first became affiliated with the military 
through enlistment or appointment before January 1, 2018, and the 
second group (referred to as ``Group B'') who first became affiliated 
on or after January 1, 2018. In general, beneficiary out-of-pocket 
costs for Group B are higher than for Group A.
    In addition to implementing the statutory specifications, the 
interim final rule also makes improvements for TRICARE Select Group A 
enrollees, compared to the features of the old TRICARE Extra plan. One 
such improvement is to convert the current cost-sharing requirement of 
15% for active duty family members and 20% for retirees and their 
family members of the allowable charge for care from a network provider 
to a fixed dollar

[[Page 45440]]

copayment calculated to approximately equal 15% or 20% of the average 
allowable charge for the category of care involved. Consistent with 
prevailing private sector health program practices, the fixed dollar 
copayment is more predictable for the patient and easier for the 
network health care provider to administer. The breakdown of categories 
of care (such as outpatient primary care visit, specialty care visit, 
emergency room visit, etc.) contained in the rule is the same as the 
categories now specified in the statute for Group B Select enrollees.
    A second improvement in TRICARE Select (for both Group A and Group 
B) is that additional preventive care services that previously were 
only offered to TRICARE Prime beneficiaries will now (under the 
authority of 10 U.S.C. 1097 and NDAA-17) also be covered for Select 
enrollees when furnished by a network health care provider. These are 
services recommended by the United States Preventive Services Task 
Force and the Health Resources and Services Administration of the 
Department of Health and Human Services.
    These improvements are based partly on the statutory provision (10 
U.S.C. 1075(c)(2)) that Group A Select enrollee cost-sharing 
requirements are calculated as if TRICARE Extra were still being 
carried out by DoD. TRICARE Extra specifications are based on the 
underlying authority of 10 U.S.C. 1097, which allows DoD to adopt 
special rules for the PPO plan. This statute was the basis for the 
original set of rules for TRICARE Extra, which were adopted in 1995, 
and is the authority for these improved rules for TRICARE Select Group 
A, adopted as if TRICARE Extra were still being carried out by DoD.
    Under the interim final rule, the cost sharing rules applicable to 
TRICARE Select Group B are those specified in 10 U.S.C. 1075. For 
TRICARE Select Group A, in addition to the copayment rules noted above, 
consistent with 10 U.S.C. 1075, an enrollment fee of $150 per person or 
$300 per family will begin January 1, 2021, for most retiree families, 
with annual updates thereafter based on the cost of living adjustment 
(COLA) applied to retired pay. At the same time, the catastrophic cap 
will increase from $3,000 to $3,500 for these retiree families. These 
changes, however, will not apply to TRICARE Select Group A active duty 
families, survivors of members who died while on active duty, or 
disability retiree families; that is, no enrollment fee will be 
applicable to this group and the applicable catastrophic cap will 
continue to be $1,000 for active duty families as established under 10 
U.S.C. 1079(b) and $3,000 for survivors of members who died while on 
active duty or disability retiree families as established under 10 
U.S.C. 1086(b).

B. Continuation of TRICARE Prime

    A second major feature of this interim final rule, based primarily 
on 10 U.S.C. 1075a (also added by section 701 of NDAA-17), is the 
continuation of TRICARE Prime as a managed care, HMO-like program. It 
generally features use of military treatment facilities (MTFs) and 
substantially reduced out-of-pocket costs for authorized care provided 
outside MTFs. Beneficiaries generally agree to use military treatment 
facilities and designated civilian provider networks and to follow 
certain managed care rules and procedures. Like with TRICARE Select, 
with respect to beneficiary cost sharing, the statute introduces a new 
split of beneficiaries into two groups (again referred to in the rule 
as Group A and Group B) based on the military sponsor's initial 
enlistment or appointment before January 1, 2018 (Group A), or on or 
after that date (Group B). Beneficiary cost sharing for Group B is 
slightly higher than for Group A.
    As with TRICARE Select, the cost sharing specifications for TRICARE 
Prime Group B are set forth in the statute, and those for Group A are 
calculated in accordance with other health care provisions of title 10 
(rather than the new section 1075a). The primary original statutory 
authority for the TRICARE Prime health plan, established by DoD 
regulation in 1995, was 10 U.S.C. 1097, and this continues to be relied 
upon for the continued operation of TRICARE Prime for Group A. Also 
relevant to the original terms of TRICARE Prime was section 731 of the 
National Defense Authorization Act for Fiscal Year 1994. That law 
required DoD to include, to the maximum extent practicable, the HMO-
like option under TRICARE. That law also required that the HMO-like 
option ``shall be administered so that the costs incurred by the 
Secretary under the TRICARE program are no greater than the costs that 
would otherwise be incurred'', to provide health care to beneficiaries. 
The extent to which this ``cost neutrality'' requirement has not been 
maintained was recently highlighted by the Congressional Budget Office: 
``CBO estimates that under current law, a typical retiree household 
enrolled in TRICARE Prime as a `family' in 2018, and for whom TRICARE 
is the primary payer of health benefits, will cost DoD about $17,400, 
and a typical family that uses Standard/Extra will cost DoD about 
$12,700.'' \1\
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    \1\ Congressional Budget Office Cost Estimate, S. 2943, National 
Defense Authorization Act for Fiscal Year 2017, June 10, 2016, page 
17.
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    Based on the TRICARE Prime cost neutrality provision in NDAA-1994, 
the original 1995 TRICARE Prime regulation included (at 32 CFR 
199.18(g)) that cost sharing requirements ``may be updated for 
subsequent years to the extent necessary to maintain compliance with 
statutory requirements pertaining to government costs.'' Since NDAA-
1994, Congress took away DoD's discretion for enrollment fee increases, 
which are now tied by law to the retired pay COLA. However, DoD 
continues to have discretion to update copayment amounts--which have 
not changed since 1995--and this discretion is confirmed by the newly 
enacted 10 U.S.C. 1075a(a)(3).
    This discretion to update copayment amounts is continued in the 
interim final rule, but the framework for setting Prime Group A 
copayment amounts is being revised. Specifically, DoD is adopting for 
Group A the same structure of categories of care that Congress adopted 
for Group B. Thus, for example, while the current TRICARE Prime 
copayment amount makes no distinction between primary care and 
specialty care services, the new Group B structure under the statute 
does have a different copayment for primary care and specialty care. 
Under the rule, copayment amounts for Group A beneficiaries will be set 
for each of those categories, as well as the other categories of care 
the statute now specifies for Group B enrollees. The interim final rule 
does not specify the amount for each category of care. Rather, 
consistent with DoD's discretion under current statute and regulation, 
the actual amount will be set each year prior to open season 
enrollment. The interim final rule does, however, specify that the 
amount for each category of care for Group A enrollees may not exceed 
the amount that Congress set for Group B enrollees. In this way, the 
Prime copay structure would be in alignment with proposed legislative 
changes recommended by the Department to Congress for enactment this 
year to eliminate the ``grandfathering'' of Group A retiree families 
and return to a single TRICARE Prime model for all working-age retiree 
families. Again, it should be noted that this applies only to per-
service copayments; enrollment fee increases for Group A enrollees will 
continue to be based on the retired pay COLA.

[[Page 45441]]

    The interim final rule also continues the point-of-service 
provision of the current TRICARE Prime plan. Any health care services 
obtained by a Prime enrollee not in accordance with the rules and 
procedures of Prime (e.g. failure to obtain a primary care manager 
referral when such a referral is required or seeing a non-network 
provider when a network provider is available) will not be paid for 
under Prime rules, but may be covered by the point-of-service option. 
This results in higher cost sharing--specifically, a deductible of $300 
per person and $600 per family, and a copayment of 50 percent of the 
allowable charges after the deductible. Point-of-service charges do not 
count against the annual catastrophic cap. These point-of-service rules 
continue for TRICARE Prime Group A and are also applicable to Group B. 
For Group B, the rules for point-of-service charges are specified in 10 
U.S.C. 1075a(c), which clarifies that point-of-service cost sharing is 
``notwithstanding'' the usual cost sharing rules of Prime Group B 
enrollees.
    One other matter on which the interim final rule preserves DoD 
discretion, similar to that in the current regulation, is with respect 
to the locations where TRICARE Prime is offered. This is noted in the 
current regulation at 32 CFR 199.17(a)(5). Under the interim final 
rule, the locations where TRICARE Prime will be offered will be 
determined by the Director, Defense Health Agency (DHA) and announced 
prior to the annual open season enrollment period. The guiding 
principle for this decision is that the purpose of TRICARE Prime is to 
support the medical readiness of the armed forces and the readiness of 
medical personnel. Codification in regulation of this guiding principle 
is a corollary to the codification by Congress in statute, specifically 
sections 703 and 725 of NDAA-17 that MTFs exist to support the medical 
readiness of the armed forces and the readiness of medical personnel.
    TRICARE Prime, especially for working age retirees and family 
members, provides MTFs clinical workload, including for a range of 
medical specialty areas that permit military health care providers to 
maintain currency and proficiency in their respective clinical fields. 
This important support of a ready medical force is what justifies the 
higher government cost of Prime (which CBO estimates at $17,400 per 
retiree family), notwithstanding the original statutory requirement of 
cost neutrality between TRICARE Prime and TRICARE Standard. This cost-
benefit assessment supports the conclusion that it is practicable to 
offer TRICARE Prime in areas where it supports the medical readiness of 
one or more MTFs. Additionally, where TRICARE Prime is offered, it may 
be limited to active duty family members if the Director, DHA 
determines it is not practicable to offer TRICARE Prime to retired 
beneficiaries as well--a determination that again would take into 
account the nature of the supported MTF and the range of services it 
offers.

C. Improved Access to Care

    A third significant change in the interim final rule is a set of 
improvements in standards for access to care. The TRICARE Select plan 
replaces TRICARE Standard as the generally applicable plan in all 
areas. Under TRICARE Select, eligible beneficiaries can choose any 
provider for their healthcare, and they will enjoy lower out-of-pocket 
costs if they choose providers within the TRICARE civilian network. The 
vast majority of TRICARE beneficiaries located in the United States 
will have access to TRICARE network providers (it is DoD's plan that at 
least 85% of the U.S. beneficiary population under TRICARE Select will 
be covered by the network upon implementation), similar to the current 
TRICARE Extra option, but with the benefit of predictable fixed dollar 
copayments. In cases in which a network provider is not available to a 
TRICARE Select enrollee, such as in remote locations where there are 
very few primary or specialty providers, enrollees will still have 
access to any TRICARE authorized provider, with cost sharing comparable 
to the current TRICARE Standard plan (i.e. 25% for retired category 
beneficiaries).
    A second interim final rule enhancement for access to care is that 
if a TRICARE Prime enrollee seeks to obtain an appointment for care 
from the managed care support contractor but is not offered an 
appointment within the applicable access time standards from a network 
provider, the enrollee will be authorized to receive care from any 
authorized provider without incurring the additional fees associated 
with point-of-service care.
    A third access to care improvement under the interim final rule is 
that the TRICARE Prime referral requirement may be waived for urgent 
care visits for Prime enrollees other than active duty members. This is 
similar to the current pilot program, which waives the referral 
requirement (other than for active duty members) for up to two urgent 
care visits per year. The specific number of urgent care visits without 
a referral will be determined annually prior to the beginning of the 
open season enrollment period.
    A fourth access to care improvement is adoption of the new 
statutory provision that a primary care manager who believes a referral 
to a specialty care network provider is medically necessary and 
appropriate need not obtain pre-authorization from the managed care 
support contractor. Managed care support contractor preauthorization is 
only required with respect to a primary care manager's referral for 
inpatient hospitalization, inpatient care at a skilled nursing 
facility, inpatient care at a residential treatment center and 
inpatient care at a rehabilitation facility.

D. Promotion of High Value Services and Medications and Telehealth 
Services

    In addition to the expansion noted above concerning preventive care 
services, the interim final rule makes a number of other improvements 
in TRICARE Prime and TRICARE Select based on provisions of sections 
701(h), 706, 718, and 729 of NDAA-17. Section 701(h), among other 
things, provides for a four-year pilot program to encourage use by 
patients of high value services and medications. Section 706, among 
other things, authorizes special arrangements with provider groups that 
will improve population-based health outcomes and focus more on 
preventive care. Section 729 calls for special actions to incentivize 
medical intervention programs to address chronic diseases and other 
conditions and healthy lifestyle interventions. Section 718, among 
other things, requires actions to promote greater use of telehealth 
services under TRICARE. While these sections of NDAA-17 also require 
actions outside the scope of this interim final rule (such as 
contracting actions) they can be partially implemented, consistent with 
Congressional intent, in this rule. The interim final rule does this in 
several ways.
    First, the interim final rule authorizes coverage under TRICARE 
Prime and TRICARE Select for medically necessary treatment of obesity 
even if it is the sole or major condition treated. Under 10 U.S.C. 
1079(a)(10), this is disallowed under the basic program. However, it is 
DoD's conclusion that the underlying authority of 10 U.S.C. 1097, 
together with section 729 of NDAA-17 (which specifically authorizes 
medical intervention for obesity), allow the Department to cover these 
services when provided by a network provider

[[Page 45442]]

for a TRICARE Prime or TRICARE Select enrollee.
    Second, the interim final rule codifies authority of the Director, 
DHA to waive or reduce copayment requirements for TRICARE Prime and 
TRICARE Select enrollees for care received from network providers for 
certain health care services that provide especially high value in 
terms of better health outcomes for patients. Authority for this 
includes section 706 and 729 of NDAA-17. This is also consistent with 
the four-year pilot program authority of section 701(h), but does not 
necessarily rely on that time-limited authority. Consistent with the 
intent of these sections, the Department also intends to use the 
authority of Sec.  199.21(j)(3) of the TRICARE Pharmacy Benefits 
Program section of the TRICARE regulations to encourage use of high 
value medications by reducing or eliminating the copayment of selected 
medicines.
    Third, consistent with section 718 of NDAA-17, the interim final 
rule provides that health care services covered by TRICARE and provided 
through the use of telehealth modalities are covered services to the 
same extent as if provided in person at the location of the patient if 
those services are medically necessary and appropriate for such 
modalities. The Director, DHA will establish standardized payment 
methods to reimburse for such services, and shall reduce or eliminate, 
as appropriate, beneficiary copayments or cost-shares for such services 
in cases in which a copayment would otherwise apply. This may be done 
by designating some telehealth services as high value services for 
which lower copays apply as well as the elimination of any beneficiary 
cost-sharing related to originating site fees when used to support the 
provision of telehealth services.

E. Changes to Health Plan Enrollment System

    A fourth major change in the interim final rule is its 
implementation of the new statutory design for the health care 
enrollment system. Starting in calendar year 2018, beneficiaries other 
than active duty members and TRICARE-for-Life beneficiaries must elect 
to enroll in TRICARE Select or TRICARE Prime in order to be covered by 
the private sector care portion of TRICARE. While TRICARE-for-Life 
beneficiaries under the age of 65 are permitted to enroll in TRICARE 
Prime under limited circumstances, their failure to enroll will not 
affect their coverage by the private sector care portion of TRICARE. 
Enrollment will be done during an open season period prior to the 
beginning of each plan year, which operates with the calendar year. An 
enrollment choice will be effective for the plan year. As an exception 
to the open season enrollment rule, enrollment changes can be made 
during the plan year for certain qualifying events, such as a change in 
eligibility status, marriage, divorce, birth of a new family member, 
relocation, loss of other health insurance, or other events.
    Eligible Prime or Select beneficiaries who do not enroll will no 
longer have private sector care coverage under the TRICARE program 
(including the TRICARE retail pharmacy and mail order pharmacy 
programs) until the next open enrollment season or they have a 
qualifying event, except that they do not lose any statutory 
eligibility for space-available care in military medical treatment 
facilities. There is a limited grace period exception to this 
enrollment requirement for calendar year 2018, as provided in section 
701(d)(3) of NDAA-17, to give beneficiaries another chance to adjust to 
this new requirement for annual enrollment. For the administrative 
convenience of beneficiaries, there are also procedures for automatic 
enrollment in Prime and Select for most active duty family members, and 
automatic renewal of enrollments of covered beneficiaries, subject to 
the opportunity to decline or cancel.
    Due to a compressed implementation schedule that precludes an 
annual open season enrollment period in calendar year 2017 for existing 
TRICARE beneficiaries to elect or change their TRICARE coverage, the 
Department will convert existing TRICARE Standard coverage to TRICARE 
Select coverage effective January 1, 2018. All other existing TRICARE 
coverages will be renewed effective January 1, 2018. As noted 
previously, beneficiaries may elect to change their TRICARE coverage 
anytime during the limited grace period in calendar year 2018.

