TRICARE Coverage and Reimbursement of Certain Services Resulting From Temporary Program Changes in Response to the COVID-19 Pandemic
Final rule.
CFR Part: "32 CFR Part 199"
RIN Number: "RIN 0720-AB81; 0720-AB82; and 0720-AB83"
Citation: "87 FR 33001"
Document Number: "Docket ID:
Page Number: "33001"
"Rules and Regulations"
Agency: "
SUMMARY: The Assistant Secretary of Defense for Health Affairs (ASD(HA)) issues this final rule related to certain provisions of three TRICARE interim final rules (IFRs) with request for comments issued in 2020 in response to the novel coronavirus disease 2019 (COVID-19) public health emergency (PHE). Temporary coverage of telephonic office visits is made permanent in this final rule, with its adoption expanded beyond the pandemic; the temporary telehealth cost-share waiver is terminated; and the temporary waiver of certain acute care hospital requirements and permanent adoption of Medicare New Technology Add-on Payments for new medical items and services are modified, as further discussed in the SUPPLEMENTARY INFORMATION section of this rule
DATES:
This rule is effective
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Purpose of the Rule In response to the novel coronavirus (SARS-CoV-2), which causes COVID-19, and the President's declared national emergency for the resulting pandemic (Proclamation 9994, 85 FR 15337 (
The second IFR, published in the FR on
The third IFR, published in the FR on
After publication of each IFR,
a. 32 CFR 199.4(g)(52) Telephone Services: The IFR temporarily modified this regulation provision which excluded telephone services (audio-only) except for biotelemetry. This final rule revises this regulatory exclusion and permanently modifies 32 CFR 199.4(c)(1)(iii) Telehealth Services to add coverage for medically necessary telephonic office visits, in all geographic areas where TRICARE beneficiaries reside. A telephonic office visit is a reimbursable telephone call between a beneficiary, who is an established patient, and a TRICARE-authorized provider. This is considered a type of telehealth modality under the TRICARE program. Specifically, this change will allow providers to be reimbursed for medically necessary care and treatment provided to beneficiaries over the telephone, when a face-to-face, hands-on visit is not required, and a two-way audio and video telehealth visit is not possible. The telephonic office visit should be a valid medical visit in that there is an examination of the patient's history and chief complaint along with clinical decision making performed by a provider. Telephonic provider-to-provider consults which are audio-only, but otherwise meet the definition of a covered consultation service are also covered under this final rule. Telephone calls of an administrative nature (e.g., appointment scheduling), routine answering of questions, prescription refills, or obtaining test results are not medical services and are not reimbursable.
b. 32 CFR 199.6(b)(4)(i)(I): The temporary waiver of certain acute care hospital requirements for temporary hospitals and freestanding ambulatory surgery centers during the COVID-19 pandemic from the second COVID IFR remains in effect, with modifications. The modification temporarily allows any entity that enrolled with Medicare as a hospital through Medicare's Hospitals Without Walls initiative to become a TRICARE-authorized hospital that may be considered to meet the requirements for an acute care hospital listed under paragraph 199.6(b)(4)(i). These entities may provide any inpatient or outpatient hospital services, when consistent with the State's emergency preparedness or COVID-19 pandemic plan and when they meet the Medicare hospital Conditions of Participation (CoP), to the extent not waived. Under Medicare's Hospitals Without Walls initiative,
The ASD(HA) also recognizes the need for increased access to inpatient and outpatient care during the COVID-19 pandemic. In the IFR, we temporarily permitted temporary hospitals and freestanding ASCs that registered with Medicare as hospitals to be reimbursed as acute care hospitals (85 FR 54914). We are modifying this expanded coverage of inpatient and outpatient care by allowing any entity enrolled with Medicare as a hospital on a temporary basis to also be considered a TRICARE-authorized hospital and receive reimbursement for inpatient and outpatient institutional charges under the TRICARE DRG payment system, Outpatient Prospective Payment System (OPPS), or other applicable hospital payment system allowed under Medicare's Hospitals Without Walls initiative, to the extent practicable. In order to reduce burden on these providers during the pandemic, we are not developing any regulatory requirements for participation in TRICARE and will instead permit any entity that registers with Medicare as a hospital under their Hospitals Without Walls initiative to be considered a TRICARE-authorized hospital. To further reduce the burden on providers and the TRICARE program, this final rule will allow the
c. 32 CFR 199.14(a)(1)(iv): Special Programs and Incentive Payments. This final rule creates new paragraph 199.14(a)(1)(iv) to more appropriately categorize the NTAP and HVBP payments. It moves the NTAP provisions from paragraph 199.14(a)(1)(iii)(E)(5) to 199.14(a)(1)(iv)(A), and moves the HVBP provision from paragraph 199.14(a)(iii)(E)(6) to 199.14(a)(1)(iv)(B). For the NTAP provisions, TRICARE: (1) Shall apply Medicare NTAP adjustments to TRICARE covered services and supplies, except for pediatric (defined for NTAPs as pertaining to patients under the age of 18, or who are treated in a children's hospital or in a pediatric ward) services and supplies; (2) shall modify NTAP reimbursement adjustment rates for NTAPs at 100 percent of the average cost of the technology or 100 percent of the costs in excess of the
d. 32 CFR 199.17(l)(3): The cost-share and copayment waiver for telehealth services during the COVID-19 pandemic was implemented in TRICARE's first COVID-19 IFR in response to efforts by federal, state, and local governments to encourage individuals to stay at home, avoid exposure, and to reduce possible transmission of the virus. When the rule was published, there was a high degree of uncertainty surrounding the potential availability of a vaccine. With the approval or emergency use authorization of several vaccines by the
e. The
f. All temporary regulation changes made by the three COVID-19-related IFRs not otherwise addressed in this final rule remain in effect as stated in the IFR under which they were implemented until such time as the conditions for their expiration are met.
g. The HVBP Program is permanently adopted and is moved from 32 CFR 199.14(a)(1)(iii)(E)(6) to 32 CFR 199.14(a)(1)(iv)(B); there are otherwise no modifications from the second IFR.
