2024-22584. Medical Billing for Healthcare Services Provided by Department of Defense Military Medical Treatment Facilities to Civilian Non-Beneficiaries

Household income falls within the below federal poverty guidelines (%)	Inpatient fee	Outpatient fee
0-100	$0	$0
101-120	750	50
121-140	1,250	50
141-160	2,000	50
161-180	3,000	50
181-200	4,000	50
201-220	5,000	50
221-240	6,000	50
241-260	7,000	50
261-280	8,000	50
281-300	9,000	50
301-320	10,000	50
321-340	11,000	50
341-360	12,000	50
361-380	13,000	50
381-400	14,000	50

Applicants with annual household income of greater than 400 percent of the applicable year's FPGs will not be eligible for a sliding fee discount but may be eligible for a catastrophic fee waiver.

I. Catastrophic Fee Waiver

The catastrophic fee waiver is based on a formula for adjusting the medical invoice over a 36-month period. The catastrophic fee waiver consists of limiting the patient's medical bill to a maximum percentage of the patient's monthly household income multiplied by 36 months and waiving fees associated with the balance of the medical bill that exceeds the calculation. If the calculation yields an amount greater than the original medical bill, then the catastrophic fee waiver will not be applicable. The maximum percentage will be set to 5 percent of the patient's monthly household income multiplied by 36 months. The ASD(HA) will annually set the catastrophic fee waiver percentage and may periodically adjust the percentage by issuing policy to be published on the DoD Reimbursement Rates website.

J. Collection in Installments

As part of the implementation of the sliding fee and catastrophic fee waiver protections to prevent severe financial harm, patients eligible for the MHS MPWP may have amounts collected in installments for a term not to exceed 72 months. Additionally, patients may request to pay their balance by lump sum. The minimum amount that may be paid by installment per month is $25.

K. Alternative Authority for Waiver of Medical Fees Based on KSA Enhancement

In accordance with 10 U.S.C. 1079b(b), the Director of DHA may issue a full waiver of fees for care provided to civilian non-beneficiaries if determined by the Director of DHA to be appropriate. Accordingly, consideration of a waiver of medical fees will occur on a case-by-case basis and only after application for the MHS MPWP has occurred. A waiver under 10 U.S.C. 1079b(b) of $600 or more will result in reporting to the IRS and issuance of a Form 1099-C to the non-beneficiary for the amount waived. Waivers under 10 U.S.C. 1079b(b) shall be used sparingly and only when the Director of DHA determines that the MHS MPWP did not sufficiently mitigate severe financial harm and receives certification from competent medical authority that the care provided to the patient enhanced the KSAs of the treating healthcare provider(s). All patient invoices will include a statement that the patient may apply for a waiver based on 10 U.S.C. 1079b(b) and 32 CFR 220.12(n) and include information on how to submit a waiver request.

L. Applicability of the MHS MPWP to Tortfeasors and Third-Party Payers

No discount or waiver of fees under 10 U.S.C. 1079b shall be interpreted to be applicable to tortfeasors under the Federal Medical Care Recovery Act (FMCRA), 42 U.S.C. 2651 or to third-party payers under 10 U.S.C. 1095. Patients treated at DoD MTFs are responsible to identify on the DD Form 3201 whether their injury/disease was caused by a third party. To be eligible to obtain any discounts or waivers ( print page 79809) under the MHS MPWP, the patient must consent and agree to cooperate with the United States to recover the cost of care against any liable tortfeasor or insurance under the FMCRA. Patients who have a remaining balance after recoveries from third-party tortfeasors or their insurers, may apply for relief of any remaining medical debt or may be refunded amounts already paid toward their medical debt if no balance is owed.

VIII. Expected Impact of This Rulemaking

DoD anticipates that section 716 of the NDAA-23 will substantially mitigate serious financial harm to non-beneficiaries through application of a sliding fee and/or a catastrophic fee waiver to medical invoices generated by MTFs. DoD anticipates that the Director of DHA's discretionary authority to waive fees for non-beneficiaries will also contribute to reducing severe financial harm.

