81 FR 11665 - TRICARE; Revision of Nonparticipating Providers Reimbursement Rate; Removal of Cost Share for Dental Sealants; TRICARE Dental Program

DEPARTMENT OF DEFENSE
Office of the Secretary

Federal Register Volume 81, Issue 44 (March 7, 2016)

Page Range		11665-11668
FR Document		2016-04983
This final rule revises the benefit payment provision for nonparticipating providers to more closely mirror industry practices by requiring TDP nonparticipating providers to be reimbursed (minus the appropriate cost-share) at the lesser of billed charges or the network maximum allowable charge for similar services in that same locality (region) or state. This rule also updates the regulatory provisions regarding dental sealants to clearly categorize them as a preventive service and, consequently, eliminate the current 20 percent cost-share applicable to sealants to conform with the language in the regulation to the statute.
Federal Register, Volume 81 Issue 44 (Monday, March 7, 2016)
[Federal Register Volume 81, Number 44 (Monday, March 7, 2016)]
[Rules and Regulations]
[Pages 11665-11668]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-04983]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

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


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

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

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

DATES: 
    Effective date: The final rule is effective April 6, 2016.
    Applicability date: The programmatic improvements in this final 
rule are scheduled to take effect as soon as the Director, Defense 
Health Agency can effectively and efficiently implement through award 
of a new TRICARE Dental Program contract. No change will be negotiated 
for existing contracts to implement this rule. Implementation through 
the new contract will be effective with the start of care delivery 
under the new contract (currently anticipated to start February 1, 
2017).

FOR FURTHER INFORMATION CONTACT: Col James Honey, Defense Health 
Agency, telephone (703) 681-0039.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

1. Purpose of Regulatory Actions

a. Need for Regulatory Actions
(1) Revision of Nonparticipating Providers' Reimbursement Rate
    Prior to 2006, TRICARE Dental Program (TDP) participating and 
nonparticipating providers were reimbursed at the equivalent of not 
less than the 50th percentile of prevailing charges made for similar 
services in the same locality (region) or state, or the provider's 
actual charge, whichever is lower, less any cost-share amount due for 
authorized services. This provision was included in the regulation to 
constitute a significant financial incentive for participation of 
providers in the contractor's network and to ensure a network of 
quality providers through use of a higher reimbursement rate. Over 
time, the Department discovered that this provision placed an 
unnecessary burden on contractors with already established, high 
quality provider networks with reimbursement rates below the 50th 
percentile that were of sufficient size to meet the access requirements 
of the TDP. Consequently, the Department of Defense published a final 
rule in the Federal Register on January 11, 2006 (71 FR 1695), revising 
the participating provider's reimbursement rate for the TDP that has 
resulted in significant cost savings to the TDP enrollees and the 
Government. Since over 80 percent of all TDP care was provided by 
network dentists, the need to also change the reimbursement rate for 
nonparticipating dentists was overlooked and not included in the 2006 
rule change. However, over the past eight years this has created an 
incentive for some network providers to leave the TDP network and for 
other providers not to become network providers. As the rule is 
currently written, depending on the geographic location, some non-
network providers

[[Page 11666]]