B. Summary of Major Provisions
a. Changes to the TRICARE Benefit
Telephonic Office Visits
A telephonic office visit is an easy-to-use telehealth modality that has many benefits. A telephonic office visit consists of a beneficiary, who is an established patient, calling his/her provider to discuss an illness (including mental illness), injury, or medical condition. During the conversation the provider will ask questions regarding the symptoms and determine if they can proceed with the telephonic office visit or if based on the information he/she reported, a face-to-face, hands-on visit is in fact medically necessary. If they proceed with the telephonic office visit, typically the provider will have the beneficiary's medical record open for review during the call, offer medical advice, and may place an order for a prescription or lab tests. During the COVID-19 pandemic, telephonic office visits have been instrumental in keeping beneficiaries safer at home with less risk of exposure to COVID-19 for conditions which a face-to-face and hands-on visit is not medically necessary. Telephonic office visits are also highly desirable for beneficiaries who reside in rural areas and/or areas where health care services are scarce. Likewise, beneficiaries without access to the internet and/or computers, smartphones, or tablets to conduct two-way audio-video telehealth visits also greatly benefit from coverage of telephonic office visits.
To understand the use of telephonic office visits during the COVID-19 pandemic, the
FOOTNOTE 1 "Issue Brief: Audio-only Telehealth Visits Essential for Use in Medicare Advantage Risk Adjustment",
FOOTNOTE 2 Ibid. END FOOTNOTE
FOOTNOTE 3 "Amid pandemic, CMS should level field for phone E/M visits",
FOOTNOTE 4 "CMS Announcement of Pay Parity for Telephone Calls Answers a TOP ACP Priority"
In converting medically necessary telephonic office visits to a permanent benefit, the
Entities Temporarily Enrolling as Hospitals
This final rule modifies the temporary waiver of certain acute care hospital requirements for TRICARE authorized hospitals in the IFR to allow any entity that has temporarily enrolled with Medicare as a hospital through their Hospitals Without Walls initiative (or enrolls in the future, should Medicare resume such enrollments) to temporarily become a TRICARE-authorized hospital under paragraph 199.6(b)(4)(i). These entities may provide any inpatient or outpatient hospital services, when consistent with the State's emergency preparedness or COVID-19 pandemic plan and when they meet the Medicare hospital CoP, to the extent not waived. While there are no direct corollaries in TRICARE regulation to the CoP being waived under Medicare, there do exist in TRICARE regulation certain requirements that would prevent allowing some facilities to be considered as acute care hospitals for the purposes of payment. Title 32 CFR 199.6(b)(3) and (4) list the requirements for providers to be considered TRICARE-authorized hospitals. It may not be possible for some entities to meet all of these requirements, such as providing primarily inpatient care or having Joint Commission (previously known as the
We continue to assert, as we did in the IFR, that these institutional requirements are necessary for TRICARE-authorized acute care hospitals. We also note there is no requirement to have a TRICARE benefit that matches Medicare's benefit, or for TRICARE to authorize all providers that are providers under Medicare. Both TRICARE's statutory authority and population differ from Medicare's, so it is appropriate for TRICARE to continue to manage its authorized provider program separately from Medicare's. During the COVID-19 pandemic, however, it is important for TRICARE to ensure swift access to inpatient and outpatient care, to include leveraging Medicare's flexibilities for acute care facilities. Under Medicare's Hospitals Without Walls initiative, CMS relaxed certain requirements to allow ASCs and other interested entities, such as licensed independent freestanding emergency departments, to temporarily enroll as Medicare-certified hospitals and to receive reimbursement for hospital inpatient and outpatient services. In the previously-published IFR, we extended coverage of acute care hospitals to include temporary hospitals and freestanding ASCs that registered with Medicare as hospitals to be reimbursed as hospitals under TRICARE. This final rule expands the original temporary hospital waiver by temporarily permitting any entity to qualify as an acute care hospital under TRICARE so long as it had enrolled with Medicare as a hospital under the Hospitals Without Walls initiative prior to the
In the IFR, it was not our intent to maintain a regulatory list of qualifying providers in
Under this provision, facilities that convert into hospitals and are Medicare-certified hospitals through an emergency waiver authority under Section 1135 of the Social Security Act and are operating in a manner consistent with their State's emergency plan in effect during the COVID-19 pandemic will be eligible for reimbursement by TRICARE for covered inpatient and outpatient services under the applicable hospital payment system. Once an entity ends, terminates, or loses its hospital status under Medicare, the facility will no longer be considered a TRICARE-authorized acute care hospital effective the date when Medicare deactivated the entity's hospital billing privileges. While we are temporarily amending the institutional provider requirements under paragraph 199.6(b)(4)(i), we are still requiring that these facilities meet Medicare's CoP (to the extent not waived) established for this Presidential national emergency. This change will improve beneficiary access to medically necessary care and may mitigate hospitals' lack of capacity and shortages of resources during the pandemic. This change is temporary for the duration of Medicare's "Hospitals Without Walls" initiative.
b. Reimbursement Modifications Consistent With Medicare Requirements
NTAPs
NTAP Reimbursement
As stated in the second IFR (85 FR 54914), for care rendered in an inpatient setting, TRICARE shall reimburse services and supplies with Medicare NTAPs using Medicare's NTAP payment adjustments for only those services and supplies that are an approved benefit under the TRICARE Program. Title 10 U.S.C. 1079(i)(2) requires TRICARE to reimburse covered services and supplies using the same reimbursement rules as Medicare, when practicable. However, this provision is not self-executing, so this FR permanently adopts the Medicare NTAP methodology. TRICARE shall also adopt future NTAP modifications published by CMS, including modifications to the NTAP methodology and the list of new technologies to which NTAPs are applied.