F. Additional Provisions of Interim Final Rule

    The interim final rule has several other noteworthy provisions. 
First, there are no changes in benefits for TRICARE-for-Life 
beneficiaries, or generally in cost sharing levels for active duty 
family members. Second, although ``TRICARE Standard'' is terminated as 
a distinct TRICARE plan as of December 31, 2017, basic program benefits 
(as established under 32 CFR 199.4) continue under both TRICARE Prime 
and TRICARE Select. In addition, when a TRICARE Select beneficiary 
receives services covered by the basic program benefits from an 
authorized health care provider who is not part of the TRICARE provider 
network, that care is covered by TRICARE as ``out-of-network'' care 
under terms that match the old TRICARE Standard plan. Third, in order 
to transition enrollment fees, deductibles, and catastrophic caps from 
a fiscal year basis to a calendar year basis, special rules apply for 
the last quarter of calendar year 2017, including that a Prime 
enrollee's enrollment fee for the quarter is one-fourth of the 
enrollment fee for fiscal year 2017, and the deductible amount and the 
catastrophic cap amount for fiscal year 2017 will be applicable to the 
15-month period of October 1, 2016, through December 31, 2017. A 
similar transition rule will apply to TRICARE for Life, TYA, TRR and 
TRS to align remaining program deductibles and/or catastrophic caps 
from a fiscal year to calendar year basis for consistency and ease of 
administration.
    Additionally, the interim final rule adopts several changes to 
regulatory provisions applicable to the TYA, TRS, TRR, and TRDP 
programs to conform with new statutory requirements. In implementing 
section 701(a) of NDAA-17, together with section 701(j)(1)(F), the rule 
conforms the TYA regulation to the statutory language which established 
the eligibility of TYA under 10 U.S.C. 1110b to enroll in TRICARE 
Select and provided that the TYA premium shall apply instead of the 
otherwise applicable TRICARE Prime or Select enrollment fee. In 
implementing section 701(j)(1)(B), the rule conforms the TRICARE 
Reserve Select plan regulation to the statutory language which defines 
``TRICARE Reserve Select'' as the TRICARE Select self-managed, 
preferred-provider network option under 10 U.S.C. 1075 made available 
to beneficiaries under 10 U.S.C. 1076d and requires payment of a 
premium for coverage instead of the TRICARE Select enrollment fee. In 
implementing section 701(j)(1)(C), the rule conforms the TRICARE 
Retired Reserve plan regulation to the statutory language which defines 
``TRICARE Retired Reserve'' as the TRICARE Select self-managed, 
preferred-provider network option under 10 U.S.C. 1075 made available 
to beneficiaries under 10 U.S.C. 1076e and requires payment of a 
premium for coverage instead of the TRICARE Select enrollment fee. In 
implementing section 701(a) and 701(e), the rule conforms the CHCBP 
regulation to replace TRICARE Standard with TRICARE Select as the 
continuation health care benefit for Department of Defense and the 
other uniformed services beneficiaries losing eligibility.

[[Page 45443]]

In implementing section 715, the rule conforms the TRDP regulation to 
the statutory language which authorizes an interagency agreement 
between the Department of Defense and the Office of Personnel 
Management to allow beneficiaries otherwise eligible for the TRDP to 
enroll in a dental insurance plan offered under the Federal Employees 
Dental and Vision Insurance Program. Under the statute, TRDP 
beneficiaries will have the opportunity to access a dental plan with 
significantly higher annual maximum benefit and a lower premium cost 
than available under the current TRDP, while giving the Department an 
opportunity to eliminate costs associated with procuring and 
administering a separate TRDP contract.
    Also, the interim final rule adopts several changes to regulatory 
provisions applicable to benefit coverage of medically necessary food 
and vitamins. Section 714 of NDAA-17 confirms long-standing TRICARE 
policy authorizing benefit coverage of medically necessary vitamins 
when prescribed for management of a covered disease or condition. In 
addition, while section 714 confirms long-standing TRICARE policy 
authorizing medical nutritional therapy coverage of medically necessary 
food and medical equipment/supplies necessary to administer such food 
when prescribed for dietary management of a covered disease or 
condition, the law also allows the medically necessary food benefit to 
include coverage of low protein modified foods. Consistent with this we 
also recognize the role of Nutritionists and Registered Dieticians in 
the appropriate planning for the use of medically necessary foods.
    Additionally, the interim final rule adopts several conforming 
changes to regulatory provisions applicable to general TRICARE 
administration, the TRICARE Pharmacy Benefits Program and the Extended 
Health Care Option to reflect transition of deductibles, catastrophic 
caps, and program reimbursement limitations, as applicable, from a 
fiscal year basis to a calendar year basis for consistency and ease of 
administration. Simultaneously, technical corrections are being made to 
the TRICARE Pharmacy Benefits Program to conform regulation provisions 
to statutory provisions enacted by section 702 of the National Defense 
Authorization Act for Fiscal Year 2016.
    Finally, the interim final rule includes authority for the 
Director, DHA to establish preferred provider networks in areas outside 
the United States where it is determined to be economically in the best 
interests of the Department of Defense. As a result of the TRICARE 
Philippines Demonstration Project, which commenced in January 1, 2013, 
the Department has determined that the TRICARE contracted preferred 
provider network established in designated locations in the Philippines 
provided adequate access to beneficiaries with 97 percent of care 
delivered by network providers. It also successfully achieved the 
demonstration goals of reducing aberrant billing activities, reduced 
out-of-pocket expenses for beneficiaries, and increased overall 
beneficiary satisfaction while leading to a net savings to the 
government. Although the demonstration was projected to continue 
through December 31, 2018, the Philippines preferred provider network 
is determined to be economically in the interests of the Department of 
Defense and the demonstration shall terminate effective December 31, 
2017, with transition of the demonstration's approved preferred 
provider network to a TRICARE Select preferred provider network 
effective January 1, 2018.

G. Recap: Cost Sharing Tables

    The following two tables summarize beneficiary fees (including 
enrollment fees, deductibles, cost sharing amounts, and catastrophic 
loss protection limits) under TRICARE Select and TRICARE Prime for 
calendar year 2018. For future calendar years, all fees are subject to 
review and annual updating in accordance with sections 1075, 1075a, and 
1097 of title 10, United States Code. Table 1 is for active duty family 
members (ADFMs); Table 2 is for retiree families. As a guide for 
understanding the tables:
    [rtarr8] For services listed as ``to be determined (TBD)'', the 
Director, DHA will ensure the applicable fee for calendar year 2018 
will be available at www.health.mil/rates before December 1, 2017.
    [rtarr8] For services not specifically addressed in these tables, 
applicable cost-sharing requirements shall be established by the 
Director, DHA and published annually.
    [rtarr8] For services designated as ``IN'', the listed fee is for 
covered services or supplies obtained ``in-network,'' meaning received 
from TRICARE authorized network providers.
    [rtarr8] For TRICARE Prime beneficiaries, if covered services or 
supplies are not obtained in accordance with the rules and procedures 
of Prime (e.g., failure to obtain a required referral or unauthorized 
use of a non-network provider), the services or supplies will be 
reimbursed under a point-of-service option for which there is a 
deductible of $300 per person or $600 per family and a cost share of 50 
percent of the allowable charges after the deductible.
    [rtarr8] For services designated as ``OON'', the listed fee for 
TRICARE Select beneficiaries is for covered services or supplies 
obtained ``out-of-network'', meaning received from non-network TRICARE 
authorized providers.
    [rtarr8] Certain preventive services have no cost sharing whether 
received from network or non-network providers. However, certain 
preventive services are not covered services for TRICARE Prime or 
Select beneficiaries unless obtained from network providers. 
Additionally, TRICARE Prime beneficiaries are required to obtain 
services in accordance with the rules and procedures of Prime to avoid 
point-of-service charges.
    [rtarr8] Enrollment fees and deductibles are listed in the tables 
as individual/family, indicating the dollar amounts applicable per 
individual or per family.
    [rtarr8] The criteria for fees associated with High Value Primary 
Care Outpatient Care and High Value Specialty Outpatient Care are under 
development but will be designed to encourage beneficiaries to receive 
health care services from high-value providers as highlighted in the 
contractor's network provider directory. When finalized, the fees will 
be made available at www.health.mil/rates.
    [rtarr8] Inpatient subsistence refers to the rate charged for 
inpatient care obtained in a military treatment facility.
    [rtarr8] ``COLA'' is the cost-of-living adjustment for retired pay 
under 10 U.S.C. 1401a by which certain fees are required to be annually 
indexed.
    [rtarr8] ``<'' means less than; <= means less than or equal to.

[[Page 45444]]



              Table 1--TRICARE Select and TRICARE Prime Cost Sharing for Active Duty Family Members
                                             for Calendar Year 2018
----------------------------------------------------------------------------------------------------------------
                                    Select Group A      Select Group B       Prime Group A       Prime Group B
                                         ADFMs               ADFMs               ADFMs               ADFMs
----------------------------------------------------------------------------------------------------------------
Annual Enrollment...............  $0................  $0................  $0................  $0
Annual Deductible...............  E1-E4: $50/$100;    E1-E4: $50/$100;    0.................  0
                                   E5 & above: $150/   E5 & above: $150/
                                   $300.               $300.
Annual Catastrophic Cap.........  $1,000............  $1,000............  1,000.............  1,000
Preventive Care Outpatient Visit  $0................  $0................  0.................  0
Primary Care Outpatient Visit...  Fixed fee to = 15%  $15 primary care    0.................  0
                                   of average          IN; 20% OON.
                                   allowable amount
                                   IN; 20% OON.
Specialty Care Outpatient Visit.  Fixed fee to = 15%  $25 specialty care  0.................  0
                                   of average          IN; 20% OON.
                                   allowable amount
                                   IN; 20% OON.
High-Value Primary Care           Under Development;  Under Development;  0.................  0
 Outpatient Visit.                 Less than normal    Less than normal
                                   primary care        primary care
                                   amount.             amount.
High-Value Specialty Care         Under Development;  Under Development;  0.................  0
 Outpatient Visit.                 Less than normal    Less than normal
                                   primary care        primary care
                                   amount.             amount.
Emergency Room Visit............  Fixed fee to = 15%  $40 IN; 20% OON...  0.................  0
                                   of average
                                   allowable amount
                                   IN; 20% OON.
Urgent Care Center..............  Same as primary     $20 IN; 20% OON...  0.................  0
                                   care outpatient
                                   amount IN; 20%
                                   OON.
Ambulatory Surgery..............  $25...............  $25 IN; 20% OON...  0.................  0
Ambulance Service (not including  Fixed fee to = 15%  $15 IN; 20% OON...  0.................  0
 air).                             of average
                                   allowable amount
                                   IN; 20% OON.
Durable Medical Equipment.......  15% IN; 20% OON...  10% IN; 20% OON...  0.................  0
Inpatient Hospital Admission....  Subsistence charge/ $60/admission IN;   0.................  0
                                   day, minimum $25/   20% OON.
                                   admission.
Inpatient Skilled Nursing/Rehab   Subsistence charge/ $25/day IN; $50/    0.................  0
 Facility.                         day, minimum $25/   day OON.
                                   admission.
----------------------------------------------------------------------------------------------------------------


       Table 2--TRICARE Select and TRICARE Prime Cost Sharing for Retiree Families for Calendar Year 2018
----------------------------------------------------------------------------------------------------------------
                                    Select Group A      Select Group B       Prime Group A       Prime Group B
                                       Retirees            Retirees            Retirees            Retirees
----------------------------------------------------------------------------------------------------------------
Annual Enrollment...............  $0 until 2021;      $450/$900.........  FY17 amount         $350/$700.
                                   $150/$300 in 2021                       ($282.60/$565.20)
                                   +COLA?                                  +COLA.
Annual Deductible...............  $150/$300.........  $150/$300 IN; $300/ $0................  $0.
                                                       $600 OON.
Annual Catastrophic Cap.........  $3,000 until 2021;  $3,500............  $3,000............  $3,500.
                                   $3,500 in 2021.
Preventive Care Visit...........  $0................  $0................  $0................  $0.
Primary Care Outpatient Visit...  Fixed fee that =    $25 primary IN;     TBD, <=$20 primary  $20 primary.
                                   20% of average      25% OON.
                                   allowable amount
                                   IN; 25% OON.
Specialty Care Outpatient Visit.  Fixed fee that =    $40 specialty IN;   TBD, <=$30          $30 specialty.
                                   20% of average      25% OON.            specialty.
                                   allowable amount
                                   IN; 25% OON.
High Value Primary Care OP Visit  Under Development;  Under Development;  Under Development;  Under Development;
                                   <normal primary     <normal primary     <normal primary     <normal primary
                                   care amount.        care amount.        care amount.        care amount.
High Value Specialty Care OP      Under Development;  Under Development;  Under Development;  Under Development;
 Visit.                            <normal specialty   <normal specialty   <normal specialty   <normal specialty
                                   care amount.        care amount.        care amount.        care amount.
Emergency Room Visit............  Fixed fee that =    $80 IN; 25% OON...  TBD, <=$60........  $60.
                                   20% of average
                                   allowable amount
                                   IN; 25% OON.
Urgent Care Center..............  Same as primary     $40 IN; 25% OON...  TBD, <=$30........  $30.
                                   care outpatient
                                   amount IN; 25%
                                   OON.
Ambulatory Surgery..............  20% IN; 25% OON...  $95 IN; 25% OON...  TBD, <=$60........  $60.
Ambulance Service (not including  Fixed fee that =    $60 IN; 25% OON...  TBD, <=$40........  $40.
 air).                             20% of average
                                   allowable amount
                                   IN; 25% OON.
Durable Med. Equip..............  20% IN; 25% OON...  20% IN; 25% OON...  20%...............  20%.
Inpatient Admission.............  $250/day up to 25%  $175/admission IN;  TBD, <=$150/        $150/admission.
                                   hosp. charge +      25% OON.            admission.
                                   20% separately
                                   billed services
                                   IN; 25% OON.
Inpatient Skilled Nursing/Rehab   $250/day up to 25%  $50/day IN; Lesser  TBD, <=$30/day....  $30/day.
 Admission.                        hospital charge +   of $300/day or
                                   20% separately      20% OON.
                                   billed services
                                   IN; 25% OON.
----------------------------------------------------------------------------------------------------------------

III. Regulatory Procedures

Public Comments Invited

    This is being issued as an interim final rule in order to comply 
with statutory specifications regarding effective dates of changes to 
TRICARE as a health care entitlement program. For example, the change 
from a fiscal year-based TRICARE plan year for purposes of enrollment 
fees, deductibles, and catastrophic caps to a calendar year-based 
TRICARE plan year requires that this regulation be in place by October 
1, 2017. Many other changes

[[Page 45445]]

must be in place by January 1, 2018, including the operation of TRICARE 
Select to replace TRICARE Extra and TRICARE Standard, which DoD no 
longer has authority to operate as of that date. In view of the 
statutory effective dates of the substantial changes in TRICARE, the 
Department finds that obtaining public comment in advance of issuing 
this rule is impracticable, unnecessary, and contrary to the public 
interest. Nonetheless, DoD invites public comments on this rule and is 
committed to considering all comments and issuing a final rule as soon 
as practicable.

Executive Order (E.O.) 13771, ``Reducing Regulation and Controlling 
Regulatory Costs''

    E.O. 13771 seeks to control costs associated with the government 
imposition of private expenditures required to comply with Federal 
regulations and to reduce regulations that impose such costs. 
Consistent with the analysis of transfer payments under OMB Circular A-
4, this interim final rule does not involve regulatory costs subject to 
E.O. 13771.

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

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This interim final rule has been designated ``significant 
regulatory action,'' although not economically significant, under 
section 3(f) of Executive Order 12866. Accordingly, this rule has been 
reviewed by the Office of Management and Budget (OMB).