The anticipated costs for the MHS MPWP include only the time required for a patient's application to be completed (see Paperwork Reduction Act section of this preamble) and reviewed. This includes time required for civilian non-beneficiary patients to complete the associated DD Form 3201 declaring their income, DoD to receive and assess the application, followed by the determination of the eligibility for a sliding scale discount, catastrophic fee waiver, or waiver under 10 U.S.C. 1079b(b) by the Director of DHA, and the response time for the decision. The total estimated time is less than 90 days. In addition, costs may be incurred for patients who desire to apply for a waiver of their medical debt (via a DD Form 3201-1) after they have been approved for the MHS MPWP.

(1) Government Burden Related to the DD Form 3201, “Application for Military Health System Modified Payment and Waiver Program”:

Table A—Government Burden Related to the DD Form 3201, “Application for Military Health System Modified Payment and Waiver Program”

Part A: Labor cost to the Federal government	Part B: Operational and maintenance costs
(1) Collection Instrument: DD Form 3201	(1) Cost Categories.
(a) Number of Total Annual Responses: 2,160	(a) Equipment: $0.
(b) Processing Time for each Response: 10 minutes	(b) Printing: $0.15/printing adjusted medical bills * 2,160 = $324.
(c) Hourly Wage of Worker(s) Processing Responses: $17.28	(c) Postage: $0.66 * 2,160 = $1,425.60.
(d) Cost to Process Each Response: $2.88	(d) Software Purchases: $0.
(e) Total Cost to Process Responses: $6,220.80	(e) Licensing Costs: $0.
(2) Overall Labor Burden to the Federal Government	(f) Other (Envelope): $0.24 * 2,160 = $518.40.
(a) Total Number of Annual Responses: 2,160	(2) Total Operational and Maintenance Cost: $2,268.00.
(b) Total Labor Burden: $6,220.80
Source: 2023 GS Pay Scale at GS-06, Step 1 ( https://federaljobs.net/​salarybase/​#Base_​Rate_​Chart).
Source: Printing page cost ( https://www.ecfr.gov/​current/​title-32/​subtitle-A/​chapter-I/​subchapter-N/​part-286/​subpart-E/​section-286.12). Postage costs: United States Postal Service, https://store.usps.com/​store/​results/​shipping-supplies/​_/​N-7d0v8v#content.
Part C: Total cost to the Federal government
(1) Total Labor Cost to the Federal Government: $6,220.80.
(2) Total Operational and Maintenance Costs: $2,268.00.
(3) Total Cost to the Federal Government: $8,488.80.

(2) Government Burden Related to the DD Form 3201-1, “Request for a Medical Debt Waiver, Military Health System Modified Payment and Waiver Program”:

Table B—Government Burden Related to the DD Form 3201-1, “Request for a Medical Debt Waiver, Military Health System Modified Payment and Waiver Program”

Part A: Labor cost to the Federal government	Part B: Operational and maintenance costs
(1) Collection Instrument: DD Form 3201-1	(1) Cost Categories.
(a) Number of Total Annual Responses: 1,080	(a) Equipment: $0.
(b) Processing Time per Response: 4 minutes	(b) Printing: $0.15/printing adjusted medical bills * 1,080 = $162.
(c) Hourly Wage of Worker(s) Processing Responses: $17.28	(c) Postage: $0.66 * 1,080 = $712.80.
(d) Cost to Process Each Response: $1.15	(d) Software Purchases: $0.
(e) Total Cost to Process Responses: $1,244.16	(e) Licensing Costs: $0.
(2) Overall Labor Burden to the Federal Government	(f) Other (Envelope): $0.24 * 1,080 = $259.20.
(a) Total Number of Annual Responses: 1,080	(2) Total Operational and Maintenance Cost: $1,134.00.
(b) Total Labor Burden: $1244.16
Source: 2023 GS Pay Scale at GS-06, Step 1 ( https://federaljobs.net/​salarybase/​#Base_​Rate_​Chart).
Part C: Total cost to the Federal government
(1) Total Labor Cost to the Federal Government: $1,244.16.
(2) Total Operational and Maintenance Costs: $1,134.00.
(3) Total Cost to the Federal Government: $2,378.16.