Pediatric Reimbursement
Per the authority provided in 10 U.S.C. 1079(i)(2), the ASD(HA) may determine that the Medicare NTAP methodology is not practicable for certain populations. One such population is TRICARE's pediatric population, which, as used in relation to the NTAP provisions in this final rule, is defined as individuals under the age of 18, or who are being treated in a children's hospital or in a pediatric ward. Since Medicare does not have a pediatric population to consider when establishing alternative reimbursements for new high-dollar technologies, the ASD(HA) has therefore determined it is not practicable to use Medicare's NTAPs for pediatric patients; instead, the NTAP adjustment should be modified to address the unique TRICARE beneficiary population of pediatric patients. Under this modification, TRICARE shall reimburse pediatric NTAP claims at 100 percent of the costs in excess of the MS-DRG. Paying these claims at 100 percent of the costs in excess of the MS-DRG increases the likelihood that all pediatric beneficiaries will receive medically necessary and appropriate treatment, especially pediatric beneficiaries with serious, life-threatening, and costly diseases.
High-Cost Treatments Without an NTAP
Some new, high-cost treatments are not identified as requiring an NTAP by CMS. This primarily occurs when a treatment for a rare, fatal disease may be appropriate for a beneficiary in TRICARE's population but is not appropriate for Medicare's population, which is typically age 65 and above. For example, Spinraza is a treatment for Spinal Muscular Atrophy, a rare genetic neuromuscular disease that primarily impacts infants and young children. Spinraza has a high-cost per treatment, but is reimbursed at substantially lower cost when administered in a hospital because it is included in the DRG reimbursement. CMS does not include Spinraza in its list of new technologies receiving an NTAP.
The ASD(HA) therefore finds it impracticable to reimburse such technologies using existing reimbursement methodologies, which do not allow sufficient rates for new, high-cost technologies during the first two or three years following FDA approval, after which, they are absorbed into the core DRG through the annual DRG update and calibration process. The ASD(HA) finds it practicable to establish a category of TRICARE NTAPs. This category may include services and supplies that are otherwise covered by TRICARE and that meet certain CMS eligibility criteria under 42 CFR 412.87. These eligibility criteria will ensure that DHA consistently and comprehensively evaluates new treatments when selecting which treatments may be approved for a TRICARE NTAP. Likewise, the reimbursement methodology for these TRICARE NTAPs shall follow the CMS reimbursement methodologies for Medicare NTAPs outlined in 42 CFR 412.88.
For these high-cost, new, life-saving treatments that do not qualify or otherwise have an NTAP designation from CMS but for which the existing Medicare reimbursement is not practicable for the TRICARE population, the Director, DHA, shall establish internal guidelines and policy for approving TRICARE NTAPs and adopting such adjustments together with any variations deemed necessary to address unique issues involving the beneficiary population or program administration. These include, but are not limited to the exact reimbursement methodology, the eligibility criteria, and the method for approving or denying a TRICARE specific NTAP. The approved TRICARE NTAPs shall be published at least annually on the website: www.health.mil/ntap.
c. Beneficiary Cost-Shares and Copayments
Termination of Cost-Share and Copayment Waivers for Telehealth During the COVID-19 Pandemic
The first IFR implemented a waiver of cost-shares and copayments (including deductibles) for all in-network authorized telehealth services for the duration of the COVID-19 pandemic (ending when the President's national emergency for COVID-19 is suspended or terminated, in accordance with applicable law and regulation). The purpose was to incentivize TRICARE beneficiaries to use telehealth services and avoid unnecessary in-person TRICARE-authorized provider visits, which could potentially bring them into contact with or aid the spread of COVID-19. The implementation of this provision was highly successful, with a significant number of beneficiaries shifting to the use of telehealth visits. Since this provision was enacted, however, several vaccines have been approved or granted emergency use authorization by the FDA and are now widely available throughout
TRICARE spent approximately
Given the availability of vaccines, the reduction of stay-at-home orders, and the cost of waiving telehealth cost-sharing, the ASD(HA) finds it appropriate to expire the waiver on the effective date of this rule or the date of expiration of the President's national emergency for COVID-19, whichever is earlier. Telehealth services remain a covered benefit for TRICARE beneficiaries after the expiration of the cost-share/copayment waiver.
C.
This rule is issued under 10 U.S.C. 1073(a)(2) giving authority and responsibility to the Secretary of Defense to administer the TRICARE program. The text of 10 U.S.C. chapter 55 can be found at https://manuals.health.mil/.
II. Regulatory History
Each of the sections under which TRICARE is administered are revised every few years to ensure requirements continue to align with the evolving health care field. Title 32 CFR 199.4 was most recently updated on
The telephone services paragraph being modified by this final rule, paragraph 199.4(g)(52), was last temporarily modified with publication of the COVID-19-related IFR published on
Title 32 CFR 199.6 was last modified
Title 32 CFR 199.14 was last permanently revised on
Title 32 CFR 199.17 was last temporarily modified on
III. Discussion of Comments & Changes
A. IFR--TRICARE Coverage and Payment for Certain Services in Response to the COVID-19 Pandemic
This IFR was published in the FR (85 FR 27921) on
a. Telephonic Office Visits
1. Provisions of the IFR
The IFR allowed TRICARE beneficiaries to obtain telephonic office visits with providers for otherwise-covered, medically necessary care and treatment and allowed reimbursement to those providers during the COVID-19 pandemic. It provided a temporary exception to the regulatory exclusion prohibiting telephone services.