Congressional Review Act, 5 U.S.C. 804(2)

    Under the Congressional Review Act, a major rule may not take 
effect until at least 60 days after submission to Congress of a report 
regarding the rule. A major rule is one that would have an annual 
effect on the economy of $100 million or more or have certain other 
impacts. This interim final rule is not a major rule under the 
Congressional Review Act.

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

    The Regulatory Flexibility Act requires that each Federal agency 
analyze options for regulatory relief of small businesses if a rule has 
a significant impact on a substantial number of small entities. For 
purposes of the RFA, small entities include small businesses, nonprofit 
organizations, and small governmental jurisdictions. This interim final 
rule is not an economically significant regulatory action, and it will 
not have a significant impact on a substantial number of small 
entities. Therefore, this rule is not subject to the requirements of 
the RFA.

Public Law 104-4, Sec. 202, ``Unfunded Mandates Reform Act''

    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any one year of 
$100 million in 1995 dollars, updated annually for inflation. That 
threshold level is currently approximately $140 million. This interim 
final rule will not mandate any requirements for state, local, or 
tribal governments or the private sector.

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

    This rulemaking 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''

    This interim final rule has been examined for its impact under E.O. 
13132, and it does not contain 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 powers and responsibilities among the various 
levels of Government. Therefore, consultation with State and local 
officials is not required.

List of Subjects in 32 CFR Part 199

    Claims, Dental health, Health care, Health insurance, Individuals 
with disabilities, Mental health, Mental health parity, Military 
personnel.

    For the reasons stated in the preamble, the Department of Defense 
amends 32 CFR part 199 as set forth below:

PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED 
SERVICES (CHAMPUS)

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. In Sec.  199.2, paragraph (b) is amended by:
0
a. Revising the definitions of ``Basic program,'' ``Deductible,'' 
``Deductible certificate,'' ``Former member,'' and ``Member.''
0
b. Adding the definitions of ``Program year'' and ``Retired category'' 
in alphabetical order.
0
c. Revising the definition of ``Retiree.''
0
d. Adding the definition of ``TRICARE Extra'' in alphabetical order.
0
e. Removing the definition of ``TRICARE extra plan.''
0
f. Adding the definition of ``TRICARE for Life'' and ``TRICARE Prime'' 
in alphabetical order.
0
g. Removing the definition of ``TRICARE prime plan.''
0
h. Revising the definitions of ``TRICARE program'' and ``TRICARE 
Retired Reserve.''
0
i. Adding the definitions of ``TRICARE Select'' and ``TRICARE 
Standard'' in alphabetical order.
0
j. Removing the definition of ``TRICARE standard plan.''
    The revisions and additions read as follows:


Sec.  199.2  Definitions.

* * * * *
    (b) * * *
    Basic program. The primary medical benefits set forth in Sec.  
199.4, generally referred to as the Civilian Health and Medical Program 
of the Uniformed Services (CHAMPUS) as authorized under chapter 55 of 
title 10 United States Code, were made available to eligible 
beneficiaries under this part.
* * * * *
    Deductible. Payment by an individual beneficiary or family of a 
specific first dollar amount of the TRICARE allowable amount for 
otherwise covered outpatient services or supplies obtained in any 
program year. The dollar amount of deductible per individual or family 
is calculated as specified by law.
    Deductible certificate. A statement issued to the beneficiary (or 
sponsor) by a TRICARE contractor certifying to deductible amounts 
satisfied by a beneficiary for any applicable program year.
* * * * *
    Former member. An individual who is eligible for, or entitled to, 
retired pay, at age 60, for non-Regular service in

[[Page 45446]]

accordance with chapter 1223, title 10, United States Code but who has 
been discharged and who maintains no military affiliation. These former 
members, at age 60, and their eligible dependents are entitled to 
medical care, commissary, exchange, and MWR privileges. Under age 60, 
they and their eligible dependents are entitled to commissary, 
exchange, and MWR privileges only.
* * * * *
    Member. An individual who is affiliated with a Service, either an 
active duty member, Reserve member, active duty retired member, or 
Retired Reserve member. Members in a retired status are not former 
members. Also referred to as the sponsor.
* * * * *
    Program year. The appropriate year (e.g., calendar year, fiscal 
year, rolling 12-month period, etc.) specified in the administration of 
TRICARE programs for application of unique requirements or limitations 
(e.g., enrollment fees, deductibles, catastrophic loss protection, 
etc.) on covered health care services obtained or provided during the 
designated time period.
* * * * *
    Retired category. Retirees and their family members who are 
beneficiaries covered by 10 U.S.C. 1086(c), other than Medicare-
eligible beneficiaries as described in 10 U.S.C. 1086(d).
    Retiree. For ease of reference in this part only, and except as 
otherwise specified in this part, the term means a member or former 
member of a Uniformed Service who is entitled to retired, retainer, or 
equivalent pay based on duty in a Uniformed Service.
* * * * *
    TRICARE Extra. The preferred-provider option of the TRICARE program 
made available prior to January 1, 2018, under which TRICARE Standard 
beneficiaries may obtain discounts on cost sharing as a result of using 
TRICARE network providers.
    TRICARE for Life. The Medicare wraparound coverage option of the 
TRICARE program made available to an eligible beneficiary by reason of 
10 U.S.C. 1086(d).
* * * * *
    TRICARE Prime. The managed care option of the TRICARE program 
established under Sec.  199.17.
    TRICARE program. The program established under Sec.  199.17.
* * * * *
    TRICARE Retired Reserve. The program established under 10 U.S.C. 
1076e and Sec.  199.25.
* * * * *
    TRICARE Select. The self-managed, preferred-provider network option 
under the TRICARE Program established by 10 U.S.C. 1075 and Sec.  
199.17 to replace TRICARE Extra and Standard after December 31, 2017.
    TRICARE Standard. The TRICARE program made available prior to 
January 1, 2018, under which the basic program of health care benefits 
generally referred to as CHAMPUS was made available to eligible 
beneficiaries under this part.
* * * * *

0
3. Section 199.4 is amended by:
0
a. Adding paragraph (c)(1)(iii);
0
b. Revising paragraph (d)(3)(iii);
0
c. Adding paragraph (d)(3)(vi)(D);
0
d. Revising paragraph (e)(28)(iv);
0
e. Adding paragraph (e)(28)(v);
0
f. Removing the words ``fiscal year'' everywhere they appear and adding 
in their place the words ``calendar year'' in paragraphs (f)(2) through 
(4) and (10);
0
g. Adding paragraph (f)(13);
0
h. Revising paragraph (g)(39) introductory text and adding paragraph 
(g)(39)(v).
0
i. Revising paragraph (g)(57).
    The revisions and additions read as follows:


Sec.  199.4  Basic program benefits.

* * * * *
    (c) * * *
    (1) * * *
    (iii) Telehealth services. Health care services covered by TRICARE 
and provided through the use of telehealth modalities are covered 
services to the same extent as if provided in person at the location of 
the patient if those services are medically necessary and appropriate 
for such modalities. The Director will establish special procedures for 
payment for such services. Additionally, where appropriate, in order to 
incentive the use of telehealth services, the Director may modify the 
otherwise applicable beneficiary cost-sharing requirements in paragraph 
(f) of this section which otherwise apply.
* * * * *
    (d) * * *
    (3) * * *
    (iii) Medical supplies and dressings (consumables)--(A) In general. 
In general, medical supplies and dressings (consumables) are those that 
do not withstand prolonged, repeated use. Such items must be related 
directly to an appropriate and verified covered medical condition of 
the specific beneficiary for whom the item was purchased and obtained 
from a medical supply company, a pharmacy, or authorized institutional 
provider. Examples of covered medical supplies and dressings are 
disposable syringes for a known diabetic, colostomy sets, irrigation 
sets, and elastic bandages. An external surgical garment specifically 
designed for use follow a mastectomy is considered a medical supply 
item.

    Note 1 to paragraph (d)(3)(iii)(A):  Generally, the allowable 
charge of a medical supply item will be under $100. Any item over 
this amount must be reviewed to determine whether it would qualify 
as a DME item. If it is, in fact, a medical supply item and does not 
represent an excessive charge, it can be considered for benefits 
under paragraph (d)(3)(iii) of this section.

    (B) Medically necessary food and medical equipment and supplies 
necessary to administer such food (other than durable medical equipment 
and supplies) when prescribed for dietary management of a covered 
disease or condition. (1) Medically necessary food, including a low 
protein modified food product or an amino acid preparation product, may 
be covered when:
    (i) Furnished pursuant to the prescription, order, or 
recommendation of a TRICARE authorized provider acting within the 
provider's scope of license/certificate of practice, for the dietary 
management of a covered disease or condition;
    (ii) Is a specifically formulated and processed product (as opposed 
to a naturally occurring foodstuff used in its natural state) for the 
partial or exclusive feeding of an individual by means of oral intake 
or enteral feeding by tube;
    (iii) Is intended for the dietary management of an individual who, 
because of therapeutic or chronic medical needs, has limited or 
impaired capacity to ingest, digest, absorb, or metabolize ordinary 
foodstuffs or certain nutrients, or who has other special medically 
determined nutrient requirements, the dietary management of which 
cannot be achieved by the modification of the normal diet alone;
    (iv) Is intended to be used under medical supervision, which may 
include in a home setting; and
    (v) Is intended only for an individual receiving active and ongoing 
medical supervision under which the individual requires medical care on 
a recurring basis for, among other things, instructions on the use of 
the food.
    (2) Medically necessary food does not include:
    (i) Food taken as part of an overall diet designed to reduce the 
risk of a disease or medical condition or as weight-loss products, even 
if the food is recommended by a physician or other health care 
professional;
    (ii) Food marketed as gluten-free for the management of celiac 
disease or non-celiac gluten sensitivity;

[[Page 45447]]

    (iii) Food marketed for the management of diabetes; or
    (iv) Such other products as the Director, Defense Health Agency 
determines appropriate.
    (3) Covered disease or condition under paragraph (d)(3)(iii)(B) of 
this section means:
    (i) Inborn errors of metabolism;
    (ii) Medical conditions of malabsorption;
    (iii) Pathologies of the alimentary tract or the gastrointestinal 
tract;
    (iv) A neurological or physiological condition; and
    (v) Such other diseases or conditions the Director, Defense Health 
Agency determines appropriate.
* * * * *
    (vi) * * *
    (D) Medically necessary vitamins used for the management of a 
covered disease or condition pursuant to a prescription, order, or 
recommendation of a TRICARE authorized provider acting within the 
provider's scope of license/certificate of practice. For purposes of 
this paragraph (d)(3)(vi)(D), the term ``covered disease or condition'' 
means:
    (1) Inborn errors of metabolism;
    (2) Medical conditions of malabsorption;
    (3) Pathologies of the alimentary tract or the gastrointestinal 
tract;
    (4) A neurological or physiological condition;
    (5) Pregnancy in relation to prenatal vitamins, with the limitation 
the prenatal vitamins that require a prescription in the United States 
may be covered for prenatal care only;
    (6) Such other disease or conditions the Director, Defense Health 
Agency determines appropriate.
* * * * *
    (e) * * *
    (28) * * *
    (iv) Health promotion and disease prevention visits (which may 
include all of the services provided pursuant to Sec.  199.17(f)(2)) 
for beneficiaries 6 years of age or older may be provided in connection 
with immunizations and cancer screening examinations authorized by 
paragraphs (e)(28)(i) and (ii) of this section).
    (v) Breastfeeding support, supplies (including breast pumps and 
associated equipment), and counseling.
* * * * *
    (f) * * *
    (13) Special transition rule for the last quarter of calendar year 
2017. In order to transition deductibles and catastrophic caps from a 
fiscal year basis to a calendar year basis, the deductible amount and 
the catastrophic cap amount specified in paragraph (f) of this section 
will be applicable to the 15-month period of October 1, 2016 through 
December 31, 2017.
    (g) * * *
    (39) Counseling. Educational, vocational, non-medical nutritional 
counseling, counseling for socioeconomic purposes, stress management, 
and/or lifestyle modification purposes, except the following are not 
excluded:
* * * * *
    (v) Medical nutritional therapy (also referred to as medical 
nutritional counseling) required in the administration of the medically 
necessary foods, services and supplies authorized in paragraph 
(d)(3)(iii)(B) of this section, medically necessary vitamins authorized 
in paragraph (d)(3)(vi)(D) of this section, or when medically necessary 
for other authorized covered services.
* * * * *
    (57) Food, food substitutes. Food, food substitutes, vitamins, or 
other nutritional supplements, including those related to prenatal 
care, except as authorized in paragraphs (d)(3)(iii)(B) and 
(d)(3)(vi)(D) of this section.
* * * * *

0
4. Section 199.5 is amended by:
0
a. Removing the words ``fiscal year'' everywhere they appear and adding 
in their place the words ``program year'' in paragraphs (c)(7)(iii), 
(f)(3), (g)(2)(i), and (h)(3)(v)(A); and
0
b. Adding paragraph (a)(3).
    The addition reads as follows:


Sec.  199.5  TRICARE Extended Health Care Option (ECHO).

    (a) * * *
    (3) The Government's cost-share for ECHO or ECHO home health 
benefits during any program year is limited as stated in this section. 
In order to transition the program year from a fiscal year to a 
calendar year basis, the Government's annual cost-share limitation 
specified in paragraph (f) of this section shall be prorated for the 
last quarter of calendar year 2018 as authorized by 10 U.S.C. 
1079(f)(2)(A).
* * * * *

0
5. Section 199.6 is amended by revising paragraphs (c)(3)(iii)(L) and 
(M) to read as follows:


Sec.  199.6  TRICARE-authorized providers.

* * * * *
    (c) * * *
    (3) * * *
    (iii) * * *
    (L) Nutritionist. The nutritionist must be licensed by the State in 
which the care is provided and must be under the supervision of a 
physician who is overseeing the episode of treatment or the covered 
program of services.
    (M) Registered dietician. The dietician must be licensed by the 
State in which the care is provided and must be under the supervision 
of a physician who is overseeing the episode of treatment or the 
covered program of services.
* * * * *


Sec.  199.7  [Amended]

0
6. Section 199.7(a)(6) is amended by removing the words ``fiscal year'' 
everywhere they appear and adding in their place the words ``calendar 
year''.


Sec.  199.8   [Amended]

0
7. Section 199.8(d)(1)(v) is amended by removing ``Sec. 199.4(f)(10)'' 
and adding in its place ``Sec.  199.4(f)(10)'' and removing the words 
``fiscal year'' and adding in their place the words ``calendar year''.

0
8. Section 199.11 is amended by revising paragraph (a) to read as 
follows:


Sec.  199.11  Overpayments recovery.

    (a) General. Actions to recover overpayments arise when the 
government has a right to recover money, funds, or property from any 
person, partnership, association, corporation, governmental body or 
other legal entity, foreign or domestic, except another Federal agency, 
because of an erroneous payment of benefits under both CHAMPUS and the 
TRICARE program under this part. The term ``Civilian Health and Medical 
Program of the Uniformed Services'' (CHAMPUS) is defined in 10 U.S.C. 
1072(2), referred to as the CHAMPUS basic program. Prior to January 1, 
2018, the term ``TRICARE program'' referred to the triple-option of 
health benefits known as TRICARE Prime, TRICARE Extra, and TRICARE 
Standard. Specifically, TRICARE Standard was the TRICARE program under 
which the basic program of health care benefits generally referred to 
as CHAMPUS was made available to eligible beneficiaries under this Part 
199. Effective January 1, 2018, the term ``TRICARE program'' is defined 
in 10 U.S.C. 1072(2) and includes TRICARE Prime, TRICARE Select and 
TRICARE for Life. It is the purpose of this section to prescribe 
procedures for investigation, determination, assertion, collection, 
compromise, waiver and termination of claims in favor of the United 
States for erroneous benefit payments arising out of the administration 
CHAMPUS and the TRICARE program. For the purpose of this section, 
references herein to TRICARE beneficiaries, claims, benefits,

[[Page 45448]]

payments, or appeals shall include CHAMPUS beneficiaries, claims, 
benefits, payments, or appeals. A claim against several joint debtors 
arising from a single incident or transaction is considered one claim. 
The Director, or a designee, may pursue collection against all joint 
debtors and is not required to allocate the burden of payment between 
debtors.
* * * * *

0
9. Section 199.17 is revised to read as follows.


Sec.  199.17  TRICARE program.