( print page 79810)

IX. Regulatory Compliance Analysis

A. Executive Order 12866, “Regulatory Planning and Review,” as Amended by Executive Order 14094, “Modernizing Regulatory Review” and Executive Order 13563, “Improving Regulation and Regulatory Review”

Executive Order 12866, as amended by 14094 (88 FR 21879, April 11, 2023), and Executive Order 13563 direct agencies to assess all costs, benefits and available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, safety effects, distributive impacts, and equity). These Executive Orders emphasize the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This proposed rule has been designated significant, under section 3(f) of Executive Order 12866, as amended by Executive Order 14094.

B. Public Law 118-15, Div. B, Title III, “Administrative Pay-As-You-Go Act of 2023”

Per the Administrative Pay-As-You-Go Act of 2023 (Fiscal Responsibility Act of 2023 (Pub. L. 118-5, div. B, title III)), agencies are required to submit certain information regarding the direct spending effects of their rules to OMB. Accordingly, the DoD does not anticipate an increase to direct spending, i.e., mandatory net outlays, stemming from the implementation of this proposed rule. This proposed rule affects only DoD's annually appropriated (discretionary) salaries and expenses resources and does not affect direct spending. Healthcare services provided by MTFs are funded by discretionary appropriations. Generally, when MTFs render healthcare services to non-beneficiaries of the Department of Defense, such as those that will be covered by implementation of this proposed rule, the care is provided on a reimbursable basis. On average from 2019-2020, MTFs generated $235.6 million annually in medical bills for healthcare services rendered to non-beneficiaries. Of that amount, an average of 29 percent is reimbursed by the third-party health insurance plans of insured patients, while another 30 percent is written off in accordance with agreed upon terms of coverage. An average of 6 percent is collected from uninsured patients and those who are insured but have remaining coinsurance and co-pays; and an average of 35 percent is transferred to the Department of the Treasury for collection actions due to an individual's unresponsiveness to due process billing activity. Of the 35 percent transferred to the Treasury, many are undocumented individuals without Social Security Numbers. The Treasury has historically recovered approximately 1 percent of the amount transferred by MTFs. All amounts recovered are deposited to the discretionary appropriation that funds MTF operations.

Table D—Historical Activity

[FY 2019-2020]

		Percent
Average Non-beneficiary Healthcare Billed by MTFs Annually	$235,618,719
Average Paid by Third-Party Insurance	68,473,042	29
Insurance Write-off	70,685,616	30
Average Paid by Patients	13,160,172	6
Transferred to Treasury	82,621,796	35
Collected by Treasury	2,478,654	1

Uninsured non-beneficiary patients and those who are insured but have high coinsurance and co-pays will benefit most from implementation of this proposed rule. Of these uninsured and underinsured, we estimate a minimum of 50 percent will be eligible for a 100 percent discount of their MTF medical bill. From Calendar Years (CY) 2018 through 2021, the average inpatient medical bill for this patient population was $47,009; and the average outpatient medical bill was $150. In Bexar County, Texas, where most of these costs were incurred ( i.e., Brooke Army Medical Center in San Antonio, Texas), the median household income is $67,275 (per the 2020 U.S. Census Bureau) and the same source reports cite that the average number of persons living in each household in Bexar County is 2.71. Consequently, we estimate that this patient population will significantly benefit from this program. For example, using the 2020 U.S. Census Bureau data for Bexar County and the average inpatient and outpatient medical bill amounts for CYs 2018-2021, applying the MHS MPWP discounts would yield a reduction of 83 percent to the average inpatient medical bill (decreasing it from $47,009 to $8,000) and a 67 percent reduction to the average outpatient medical bill (decreasing it from $150 to $50).

CY 2018-2021	Average medical bill	MHS MPWP discount	% Discount	New bill
Inpatient	$47,009	$39,009	83	$8,000
Outpatient	150	100	67	50
Notes: Based on 2020 U.S. Census Bureau data for Bexar County, Texas, where median household income is $67,275 and the average number of persons living in each household is 2.71.