are actually reimbursed at a higher amount than they would have been 
had they been a participating provider and receiving the negotiated 
network rate. Specifically, the final rule will require TDP 
nonparticipating providers to be reimbursed (minus the appropriate 
cost-share) at the lesser of (1) billed charges; (2) the network 
maximum allowable charge for similar services in that same locality 
(region) or state. This revision will increase the number of network 
providers and provide cost savings to enrollees and the Government.
(2) Removal of Cost-Share for Dental Sealants
    Sealants are currently separately defined in the TDP regulation at 
32 CFR 199.13(b)(24), and specifically identified as a covered non-
preventive service subject to a 20 percent cost-share. The cost-share 
for dental sealants was originally put in place when there was minimal 
evidence as to the effectiveness of dental sealants preventing tooth 
decay. The scientific evidence is now overwhelming that dental sealants 
are effective in preventing tooth decay and the vast majority of 
commercial dental insurance plans cover this procedure with no cost 
shares. Further, the American Dental Association's Council on Dental 
Care Programs Code on Dental Procedures and Nomenclature classifies 
dental sealants as a preventive procedure. Additionally, the Department 
currently recognizes sealants as a preventive service under the TRICARE 
Retiree Dental Program per 32 CFR 199.22(f)(1)(ii)(C). The regulatory 
revisions regarding dental sealants will delete the separate definition 
of dental sealants, specifically include sealants as a category of 
preventive service under 32 CFR 199.13(e)(2)(i)(B), delete any possible 
inconsistency in the definition of preventive service in 32 CFR 
199.13(b)(20) and (e)(2)(i), and update the cost-share table in 32 CFR 
199.13(e)(3)(i) to delete the specific line item reference to sealants 
being subject to a 20 percent cost-share in order to conform with the 
requirement in 10 U.S.C. 1076a(e)(1)(A) that TDP enrollees pay no 
charge for preventive services.
b. Legal Authority for the Regulatory Action
    This regulation is finalized under the authority of 10 U.S.C. 1076a 
which authorizes the Secretary of Defense to establish a voluntary 
enrollment dental plan for eligible dependents of members of the 
uniformed services who are on active duty for a period of more than 30 
days, members of the Selected Reserve of the Ready Reserve, members of 
the Individual Ready Reserve, and eligible dependents of members of the 
Ready Reserve of the reserve components who are not on active duty for 
more than 30 days.

2. Summary of the Final Rule

    In this final rule, the regulatory language changes 
nonparticipating provider (e.g. non-network or out-of-network) 
reimbursement at 32 CFR 199.13(g)(2)(i) to be on an equivalent basis 
with network reimbursement, in order to serve as an incentive for both 
providers to participate in the network and for beneficiaries to 
utilize network providers in order to avoid additional out-of-pocket 
costs for balance billing. The final rule includes several technical 
revisions for clarification and consistency sake in defining 
beneficiary liability, nonparticipating provider and participating 
provider in the context of the TDP. The final rule also amends several 
provisions within 32 CFR 199.13 to eliminate the separate definition of 
sealants, specifically include sealants as a covered preventive 
service, and remove beneficiary cost sharing by covering sealants at 
100 percent of allowable charge as authorized by law.

3. Summary of the Costs and Benefits

    This final rule is not anticipated to have an annual effect on the 
economy of $100 million or more, making it a substantive, non-
significant rule under the Executive Order and the Congressional Review 
Act. The amendment to transition nonparticipating provider 
reimbursement to be on an equivalent basis with network reimbursement, 
will result in (1) a lower allowed-to-billed ratio and a decrease in 
TDP claim payments, (2) premium decreases for beneficiaries; (3) a 
corresponding increase in enrollment by eligible beneficiaries as a 
result of these premium changes; (4) resultant cost savings to the 
government through reduced premium subsidies; and (5) increased out-of-
pocket costs for beneficiaries who opt to use a nonparticipating 
provider who may balance bill for the difference in contractor payment 
at the current rates and the new, lower network agreement rates. While 
the requirements for sealant coverage will not change, the removal of 
beneficiary cost sharing for sealants will result in (1) a marginal 
increase in sealant utilization, as we anticipate most beneficiaries 
requiring sealants are currently receiving these services since they 
remain a relatively inexpensive procedure and are typically viewed as 
beneficial; (2) a minimal premium increase for beneficiaries; and (3) 
an increase in government costs as a result of both the direct effect 
of the waived cost sharing on current sealant services and the full 
cost of the additional utilization. We estimate that the net effects of 
the TDP provisions that would be implemented by this rule would result 
in a net premium decrease for TDP beneficiaries and corresponding cost 
savings to the government over $17 million per year as well as an 
anticipated increase in the number of participating network providers.