2. Analysis of Public Comments
The public comments regarding the temporary exception to the regulatory exclusion prohibiting telephone services were minimal. Commenters requested that
Two commenters requested
3. Provisions of Final Rule
No changes were made in response to public comments; however, this provision has been revised for the final rule (see next section for details).
b. Interstate and
1. Provisions of the IFR
The IFR allowed providers to be reimbursed for interstate practice, both in person and via telehealth, during the global pandemic so long as the provider met the requirements for practicing in that State or under Federal law. It removed the requirement that the provider must be licensed in the state where practicing, even if that license is optional. For providers overseas, this allowed providers, both in person and via telehealth, to practice outside of the nation where licensed when permitted by the host nation.
2. Analysis of Public Comments
Comments received on the relaxation of licensing requirements for providers during the pandemic were generally supportive, with no comments received opposed. Several commenters suggested implementing the relaxed licensing requirement permanently for telehealth.
3. Provisions of Final Rule
The final rule is consistent with the IFR.
c. Waiver of Copayments and Cost-Sharing for Telehealth Services
1. Provisions of the IFR
The IFR waived cost-shares and copayments for telehealth services for TRICARE Prime and Select beneficiaries utilizing telehealth services with an in-network, TRICARE-authorized provider during the President's declared national emergency for COVID-19.
2. Analysis of Public Comments
We received four comments regarding the waiving of telehealth cost-shares and copays, all of them supportive of the waiver, with one commenter also noting the negative effect of loss copay revenue for the
We thank all the commenters for their support and feedback. TRICARE's temporary waiving of cost-shares and copays for all telehealth services was in line with initiatives by commercial insurers to incentivize telehealth care to help prevent the spread of COVID-19 and to reduce financial burdens on patients. TRICARE's cost-shares and copayments are set by law and require copayments and cost-sharing for telehealth services to be the same as if the service was provided in person. Section 718(d) of the National Defense Authorization Act of 2017 authorized the Secretary of Defense to reduce or eliminate copayments or cost-shares when deemed appropriate for covered beneficiaries in connection with the receipt of telehealth services under TRICARE. Given the national emergency caused by the COVID-19 pandemic, it was deemed appropriate to remove cost-shares and copayments for telehealth services during the pandemic, until there was no longer an urgent need to incentivize telehealth visits.
3. Provisions of Final Rule
The final rule is consistent with the IFR, except that this provision may terminate early. This provision of the final rule is being terminated early due to both the cost of waiving cost-shares and because there remain few, if any, stay-at-home orders for this provision to support. Defense Health Program dollars are better spent on testing, vaccination, and treatment for COVID-19, including a waiver of cost-shares for medically necessary COVID-19 testing, which remains in effect as a result of the CARES Act.
B. IFR--TRICARE Coverage of Certain Medical Benefits in Response to the COVID-19 Pandemic
This IFR was published in the FR on
a. SNF 3-Day Prior Stay Waiver
1. Provisions of the IFR
The IFR temporarily waived the regulatory requirement that an individual be an inpatient of a hospital for not less than three consecutive calendar days before discharge from the hospital (three-day prior hospital stay) for coverage of a SNF admission for the duration of the COVID-19 public health emergency, consistent with a similar waiver under Medicare and TRICARE's statutory requirement to have a SNF benefit like Medicare's. The waiver will terminate when the
2. Analysis of Public Comments
We received one comment on this provision of the IFR that was supportive of the waiver, but requested the
We thank the commenter for their support and feedback. TRICARE is primary payer for Medicare/TRICARE dual eligible beneficiaries that have exhausted the Medicare 100-day SNF benefit (meeting TRICARE coverage requirements without any other forms of other health insurance (OHI)), and TRICARE is also primary payer for non-Medicare TRICARE beneficiaries who have no OHI and who meet the TRICARE SNF coverage requirements. Because TRICARE covers patients immediately after benefits are exhausted, there is no current requirement for a 60-day wellness period under TRICARE.
3. Provisions of Final Rule
The final rule is consistent with the IFR.
b. Waiving of Acute Care Hospital Requirements for Temporary Hospital Facilities and Freestanding ASCs
1. Provisions of the IFR
The IFR temporarily exempted temporary hospital facilities and freestanding ASCs that enrolled as hospitals with Medicare from the institutional provider requirements for acute care hospitals described in paragraph 199.6(b)(4)(i). This allowed these facilities to provide inpatient and outpatient hospital services to improve the access of beneficiaries to medically necessary care. This change was consistent with 10 U.S.C. 1079(i)(2) to reimburse hospitals and other institutional providers in accordance with the same reimbursement methodology as Medicare, when practicable. This waiver remains in effect through the end of Medicare's "Hospitals Without Walls" initiative.
2. Analysis of Public Comments
No public comments were received on this provision.
3. Provisions of Final Rule
No changes were made in response to public comments; however, this provision has been modified for the final rule (see next section for details).
c. 20 Percent Increase in DRG Rates for COVID-19 Patients
1. Provisions of the IFR
The IFR temporarily adopted the Medicare Hospital Inpatient Prospective Payment Add-On Payment for COVID-19 patients during the COVID-19 PHE period. The add-on payment for COVID-19 patients increased the weighting factor that would otherwise apply to the DRG to which the discharge is assigned by 20 percent.
2. Analysis of Public Comments
We received one comment regarding this provision of the IFR. The commenter noted that sole community hospitals (SCHs) are not subject to reimbursement under the DRG system and, as such, would not be eligible for the 20 percent increased reimbursement rate in the IFR. The commenter requested TRICARE modify reimbursement for SCHs to make them eligible for the 20 percent increased payment.
We appreciate the feedback from the commenter regarding a 20 percent increase for acute inpatient reimbursement for SCHs treating COVID-19 patients. We would note that while SCHs are not eligible for the 20 percent increased DRG reimbursement, we do an aggregate comparison of SCH claims paid with what we would have paid under the DRG methodology (which would include the 20 percent DRG increase) and if the SCH payments are lower than what would have been paid under the DRG methodology, we then pay the SCH the difference. So, while we are not adding 20 percent to the SCH calculation, it is added to the DRG and then used in the annual adjustment payment calculation.