    (a) Establishment. The TRICARE program is established for the 
purpose of implementing a comprehensive managed health care program for 
the delivery and financing of health care services in the Military 
Health System.
    (1) Purpose. The TRICARE program implements a number of 
improvements primarily through modernized managed care support 
contracts that include special arrangements with civilian sector health 
care providers and better coordination between military medical 
treatment facilities (MTFs) and these civilian providers to deliver an 
integrated, health care delivery system that provides beneficiaries 
with access to high quality healthcare. Implementation of these 
improvements, to include enhanced access, improved health outcomes, 
increased efficiencies and elimination of waste, in addition to 
improving and maintaining operational medical force readiness, includes 
adoption of special rules and procedures not ordinarily followed under 
CHAMPUS or MTF requirements. This section establishes those special 
rules and procedures.
    (2) Statutory authority. Many of the provisions of this section are 
authorized by statutory authorities other than those which authorize 
the usual operation of the CHAMPUS program, especially 10 U.S.C. 1079 
and 1086. The TRICARE program also relies upon other available 
statutory authorities, including 10 U.S.C. 1075 (TRICARE Select), 10 
U.S.C. 1075a (TRICARE Prime cost sharing), 10 U.S.C. 1095f (referrals 
and pre-authorizations under TRICARE Prime), 10 U.S.C. 1099 (health 
care enrollment system), 10 U.S.C. 1097 (contracts for medical care for 
retirees, dependents and survivors: Alternative delivery of health 
care), and 10 U.S.C. 1096 (resource sharing agreements).
    (3) Scope of the program. The TRICARE program is applicable to all 
the uniformed services. TRICARE Select and TRICARE-for-Life shall be 
available in all areas, including overseas as authorized in paragraph 
(u) of this section. The geographic availability of TRICARE Prime is 
generally limited as provided in this section. The Assistant Secretary 
of Defense (Health Affairs) may also authorize modifications to TRICARE 
program rules and procedures as may be appropriate to the area 
involved.
    (4) Rules and procedures affected. Much of this section relates to 
rules and procedures applicable to the delivery and financing of health 
care services provided by civilian providers outside military treatment 
facilities. This section provides that certain rules, procedures, 
rights and obligations set forth elsewhere in this part (and usually 
applicable to CHAMPUS) are different under the TRICARE program. To the 
extent that TRICARE program rules, procedures, rights and obligations 
set forth in this section are not different from or otherwise in 
conflict with those set forth elsewhere in this part as applicable to 
CHAMPUS, the CHAMPUS provisions are incorporated into the TRICARE 
program. In addition, some rules, procedures, rights and obligations 
relating to health care services in military treatment facilities are 
also different under the TRICARE program. In such cases, provisions of 
this section take precedence and are binding.
    (5) Implementation based on local action. The TRICARE program is 
not automatically implemented in all respects in all areas where it is 
potentially applicable. Therefore, not all provisions of this section 
are automatically implemented. Rather, implementation of the TRICARE 
program and this section requires an official action by the Director, 
Defense Health Agency. Public notice of the initiation of portions of 
the TRICARE program will be achieved through appropriate communication 
and media methods and by way of an official announcement by the 
Director identifying the military medical treatment facility catchment 
area or other geographical area covered.
    (6) Major features of the TRICARE program. The major features of 
the TRICARE program, described in this section, include the following:
    (i) Beneficiary categories. Under the TRICARE program, health care 
beneficiaries are generally classified into one of several categories:
    (A) Active duty members, who are covered by 10 U.S.C. 1074(a).
    (B) Active duty family members, who are beneficiaries covered by 10 
U.S.C. 1079 (also referred to in this section as ``active duty family 
category'').
    (C) Retirees and their family members (also referred to in this 
section as ``retired category''), who are beneficiaries covered by 10 
U.S.C. 1086(c) other than those beneficiaries eligible for Medicare 
Part A.
    (D) Medicare eligible retirees and Medicare eligible retiree family 
members who are beneficiaries covered by 10 U.S.C. 1086(d) as each 
become individually eligible for Medicare Part A and enroll in Medicare 
Part B.
    (E) Military treatment facility (MTF) only beneficiaries are 
beneficiaries eligible for health care services in military treatment 
facilities, but not eligible for a TRICARE plan covering non-MTF care.
    (ii) Health plans available. The major TRICARE health plans are as 
follows:
    (A) TRICARE Prime. ``TRICARE Prime'' is a health maintenance 
organization (HMO)-like program. It generally features use of military 
treatment facilities and substantially reduced out-of-pocket costs for 
care provided outside MTFs. Beneficiaries generally agree to use 
military treatment facilities and designated civilian provider networks 
and to follow certain managed care rules and procedures. The primary 
purpose of TRICARE Prime is to support the effective operation of an 
MTF, which exists to support the medical readiness of the armed forces 
and the readiness of medical personnel. TRICARE Prime will be offered 
in areas where the Director determines that it is appropriate to 
support the effective operation of one or more MTFs.
    (B) TRICARE Select. ``TRICARE Select'' is a self-managed, preferred 
provider organization (PPO) program. It allows beneficiaries to use the 
TRICARE provider civilian network, with reduced out-of-pocket costs 
compared to care from non-network providers, as well as military 
treatment facilities (where they exist and when space is available). 
TRICARE Select enrollees will not have restrictions on their freedom of 
choice with respect to authorized health care providers. However, when 
a TRICARE Select beneficiary receives services covered under the basic 
program from an authorized health care provider who is not part of the 
TRICARE provider network that care is covered by TRICARE but is subject 
to higher cost sharing amounts for ``out-of-network'' care. Those 
amounts are the same as under the basic program under Sec.  199.4.
    (C) TRICARE for Life. ``TRICARE for Life'' is the Medicare 
wraparound coverage plan under 10 U.S.C. 1086(d). Rules applicable to 
this plan are unaffected by this section; they are generally set forth 
in Sec. Sec.  199.3 (Eligibility), 199.4 (Basic Program Benefits), and 
199.8 (Double Coverage).

[[Page 45449]]

    (D) TRICARE Standard. ``TRICARE Standard'' generally referred to 
the basic CHAMPUS program of benefits under Sec.  199.4. While the law 
required termination of TRICARE Standard as a distinct TRICARE plan 
December 31, 2017, the CHAMPUS basic program benefits under Sec.  199.4 
continues as the baseline of benefits common to the TRICARE Prime and 
TRICARE Select plans.
    (iii) Comprehensive enrollment system. The TRICARE program includes 
a comprehensive enrollment system for all categories of beneficiaries 
except TRICARE-for-Life beneficiaries. When eligibility for enrollment 
for TRICARE Prime and/or TRICARE Select exists, a beneficiary must 
enroll in one of the plans. Refer to paragraph (o) of this section for 
TRICARE program enrollment procedures.
    (7) Preemption of State laws. (i) Pursuant to 10 U.S.C. 1103 the 
Department of Defense has determined that in the administration of 10 
U.S.C. chapter 55, preemption of State and local laws relating to 
health insurance, prepaid health plans, or other health care delivery 
or financing methods is necessary to achieve important Federal 
interests, including but not limited to the assurance of uniform 
national health programs for military families and the operation of 
such programs at the lowest possible cost to the Department of Defense, 
that have a direct and substantial effect on the conduct of military 
affairs and national security policy of the United States.
    (ii) Based on the determination set forth in paragraph (a)(7)(i) of 
this section, any State or local law relating to health insurance, 
prepaid health plans, or other health care delivery or financing 
methods is preempted and does not apply in connection with TRICARE 
regional contracts. Any such law, or regulation pursuant to such law, 
is without any force or effect, and State or local governments have no 
legal authority to enforce them in relation to the TRICARE regional 
contracts. (However, the Department of Defense may by contract 
establish legal obligations of the part of TRICARE contractors to 
conform with requirements similar or identical to requirements of State 
or local laws or regulations).
    (iii) The preemption of State and local laws set forth in paragraph 
(a)(7)(ii) of this section includes State and local laws imposing 
premium taxes on health or dental insurance carriers or underwriters or 
other plan managers, or similar taxes on such entities. Such laws are 
laws relating to health insurance, prepaid health plans, or other 
health care delivery or financing methods, within the meaning of the 
statutes identified in paragraph (a)(7)(i) of this section. Preemption, 
however, does not apply to taxes, fees, or other payments on net income 
or profit realized by such entities in the conduct of business relating 
to DoD health services contracts, if those taxes, fees or other 
payments are applicable to a broad range of business activity. For 
purposes of assessing the effect of Federal preemption of State and 
local taxes and fees in connection with DoD health and dental services 
contracts, interpretations shall be consistent with those applicable to 
the Federal Employees Health Benefits Program under 5 U.S.C. 8909(f).
    (b) TRICARE Prime and TRICARE Select health plans in general. The 
two primary plans for beneficiaries in the active duty family category 
and the retired category (which does not include most Medicare-eligible 
retirees/dependents) are TRICARE Prime and TRICARE Select. This 
paragraph (b) further describes the TRICARE Prime and TRICARE Select 
health plans.
    (1) TRICARE Prime. TRICARE Prime is a managed care option that 
provides enhanced medical services to beneficiaries at reduced cost-
sharing amounts for beneficiaries whose care is managed by a designated 
primary care manager and provided by an MTF or network provider. 
TRICARE Prime is offered in a location in which an MTF is located 
(other than a facility limited to members of the armed forces) that has 
been designated by the Director as a Prime Service Area. In addition, 
where TRICARE Prime is offered it may be limited to active duty family 
members if the Director determines it is not practicable to offer 
TRICARE Prime to retired category beneficiaries. TRICARE Prime is not 
offered in areas where the Director determines it is impracticable. If 
TRICARE Prime is not offered in a geographical area, certain active 
duty family members residing in the area may be eligible to enroll in 
TRICARE Prime Remote program under paragraph (g) of this section.
    (2) TRICARE Select. TRICARE Select is the self-managed option under 
which beneficiaries may receive authorized basic program benefits from 
any TRICARE authorized provider. The TRICARE Select health care plan 
also provides enhanced program benefits to beneficiaries with access to 
a preferred-provider network with broad geographic availability within 
the United States at reduced out-of-pocket expenses. However, when a 
beneficiary receives services from an authorized health care provider 
who is not part of the TRICARE provider network, only basic program 
benefits (not enhanced Select care) are covered by TRICARE and the 
beneficiary is subject to higher cost sharing amounts for ``out-of-
network'' care. Those amounts are the same as under the basic program 
under Sec.  199.4.
    (c) Eligibility for enrollment in TRICARE Prime and TRICARE Select. 
Beneficiaries in the active duty family category and the retired 
category are eligible to enroll in TRICARE Prime and/or TRICARE Select 
as outlined in this paragraph (c). A retiree or retiree family member 
who becomes eligible for Medicare Part A is not eligible to enroll in 
TRICARE Select; however, as provided in this paragraph (c), some 
Medicare eligible retirees/family members may be allowed to enroll in 
TRICARE Prime where available. In general, when a retiree or retiree 
family member becomes individually eligible for Medicare Part A and 
enrolls in Medicare Part B, he/she is automatically eligible for 
TRICARE-for-Life and is required to enroll in the Defense Enrollment 
Eligibility Reporting System (DEERS) to verify eligibility. Further, 
some rules and procedures are different for dependents of active duty 
members and retirees, dependents, and survivors.
    (1) Active duty members. Active duty members are required to enroll 
in Prime where it is offered. Active duty members shall have first 
priority for enrollment in Prime.
    (2) Dependents of active duty members. Beneficiaries in the active 
duty family member category are eligible to enroll in Prime (where 
offered) or Select.
    (3) Survivors of deceased members. (i) The surviving spouse of a 
member who dies while on active duty for a period of more than 30 days 
is eligible to enroll in Prime (where offered) or Select for a 3 year 
period beginning on the date of the member's death under the same rules 
and provisions as dependents of active duty members.
    (ii) A dependent child or unmarried person (as described in Sec.  
199.3(b)(2)(ii) or (iv)) of a member who dies while on active duty for 
a period of more than 30 days whose death occurred on or after October 
7, 2001, is eligible to enroll in Prime (where offered) or Select and 
is subject to the same rules and provisions of dependents of active 
duty members for a period of three years from the date the active duty 
sponsor dies or until the surviving eligible dependent:
    (A) Attains 21 years of age; or
    (B) Attains 23 years of age or ceases to pursue a full-time course 
of study prior to attaining 23 years of age, if, at 21 years of age, 
the eligible surviving dependent is enrolled in a full-time course of 
study in a secondary school or

[[Page 45450]]

in a full-time course of study in an institution of higher education 
approved by the Secretary of Defense and was, at the time of the 
sponsor's death, in fact dependent on the member for over one-half of 
such dependent's support.
    (4) Retirees, dependents of retirees, and survivors (other than 
survivors of deceased members covered under paragraph (c)(3) of this 
section). All retirees, dependents of retirees, and survivors who are 
not eligible for Medicare Part A are eligible to enroll in Select. 
Additionally, retirees, dependents of retirees, and survivors who are 
not eligible for Medicare Part A based on age are also eligible to 
enroll in TRICARE Prime in locations where it is offered and where an 
MTF has, in the judgment of the Director, a significant number of 
health care providers, including specialty care providers, and 
sufficient capability to support the efficient operation of TRICARE 
Prime for projected retired beneficiary enrollees in that location.
    (d) Health benefits under TRICARE Prime--(1) Military treatment 
facility (MTF) care--(i) In general. All participants in Prime are 
eligible to receive care in military treatment facilities. Participants 
in Prime will be given priority for such care over other beneficiaries. 
Among the following beneficiary groups, access priority for care in 
military treatment facilities where TRICARE is implemented as follows:
    (A) Active duty service members;
    (B) Active duty service members' dependents and survivors of 
service members who died on active duty, who are enrolled in TRICARE 
Prime;
    (C) Retirees, their dependents and survivors, who are enrolled in 
TRICARE Prime;
    (D) Active duty service members' dependents and survivors of 
deceased members, who are not enrolled in TRICARE Prime; and
    (E) Retirees, their dependents and survivors who are not enrolled 
in TRICARE Prime. For purposes of this paragraph (d)(1), survivors of 
members who died while on active duty are considered as among 
dependents of active duty service members.
    (ii) Special provisions. Enrollment in Prime does not affect access 
priority for care in military treatment facilities for several 
miscellaneous beneficiary groups and special circumstances. Those 
include Secretarial designees, NATO and other foreign military 
personnel and dependents authorized care through international 
agreements, civilian employees under workers' compensation programs or 
under safety programs, members on the Temporary Disability Retired List 
(for statutorily required periodic medical examinations), members of 
the reserve components not on active duty (for covered medical 
services), military prisoners, active duty dependents unable to enroll 
in Prime and temporarily away from place of residence, and others as 
designated by the Assistant Secretary of Defense (Health Affairs). 
Additional exceptions to the normal Prime enrollment access priority 
rules may be granted for other categories of individuals, eligible for 
treatment in the MTF, whose access to care is necessary to provide an 
adequate clinical case mix to support graduate medical education 
programs or readiness-related medical skills sustainment activities, to 
the extent approved by the ASD(HA).
    (2) Non-MTF care for active duty members. Under Prime, non-MTF care 
needed by active duty members continues to be arranged under the 
supplemental care program and subject to the rules and procedures of 
that program, including those set forth in Sec.  199.16.
    (3) Civilian sector Prime benefits. Health benefits for Prime 
enrollees for care received from civilian providers are those under 
Sec.  199.4 and the additional benefits identified in paragraph (f) of 
this section.
    (e) Health benefits under the TRICARE Select plan--(1) Civilian 
sector care. The health benefits under TRICARE Select for enrolled 
beneficiaries received from civilian providers are those under Sec.  
199.4, and, in addition, those in paragraph (f) of this section when 
received from a civilian network provider.
    (2) Military treatment facility (MTF) care. All TRICARE Select 
enrolled beneficiaries continue to be eligible to receive care in 
military treatment facilities on a space available basis.
    (f) Benefits under TRICARE Prime and TRICARE Select--(1) In 
general. Except as specifically provided or authorized by this section, 
all benefits provided, and benefit limitations established, pursuant to 
this part, shall apply to TRICARE Prime and TRICARE Select.
    (2) Preventive care services. Certain preventive care services not 
normally provided as part of basic program benefits under Sec.  199.4 
are covered benefits when provided to Prime or Select enrollees by 
providers in the civilian provider network. Such additional services 
are authorized under 10 U.S.C. 1097, including preventive care services 
not part of the entitlement under 10 U.S.C. 1074d and services that 
would otherwise be excluded under 10 U.S.C. 1079(a)(10). Other 
authority for such additional services includes section 706 of the 
National Defense Authorization Act for Fiscal Year 2017. The specific 
set of such services shall be established by the Director and announced 
annually before the open season enrollment period. Standards for 
preventive care services shall be developed based on guidelines from 
the U.S. Department of Health and Human Services. Such standards shall 
establish a specific schedule, including frequency or age 
specifications for services that may include, but are not limited to:
    (i) Laboratory and imaging tests, including blood lead, rubella, 
cholesterol, fecal occult blood testing, and mammography;
    (ii) Cancer screenings (including cervical, breast, lung, prostate, 
and colon cancer screenings);
    (iii) Immunizations;
    (iv) Periodic health promotion and disease prevention exams;
    (v) Blood pressure screening;
    (vi) Hearing exams;
    (vii) Sigmoidoscopy or colonoscopy;
    (viii) Serologic screening; and
    (ix) Appropriate education and counseling services. The exact 
services offered shall be established under uniform standards 
established by the Director.
    (3) Treatment of obesity. Under the authority of 10 U.S.C. 1097 and 
sections 706 and 729 of the National Defense Authorization Act for 
Fiscal Year 2017, notwithstanding 10 U.S.C. 1079(a)(10), treatment of 
obesity is covered under TRICARE Prime and TRICARE Select even if it is 
the sole or major condition treated. Such services must be provided by 
a TRICARE network provider and be medically necessary and appropriate 
in the context of the particular patient's treatment.
    (4) High value services. Under the authority of 10 U.S.C. 1097 and 
other authority, including sections 706 and 729 of the National Defense 
Authorization Act for Fiscal Year 2017, for purposes of improving 
population-based health outcomes and incentivizing medical intervention 
programs to address chronic diseases and other conditions and healthy 
lifestyle interventions, the Director may waive or reduce cost sharing 
requirements for TRICARE Prime and TRICARE Select enrollees for care 
received from network providers for certain health care services 
designated for this purpose. The specific services designated for this 
purpose will be those the Director determines provide especially high 
value in terms of better health outcomes. The specific services 
affected for any plan year will be announced by the Director prior to 
the