II. Background

1 . Statutory and Regulatory Background

    The TRICARE Dental Program (TDP) allows the Secretary of Defense to 
offer comprehensive premium based indemnity dental insurance coverage 
to qualified individuals. The funds used by the TDP are appropriated 
funds furnished by Congress through annual appropriation acts and funds 
collected as premium shares from beneficiaries. TDP is delivered 
through a competitively procured contract awarded by the Director, 
Defense Health Agency, or designee. TDP enrollees are required to pay 
all or a portion of the premium cost depending on their status. For 
those eligible for premium sharing, including active duty dependents 
and certain Selected Reserve and Individual Reserve members, the 
portion of premium share to be paid by them is no more than forty (40) 
percent of the total premium. For those entitled to premium sharing, 
the Government pays the remaining sixty (60) percent of the premium. 
Additional information regarding the TDP is available at 
www.tricare.mil/tdp.
    Because the amendments to 32 CFR 199.13 will result in changes to 
the TDP voluntary enrollment dental insurance plan which is 
administered through a competitively procured contract, these 
amendments will be incorporated into the next TDP contract and are 
scheduled to take effect with the start of health care delivery under 
the next awarded TDP contract (currently anticipated to start February 
1, 2017).

2. Summary of the Proposed Rule

    We proposed several amendments to the TRICARE Dental Program (TDP) 
regulation. Specifically, we proposed revising the benefit payment 
provision for nonparticipating providers to more closely mirror 
industry practices by requiring TDP nonparticipating providers to be 
reimbursed (minus the appropriate cost-share) at the lesser of (1) 
billed charges: Or (2) the network maximum allowable charge for similar

[[Page 11667]]

services in that same locality (region) or state. This rule also 
proposed updates to the regulatory provisions regarding dental sealants 
to clearly categorize them as a preventive service and, consequently, 
eliminate the current 20 percent cost-share applicable to sealants to 
conform the language in the regulation to the statute.

3. Summary of the Final Rulemaking

    The final rule changes the nonparticipating provider (e.g. non-
network or out-of-network) reimbursement at 32 CFR 199.13(g)(2)(i) to 
be on an equivalent basis with network reimbursement, in order to serve 
as an incentive for both providers to participate in the network and 
for beneficiaries to utilize network providers in order to avoid 
additional out-of-pocket costs for balance billing. The final rule also 
eliminates the separate definition of sealants found at 32 CFR 
199.13(b)(24) in favor of including it as a category of preventive 
service under 32 CFR 199.13(e)(2)(i)(B). Also, as a result of clearly 
classifying dental sealants as a preventive service, the final rule 
eliminates the current 20 percent cost-share to conform with the 
requirement in 10 U.S.C. 1076a(e)(1)(A) that TDP enrollees pay no 
charge for preventive services.

III. Summary of and Response to Public Comments

    The proposed rule was published in the Federal Register (79 FR 
78362) December 30, 2014, for a 60-day comment period. We received only 
one comment on the proposed rule applauding the proposed change to 
remove the 20 percent cost share for dental sealants. Because the 
comment supported the proposed changes, we are finalizing the proposed 
rule with no changes.

IV. Regulatory Procedures

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

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

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

    It has been determined that this final rule does not contain a 
Federal mandate that may result in the expenditure by State, local and 
tribal governments, in aggregate, or by the private sector, of $100 
million or more in any one year.

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

    It has been certified that this 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. Set forth in the final rule are minor revisions to 
the existing regulation. The DoD does not anticipate a significant 
impact on the Program.

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

    It has been determined that this final rule will not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Act of 1995. Existing information collections requirements of the 
TRICARE and Medicare programs will be utilized.

Executive Order 13132, Federalism

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

List of Subjects in 32 CFR Part 199

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

    Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

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

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


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


Sec.  199.13  TRICARE Dental Program.