With the implementation of the MHS MPWP, we anticipate the percentage of cases being transferred to the Treasury for collection activity, and the average amounts paid for by uninsured and underinsured patients, being substantially decreased. While this may cause an increase in discretionary spending of the Defense Health Program appropriation; it will not cause an increase in mandatory net outlays (direct spending). The Administrative Pay-As-You-Go Act of 2023 is available at https://www.whitehouse.gov/​wp-content/​uploads/​2023/​09/​M-23-21-Admin-PAYGO-Guidance.pdf. ( print page 79811)

C. Congressional Review Act (5 U.S.C. 801 et seq.)

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act), OMB's Office of Information and Regulatory Affairs has determined that this proposed rule does not meet the criteria set forth in 5 U.S.C. 804(2).

D. Public Law 96-354, “Regulatory Flexibility Act” (5 U.S.C. 601)

The ASD(HA) certified that this proposed rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. The Regulatory Flexibility Act aims at taking into account the impact of regulations on small businesses, small organizations, small governmental jurisdictions, and small entities. More specifically, the law states “. . . agencies shall endeavor . . . to fit regulatory and informational requirements to the scale of the business, organizations, and governmental jurisdictions subject to regulation.” (Pub. L. 96-354, September 19, 1980; section 2 (b)) The proposed amendments to 32 CFR part 220 do not impact the small entities referenced in this paragraph. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

E. Section 202, Public Law 104-4, “Unfunded Mandates Reform Act”

Section 202 of the Unfunded Mandates Reform Act of 1995 (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 $100 million in 1995 dollars, updated annually for inflation. In 2024, that threshold is approximately $183 million. This proposed rule will not mandate any requirements for State, local, or tribal governments, and will not affect private sector costs. An unfunded mandate occurs when a State, local, or tribal government must perform certain actions or offer certain programs but does not receive any Federal funds to make it happen. The Federal Government passes legislation requiring the program, but the law does not include any funding. This proposed rule will only affect a very narrow category of the public and it will not impact State, local, or tribal governments. Additionally, it will not affect private sector costs as all proposed actions would be completed by Federal agencies.

F. Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35)

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

(1) Respondent Burden Related to DD Form 3201, “Application for Military Health System Modified Payment and Waiver Program.” This is a new collection. Using the information collected on the form, DoD medical billing offices will determine whether the patient is eligible for the medical discount/waiver program. If the patient is eligible, the billing office will generate an adjusted medical bill and send it to the patient. If the patient is not eligible, the billing office will send written correspondence to the patient, informing them that they are not eligible for the discount program and of their right to reapply should their financial circumstances change. Processing of the application will be annotated on the last page of the application. The application will be filed in the billing office's official records.

	Part A: Estimation of respondent burden		Part B: Labor cost of respondent burden
(1)	Collection Instrument: DD Form 3201	(1)	Collection Instrument: DD Form 3201.
(a)	Number of Respondents: 2,160	(a)	Number of Total Annual Responses: 2,160.
(b)	Number of Responses Per Respondent: 1	(b)	Response Time: 4 minutes.
(c)	Number of Total Annual Responses: 2,160	(c)	Respondent Hourly Wage: $33.58.*
(d)	Response Time: 4 minutes	(d)	Labor Burden per Response: $2.24.
(e)	Respondent Burden Hours: 144 hours	(e)	Total Labor Burden: $4,835.52.
(2)	Total Submission Burden	(2)	Overall Labor Burden.
(a)	Total Number of Respondents: 2,160	(a)	Total Number of Annual Reponses: 2,160.
(b)	Total Number of Annual Responses: 2,160	(b)	Total Labor Burden: $4,835.52.
(c)	Total Respondent Burden Hours: 144 hours
Approximately 8,000 civilian non-beneficiary patients are treated at DoD MTFs annually. The U.S. Census Bureau estimates that 27 percent of Americans are uninsured. Based on that estimate, we anticipate that 2,160 (or 27 percent of 8,000) patients will not have insurance and may face serious financial harm stemming from MTF medical bills. We anticipate that those uninsured individuals will apply for the MHS MPWP each year.
*  Source: http://www.bls.gov/​web/​empsit/​ceseesummary.htm (Bureau of Labor Statistics national average hourly wage for all employees June 2023)

(2) Respondent Burden Related to DD Form 3201-1, “Request for Waiver of Medical Debt, Military Health System Modified Payment and Waiver Program”. This is a new collection. The 10 U.S.C. 1079b statute grants the Director of the Defense Health Agency discretionary authority to grant waivers to medical bills in certain instances. Accordingly, the DD Form 3201-1 may be used by non-beneficiary patients to apply for a waiver. For patients who are approved for waivers (not discounts) under the Director of the Defense Health Agency's discretionary authority, the waived amount, along with the patient's SSN and address, will be relayed to the IRS.