[[Page 45451]]

open season enrollment period for that plan year. Services affected by 
actions of the Director under paragraph (f)(5) of this section may be 
associated with actions taken for high value medications under Sec.  
199.21(j)(3) for select pharmaceutical agents to be cost-shared at a 
reduced or zero dollar rate.
    (5) Other services. In addition to services provided pursuant to 
paragraphs (f)(2) through (4) of this section, other benefit 
enhancements may be added and other benefit restrictions may be waived 
or relaxed in connection with health care services provided to TRICARE 
Prime and TRICARE Select enrollees. Any such other enhancements or 
changes must be approved by the Director based on uniform standards.
    (g) TRICARE Prime Remote for Active Duty Family Members--(1) In 
general. In geographic areas in which TRICARE Prime is not offered and 
in which eligible family members reside, there is offered under 10 
U.S.C. 1079(p) TRICARE Prime Remote for Active Duty Family Members as 
an enrollment option. TRICARE Prime Remote for Active Duty Family 
Members (TPRADFM) will generally follow the rules and procedures of 
TRICARE Prime, except as provided in this paragraph (g) and otherwise 
except to the extent the Director determines them to be infeasible 
because of the remote area.
    (2) Active duty family member. For purposes of this paragraph (g), 
the term ``active duty family member'' means one of the following 
dependents of an active duty member of the Uniformed Services:
    (i) Spouse, child, or unmarried person, as defined in Sec.  
199.3(b)(2)(i), (ii), or (iv);
    (ii) For a 3-year period, the surviving spouse of a member who dies 
while on active duty for a period of more than 30 days whose death 
occurred on or after October 7, 2001; and
    (iii) The surviving dependent child or unmarried person, as defined 
in Sec.  199.3(b)(2)(ii) or (iv), of a member who dies while on active 
duty for a period of more than 30 days whose death occurred on or after 
October 7, 2001. Active duty family member status is for a period of 3 
years from the date the active duty sponsor dies or until the surviving 
eligible dependent:
    (A) Attains 21 years of age; or
    (B) Attains 23 years of age or ceases to pursue a full-time course 
of study prior to attaining 23 years of age, if, at 21 years of age, 
the eligible surviving dependent is enrolled in a full-time course of 
study in a secondary school or in a full-time course of study in an 
institution of higher education approved by the Secretary of Defense 
and was, at the time of the sponsor's death, in fact dependent on the 
member for over one-half of such dependent's support.
    (3) Eligibility. (i) An active duty family member is eligible for 
TRICARE Prime Remote for Active Duty Family Members if he or she is 
eligible for CHAMPUS and, on or after December 2, 2003, meets the 
criteria of paragraphs (g)(3)(i)(A) and (B) or paragraph (g)(3)(i)(C) 
of this section or on or after October 7, 2001, meets the criteria of 
paragraph (g)(3)(i)(D) or (E) of this section:
    (A) The family member's active duty sponsor has been assigned 
permanent duty as a recruiter; as an instructor at an educational 
institution, an administrator of a program, or to provide 
administrative services in support of a program of instruction for the 
Reserve Officers' Training Corps; as a full-time adviser to a unit of a 
reserve component; or any other permanent duty designated by the 
Director that the Director determines is more than 50 miles, or 
approximately one hour driving time, from the nearest military 
treatment facility that is adequate to provide care.
    (B) The family members and active duty sponsor, pursuant to the 
assignment of duty described in paragraph (g)(3)(i)(A) of this section, 
reside at a location designated by the Director, that the Director 
determines is more than 50 miles, or approximately one hour driving 
time, from the nearest military medical treatment facility adequate to 
provide care.
    (C) The family member, having resided together with the active duty 
sponsor while the sponsor served in an assignment described in 
paragraph (g)(3)(i)(A) of this section, continues to reside at the same 
location after the sponsor relocates without the family member pursuant 
to orders for a permanent change of duty station, and the orders do not 
authorize dependents to accompany the sponsor to the new duty station 
at the expense of the United States.
    (D) For a 3 year period, the surviving spouse of a member who dies 
while on active duty for a period of more than 30 days whose death 
occurred on or after October 7, 2001.
    (E) The surviving dependent child or unmarried person as defined in 
Sec.  199.3(b)(2)(ii) or (iv), of a member who dies while on active 
duty for a period of more than 30 days whose death occurred on or after 
October 7, 2001, for three years from the date the active duty sponsor 
dies or until the surviving eligible dependent:
    (1) Attains 21 years of age; or
    (2) Attains 23 years of age or ceases to pursue a full-time course 
of study prior to attaining 23 years of age, if, at 21 years of age, 
the eligible surviving dependent is enrolled in a full-time course of 
study in a secondary school or in a full-time course of study in an 
institution of higher education approved by the Secretary of Defense 
and was, at the time of the sponsor's death, in fact dependent on the 
member for over one-half of such dependent's support.
    (ii) A family member who is a dependent of a reserve component 
member is eligible for TRICARE Prime Remote for Active Duty Family 
Members if he or she is eligible for CHAMPUS and meets all of the 
following additional criteria:
    (A) The reserve component member has been ordered to active duty 
for a period of more than 30 days.
    (B) The family member resides with the member.
    (C) The Director, determines the residence of the reserve component 
member is more than 50 miles, or approximately one hour driving time, 
from the nearest military medical treatment facility that is adequate 
to provide care.
    (D) ``Resides with'' is defined as the TRICARE Prime Remote 
residence address at which the family resides with the activated 
reservist upon activation.
    (4) Enrollment. TRICARE Prime Remote for Active Duty Family Members 
requires enrollment under procedures set forth in paragraph (o) of this 
section or as otherwise established by the Director.
    (5) Health care management requirements under TRICARE Prime Remote 
for Active Duty Family Members. The additional health care management 
requirements applicable to Prime enrollees under paragraph (n) of this 
section are applicable under TRICARE Prime Remote for Active Duty 
Family Members unless the Director determines they are infeasible 
because of the particular remote location. Enrollees will be given 
notice of the applicable management requirements in their remote 
location.
    (6) Cost sharing. Beneficiary cost sharing requirements under 
TRICARE Prime Remote for Active Duty Family Members are the same as 
those under TRICARE Prime under paragraph (m) of this section, except 
that the higher point-of-service option cost sharing and deductible 
shall not apply to routine primary health care services in cases in 
which, because of the remote location, the beneficiary is not assigned 
a primary care manager or the Director determines that care from a 
TRICARE network provider is not available within the

[[Page 45452]]

TRICARE access standards under paragraph (p)(5) of this section. The 
higher point-of-service option cost sharing and deductible shall apply 
to specialty health care services received by any TRICARE Prime Remote 
for Active Duty Family Members enrollee unless an appropriate referral/
preauthorization is obtained as required by paragraph (n) of this 
section under TRICARE Prime. In the case of pharmacy services under 
Sec.  199.21, where the Director determines that no TRICARE network 
retail pharmacy has been established within a reasonable distance of 
the residence of the TRICARE Prime Remote for Active Duty Family 
Members enrollee, cost sharing applicable to TRICARE network retail 
pharmacies will be applicable to all CHAMPUS eligible pharmacies in the 
remote area.
    (h) Resource sharing agreements. Under the TRICARE program, any 
military medical treatment facility (MTF) commander may establish 
resource sharing agreements with the applicable managed care support 
contractor for the purpose of providing for the sharing of resources 
between the two parties. Internal resource sharing and external 
resource sharing agreements are authorized. The provisions of this 
paragraph (h) shall apply to resource sharing agreements under the 
TRICARE program.
    (1) In connection with internal resource sharing agreements, 
beneficiary cost sharing requirements shall be the same as those 
applicable to health care services provided in facilities of the 
uniformed services.
    (2) Under internal resource sharing agreements, the double coverage 
requirements of Sec.  199.8 shall be replaced by the Third Party 
Collection procedures of 32 CFR part 220, to the extent permissible 
under such part. In such a case, payments made to a resource sharing 
agreement provider through the TRICARE managed care support contractor 
shall be deemed to be payments by the MTF concerned.
    (3) Under internal or external resource sharing agreements, the 
commander of the MTF concerned may authorize the provision of services, 
pursuant to the agreement, to Medicare-eligible beneficiaries, if such 
services are not reimbursable by Medicare, and if the commander 
determines that this will promote the most cost-effective provision of 
services under the TRICARE program.
    (4) Under external resource sharing agreements, there is no cost 
sharing applicable to services provided by military facility personnel. 
Cost sharing for non-MTF institutional and related ancillary charges 
shall be as applicable to services provided under TRICARE Prime or 
TRICARE Select, as appropriate.
    (i) General quality assurance, utilization review, and 
preauthorization requirements under the TRICARE program. All quality 
assurance, utilization review, and preauthorization requirements for 
the basic CHAMPUS program, as set forth in this part (see especially 
applicable provisions in Sec. Sec.  199.4 and 199.15), are applicable 
to Prime and Select except as provided in this chapter. Pursuant to an 
agreement between a military medical treatment facility and TRICARE 
managed care support contractor, quality assurance, utilization review, 
and preauthorization requirements and procedures applicable to health 
care services outside the military medical treatment facility may be 
made applicable, in whole or in part, to health care services inside 
the military medical treatment facility.
    (j) Pharmacy services. Pharmacy services under Prime and Select are 
as provided in the Pharmacy Benefits Program (see Sec.  199.21).
    (k) Design of cost sharing structures under TRICARE Prime and 
TRICARE Select--(1) In general. The design of the cost sharing 
structures under TRICARE Prime and TRICARE Select includes several 
major factors: beneficiary category (e.g., active duty family member 
category or retired category, and there are some special rules for 
survivors of active duty deceased sponsors and medically retired 
members and their dependents); date of initial military affiliation 
(i.e., before or on or after January 1, 2018), category of health care 
service received, and network or non-network status of the provider.
    (2) Categories of health care services. This paragraph (k)(2) 
describes the categories of health care services relevant to 
determining copayment amounts.
    (i) Preventive care visits. These are outpatient visits and related 
services described in paragraph (f)(2) of this section. There are no 
cost sharing requirements for preventive care listed under Sec. Sec.  
199.4(e)(28)(i) through (iv) and 199.17(f)(2). Beneficiaries shall not 
be required to pay any portion of the cost of these preventive services 
even if the beneficiary has not satisfied any applicable deductible for 
that year.
    (ii) Primary care outpatient visits. These are outpatient visits, 
not occurring in an ER or urgent care center, with the following 
provider specialties:
    (A) General Practice.
    (B) Family Practice.
    (C) Internal Medicine.
    (D) OB/GYN.
    (E) Pediatrics.
    (F) Physician's Assistant.
    (G) Nurse Practitioner.
    (H) Nurse Midwife.
    (iii) Specialty care outpatient visits. This category applies to 
outpatient care provided by provider specialties other than those 
listed under primary care outpatient visits under paragraph (k)(2)(ii) 
of this section and not specifically included in one of the other 
categories of care (e.g., emergency room visits etc.) under paragraph 
(k)(2) of this section. This category also includes partial 
hospitalization services, intensive outpatient treatment, and opioid 
treatment program services. The per visit fee shall be applied on a per 
day basis on days services are received, with the exception of opioid 
treatment program services reimbursed in accordance with Sec.  
199.14(a)(2)(ix)(A)(3)(i) which per visit fee will apply on a weekly 
basis.
    (iv) Emergency room visits.
    (v) Urgent care center visits.
    (vi) Ambulance services. This is for ground ambulance services.
    (vii) Ambulatory surgery. This is for facility-based outpatient 
ambulatory surgery services.
    (viii) Inpatient hospital admissions.
    (ix) Skilled nursing facility or rehabilitation facility 
admissions. This category includes a residential treatment center, or 
substance use disorder rehabilitation facility residential treatment 
program.
    (x) Durable medical equipment, prosthetic devices, and other 
authorized supplies.
    (xi) Outpatient prescription pharmaceuticals. These are addressed 
in Sec.  199.21.
    (3) Beneficiary categories further subdivided. For purposes of both 
TRICARE Prime and TRICARE Select, enrollment fees and cost sharing by 
beneficiary category (e.g., active duty family member category or 
retired category) are further differentiated between two groups:
    (i) Group A consists of Prime or Select enrollees whose sponsor 
originally enlisted or was appointed in a uniformed service before 
January 1, 2018.
    (ii) Group B consists of Prime or Select enrollees whose sponsor 
originally enlisted or was appointed in a uniformed service on or after 
January 1, 2018.
    (l) Enrollment fees and cost sharing (including deductibles and 
catastrophic cap) amounts. This paragraph (l) provides enrollment fees 
and cost sharing requirements applicable to TRICARE Prime and TRICARE 
Select enrollees.