3. Provisions of Final Rule
The final rule is consistent with the IFR.
d. LTCH Reimbursement at the Federal Rate
1. Provisions of the IFR
The IFR adopted the Medicare waiver of site neutral payment provisions for LTCHs during the COVID-19 PHE period, waiving the site neutral payment provisions and reimbursing all LTCH cases at the LTCH PPS standard Federal rate for claims within the COVID-19 PHE period.
2. Analysis of Public Comments
No public comments were received on this provision.
3. Provisions of Final Rule
The final rule is consistent with the IFR.
e. Adoption of Medicare's NTAPs for New Medical Services
1. Provisions of the IFR
The IFR permanently added coverage of Medicare's NTAP payments for new medical services, adding an additional payment to the DRG payment for new and emerging technologies approved by Medicare.
2. Analysis of Public Comments
No public comments were received on this provision.
3. Provisions of Final Rule
No changes were made in response to public comments; however, this provision has been revised in the final rule (see next section for details).
f. Adoption of Medicare's HVBP Program
1. Provisions of the IFR
The IFR permanently added coverage of Medicare's HVBP Program. The HVBP Program provides incentives to hospitals that show improvement in areas of health care delivery, process improvement, and increased patient satisfaction.
2. Analysis of Public Comments
No comments were received on this provision.
3. Provisions of Final Rule
The final rule content is consistent with the IFR content; however the HVBP provision has been moved from 199.14(a)(1)(iii)(E)(6) to 199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions.
IV. Summary of Changes From IFRs
A. Telephonic Office Visits
Telephonic office visits temporarily adopted in the IFR are permanently adopted in this final rule. The Director, DHA shall issue subsequent policy guidance of medically necessary and appropriate telephonic office visits to ensure best practices and protect against fraud.
B. Temporary Hospitals
The final rule modifies the waiver of acute care hospital requirements at paragraph 199.6(b)(4)(i) by expanding the waiver to include any facility registered with Medicare under its Hospitals Without Walls initiative, not just temporary hospitals and freestanding ASCs as were authorized by the IFR.
C. NTAPs
This final rule permanently adopts the Medicare NTAP methodology and future NTAP modifications published by CMS, for those otherwise approved benefits under the TRICARE Program. This rule also creates a pediatric NTAP reimbursement methodology based on 100 percent of the costs in excess of the MS-DRG. Finally, this rule provides a mechanism to establish a TRICARE-specific NTAP for those high-cost treatments that do not have an NTAP designation because the population affected and treated by these new technologies are outside of Medicare's beneficiary population.
D. Adoption of Medicare's HVBP Program
This final rule moves the HVBP provision from 32 CFR 199.14(a)(1)(iii)(E)(6) to 32 CFR 199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions; there are no changes to the content of the HVBP provision.
E. Telehealth Cost-Share/Copayment Waiver
This final rule finalizes the cost-share/copayment waiver provision as written in the IFR, except that it now terminates on the effective date of this rule, or the date of termination of the President's national emergency for COVID-19, whichever is earlier.
V. Regulatory Analysis
A. Regulatory Planning and Review
a. Executive Orders
Executive Order 12866, "Regulatory Planning and Review" and Executive Order 13563, "Improving Regulation and Regulatory Review"
Executive Orders 12866 and 13563 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. Accordingly, the rule has been reviewed by the
b. Summary
The modifications to paragraph 199.4(g)(52) in this FR will revise the regulatory exclusion prohibiting coverage of telephone services and thereby allow permanent coverage of medical necessary and appropriate telephonic office visits for all TRICARE beneficiaries in all geographic locations.
The modification to paragraph 199.6(b)(4)(i) in this FR will allow any entity that temporarily enrolled with Medicare as a hospital through the Hospitals Without Walls initiative to be deemed to meet the requirements for acute care hospitals established under TRICARE for the duration of the COVID-19 pandemic. This will allow more entities to provide inpatient and outpatient hospital services, increasing access to medically necessary care for beneficiaries.
The modifications to paragraph 199.14(a)(1)(iv)(A) (previously 199.14(a)(1)(iii)(E)(5) in the IFR and re-designated in this final rule) will: (1) Adopt the Medicare NTAP methodology and future NTAP modifications published by CMS, (2) create a pediatric NTAP reimbursement methodology based on 100 percent of the costs in excess of the MS-DRG, and (3) provide a mechanism to reimburse high-cost treatments that do not have a Medicare NTAP designation (due to beneficiary population differences).
The modifications to paragraph 199.17(l)(3) in this rule will provide for an earlier termination of the temporary waiver of cost-sharing and copayments for telehealth.
c. Affected Population
The modifications in this rule impact all TRICARE beneficiaries, TRICARE-authorized providers, the TRICARE program staff and contractors. Beneficiaries will be impacted by the permanent addition of telephonic office visits, the elimination of the telehealth cost-share/copayment waivers, increased access to new technologies afforded by the pediatric NTAPs reimbursement methodology, and increased access to acute care in temporary hospitals. TRICARE-authorized providers will be minimally impacted in that telephonic office visit will give them a new means to provide care and treatment to beneficiaries and generate revenue. TRICARE-authorized providers who administer Medicare approved NTAPs to pediatric patients will be reimbursed at a higher rate. Acute care facilities that qualify under Medicare's Hospitals Without Walls initiative will benefit by automatically qualifying as a TRICARE-authorized provider for the duration of the pandemic. TRICARE program staff and contractors who administer the TRICARE benefit will be minimally impacted as this change will require them to update their systems to accommodate the change.