	Part A: Estimation of respondent burden		Part B: Labor cost of respondent burden
(1)	Collection Instrument: DD Form 3201-1	(1)	Collection Instrument: DD Form 3201-1.
(a)	Number of Respondents: 1,080	(a)	Number of Total Annual Responses: 1,080.
( print page 79812)
(b)	Number of Responses Per Respondent: 1	(b)	Response Time: 4 minutes.
(c)	Number of Total Annual Responses: 1,080	(c)	Respondent Hourly Wage: $33.58.
(d)	Response Time: 4 minutes	(d)	Labor Burden per Response: $2.24.
(e)	Respondent Burden Hours: 72 hours	(e)	Total Labor Burden: $2,417.76.
(2)	Total Submission Burden	(2)	Overall Labor Burden.
(a)	Total Number of Respondents: 1,080	(a)	Total Number of Annual Reponses: 1,080.
(b)	Total Number of Annual Responses: 1,080	(b)	Total Labor Burden: $2,417.76.
(c)	Total Respondent Burden Hours: 72 hours
Of the 2,160 anticipated applicants to the program, we anticipate that most will receive a substantially discounted medical bill. However, this estimate is prepared with a worst-case scenario in which half of the applicants desire to apply for a waiver.

Written comments and recommendations on the proposed information collection should be sent to Mr. Matt Eliseo at the Office of Management and Budget, DoD Desk Officer, Room 10102, New Executive Office Building, Washington, DC 20503, with a copy to Ms. Merlyn Jenkins at the Office of the Secretary of Defense for Health Affairs, Health Resources Management and Policy, 1200 Defense Pentagon, Washington, DC 20301-1200. Comments can be received from 30 to 60 days after the date of this notice, but comments to OMB will be most useful if received by OMB within 30 days after the date of this notice.

You may also submit comments identified by docket number and title through the Federal eRulemaking Portal at http://www.regulations.gov. Follow the instructions for submitting comments.

All submissions received must include the agency name, docket number and 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.

To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Ms. Merlyn Jenkins at the Office of the Secretary of Defense for Health Affairs, Health Resources Management and Policy, 1200 Defense Pentagon, Washington, DC 20301-1200, [phone].

G. Executive Order 13132, “Federalism”

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirement costs on State and local governments, preempts state law, or otherwise has federalism implications. This proposed rule will not have a substantial effect on State and local governments.

H. Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments”

Executive Order 13175 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct compliance costs on one or more Indian tribes, preempts tribal law, or effects the distribution of power and responsibilities between the Federal Government and Indian tribes. This proposed rule will not have a substantial effect on Indian tribal governments.

List of Subjects in 32 CFR Part 220

• Accounts receivable
• Civilian medical debt
• Claims
• Healthcare
• Health insurance
• Medical billing
• Medical debt
• Medical debt waiver
• Military medical treatment facilities
• Military personnel, and Third party collections

Accordingly, the DoD proposes to amend 32 CFR part 220 to read as follows:

PART 220—MEDICAL BILLING FOR HEALTHCARE SERVICES PROVIDED BY DEPARTMENT OF DEFENSE MILITARY MEDICAL TREATMENT FACILITIES TO CIVILIAN NON-BENEFICIARIES

1. The authority citation for part 220 is revised to read as follows:

Authority: 5 U.S.C. 301; 10 U.S.C. 1095, 1097b(b), 1079b; 31 U.S.C. 3711, 3717; and 42 U.S.C. 2651.

2. The part heading is revised to read as set forth above.

3. Add § 220.12 to reads as follows:

§ 220.12

Medical billing for healthcare services provided by DoD Military Medical Treatment Facilities to civilian non-beneficiaries.