[[Page 45453]]

    (1) Enrollment fee and cost sharing under TRICARE Prime. (i) For 
Group A enrollees:
    (A) There is no enrollment fee for the active duty family member 
category.
    (B) The retired category enrollment fee in calendar year 2018 is 
equal to the Prime enrollment fee for fiscal year 2017, indexed to 
calendar year 2018 and thereafter in accordance with 10 U.S.C. 1097. 
The Assistant Secretary of Defense (Health Affairs) may exempt 
survivors of active duty deceased sponsors and medically retired 
Uniformed Services members and their dependents from future increases 
in enrollment fees. The Assistant Secretary of Defense (Health Affairs) 
may also waive the enrollment fee requirements for Medicare-eligible 
beneficiaries.
    (C) The cost sharing amounts are established annually in connection 
with the open season enrollment period. An amount is established for 
each category of care identified in paragraph (k)(2) of this section, 
taking into account all applicable statutory provisions, including 10 
U.S.C. chapter 55. The amount for each category of care may not exceed 
the amount for Group B as set forth in 10 U.S.C. 1075a.
    (D) The catastrophic cap is $1,000 for active duty families and 
$3,000 for retired category families.
    (ii) For Group B enrollees, the enrollment fee, catastrophic cap 
and cost sharing amounts are as set forth in 10 U.S.C. 1075a.
    (iii) For both Group A and Group B, for health care services 
obtained by a Prime enrollee but not obtained in accordance with the 
rules and procedures of Prime (e.g. failure to obtain a primary care 
manager referral when such a referral is required or seeing a non-
network provider when Prime rules require use of a network provider and 
one is available) will not be paid under Prime rules but may be covered 
by the point-of-service option. For services obtained under the point-
of-service option, the deductible is $300 per person and $600 per 
family. The beneficiary cost share is 50 percent of the allowable 
charges for inpatient and outpatient care, after the deductible. Point-
of-service charges do not count against the annual catastrophic cap.
    (2) Enrollment fee and cost sharing under TRICARE Select. (i) For 
Group A enrollees:
    (A) The enrollment fee in calendar years 2018 through 2020 is zero 
and the catastrophic cap is as provided in 10 U.S.C. 1079 or 1086. The 
enrollment fee and catastrophic cap in 2021 and thereafter for certain 
beneficiaries in the retired category is as provided in 10 U.S.C. 
1075(e), except the enrollment fee and catastrophic cap adjustment 
shall not apply to survivors of active duty deceased sponsors and 
medically retired Uniformed Services members and their dependents.
    (B) The cost sharing amounts for network care for Group A enrollees 
are calculated for each category of care described in paragraph (k)(2) 
of this section by taking into account all applicable statutory 
provisions, including 10 U.S.C. chapter 55, as if TRICARE Extra and 
Standard programs were still being implemented. When determined 
practicable, including efficiency and effectiveness in administration, 
the amounts established are converted to fixed dollar amounts for each 
category of care for which a fixed dollar amount is established by 10 
U.S.C. 1075. When determined not to be practicable, as in the 
categories of care including ambulatory surgery, inpatient admissions, 
and inpatient skilled nursing/rehabilitation admissions, the calculated 
cost-sharing amounts are not converted to fixed dollar amounts. The 
fixed dollar amount for each category is set prospectively for each 
calendar year as the amount (rounded down to the nearest dollar amount) 
equal to 15% for enrollees in the active duty family beneficiary 
category or 20% for enrollees in the retired beneficiary category of 
the projected average allowable payment amount for each category of 
care during the year, as estimated by the Director. The projected 
average allowable payment amount for primary care (including urgent 
care) and specialty care outpatient appointments include payments for 
ancillary services (e.g., laboratory and radiology services) that are 
provided in connection with the respective outpatient visit. As such, 
there is no separate cost sharing for these ancillary services.
    (C) The cost share for care received from non-network providers is 
as provided in Sec.  199.4.
    (D) The annual deductible amount is as provided in 10 U.S.C. 1079 
or 1086.
    (ii) For Group B enrollees, the enrollment fee, annual deductible 
for services received while in an outpatient status, catastrophic cap 
and cost sharing amounts are as provided in 10 U.S.C. 1075 and as 
consistent with this section.
    (3) Special cost-sharing rules. (A) There is no separate cost-
sharing applicable to ancillary health care services obtained in 
conjunction with an outpatient primary or specialty care visit under 
TRICARE Prime or from network providers under TRICARE Select.
    (B) Cost-sharing for maternity care services shall be determined in 
accordance with Sec.  199.4(e)(16).
    (4) Special transition rule for the last quarter of calendar year 
2017. In order to transition enrollment fees, deductibles, and 
catastrophic caps from a fiscal year basis to a calendar year basis, 
the following special rules apply for the last quarter of calendar year 
2017:
    (A) A Prime enrollee's enrollment fee for the quarter is one-fourth 
of the enrollment fee for fiscal year 2017.
    (B) The deductible amount and the catastrophic cap amount for 
fiscal year 2017 will be applicable to the 15-month period of October 
1, 2016 through December 31, 2017.
    (m) Limit on out-of-pocket costs under TRICARE Prime and TRICARE 
Select. For the purpose of this paragraph (m), out-of-pocket costs 
means all payments required of beneficiaries under paragraph (l) of 
this section, including enrollment fees, deductibles, and cost-sharing 
amounts, with the exception of point-of-service charges. In any case in 
which a family reaches their applicable catastrophic cap, all remaining 
payments that would have been required of the beneficiary under 
paragraph (l) of this section for authorized care, with the exception 
of applicable point-of-service charges pursuant to paragraph 
(l)(1)(iii) of this section, will be paid by the program for the 
remainder of that calendar year.
    (n) Additional health care management requirements under TRICARE 
Prime. Prime has additional, special health care management 
requirements not applicable under TRICARE Select.
    (1) Primary care manager. (i) All active duty members and Prime 
enrollees will be assigned a primary care manager pursuant to a system 
established by the Director, and consistent with the access standards 
in paragraph (p)(5)(i) of this section. The primary care manager may be 
an individual, physician, a group practice, a clinic, a treatment site, 
or other designation. The primary care manager may be part of the MTF 
or the Prime civilian provider network. The enrollee will be given the 
opportunity to register a preference for primary care manager from a 
list of choices provided by the Director. This preference will be 
entered on a TRICARE Prime enrollment form or similar document. 
Preference requests will be considered, but primary care manager 
assignments will be subject to availability under the MTF beneficiary 
category priority system under paragraph (d) of this section and 
subject to other operational requirements. (ii) Prime enrollees who are 
dependents of active duty members in pay grades E-1 through E-4 shall 
have priority over

[[Page 45454]]

other active duty dependents for enrollment with MTF PCMs, subject to 
MTF capacity.
    (2) Referral and preauthorization requirements. (i) Under TRICARE 
Prime there are certain procedures for referral and preauthorization.
    (A) For the purpose of this paragraph (n)(2), referral addresses 
the issue of who will provide authorized health care services. In many 
cases, Prime beneficiaries will be referred by a primary care manager 
to a medical department of an MTF if the type of care needed is 
available at the MTF. In such a case, failure to adhere to that 
referral will result in the care being subject to point-of-service 
charges. In other cases, a referral may be to the civilian provider 
network, and again, point-of-service charges would apply to a failure 
to follow the referral.
    (B) In contrast to referral, preauthorization addresses the issue 
of whether particular services may be covered by TRICARE, including 
whether they appear necessary and appropriate in the context of the 
patient's diagnosis and circumstances. A major purpose of 
preauthorization is to prevent surprises about coverage determinations, 
which are sometimes dependent on particular details regarding the 
patient's condition and circumstances. While TRICARE Prime has referral 
requirements that do not exist for TRICARE Select, TRICARE Select has 
some preauthorization requirements that do not exist for TRICARE Prime.
    (ii) Except as otherwise provided in this paragraph (n)(2), a 
beneficiary enrolled in TRICARE Prime is required to obtain a referral 
for care through a designated primary care manager (or other authorized 
care coordinator) prior to obtaining care under the TRICARE program.
    (iii) There is no referral requirement under paragraph (n)(2)(i) of 
this section in the following circumstances:
    (A) In emergencies;
    (B) For urgent care services for a certain number of visits per 
year (zero to unlimited), with the number specified by the Director and 
notice provided in connection with the open season enrollment period 
preceding the plan year; and
    (C) In any other special circumstances identified by the Director, 
generally with notice provided in connection with the open season 
enrollment period for the plan year.
    (iv) A primary care manager who believes a referral to a specialty 
care provider is medically necessary and appropriate need not obtain 
pre-authorization from the managed care support contractor before 
referring a patient to a network specialty care provider. Such 
preauthorization is only required with respect to a primary care 
manager's referral for:
    (A) Inpatient hospitalization;
    (B) Inpatient care at a skilled nursing facility;
    (C) Inpatient care at a rehabilitation facility; and
    (D) Inpatient care at a residential treatment facility.
    (v) The restrictions in paragraph (n)(2)(iv) of this section on 
preauthorization requirements do not apply to any preauthorization 
requirements that are generally applicable under TRICARE, independent 
of TRICARE Prime referrals, such as:
    (A) Under the Pharmacy Benefits Program under 10 U.S.C. 1074g and 
Sec.  199.21.
    (B) For laboratory and other ancillary services.
    (C) Durable medical equipment.
    (vi) The cost-sharing requirement for a beneficiary enrolled in 
TRICARE Prime who does not obtain a referral for care when it is 
required, including care from a non-network provider, is as provided in 
paragraph (l)(1)(iv) of this section concerning point-of-service care.
    (vii) In the case of care for which preauthorization is not 
required under paragraph (n)(2)(iv) of this section, the Director may 
authorize a managed care support contractor to offer a voluntary pre-
authorization program to enable beneficiaries and providers to confirm 
covered benefit status and/or medical necessity or to understand the 
criteria that will be used by the managed care support contractor to 
adjudicate the claim associated with the proposed care. A network 
provider may not be required to use such a program with respect to a 
referral.
    (3) Restrictions on the use of providers. The requirements of this 
paragraph (n)(3) shall be applicable to health care utilization under 
TRICARE Prime, except in cases of emergency care and under point-of-
service option (see paragraph (n)(4) of this section).
    (i) Prime enrollees must obtain all primary health care from the 
primary care manager or from another provider to which the enrollee is 
referred by the primary care manager or otherwise authorized.
    (ii) For any necessary specialty care and non-emergent inpatient 
care, the primary care manager or other authorized individual will 
assist in making an appropriate referral.
    (iii) Though referrals for specialty care are generally the 
responsibility of the primary care managers, subject to discretion 
exercised by the TRICARE Regional Directors, and established in 
regional policy or memoranda of understanding, specialist providers may 
be permitted to refer patients for additional specialty consultation 
appointment services within the TRICARE contractor's network without 
prior authorization by primary care managers.
    (iv) The following procedures will apply to health care referrals 
under TRICARE Prime:
    (A) The first priority for referral for specialty care or inpatient 
care will be to the local MTF (or to any other MTF in which catchment 
area the enrollee resides).
    (B) If the local MTF(s) are unavailable for the services needed, 
but there is another MTF at which the needed services can be provided, 
the enrollee may be required to obtain the services at that MTF. 
However, this requirement will only apply to the extent that the 
enrollee was informed at the time of (or prior to) enrollment that 
mandatory referrals might be made to the MTF involved for the service 
involved.
    (C) If the needed services are available within civilian preferred 
provider network serving the area, the enrollee may be required to 
obtain the services from a provider within the network. Subject to 
availability, the enrollee will have the freedom to choose a provider 
from among those in the network.
    (D) If the needed services are not available within the civilian 
preferred provider network serving the area, the enrollee may be 
required to obtain the services from a designated civilian provider 
outside the area. However, this requirement will only apply to the 
extent that the enrollee was informed at the time of (or prior to) 
enrollment that mandatory referrals might be made to the provider 
involved for the service involved (with the provider and service either 
identified specifically or in connection with some appropriate 
classification).
    (E) In cases in which the needed health care services cannot be 
provided pursuant to the procedures identified in paragraphs 
(n)(3)(iv)(A) through (D) of this section, the enrollee will receive 
authorization to obtain services from a TRICARE-authorized civilian 
provider(s) of the enrollee's choice not affiliated with the civilian 
preferred provider network.
    (iv) When Prime is operating in non-catchment areas, the 
requirements in paragraphs (n)(3)(iv)(B) through (E) of this section 
shall apply.
    (4) Point-of-service option. TRICARE Prime enrollees retain the 
freedom to obtain services from civilian providers

[[Page 45455]]

on a point-of service basis. Any health care services obtained by a 
Prime enrollee, but not obtained in accordance with the rules and 
procedures of Prime, will be covered by the point-of-service option. In 
such cases, all requirements applicable to health benefits under Sec.  
199.4 shall apply, except that there shall be higher deductible and 
cost sharing requirements (as set forth in paragraph (l)(1)(iii)) of 
this section). However, Prime rules may cover such services if the 
enrollee did not know and could not reasonably have been expected to 
know that the services were not obtained in accordance with the 
utilization management rules and procedures of Prime.
    (5) Prime travel benefit. In accordance with guidelines issues by 
the Assistant Secretary of Defense (Health Affairs), certain travel 
expenses may be reimbursed when a TRICARE Prime enrollee is referred by 
the primary care manager for medically necessary specialty care more 
than 100 miles away from the primary care manager's office. Such 
guidelines shall be consistent with appropriate provisions of generally 
applicable Department of Defense rules and procedures governing travel 
expenses.
    (o) TRICARE program enrollment procedures. There are certain 
requirements pertaining to procedures for enrollment in TRICARE Prime, 
TRICARE Select, and TRICARE Prime Remote for Active Duty Family 
Members. (These procedures do not apply to active duty members, whose 
enrollment is mandatory and automatic.)
    (1) Annual open season enrollment. (i) As a general rule, 
enrollment (or a modification to a previous enrollment) must occur 
during the open season period prior to the plan year, which is on a 
calendar year basis. The open season enrollment period will be of at 
least 30 calendar days duration. An enrollment choice will be 
applicable for the plan year.
    (ii) Open season enrollment procedures may include automatic re-
enrollment in the same plan for the next plan year for enrollees or 
sponsors that will occur in the event the enrollee does not take other 
action during the open season period.
    (2) Exceptions to the calendar year enrollment process. The 
Director will identify certain qualifying events that may be the basis 
for a change in enrollment status during a plan year, such as a change 
in eligibility status, marriage, divorce, birth of a new family member, 
relocation, loss of other health insurance, or other events. In the 
case of such an event, a beneficiary eligible to enroll in a plan may 
newly enroll, dis-enroll, or modify a previous enrollment during the 
plan year. Initial payment of the applicable enrollment fee shall be 
collected for new enrollments in accordance with established 
procedures. Any applicable enrollment fee will be pro-rated. A 
beneficiary who dis-enrolls without enrolling at the same time in 
another plan is not eligible to enroll in a plan later in the same plan 
year unless there is another qualifying event. A beneficiary who is 
dis-enrolled for failure to pay a required enrollment fee installment 
is not eligible to re-enroll in a plan later in the same plan year 
unless there is another qualifying event. Generally, the effective date 
of coverage will coincide with the date of the qualifying event.
    (3) Installment payments of enrollment fee. The Director will 
establish procedures for installment payments of enrollment fees. (4) 
Effect of failure to enroll. Beneficiaries eligible to enroll in Prime 
or Select and who do not enroll will no longer have coverage under the 
TRICARE program until the next annual open season enrollment or they 
have a qualifying event, except that they do not lose any statutory 
eligibility for space-available care in military medical treatment 
facilities. There is a limited grace period exception to this 
enrollment requirement for calendar year 2018, as provided in section 
701(d)(3) of the National Defense Authorization Act for Fiscal Year 
2017.
    (5) Automatic enrollment for certain dependents. Under 10 U.S.C. 
1097a, in the case of dependents of active duty members in the grade of 
E-1 to E-4, such dependents who reside in a catchment area of a 
military treatment facility shall be enrolled in TRICARE Prime. The 
Director may provide for the automatic enrollment in TRICARE Prime for 
such dependents of active duty members in the grade of E-5 and higher. 
In any case of automatic enrollment under this paragraph (o)(5), the 
member will be provided written notice and the automatic enrollment may 
be cancelled at the election of the member.
    (6) Grace periods. The Director may make provisions for grace 
periods for enrollment-related actions to facilitate effective 
operation of the enrollment program.
    (p) Civilian preferred provider networks. A major feature of the 
TRICARE program is the civilian preferred provider network.
    (1) Status of network providers. Providers in the preferred 
provider network are not employees or agents of the Department of 
Defense or the United States Government. Although network providers 
must follow numerous rules and procedures of the TRICARE program, on 
matters of professional judgment and professional practice, the network 
provider is independent and not operating under the direction and 
control of the Department of Defense.
    (2) Utilization management policies. Preferred providers are 
required to follow the utilization management policies and procedures 
of the TRICARE program. These policies and procedures are part of 
discretionary judgments by the Department of Defense regarding the 
methods of delivering and financing health care services that will best 
achieve health and economic policy objectives.
    (3) Quality assurance requirements. A number of quality assurance 
requirements and procedures are applicable to preferred network 
providers. These are for the purpose of assuring that the health care 
services paid for with government funds meet the standards called for 
in the contract and provider agreement.
    (4) Provider qualifications. All preferred providers must meet the 
following qualifications:
    (i) They must be TRICARE-authorized providers and TRICARE- 
participating providers. In addition, a network provider may not 
require payment from the beneficiary for any excluded or excludable 
services that the beneficiary received from the network provider (i.e., 
the beneficiary will be held harmless) except as follows:
    (A) If the beneficiary did not inform the provider that he or she 
was a TRICARE beneficiary, the provider may bill the beneficiary for 
services provided.
    (B) If the beneficiary was informed in writing that the specific 
services were excluded or excludable from TRICARE coverage and the 
beneficiary agreed in writing, in advance of the services being 
provided, to pay for the services, the provider may bill the 
beneficiary.
    (ii) All physicians in the preferred provider network must have 
staff privileges in a hospital accredited by The Joint Commission (TJC) 
or other accrediting body determined by the Director. This requirement 
may be waived in any case in which a physician's practice does not 
include the need for admitting privileges in such a hospital, or in 
locations where no accredited facility exists. However, in any case in 
which the requirement is waived, the physician must comply with 
alternative qualification standards as are established by the Director.
    (iii) All preferred providers must agree to follow all quality 
assurance, utilization management, and patient