d. Costs /5/
FOOTNOTE 5 Most costs associated with this final rule are technically considered to be transfers, i.e., an income transfer between taxpayers and program beneficiaries. The only true "costs" of this rule are administrative costs, and all other costs should be considered to be transfer payments. END FOOTNOTE
The new incremental costs associated with this final rule are
This estimate assumes the President's national emergency for COVID-19 would expire by
1. New Incremental Costs
The incremental health care impact of new permanent benefit and reimbursement changes implemented in the final rule is
Table 1-New Costs Due to Modifications in the Final Rule Provision Through FY2024 Paragraph 199.4(g)(52)-Permanent Coverage of Telephonic Office Visits$ 19.6M Paragraph 199.6(b)(4)(i)-Expanded Coverage for Temporary Hospitals 0M Paragraph 199.14(a)(1)(iv)(A)( 2 )-Methodology for 0.04M Pediatric NTAPs Cases Paragraph 199.14(a)(1)(iv)(A)( 3 )-Addition of TRICARE 1.2M NTAPs Total 20.88M
Telephonic Office Visits. Government expenditures for TRICARE first-pay and second pay claims for identifiable telephonic office visits amounted to approximately
Expanded Coverage of Temporary Hospitals. This estimate assumes that care received at facilities that register with Medicare as hospitals would have been provided in other TRICARE-authorized hospitals but for the regulation change. We do not anticipate any induced demand for hospital care due to the authorization of new facilities. As such, there are no incremental costs associated with expanding coverage of temporary hospitals.
NTAP Pediatric Reimbursement Methodology. An analysis of claims data for FY20 and FY21 found 23 pediatric cases which would have qualified under this methodology. This estimate is based on an average of what would have been paid for those cases, along with calculations for increases in health care costs each year. This estimate includes only the difference between the standard NTAP rate (65 percent of the cost of treatment) and the NTAP Pediatric reimbursement rate (100 percent). This estimate is highly uncertain as the number of pediatric patients receiving an NTAP each year will vary (we assumed 15 cases or fewer per year), the costs of those NTAPs are unknown, and because the number of NTAPs approved by Medicare increases each year.
TRICARE NTAP Approval Process and Reimbursement Methodology. The costs of this provision were estimated by identifying one drug without a Medicare NTAP due to their use by the 64 and younger population, calculating the treatment costs for that drug, applying the TRICARE NTAP adjustment methodology, and identifying how many TRICARE beneficiaries were treated with that drug each year. This estimate is highly uncertain and is dependent on the number of TRICARE NTAPs approved each year by the Director, DHA, the cost of each of those technologies, and the number of TRICARE beneficiaries receiving each technology.
2. Costs Associated With Previously-Implemented Temporary Regulatory Provisions
Provisions under this portion of the estimate have already been implemented; cost estimates provided here are updates from estimates published in the associated IFR under which they were implemented. These amounts are estimated through the end of
Table 2-Costs Due to Temporary Provisions Implemented in Prior IFRs
Provision Through Implementation Planned expiration
September 30, 2022 date
(million)
Paragraph 199.4(b)(3)(xiv)-SNF Three-Day Prior $ 1.9 March 1, 2020 Termination of President's national emergency for
Stay Waiver COVID-19.
Paragraph 199.4(g)(52)-Temporary Waiver of the 32.1 May 12, 2020 Termination of President's national emergency for
Exclusion on Audio-only Telehealth COVID-19.
Paragraph 199.6(b)(4)(i)-Temporary Hospitals 0 September 3, 2020 Expiration of Medicare's Hospitals Without Walls
and Freestanding ASCs Registering as Hospitals Initiative.
(as implemented in the IFR)
Paragraph 199.6(c)(2) Waiver of provider 0 May 12, 2020 Termination of President's national emergency for
licensing requirements for interstate and COVID-19.
international practice
Paragraph 199.14(a)(1)(iii)(E)( 76.5 January 27, 2020 Termination HHS PHE.
2 )-20 Percent DRG Increase for
COVID-19 Patients
Paragraph 199.14(a)(9)-LTCH Site Neutral 17.8 January 27, 2020 Termination HHS PHE.
Payments
Paragraph 199.17(l)(3) Temporary Telehealth 149.7 May 12, 2020 Effective date of this final rule or termination
Cost-Share/Copayment Waiver of President's national emergency for COVID-19,
whichever is earlier.
Total 278.0
SNF Three-Day Prior Stay Waiver. The nominal cost associated with this provision is due to an assumption that, as a result of the waiver, SNF admissions will increase by three percent. This estimate is consistent with the estimate in the IFR.
Temporary Waiver of the Exclusion of Audio-only Telehealth Visits. This estimate accounts for amounts related to the temporary waiver of the exclusion of audio-only telehealth visits from the first IFR, and is consistent with the factors discussed above for telephonic office visits. Included are amounts for FY20 through the end of FY22. These amounts reflect the costs had the ASD(HA) not made telephonic office visits permanent, but continued to let them expire at the end of the national emergency. If the President's national emergency expires prior to the end of
Temporary Hospitals and Freestanding ASCs. This zero cost estimate assumes that inpatient care provided in these alternate sites is care that would have been reimbursed under TRICARE but for a lack of acute care hospital facility space (i.e., we do not estimate that there would be any induced demand because of an increase in facilities). Additionally, it assumes that while reimbursement for outpatient procedures in freestanding ASCs would be higher than had those procedures been reimbursed under the traditional reimbursement rates for freestanding ASCs, the number of facilities choosing to register as hospitals is likely to be small enough to have a negligible impact on the budget. This estimate is consistent with the estimate in the IFR.