(a) Applicability. (1) This section applies to all persons who receive reimbursable care in a military medical treatment facility (MTF) who are not covered beneficiaries of the Department of Defense (DoD) as defined in § 220.14, other than persons who receive care in an MTF pursuant to an agreement between the United States and a foreign government or other entity.

(2) This section does not apply to third persons (or their insurers) with a tort liability under the Federal Medical Care Recovery Act (FMCRA) (42 U.S.C. 2651) or third-party payers under 10 U.S.C. 1095. The discounts and waivers implemented by this section may not be used to reduce the value of the care and treatment that is recoverable from those third persons (or their insurers) under the FMCRA or 10 U.S.C. 1095.

(b) Definitions. (1) Military Health System (MHS) Modified Payment and Waiver Program (MPWP). The MHS MPWP is a DoD program to implement an enacted Fiscal Year 2023 National Defense Authorization Act (2023-NDAA) amendment to section 1079b of title 10, United States Code (U.S.C.). Section 716 of the 2023-NDAA amended 10 U.S.C. 1079b to require, inter alia, the Director of the Defense Health Agency to reduce fees that would otherwise be charged to civilian non-beneficiaries for medical care according to a sliding scale and to implement a catastrophic fee waiver to prevent severe financial harm. It also granted the Director of the Defense Health Agency with discretionary authority to issue waivers of fees for medical care if the provision of such care enhances the knowledge, skills, and abilities of healthcare providers.

(2) Covered payer. A third-party payer or other insurance, medical service, or health plan.

(3) Covered by a covered payer. A medical item or service is deemed to be covered by a covered payer when:

(i) The patient possesses health insurance that is in effect on the date(s) that the item or service was provided;

(ii) The health insurance plan provides coverage for the geographic area where the care was delivered;

(iii) The care provided to the patient is an item or service covered by the terms of the insurance plan, and;

(iv) The health insurance plan provides coverage for care rendered in a U.S. Government/DoD facility; ( print page 79813)

(v) The insurer agrees to pay the facility directly;

(vi) The insurer agrees to provide the facility with an Explanation of Benefits (EOB) that details how the insurer processed the claims according to the insurance plan; and

(vii) The patient authorizes the DoD to file insurance claims against the insurance policy.

(4) Non-covered item or service. A medical item or service that is not covered by the terms of the insurance plan.

(5) Third-party payer and insurance, medical service, or health plan have the meaning given those terms in 10 U.S.C. 1095(h).

(6) Knowledge, skills, and abilities (KSAs). KSAs are a set of clinical skill requirements that a healthcare provider needs in order to provide medical care or treatment in the deployed environment.

(7) Reasonable value of medical care. Reasonable value of medical care is defined in § 220.8. The reasonable value of medical care is based on the amount billed by the MTF before application of any sliding scale discount, catastrophic fee waiver discount, or other discount or waiver under this section.

(c) Notifications concerning MHS MPWP. The Assistant Secretary of Defense for Health Affairs (ASD(HA)) will maintain a public website containing information about the MHS MPWP, applicable forms (with links to the forms), and a fee discount calculator. The DoD will notify non-beneficiary patients of the availability of the MHS MPWP. Information about the MHS MPWP will be posted in MTFs ( e.g., in waiting rooms and information desks) and included in DoD patient invoices.

(d) Requirement to complete a DD Form 2569. MTFs will present the DD Form 2569, “Third Party Collection Program/Medical Services Account/Other Health Insurance” to all patients. It will also be available at https://www.esd.whs.mil/​Directives/​forms/​dd2500_​2999/​. All patients (regardless of insurance status) must complete the DD Form 2569.

(1) Before applying for the MHS MPWP, all patients (regardless of health insurance status) must fully complete (including by signing) the DD Form 2569 and ensure that a current and accurate DD Form 2569 is on file with the applicable MTF. Successful completion of these steps is a condition of eligibility for the MHS MPWP.

(2) For patients with health insurance, the DoD will file insurance claims on behalf of the patient. Patients with health insurance who do not consent to allowing the DoD to file health insurance claims on their behalf will not be eligible for the MHS MPWP.