[[Page 45456]]

referral procedures established pursuant to this section, to make 
available to designated DoD utilization management or quality 
monitoring contractors medical records and other pertinent records, and 
to authorize the release of information to MTF Commanders regarding 
such quality assurance and utilization management activities.
    (iv) All preferred network providers must be Medicare participating 
providers, unless this requirement is waived based on extraordinary 
circumstances. This requirement that a provider be a Medicare 
participating provider does not apply to providers who not eligible to 
be participating providers under Medicare.
    (v) The network provider must be available to all TRICARE 
beneficiaries.
    (vi) The provider must agree to accept the same payment rates 
negotiated for Prime enrollees for any person whose care is 
reimbursable by the Department of Defense, including, for example, 
Select participants, supplemental care cases, and beneficiaries from 
outside the area.
    (vii) All preferred providers must meet all other qualification 
requirements, and agree to comply with all other rules and procedures 
established for the preferred provider network.
    (viii) In locations where TRICARE Prime is not available, a TRICARE 
provider network will, to the extent practicable, be available for 
TRICARE Select enrollees. In these locations, the minimal requirements 
for network participation are those set forth in paragraph (p)(4)(i) of 
this section. Other requirements of this paragraph (p) will apply 
unless waived by the Director.
    (5) Access standards. Preferred provider networks will have 
attributes of size, composition, mix of providers and geographical 
distribution so that the networks, coupled with the MTF capabilities 
(when applicable), can adequately address the health care needs of the 
enrollees. In the event that a Prime enrollee seeks to obtain from the 
managed care support contractor an appointment for care but is not 
offered an appointment within the access time standards from a network 
provider, the enrollee will be authorized to receive care from a non-
network provider without incurring the additional fees associated with 
point-of-service care. The following are the access standards:
    (i) Under normal circumstances, enrollee travel time may not exceed 
30 minutes from home to primary care delivery site unless a longer time 
is necessary because of the absence of providers (including providers 
not part of the network) in the area.
    (ii) The wait time for an appointment for a well-patient visit or a 
specialty care referral shall not exceed four weeks; for a routine 
visit, the wait time for an appointment shall not exceed one week; and 
for an urgent care visit the wait time for an appointment shall 
generally not exceed 24 hours.
    (iii) Emergency services shall be available and accessible to 
handle emergencies (and urgent care visits if not available from other 
primary care providers pursuant to paragraph (p)(5)(ii) of this 
section), within the service area 24 hours a day, seven days a week.
    (iv) The network shall include a sufficient number and mix of board 
certified specialists to meet reasonably the anticipated needs of 
enrollees. Travel time for specialty care shall not exceed one hour 
under normal circumstances, unless a longer time is necessary because 
of the absence of providers (including providers not part of the 
network) in the area. This requirement does not apply under the 
Specialized Treatment Services Program.
    (v) Office waiting times in nonemergency circumstances shall not 
exceed 30 minutes, except when emergency care is being provided to 
patients, and the normal schedule is disrupted.
    (6) Special reimbursement methods for network providers. The 
Director, may establish, for preferred provider networks, reimbursement 
rates and methods different from those established pursuant to Sec.  
199.14. Such provisions may be expressed in terms of percentage 
discounts off CHAMPUS allowable amounts, or in other terms. In 
circumstances in which payments are based on hospital-specific rates 
(or other rates specific to particular institutional providers), 
special reimbursement methods may permit payments based on discounts 
off national or regional prevailing payment levels, even if higher than 
particular institution-specific payment rates.
    (q) Preferred provider network establishment. (1) The any qualified 
provider method may be used to establish a civilian preferred provider 
network. Under this method, any TRICARE-authorized provider that meets 
the qualification standards established by the Director, or designee, 
may become a part of the preferred provider network. Such standards 
must be publicly announced and uniformly applied. Also under this 
method, any provider who meets all applicable qualification standards 
may not be excluded from the preferred provider network. Qualifications 
include:
    (i) The provider must meet all applicable requirements in paragraph 
(p)(4) of this section.
    (ii) The provider must agree to follow all quality assurance and 
utilization management procedures established pursuant to this section.
    (iii) The provider must be a participating provider under TRICARE 
for all claims.
    (iv) The provider must meet all other qualification requirements, 
and agree to all other rules and procedures, that are established, 
publicly announced, and uniformly applies by the Director (or other 
authorized official).
    (v) The provider must sign a preferred provider network agreement 
covering all applicable requirements. Such agreements will be for a 
duration of one year, are renewable, and may be canceled by the 
provider or the Director (or other authorized official) upon 
appropriate notice to the other party. The Director shall establish an 
agreement model or other guidelines to promote uniformity in the 
agreements.
    (2) In addition to the above requirements, the Director, or 
designee, may establish additional categories of preferred providers of 
high quality/high value that require additional qualifications.
    (r) General fraud, abuse, and conflict of interest requirements 
under TRICARE program. All fraud, abuse, and conflict of interest 
requirements for the basic CHAMPUS program, as set forth in this part 
(see especially applicable provisions of Sec.  199.9) are applicable to 
the TRICARE program.
    (s) [Reserved]
    (t) Inclusion of Department of Veterans Affairs Medical Centers in 
TRICARE networks. TRICARE preferred provider networks may include 
Department of Veterans Affairs health facilities pursuant to 
arrangements, made with the approval of the Assistant Secretary of 
Defense (Health Affairs), between those centers and the Director, or 
designated TRICARE contractor.
    (u) Care provided outside the United States. The TRICARE program is 
not automatically implemented in all respects outside the United 
States. This paragraph (u) sets forth the provisions of this section 
applicable to care received outside the United States under the 
following TRICARE health plans.
    (1) TRICARE Prime. The Director may, in conjunction with 
implementation of the TRICARE program, authorize a special Prime 
program for command sponsored dependents of active duty members who 
accompany the members in their assignments in foreign countries. Under 
this special program, a preferred provider network may be

[[Page 45457]]

established through contracts or agreements with selected health care 
providers. Under the network, Prime covered services will be provided 
to the enrolled covered dependents subject to applicable Prime 
deductibles, copayments, and point-of-service charges. To the extent 
practicable, rules and procedures applicable to TRICARE Prime under 
this section shall apply unless specific exemptions are granted in 
writing by the Director. The use of this authority by the Director for 
any particular geographical area will be published on the primary 
publicly available Internet Web site of the Department and on the 
publicly available Internet Web site of the managed care support 
contractor that has established the provider network under the TRICARE 
program. Published information will include a description of the 
preferred provider network program and other pertinent information. The 
Director shall also issue policies, instructions, and guidelines 
necessary to implement this special program.
    (2) TRICARE Select. The TRICARE Select option shall be available 
outside the United States except that a preferred provider network of 
providers shall only be established in areas where the Director 
determines that it is economically in the best interest of the 
Department of Defense. In such a case, the Director shall establish a 
preferred provider network through contracts or agreements with 
selected health care providers for eligible beneficiaries to receive 
covered benefits subject to the enrollment and cost-sharing amounts 
applicable to the specific category of beneficiary. When an eligible 
beneficiary, other than a TRICARE for Life beneficiary, receives 
covered services from an authorized TRICARE non-network provider, 
including in areas where a preferred provider network has not been 
established by the Director, the beneficiary shall be subject to cost-
sharing amounts applicable to out-of-network care. To the extent 
practicable, rules and procedures applicable to TRICARE Select under 
this section shall apply unless specific exemptions are granted in 
writing by the Director. The use of this authority by the Director to 
establish a TRICARE preferred provider network for any particular 
geographical area will be published on the primary publicly available 
Internet Web site of the Department and on the publicly available 
Internet Web site of the managed care support contractor that has 
established the provider network under the TRICARE program. Published 
information will include a description of the preferred provider 
network program and other pertinent information. The Director shall 
also issue policies, instructions, and guidelines necessary to 
implement this special program.
    (3) TRICARE for Life. The TRICARE for Life (TFL) option shall be 
available outside the United States. Eligible TFL beneficiaries may 
receive covered services and supplies authorized under Sec.  199.4, 
subject to the applicable catastrophic cap, deductibles and cost-shares 
under Sec.  199.4, whether received from a network provider or any 
authorized TRICARE provider not in a preferred provider network. 
However, if a TFL beneficiary receives covered services from a PPN 
provider, the beneficiary's out-of-pocket costs will generally be 
lower.
    (v) Administration of the TRICARE program in the state of Alaska. 
In view of the unique geographical and environmental characteristics 
impacting the delivery of health care in the state of Alaska, 
administration of the TRICARE program in the state of Alaska will not 
include financial underwriting of the delivery of health care by a 
TRICARE contractor. All other provisions of this section shall apply to 
administration of the TRICARE program in the state of Alaska as they 
apply to the other 49 states and the District of Columbia.
    (w) Administrative procedures. The Assistant Secretary of Defense 
(Health Affairs), the Director, and MTF Commanders (or other authorized 
officials) are authorized to establish administrative requirements and 
procedures, consistent with this section, this part, and other 
applicable DoD Directives or Instructions, for the implementation and 
operation of the TRICARE program.


Sec.  199.18  [Removed and Reserved]

0
10. Section 199.18 is removed and reserved.

0
11. Section 199.20 is amended by:
0
a. Revising paragraph (a);
0
b. Removing the words ``TRICARE Standard program'' and adding in their 
place the words ``TRICARE Select program'' in paragraph (c);
0
c. Revising paragraphs (d)(7)(i)(D) introductory text, (d)(7)(i)(D)(1) 
and (2), and (e)(1) and (3);
0
d. Removing the words ``TRICARE Standard'' and adding in their place 
the words ``TRICARE Select program'' in paragraphs (f) through (n);
0
e. Removing and reserving paragraph (o);
0
f. Revising paragraph (p)(1);
0
g. Removing the semicolon at the end of paragraph (p)(2)(iii) and 
adding ``; and'' in its place;
0
h. Revising paragraph (p)(2)(iv); and
0
i. Removing paragraph (p)(2)(v).
    The revisions and additions read as follows:


Sec.  199.20  Continued Health Care Benefit Program (CHCBP).

    (a) Purpose. The CHCBP is a premium-based temporary health care 
coverage program, authorized by 10 U.S.C. 1078a, and available to 
individuals who meet the eligibility and enrollment criteria as set 
forth in paragraph (d)(1) of this section. The CHCBP is not part of the 
TRICARE program. However, as set forth in this section, it functions 
under similar rules and procedures to the TRICARE Select program. 
Because the purpose of the CHCBP is to provide a continuation health 
care benefit for Department of Defense and the other uniformed services 
beneficiaries losing eligibility, it will be administered so that it 
appears, to the maximum extent practicable, to be part of the TRICARE 
Select program. Medical coverage under this program will be the same as 
the benefits payable under the TRICARE Select program. There is a cost 
for enrollment to the CHCBP and these premium costs must be paid by 
CHCBP enrollees before any care may be cost shared.
* * * * *
    (d) * * *
    (7) * * *
    (i) * * *
    (D) In the case of a former spouse of a member or former member 
(other than the former spouse whose marriage was dissolved after the 
separation of the member from the service unless such separation was by 
retirement), the period of coverage under the CHCBP is unlimited, if 
former spouse:
    (1) Has not remarried before age of 55 after the marriage to the 
member or former member was dissolved; and
    (2) Was eligible for TRICARE as a dependent or enrolled in CHCBP at 
any time during the 18 month period before the date of the divorce, 
dissolution, or annulment; and
* * * * *
    (e) * * *
    (1) In general. Except as provided in paragraph (e)(2) of this 
section, the provisions of Sec.  199.4 shall apply to the CHCBP as they 
do to TRICARE Select under Sec.  199.17.
* * * * *
    (3) Beneficiary liability. For purposes of CHCBP coverage, the 
beneficiary deductible, catastrophic cap and cost

[[Page 45458]]

share provisions of the TRICARE Select plan applicable to Group B 
beneficiaries under Sec.  199.17(l)(2)(ii) shall apply based on the 
category of beneficiary (e.g., Active Duty Family Member or Retiree 
Family) to which the CHCBP enrollee last belonged, except that for 
separating active duty members, amounts applicable to TRICARE Select 
Active Duty Family Members shall apply. The premium under paragraph (q) 
of this section applies instead of any TRICARE Select plan enrollment 
fee under Sec.  199.17.
* * * * *
    (p) * * *
    (1) In general. Special programs established under this part that 
are not part of the TRICARE Select program are not, unless specifically 
provided in this section, available to participants in the CHCBP.
    (2) * * *
    (iv) The TRICARE Prime Program under Sec.  199.17.
* * * * *

0
12. Section 199.21 is amended by:
0
a. Revising paragraphs (i)(2) introductory text and (i)(2)(i) through 
(iv);
0
b. Removing and reserving paragraph (i)(2)(v); and
0
c. Revising paragraphs (i)(2)(vi) through (viii) and (i)(2)(x)(A).
    The revisions read as follows:


Sec.  199.21  TRICARE Pharmacy Benefits Program.

* * * * *
    (i) * * *
    (2) Cost-sharing amounts. Active duty members of the uniformed 
services do not pay cost-shares or annual deductibles. For other 
categories of beneficiaries, after applicable annual deductibles are 
met, cost-sharing amounts prior to October 1, 2016, are set forth in 
this paragraph (i)(2).
    (i) For pharmaceutical agents obtained from a military treatment 
facility, there is no cost-sharing or annual deductible.
    (ii) For pharmaceutical agents obtained from a retail network 
pharmacy there is a:
    (A) $24.00 cost-share per prescription required for up to a 30-day 
supply of a formulary pharmaceutical agent.
    (B) $10.00 cost-share per prescription for up to a 30-day supply of 
a generic pharmaceutical agent.
    (C) $0.00 cost-share for vaccines/immunizations authorized as 
preventive care for eligible beneficiaries.
    (iii) For formulary and generic pharmaceutical agents obtained from 
a retail non-network pharmacy, except as provided in paragraph 
(i)(2)(vi) of this section, there is a 20 percent or $20.00 cost-share 
(whichever is greater) per prescription for up to a 30-day supply of 
the pharmaceutical agent.
    (iv) For pharmaceutical agents obtained under the TRICARE mail-
order program there is a:
    (A) $20 cost-share per prescription for up to a 90-day supply of a 
formulary pharmaceutical agent.
    (B) $0.00 cost-share for up to a 90-day supply of a generic 
pharmaceutical agent.
    (C) $49.00 cost-share for up to a 90-day supply of a non-formulary 
pharmaceutical agent.
    (D) $0.00 cost-share for smoking cessation pharmaceutical agents 
covered under the smoking cessation program.
* * * * *
    (vi) For TRICARE Prime beneficiaries there is no annual deductible 
applicable for pharmaceutical agents obtained from retail network 
pharmacies or the TRICARE mail-order program. However, for TRICARE 
Prime beneficiaries who obtain formulary or generic pharmaceutical 
agents from retail non-network pharmacies, an enrollment year 
deductible of $300 per person and $600 per family must be met after 
which there is a beneficiary cost-share of 50 percent per prescription 
for up to a 30-day supply of the pharmaceutical agent.
    (vii) For TRICARE Select beneficiaries the annual deductible which 
must be met before the cost-sharing amounts for pharmaceutical agents 
in paragraph (i)(2) of this section are applicable is as provided for 
each category of TRICARE Select enrollee in Sec.  199.17(l)(2).
    (viii) For TRICARE beneficiaries not otherwise qualified to enroll 
in TRICARE Prime or Select, the annual deductible which must be met 
before the cost-sharing amounts for pharmaceutical agents in paragraph 
(i)(2) of this section are applicable is as provided in Sec.  199.4(f).
* * * * *
    (x) * * *
    (A) Beginning October 1, 2016, the amounts specified in this 
paragraph (i)(2) shall be increased annually by the percentage increase 
in the cost-of-living adjustment by which retired pay is increased 
under 10 U.S.C. 1401a for the year. If the amount of the increase is 
equal to or greater than 50 cents, the amount of the increase shall be 
rounded to the nearest multiple of $1. If the amount of the increase is 
less than 50 cents, the increase shall not be made for that year, but 
shall be carried over to, and accumulated with, the amount of the 
increase for the subsequent year or years and made when the aggregate 
amount of increases for a year is equal to or greater than 50 cents.
* * * * *

0
13. In Sec.  199.22, paragraph (a) is revised to read as follows:


Sec.  199.22  TRICARE Retiree Dental Program (TRDP).