* * * * *
    (b) * * *
    (4) Beneficiary liability. The legal obligation of the beneficiary, 
his or her estate, or responsible family member to pay for the costs of 
dental care or treatment received. Specifically, for the purposes of 
services and supplies covered by the TDP, beneficiary liability 
including cost-sharing amounts or any amount above the network maximum 
allowable charge where the provider selected by the beneficiary is not 
a participating provider or a provider within an approved alternative 
delivery system. In cases where a nonparticipating provider does not 
accept assignment of benefits.
* * * * *
    (14) Nonparticipating provider. A dentist or dental hygienist that 
furnished dental services to a TDP beneficiary, but who has not agreed 
to participate in the contractor's network and accept reimbursement in 
accordance with the contractor's network agreement. A nonparticipating 
provider looks to the beneficiary or active duty, Selected Reserve or 
Individual Ready Reserve member for final responsibility for payment of 
his or her charge, but may accept payment (assignment of benefits) 
directly from the insurer or assist the beneficiary in filing the claim 
for reimbursement by the dental plan contractor. Where the 
nonparticipating provider does not accept payment directly from the 
insurer, the insurer pays the beneficiary or active duty, Selected 
Reserve or Individual Ready Reserve member, not the provider.
* * * * *
    (17) Participating provider. A dentist or dental hygienist who has 
agreed to participate in the contractor's network and accept 
reimbursement in accordance with the contractor's network agreement as 
the total charge (even though less than the actual billed amount), 
including provision for payment to the provider by the beneficiary (or 
active duty, Selected

[[Page 11668]]

Reserve or Individual Ready Reserve member) or any cost-share for 
covered services.
* * * * *
    (20) Preventive services. Traditional prophylaxis including scaling 
deposits from teeth, polishing teeth, and topical application of 
fluoride to teeth, as well as other dental services authorized in 
paragraph (e) of this section.
* * * * *
    (e) * * *
    (2) * * *
    (i) Diagnostic and preventive services. Benefits may be extended 
for those dental services described as oral examination, diagnostic, 
and preventive services when performed directly by dentists and dental 
hygienists as authorized under paragraph (f) of this section. These 
include the following categories of service:
* * * * *
    (B) * * *
    (5) Sealants.
* * * * *
    (f) * * *
    (5) Participating provider. An authorized provider may elect to 
participate as a network provider in the dental plan contractor's 
network and any such election will apply to all TDP beneficiaries. The 
authorized provider may not participate on a claim-by-claim basis. The 
participating provide must agree to accept, within one (1) day of a 
request for appointment, beneficiaries in need of emergency palliative 
treatment. Payment to the participating provider is based on the 
methodology specified in paragraph (g)(2)(ii) of this section. The fee 
or charge determinations are binding upon the provider in accordance 
with the dental plan contractor's procedures for participation in the 
network. Payment is made directly to the participating provider, and 
the participating provider may only charge the beneficiary the 
applicable percent cost-share of the dental plan contractor's allowable 
charge for those benefit categories as specified in paragraph (e) of 
this section, in addition to the full charges for any services not 
authorized as benefits.
* * * * *
    (g) * * *
    (2) * * *
    (i) Nonparticipating providers (or the Beneficiaries or active 
duty, Selected Reserve or Individual Ready Reserve members for 
unassigned claims) shall be reimbursed at the lesser of the provider's 
actual charge: Or the network maximum allowable charge for similar 
services for that same locality (region) or state, whichever is lower, 
subject to the exception listed in paragraph (e)(3)(ii) of this 
section, less any cost-share amount due for authorized services. The 
network maximum allowable charge is the maximum negotiated fee between 
the dental contractor and any TDP participating provider for similar 
services covered by the dental plan in that same locality (region) or 
state.
* * * * *

    Dated: March 2, 2016.
Morgan E. Park,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-04983 Filed 3-4-16; 8:45 am]
 BILLING CODE 5001-06-P
Document Created: 2018-02-02 15:08:12
Document Modified: 2018-02-02 15:08:12
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective date: The final rule is effective April 6, 2016.
Contact		Col James Honey, Defense Health Agency, telephone (703) 681-0039.
FR Citation		81 FR 11665
RIN Number		0720-AB62
CFR Associated		Claims; Dental Health; Health Care; Health Insurance; Dental Sealants and Military Personnel
81 FR 11665 - TRICARE; Revision of Nonparticipating Providers Reimbursement Rate; Removal of Cost Share for Dental Sealants; TRICARE Dental Program

DEPARTMENT OF DEFENSEOffice of the Secretary

Federal Register Volume 81, Issue 44 (March 7, 2016)

DEPARTMENT OF DEFENSE
Office of the Secretary