Waiver of Interstate and
20 Percent DRG Increase. In the second IFR, we estimated that in an eighteen-month period, we would spend
LTCH Site Neutral Payments. TRICARE is in the process of phasing in Medicare's site-neutral payment rates. The phase-in has been halted as a result of the IFR; this estimate assumes TRICARE LTCH claims will be paid at the full LTCH PPS rate through the end of the HHS PHE. This estimate is consistent with the estimate in the IFR.
Temporary Waiver of Cost-Shares and Copayments for Telehealth Services. The largest cost-driver for provisions in the previously published IFRs is the temporary waiver of cost-shares and copayments for telehealth, which is expected to cost
3. Costs Associated With Previously-Implemented Permanent Regulatory Provisions
The second COVID-19 IFR implemented two permanent provisions, NTAPs and HVBP. Both are finalized in this FR. The costs associated with the changes to NTAPs implemented in this FR are provided in the first section of the cost estimate. This section provides costs associated with NTAPs as implemented in the IFR, as well as costs associated with the HVBP Program.
Table 3-Costs Due to Permanent Reimbursement Changes Implemented in the Second IFR Provision Through FY2024 Paragraph 199.14(a)(1)(iv)(A)-NTAPs (not including the new pediatric reimbursement methodology$ 9.1M provided in table 1) Paragraph 199.14(a)(1)(iv)(B)-HVBP Program 3.9M Total 13.0M
NTAPs. The IFR included the cost estimate through
For FY2022, there are a total of 38 Medicare treatments with NTAPs, 15 of which are new and represent a new traditional technology, Qualified Infectious Disease Products, or breakthrough technology. Consistent with the IFR, this estimate assumes TRICARE NTAPs would continue to be a similar percentage of inpatient spending to Medicare's NTAP usage and that TRICARE would adopt all of Medicare's NTAPs. This amount will vary depending on the number of new NTAPs adopted by Medicare each year, the extent to which Medicare-identified emerging technologies are covered under TRICARE's statutory and regulatory requirements, and the extent to which TRICARE's population utilizes these technologies. The costs for this provision may overestimate the incremental costs of this regulatory change, because many of these claims were being approved on a case-by-case basis by the Director, DHA, under waiver authority. In those cases, adopting NTAPs was likely to reflect a cost savings compared to the estimated costs, as waivers are typically paid at billed charges.
HVBP Program. The HVBP Program was implemented retroactive to
e. Benefits
The addition of telephonic office visits as a permanent benefit will positively impact beneficiaries, particularly beneficiaries with limited access to broadband and other technology required for video telehealth visits, as this change will provide them better access to the existing telehealth benefit. This will result in avoided travel time and time spent in the provider's waiting room (a benefit of approximately one hour per beneficiary per visit, at a monetized value to the beneficiary of
f. Alternatives
Public Law 96-354, "Regulatory Flexibility Act" (5 U.S.C. 601)
The Assistant Secretary of Defense for Health Affairs certifies that this final rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.
The provisions of this IFR that are most likely to have an economic impact on hospitals and other health care providers are the reimbursement provisions adopted to meet the statutory requirement that TRICARE reimburse like Medicare. As its measure of significant economic impact on a substantial number of small entities, HHS uses an adverse change in revenue of more than 3 to 5 percent. While TRICARE is not required to follow this guidance in the issuance of our rules, we provide this metric for context, given that these temporary and permanent changes align with similar changes made by Medicare.
Given that the temporary reimbursement provisions of this IFR increase reimbursement for hospitals and LTCHs, we find that these provisions would not have an adverse impact on revenue for hospitals and, therefore, would not have a significant impact on these hospitals and other providers meeting the definition of small businesses. We also find that NTAPs, given that they increase revenue under the DRG system, would not have an adverse impact on hospitals and providers. The HVBP program would not reduce revenue for a hospital being penalized under the system beyond the HHS threshold. Lastly, coverage of telephonic office visits and temporary hospitals are not expected to result in any adverse economic impact on hospitals or other health care providers.
C. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C.
D. Sec. 202, Public Law 104-4, "Unfunded Mandates Reform Act"
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of
E. Public Law 96-511, "Paperwork Reduction Act" (44
It has been determined that 32 CFR part 199 does not impose reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.
F. Executive Order 13132, "Federalism"
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This final rule will not have a substantial effect on State and local governments.
G. Executive Order 13175, "Consultation and Coordination With Indian Tribal Governments"
It has been determined that this rule does not have a substantial effect on Indian tribal governments. This rule does not impose substantial direct compliance costs on one or more Indian tribes, preempt tribal law, or effect the distribution of power and responsibilities between the federal government and Indian tribes.
List of Subjects in 32 CFR Part 199 Administrative practice and procedure, Claims, Dental, Fraud, Health care, Health insurance, Individuals with disabilities, Mental health programs, and Military personnel.
For the reasons stated in the preamble, the interim final rules amending 32 CFR part 199, which were published at 85 FR 27921-27927,
PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES (CHAMPUS)
1. The authority citation for part 199 continues to read as follows:
Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55.
2. Amend
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Telephonic consultations: A covered consultation service conducted via telephone call between TRICARE-authorized providers, including a verbal and written report to the patient's treating/requesting physician or other TRICARE-authorized provider.
Telephonic office visits. A covered service provided via a telephone call between a beneficiary who is an established patient and a TRICARE-authorized provider. See
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3. Amend
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(c) * * *
(1) * * *
(iii) Telehealth services. Health care services covered by TRICARE and provided through the use of telehealth modalities including telephone services for: telephonic office visits; telephonic consultations; electronic transmission of data or biotelemetry or remote physiologic monitoring services and supplies, 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.
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(g)(52) Telephone services. Services or advice rendered by telephone are excluded. Exceptions:
(i) Medically necessary and appropriate Telephonic office visits are covered as authorized in paragraph (c)(1)(iii) of this section.