    (a) Establishment. The TRDP is a premium based indemnity dental 
insurance coverage program that will be available to certain retirees 
and their surviving spouses, their dependents, and certain other 
beneficiaries, as specified in paragraph (d) of this section. The TRDP 
is authorized by 10 U.S.C. 1076c.
    (1) The Director will, except as authorized in paragraph (a)(2) of 
this section, make available a premium based indemnity dental insurance 
plan for eligible TRDP beneficiaries specified in paragraph (d) of this 
section consistent with the provisions of this section.
    (2) The TRDP premium based indemnity dental insurance program under 
paragraph (a) of this section may be provided by allowing eligible 
beneficiaries specified in paragraph (d) of this section to enroll in 
an insurance plan under chapter 89A of title 5, United States Code that 
provides benefits similar to those benefits provided under paragraph 
(f) of this section. Such enrollment shall be authorized pursuant to an 
agreement entered into between the Department of Defense and the Office 
of Personnel Management which agreement, in the event of any 
inconsistency, shall take precedence over provisions in this section.
* * * * *

0
14. Section 199.24 is amended by revising paragraphs (a) introductory 
text, (a)(4)(i) heading, (a)(4)(i)(A), (a)(4)(iv), (c) introductory 
text, (d) introductory text, (d)(1)(ii) and (iii), (d)(2) and (3), (f), 
and (g)(1) to read as follows:


Sec.  199.24  TRICARE Reserve Select.

    (a) Establishment. TRICARE Reserve Select offers the TRICARE Select 
self-managed, preferred-provider network option under Sec.  199.17 to 
qualified members of the Selected Reserve, their immediate family 
members, and qualified survivors under this section.
* * * * *
    (4) * * *
    (i) TRICARE Select rules applicable. (A) Unless specified in this 
section or otherwise prescribed by the Director, provisions of TRICARE 
Select under Sec.  199.17 apply to TRICARE Reserve Select.
* * * * *
    (iv) Benefits. When their coverage becomes effective, TRICARE 
Reserve

[[Page 45459]]

Select beneficiaries receive the TRICARE Select benefit including 
access to military treatment facility services and pharmacies, as 
described in Sec. Sec.  199.17 and 199.21. TRICARE Reserve Select 
coverage features the deductible, catastrophic cap and cost share 
provisions of the TRICARE Select plan applicable to Group B active duty 
family members under Sec.  199.17(l)(2)(ii) for both the member and the 
member's covered family members; however, the TRICARE Reserve Select 
premium under paragraph (c) of this section applies instead of any 
TRICARE Select plan enrollment fee under Sec.  199.17. Both the member 
and the member's covered family members are provided access priority 
for care in military treatment facilities on the same basis as active 
duty service members' dependents who are not enrolled in TRICARE Prime 
as described in Sec.  199.17(d)(1)(i)(D).
* * * * *
    (c) TRICARE Reserve Select premiums. Members are charge premiums 
for coverage under TRICARE Reserve Select that represent 28 percent of 
the total annual premium amount that the Director determines on an 
appropriate actuarial basis as being appropriate for coverage under the 
TRICARE Select benefit for the TRICARE Reserve Select eligible 
population. Premiums are to be paid monthly, except as otherwise 
provided through administrative implementation, pursuant to procedures 
established by the Director. The monthly rate for each month of a 
calendar year is one-twelfth of the annual rate for that calendar year.
* * * * *
    (d) Procedures. The Director may establish procedures for the 
following.
    (1) * * *
    (ii) Qualifying event. Procedures for qualifying events in TRICARE 
Select plans under Sec.  199.17(o) shall apply to TRICARE Reserve 
Select coverage. Additionally, the Director may identify other events 
unique to needs of the Reserve Components as qualifying events.
    (iii) Enrollment. Procedures for enrollment in TRICARE Select plans 
under Sec.  199.17(o) shall apply to TRICARE Reserve Select enrollment. 
Generally, the effective date of coverage will coincide with the first 
day of a month unless enrollment is due to a qualifying event and a 
different date on or after the qualifying event is required to prevent 
a lapse in health care coverage.
* * * * *
    (2) Termination. Termination of coverage for the TRS member/
survivor will result in termination of coverage for the member's/
survivor's family members in TRICARE Reserve Select. Procedures may be 
established for coverage to be terminated as follows.
    (i) Coverage shall terminate when members or survivors no longer 
qualify for TRICARE Reserve Select as specified in paragraph (b) of 
this section, with one exception. If a member is involuntarily 
separated from the Selected Reserve under other than adverse 
conditions, as characterized by the Secretary concerned, and is covered 
by TRICARE Reserve Select on the last day of his or her membership in 
the Selected Reserve, then TRICARE Reserve Select coverage may 
terminate up to 180 days after the date on which the member was 
separated from the Selected Reserve. This applies regardless of type of 
coverage. This exception expires December 31, 2018.
    (ii) Coverage may terminate for members, former members, and 
survivors who gain coverage under another TRICARE program.
    (iii) In accordance with the provisions of Sec.  199.17(o)(2) 
coverage terminates for members/survivors who fail to make premium 
payments in accordance with established procedures.
    (iv) Coverage may be terminated for members/survivors upon request 
at any time by submitting a completed request in the appropriate format 
in accordance with established procedures.
    (3) Re-enrollment following termination. Absent a new qualifying 
event, members/survivors (subject to paragraph (d)(1)(iv) of this 
section) are not eligible to re-enroll in TRICARE Reserve Select until 
the next annual open season.
* * * * *
    (f) Administration. The Director may establish other rules and 
procedures for the effective administration of TRICARE Reserve Select, 
and may authorize exceptions to requirements of this section, if 
permitted by law.
    (g) * * *
    (1) Coverage. This term means the medical benefits covered under 
the TRICARE Select program as further outlined in Sec.  199.17 whether 
delivered in military treatment facilities or purchased from civilian 
sources.
* * * * *

0
15. Section 199.25 is amended by revising paragraphs (a) introductory 
text, (a)(4)(i) heading, (a)(4)(i)(A), (a)(4)(iv), (c) introductory 
text, (d) introductory text, (d)(1)(ii) and (iii), (d)(2) and (3), (f), 
and (g)(1) to read as follows:


Sec.  199.25  TRICARE Retired Reserve.

    (a) Establishment. TRICARE Retired Reserve offers the TRICARE 
Select self-managed, preferred-provider network option under Sec.  
199.17 to qualified members of the Retired Reserve, their immediate 
family members, and qualified survivors under this section.
* * * * *
    (4) * * *
    (i) TRICARE Select rules applicable. (A) Unless specified in this 
section or otherwise prescribed by the ASD (HA), provisions of TRICARE 
Select under Sec.  199.17 apply to TRICARE Retired Reserve.
* * * * *
    (iv) Benefits. When their coverage becomes effective, TRICARE 
Retired Reserve beneficiaries receive the TRICARE Select benefit 
including access to military treatment facilities on a space available 
basis and pharmacies, as described in Sec.  199.17. TRICARE Retired 
Reserve coverage features the deductible, cost sharing, and 
catastrophic cap provisions of the TRICARE Select plan applicable to 
Group B retired members and dependents of retired members under Sec.  
199.17(l)(2)(ii); however, the TRICARE Reserve Select premium under 
paragraph (c) of this section applies instead of any TRICARE Select 
plan enrollment fee under Sec.  199.17. Both the member and the 
member's covered family members are provided access priority for care 
in military treatment facilities on the same basis as retired members 
and their dependents who are not enrolled in TRICARE Prime as described 
in Sec.  199.17(d)(1)(i)(E).
* * * * *
    (c) TRICARE Retired Reserve premiums. Members are charged for 
coverage under TRICARE Retired Reserve that represent the full cost of 
the program as determined by the Director utilizing an appropriate 
actuarial basis for the provision of the benefits provided under the 
TRICARE Select program for the TRICARE Retired Reserve eligible 
beneficiary population. Premiums are to be paid monthly, except as 
otherwise provided through administrative implementation, pursuant to 
procedures established by the Director. The monthly rate for each month 
of a calendar year is one-twelfth of the annual rate for that calendar 
year.
* * * * *
    (d) Procedures. The Director may establish procedures for the 
following.
    (1) * * *
    (ii) Qualifying event. Procedures for qualifying events in TRICARE 
Select plans under Sec.  199.17(o) shall apply to TRICARE Retired 
Reserve coverage.
    (iii) Enrollment. Procedures for enrollment in TRICARE Select plans 
under Sec.  199.17(o) shall apply to

[[Page 45460]]

TRICARE Retired Reserve enrollment. Generally, the effective date of 
coverage will coincide with the first day of a month unless enrollment 
is due to a qualifying event and a different date on or after the 
qualifying event is required to prevent a lapse in health care 
coverage.
* * * * *
    (2) Termination. Termination of coverage for the TRR member/
survivor will result in termination of coverage for the member's/
survivor's family members in TRICARE Retired Reserve. Procedures may be 
established for coverage to be terminated as follows.
    (i) Coverage shall terminate when members or survivors no longer 
qualify for TRICARE Retired Reserve as specified in paragraph (c) of 
this section. For purposes of this section, the member or their 
survivor no longer qualifies for TRICARE Retired Reserve when the 
member has been eligible for coverage in a health benefits plan under 
Chapter 89 of Title 5, U.S.C. for more than 60 days. Further, coverage 
shall terminate when the Retired Reserve member attains the age of 60 
or, if survivor coverage is in effect, when the deceased Retired 
Reserve member would have attained the age of 60.
    (ii) Coverage may terminate for members, former members, and 
survivors who gain coverage under another TRICARE program.
    (iii) In accordance with the provisions of Sec.  199.17(o)(2) 
coverage terminates for members/survivors who fail to make premium 
payments in accordance with established procedures.
    (iv) Coverage may be terminated for members/survivors upon request 
at any time by submitting a completed request in the appropriate format 
in accordance with established procedures.
    (3) Re-enrollment following termination. Absent a new qualifying 
event, members/survivors are not eligible to re-enroll in TRICARE 
Retired Reserve until the next annual open season.
* * * * *
    (f) Administration. The Director may establish other rules and 
procedures for the effective administration of TRICARE Retired Reserve, 
and may authorize exceptions to requirements of this section, if 
permitted by law.
    (g) * * *
    (1) Coverage. This term means the medical benefits covered under 
the TRICARE Select program as further outlined in Sec.  199.17 whether 
delivered in military treatment facilities or purchased from civilian 
sources.
* * * * *

0
16. Section 199.26 is amended by:
0
a. Revising paragraphs (a) introductory text, (a)(4)(i)(C), 
(a)(4)(i)(D) introductory text, and (a)(4)(ii) and (iv);
0
b. Removing paragraph (a)(4)(v);
0
c. Revising paragraphs (c) introductory text, (d) introductory text, 
and (d)(1)(ii);
0
d. Removing paragraph (d)(1)(iii);
0
e. Revising paragraphs (d)(2) introductory text, (d)(2)(v), (vi), and 
(vii), and (f); and
0
f. Removing paragraph (g).
    The revisions read as follows:


Sec.  199.26  TRICARE Young Adult.

    (a) Establishment. The TRICARE Young Adult (TYA) program offers 
options of medical benefits provided under the TRICARE program to 
qualified unmarried adult children of TRICARE-eligible uniformed 
service sponsors who do not otherwise have eligibility for medical 
coverage under a TRICARE program at age 21 (23 if enrolled in a full-
time course of study at an approved institution of higher learning, and 
the sponsor provides over 50 percent of the student's financial 
support), and are under age 26.
* * * * *
    (4) * * *
    (i) * * *
    (C) TRICARE Select is available to all TYA-eligible young adult 
dependents.
    (D) TRICARE Prime is available to TYA-eligible young adult 
dependents, provided that TRICARE Prime (including the Uniformed 
Services Family Health Plan) is available in the geographic location 
where the TYA enrollee resides. TYA-eligible young adults are:
* * * * *
    (ii) Premiums. TYA coverage is a premium based program that an 
eligible young adult dependent may purchase. There is only individual 
coverage, and a premium shall be charged for each dependent even if 
there is more than one qualified dependent in the uniformed service 
sponsor's family that qualifies for TYA coverage. Dependents qualifying 
for TYA status can purchase individual TRICARE Select or TRICARE Prime 
coverage (as applicable) according to the rules governing the TRICARE 
option for which they are qualified on the basis of their uniformed 
service sponsor's TRICARE-eligible status (active duty, retired, 
Selected Reserve, or Retired Reserve) and the availability of a desired 
option in their geographic location. Premiums shall be determined in 
accordance with paragraph (c) of this section.
* * * * *
    (iv) Benefits. When their TYA coverage becomes effective, qualified 
beneficiaries receive the benefit of the TRICARE option that they 
selected, including, if applicable, access to military treatment 
facilities and pharmacies. TYA coverage features the cost share, 
deductible and catastrophic cap provisions applicable to Group B 
beneficiaries based on the program selected, i.e., the TRICARE Select 
program under Sec.  199.17(l)(2)(ii) or the TRICARE Prime program under 
Sec.  199.17(l)(ii), as well as the status of their military sponsor. 
Access to military treatment facilities under the system of access 
priorities in Sec.  199.17(d)(1) is also based on the program selected 
as well as the status of the military sponsor. Premiums are not 
credited to deductibles or catastrophic caps; however, TYA premiums 
shall apply instead of any applicable TRICARE Prime or Select 
enrollment fee.
* * * * *
    (c) TRICARE Young Adult premiums. Qualified young adult dependents 
are charged premiums for coverage under TYA that represent the full 
cost of the program, including reasonable administrative costs, as 
determined by the Director utilizing an appropriate actuarial basis for 
the provision of TRICARE benefits for the TYA-eligible beneficiary 
population. Separate premiums shall be established for TRICARE Select 
and Prime plans. There may also be separate premiums based on the 
uniformed services sponsor's status. Premiums are to be paid monthly, 
except as otherwise provided through administrative implementation, 
pursuant to procedures established by the Director. The monthly rate 
for each month of a calendar year is one-twelfth of the annual rate for 
that calendar year.
* * * * *
    (d) Procedures. The Director may establish procedures for the 
following.
    (1) * * *
    (ii) Enrollment. Procedures for enrollment in TRICARE plans under 
Sec.  199.17(o) shall apply to a qualified dependent purchasing TYA 
coverage. Generally, the effective date of coverage will coincide with 
the first day of a month unless enrollment is due to a qualifying event 
and a different date on or after the qualifying event is required to 
prevent a lapse in health care coverage.
    (2) Termination. Procedures may be established for TYA coverage to 
be terminated as follows.
* * * * *
    (v) Coverage may be terminated for young adult dependents upon 
request at any time by submitting a completed

[[Page 45461]]

request in the appropriate format in accordance with established 
procedures.
    (vi) In accordance with the provisions of Sec.  199.17(o)(2), 
coverage terminates for young adult dependents who fail to make premium 
payments in accordance with established procedures.
    (vii) Absent a new qualifying event, young adults are not eligible 
to re-enroll in TYA until the next annual open season.
* * * * *
    (f) Administration. The Director may establish other processes, 
policies and procedures for the effective administration of the TYA 
Program and may authorize exceptions to requirements of this section, 
if permitted.

    Dated: September 20, 2017.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2017-20392 Filed 9-28-17; 8:45 am]
BILLING CODE 5001-06-P