(3) Updating the DD Form 2569. The DoD may use a completed DD Form 2569 for multiple episodes of care. Unless a DD Form 2569 completed within the preceding 12 months for the patient is available, the DoD will solicit an updated DD Form 2569 from patients who receive a subsequent episode of care from the MTF. However, the lack of an updated form will not preclude the DoD from filing additional claims against encounters for the patient.

(e) Notifications on Medical Invoices. In addition to any notifications otherwise already required by law, regulation, or DoD policy, all DoD invoices will notify patients that-

(1) Patients must consent to DoD filing insurance claims on their behalf to be eligible for the MHS MPWP;

(2) The DoD will suspend fee assessment and patient billing actions against the debtor for up to 120 days while the DoD is pursuing an insurance claim or claim against a third-party payer;

(3) For patients who are covered by a covered payer, the DoD will only bill the patient for the insurer-assigned copays, coinsurance, deductibles, nominal fees, and non-covered services;

(4) The patient demonstrates potential eligibility for the MHS MPWP fee discounts and catastrophic fee waivers by completing and submitting DD Form 2569 and DD Form 3201, which may result in a discount of their medical invoice after pursuit or recovery of claims against third party payers (instructions for demonstrating eligibility, including deadline, will also be included);

(5) In addition to fee discounts and catastrophic fee waivers, patients may request a full waiver under 10 U.S.C. 1079b(b) by submitting a DD Form 3201-1, Request for Medical Debt Waiver, Military Health System Modified Payment and Waiver Program. Patients may be considered for a full waiver if they previously applied to the MHS MPWP and it did not sufficiently mitigate financial harm and if the applicable care provided is determined to enhance the KSAs of DoD healthcare providers. Waivers under 10 U.S.C. 1079b(b) may result in information reporting to the Internal Revenue Service and issuance of a Form 1099-C, Cancellation of Debt, and the waived amount(s) may constitute gross income to the patient under 26 U.S.C. 61;

(6) If fees or charges (including those reduced under the MHS MPWP) become delinquent due to non-payment, the DoD will establish a debt for the delinquent amount and commence efforts to collect the established debt, which may include transfer to the Department of the Treasury in accordance with applicable authority; and

(7) That invoices issued after reduction or waiver of charges under the MHS MPWP will reflect the date by which an unpaid account will become delinquent.

(f) DoD medical billing rates. Annually, the ASD(HA) publishes the rates that DoD uses for medical billing. Except for reasons listed in 32 CFR 220.8(f) or (g), the DoD rate will be used for all non-beneficiary billing, including billing to either the insurer or patient.

(g) For non-covered items or services. In any instance where an item or service is not covered by a covered payer, the DoD will bill the patient for the full amount of the service.

(h) For patients who are potentially covered by a covered payer. In any instance where a patient submits a DD Form 2569 that indicates that the patient possesses valid health insurance, the DoD will suspend any collections against the patient to allow time for the claim remittance to be processed by the insurer and for a valid EOB to be received, or until 120 days have passed since filing for payment from the insurance company, whichever comes first. Upon receipt of an EOB, the DoD will bill the patient only for those amounts that are designated by the insurance company as a copay, coinsurance, deductible, nominal fee, or non-covered service. If insurance remittance and an EOB are not received within 120 days of filing of a claim, the DoD will deem the item or service to be a non-covered service. If insurance remittance and an EOB are received after 120 days have elapsed, the DoD will deposit the remittance and adjust the patient's account accordingly. The DoD will issue to the patient a revised medical invoice reflecting updated balances.

(i) Actions when an insurance payment and/or EOB is received. When the DoD receives an insurance payment and/or an EOB, the DoD will post all payments and adjustments for those items or services that are deemed as covered by a covered payer against the bill in the manner prescribed by the EOB. The DoD will bill the patient for any remaining copays, co-insurance, deductibles, nominal fees and non-covered services.