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4. Effective
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(b) * * *
(4) * * *
(i) * * *
(I) * * *
Note to paragraph (b)(4)(i)(I): For the duration of Medicare's "Hospitals Without Walls" initiative for the coronavirus disease 2019 (COVID-19) outbreak, any entity that temporarily enrolls with Medicare as a hospital may be temporarily exempt from certain institutional requirements for acute care hospitals under TRICARE. To the extent practicable, the Director,
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5. Amend
a. Adding a sentence at the end of paragraph (a)(1)(iii)(E) introductory text;
b. Adding paragraph (a)(1)(iv);
c. Redesignating paragraph (a)(1)(iii)(E)(5) as paragraph (a)(1)(iv)(A) and revising newly redesignated paragraph (a)(1)(iv)(A);
d. Redesignating paragraph (a)(1)(iii)(E)(6) as paragraph (a)(1)(iv)(B).
The revision and addition read as follows:
(a) * * *
(1) * * *
(iii) * * *
(E) *** Additional adjustments to DRG amounts are included in paragraph (a)(1)(iv) of this section.
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(iv) Special Programs and Incentive Payments. (A) Additional payment for new medical services and technologies. TRICARE will make New Technology Add On Payments (NTAPs) adjustments to DRGs as provided in paragraphs (a)(1)(iv)(A)(1) through (a)(1)(iv)(A)(11) of this section. The Director,
(1) Adoption of Medicare NTAPs. For TRICARE covered services and supplies, TRICARE will adopt Medicare NTAPs as implemented under 42 CFR 412.87 under the same conditions as published by the
(2) Pediatric cases. For pediatric NTAP DRGs, the TRICARE NTAP adjustment shall be modified to be set at 100 percent of the costs in excess of the
(3) TRICARE designated NTAP adjustments. For categories of TRICARE covered services and supplies for which Medicare has not established an NTAP adjustment for DRGs, the Director, DHA may designate a TRICARE NTAP adjustment through a process using criteria to identify and select such new technology services/supplies similar to that utilized by Medicare under 42 CFR 412.87. The Director, DHA may then designate a TRICARE NTAP reimbursement adjustment through a process using a methodology similar to the Medicare methodology outlined in 42 CFR 412.88. This discretionary authority to designate TRICARE NTAP adjustments shall apply to services and supplies typically provided to TRICARE beneficiaries age 64 or younger when Medicare has not established an NTAP adjustment for such services/supplies. As with other discretionary authority under this part, a decision to designate a TRICARE category of services/supplies for an NTAP adjustment to DRGs and the amount of such an adjustment are not subject to the appeal and hearing procedures of
(4) Eligibility requirements and reimbursement methodology for TRICARE designated NTAP adjustments. A new medical service or technology represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of TRICARE beneficiaries. The totality of the circumstances is considered when making a determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of TRICARE beneficiaries.
(5) Criteria for improvement. A determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of TRICARE beneficiaries means one or more of the following:
(i) The new medical service or technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments.
(ii) The new medical service or technology offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable, or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods and there must also be evidence that use of the new medical service or technology to make a diagnosis affects the management of the patient.
(iii) The use of the new medical service or technology significantly improves clinical outcomes relative to services or technologies previously available as demonstrated by one or more of the following seven outcomes: A reduction in at least one clinically significant adverse event, including a reduction in mortality or a clinically significant complication; A decreased rate of at least one subsequent diagnostic or therapeutic intervention; A decreased number of future hospitalizations or physician visits; A more rapid beneficial resolution of the disease process treatment including, but not limited to, a reduced length of stay or recovery time; An improvement in one or more activities of daily living; An improved quality of life; or A demonstrated greater medication adherence or compliance.
(iv) The totality of the information otherwise demonstrates that the new medical service or technology substantially improves, relative to technologies previously available, the diagnosis or treatment of TRICARE beneficiaries.
(6) Evidence. Evidence from scientific literature may be sufficient to establish that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of TRICARE beneficiaries.
(7) Prevalence. The medical condition diagnosed or treated by the new medical service or technology may have a low prevalence among TRICARE beneficiaries.
(8) Subpopulation. The new medical service or technology may represent an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of a subpopulation of patients with the medical condition diagnosed or treated by the new medical service or technology.
(9) Newness criteria. A medical service or technology may be considered new within 2 or 3 years after the point at which data begin to become available reflecting the inpatient hospital code assigned to the new service or technology (depending on when a new code is assigned and data on the new service or technology becomes available for DRG recalibration). After TRICARE has recalibrated the DRGs, based on available data, to reflect the costs of an otherwise new medical service or technology, the medical service or technology will no longer be considered "new" under the criterion of this section.
(10) Payment methodology. For discharges involving new medical services or technologies that meet the criteria specified in paragraphs (a)(1)(iv)(A)(4) through (a)(1)(iv)(A)(9) and that are approved as TRICARE NTAPs per paragraph (a)(1)(iv)(A)(11) of this section, TRICARE payment will be the lesser of:
(i) The CMS designated percentage of the estimated costs of the new technology or medical service, as published in 42 CFR 412.88; or
(ii) The CMS designated percentage of the difference between the full DRG payment and the hospital's estimated cost for the case, as published in 42 CFR 412.88.
(11) Publication and timing. TRICARE may consider whether a new medical service or technology meets the eligibility criteria specified in paragraphs (a)(1)(iv)(A)(4) through (a)(1)(iv)(A)(9) of this section and announce the results on the NTAP website. In doing so, TRICARE only considers, for add-on payments for a particular fiscal year, an application for which the new medical device or product has received FDA marketing authorization by
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6. Amend
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(l) * * *
(3) * * *
(iii) * * * This temporary waiver provision terminates
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Dated:
Alternate OSD Federal Register Liaison Officer,
[FR Doc. 2022-10545 Filed 5-31-22;
BILLING CODE 5001-06-P
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