(j) Application for the MHS MPWP (DD Form 3201). All DoD invoices generated for non-covered beneficiaries will include a statement that all patients applying for the MHS MPWP must ( print page 79814) complete DD Form 3201 and must include instructions on how to apply ( i.e., the deadline and where to submit the application). Processing of the application will be logged on the last page of the DD Form 3201. Applicants to the MHS MPWP will be notified of the status of their application via the following methods:

(1) For approved applications, the DoD will issue to the patient a modified medical invoice reflecting the adjusted balance due after applying the sliding fee and/or catastrophic fee waiver. The invoice modified to reflect fee adjustments or waiver under the MHS MPWP will include notification of the requirement to transfer delinquent debts to the Department of the Treasury if, after any modification under the MHS MPWP, an unpaid invoice becomes delinquent.

(2) For disapproved applications, the DoD will issue a letter reflecting the reason why the application was disapproved. The letter will inform the patient of their right to reapply should their financial circumstances change.

(k) Requirements to apply to the MHS MPWP. (1) To apply to the MHS MPWP all patients must:

(i) Complete a DD Form 2569 (even in cases where the patient possesses no health insurance). Insurance remittances must be applied before the patient can be considered for the MHS MPWP.

(ii) Complete a DD Form 3201, “Application for Military Health System Modified Payment and Waiver Program.”

(iii) Attach a copy of the patient's (or guarantor's if the patient is a minor) most recently filed Federal Income Tax Return to the DD Form 3201.

(iv) Attach a copy of the patient's (or guarantor's if the patient is a minor) last two pay stubs.

(v) Indicate whether their injury/disease was caused by a third party and provide explanatory information.

(2) Required certifications.

(i) If the patient did not file a Federal Income Tax Return for the preceding year, the patient must certify this on the DD Form 3201.

(ii) If the patient has no verifiable income, the patient must certify this and provide a certification of their current annual income amount on the DD Form 3201.

(iii) If the patient believes that hospitalization/care occurred as the result of an action for which another party may be responsible, then to be eligible for the MHS MPWP, the patient must agree to cooperate and assist the United States to recover the cost of care from said party.

(l) Basis to assign a Sliding Fee Discount/Catastrophic Fee Waiver —(1) MHS Discount Calculator. Once a year, the ASD(HA) will promulgate an MHS Discount Calculator. The initial calculator will assign a 100 percent sliding fee discount and no stratified nominal fee to applicants to the MHS MPWP whose annual household income is at or below 100 percent of the applicable year's Federal Poverty Guidelines; and a 100 percent sliding fee discount plus a stratified nominal fee to applicants whose annual household income is greater than 100 percent and at or below 400 percent of the Federal Poverty Guidelines current at the time of application. Applicants with annual household income of greater than 400 percent of the applicable year's Federal Poverty Guidelines will not be eligible for a sliding fee discount; but may be eligible for a catastrophic fee waiver.

(2) Catastrophic Fee Waiver. For applicants who exceed the 400 percent threshold, the calculator will assign an ASD(HA)-approved maximum percentage that may be charged monthly based on the patient's monthly household income. The maximum percentage will be set to 5 percent. The monthly household income will be multiplied by 5 percent and the result will be multiplied by 36 months to derive the amount of downward adjustment to the patient's bill. Amounts that exceed the recalculated amount will be waived. If the original bill is less than the recalculated bill, the original bill will remain as the balance owed.

(3) Nominal fee. Once a year, the ASD(HA) will publish a stratified nominal inpatient and outpatient fee. The nominal fee will be assigned in any case where the sliding fee results in a 100 percent discount of the medical invoice and the patient's income is above 100 percent and up to 400 percent of the applicable year's Federal Poverty Guidelines. Stratified nominal fees are generally established in a manner that is equitable with what military retirees enrolled in the TRICARE program would be required to pay in the private sector for comparable services. The initial nominal stratified fees are as follows:

Household income falls within the below Federal poverty guidelines	Inpatient fee	Outpatient fee
0%-100%	$0
101%-120%	$750	$50
121%-140%	1,250	50
141%-160%	2,000	50
161%-180%	3,000	50
181%-200%	4,000	50
201%-220%	5,000	50
221% -240%	6,000	50
241%-260%	7,000	50
261%-280%	8,000	50
281%-300%	9,000	50
301%-320%	10,000	50
321%-340%	11,000	50
341%-360%	12,000	50
361%-380%	13,000	50
381%-400%	14,000	50