[Federal Register Volume 59, Number 66 (Wednesday, April 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8113]
[[Page Unknown]]
[Federal Register: April 6, 1994]
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DEPARTMENT OF DEFENSE
32 CFR Part 199
[DoD 6010.8-R]
RIN 0720-AA24
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS); Continued Health Care Benefit Program
AGENCY: Office of the Secretary, DoD.
ACTION: Interim rule.
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SUMMARY: This rule establishes a Continued Health Care Benefit Program
(CHCBP) for certain DoD health care beneficiaries who lose eligibility
for health care in the Military Health Services System (MHSS). It
provides for use of the CHAMPUS benefit structure and CHAMPUS rules and
procedures for the CHCBP and seeks public comments on our plan to
implement the Continued Health Care Benefit Program.
DATES: This rule is effective October 1, 1994. Written comments must be
received on or before June 6, 1994.
ADDRESSES: Office of the Civilian Health and Medical Program of the
Uniformed Services (OCHAMPUS), Office of Program Development; Aurora,
Colorado 80045-6900.
FOR FURTHER INFORMATION CONTACT: Mr. Gunther J. Zimmerman, Office of
the Assistant Secretary of Defense (Health Affairs), (703) 695-3331.
SUPPLEMENTARY INFORMATION:
I. Overview of the Proposed Rule
Implementation of the Continued Health Care Benefit Program (CHCBP)
was directed by Congress in section 4408 of the National Defense
Authorization Act for Fiscal Year 1993, Public Law 102-484, which
amended title 10, United States Code, by adding section 1078a. This law
directed the implementation of a program of temporary continued health
benefits coverage for certain former beneficiaries of DoD, comparable
to the health benefits provided for former civilian employees of the
Federal government.
Congress also directed the program start by October 1, 1994, and
replace the conversion health care programs authorized in section 1086a
and 1145(b) of title 10. Conversion health care is provided via a
Department of Defense (DoD) contract with Mutual of Omaha and is
scheduled to end September 30, 1994.
The status directs that the benefits offered by the CHCBP must be
comparable to those offered to former civilian employees of the Federal
government. As is the case for those employees, the costs will be borne
by the beneficiary who will pay the entire premium charge.
Additionally, the DoD is permitted to charge up to an additional ten
percent of the premium charge to cover administrative expenses.
Under section 4408(b), eligibility to enroll in the CHCBP includes
members of the uniformed services who are discharged or released
(voluntarily or involuntarily as long as not under adverse conditions)
and their dependents; certain unremarried former spouses of a member or
former member; and emancipated children.
Health care coverage in the CHCBP is for a specific time period,
which varies by the category of beneficiary. Coverage periods are as
follows: Former uniformed services members and their dependents--up to
18 months; unremarried former spouses--up to 36 months; emancipated
children (age 21 if not in college or up to age 23 if in college)--up
to 36 months. Eligible beneficiaries generally will have 60 days to
elect coverage after they are notified of their opportunity to enroll.
The Department of Defense considered three alternatives to
implement this program: first, integration of the program within the
Federal Employee Health Benefit Program (FEHBP) health care plans under
arrangement with the Office of Personnel Management (OPM); second,
competitive procurement of a private insurer to administer this
program; and lastly, continued CHAMPUS-type coverage, paid for by the
beneficiary, with a third party administrator collecting the premiums
and performing eligibility and verification functions. The first option
was rejected based on the difficulties of making the transition from a
DoD administered benefit to an OPM program. The second option was not
selected based on the likelihood that an acquisition process involving
a beneficiary group of such unpredictable size and characteristics
would not result in a vendor willing to underwrite this program.
Contractors would be wary that health care costs would exceed the
capped premium. Thus, we propose to offer this program directly through
the established mechanisms of CHAMPUS.
Under this approach, beneficiaries will continue to make use of
existing CHAMPUS rules and administrative structures to receive their
medical care and have medical claims paid. This feature will allow
enrollees to make use of discounts and reduced copayments and provider
arrangements already part of CHAMPUS in some locations. As previously
noted, a third party administrator (TPA) will act as a central agent
for the program. The functions of this TPA will be to: receive
applications for enrollment of beneficiaries; verify eligibility and
approve enrollment; notify the Defense Enrollment and Eligibility
Reporting Systems (DEERS) of enrollment; collect premiums; and provide
administrative services. CHCBP eligibles will obtain information
concerning the program and the application process and other TPA
functions at their local base transition office or through the nearest
military treatment facility's (MTF) Health Benefits Advisory (HBA).
It is expected that premium rates for this program will be
comparable to the premium rates of a mid-range Health Maintenance
Organization (HMO) offered in the FEHBP. The Department of Defense has
contracted with a private sector actuarial firm to help develop premium
rates. It is anticipated these rates will include individual and family
premiums, but will not be age/sex adjusted. (Similar to FEHBP premium
schedules). Premium rates for fiscal year 1995 are currently being
calculated, however, it is expected that these quarterly rates will be
in the range of $250 self and $625 for family.
II. Rulemaking Procedures
Executive Order 12866 requires certain regulatory assessments for
any ``significant regulatory action,'' defined as one which would
result in an annual effect on the economy of $100 million or more, or
have other substantial impacts.
The Regulatory Flexibility Act (RFA) requires that each Federal
agency prepare, and make available for public comment, a regulatory
flexibility analysis when the agency issues a regulation which would
have a significant impact on a substantial number of small entities.
This is not a significant regulatory action under the provisions of
Executive Order 12866, and it would not have a significant impact on a
substantial number of small entities.
The proposed rule will impose additional information collection
requirements on the public under the Paperwork Reduction Act of 1980
(44 USC 3501-3511), because beneficiaries will be required to enroll.
Request for approval and review has been submitted.
This is a proposed rule. Public comments are invited. All comments
will be considered. A discussion of the major issues received by public
comments will be included with issuance of the final rule, anticipated
approximately 60 days after the end of the comment period.
List of Subjects in 32 CFR Part 199
Claims, Handicapped, Health insurance, Military personnel.
Accordingly, 32 CFR Part 199 is amended as follows:
PART 199--[AMENDED]
1. The authority citation for Part 199 continues to read as
follows:
Authority: 10 U.S.C. Chapter 55, 5 U.S.C. 301.
2. A new Sec. 199.20 is added to read as follows:
Sec. 199.20 Continued Health Care Benefit Program (CHCBP).
(a) Purpose. The CHCBP is a premium based temporary health care
coverage program that will be available to qualified beneficiaries (set
forth in paragraph (d)(1) of this section). Medical coverage under this
program will mirror the benefits offered via the basic CHAMPUS program.
Premium costs for this coverage are payable by enrollees to a Third
Party Administrator. The CHCBP is not part of the CHAMPUS program.
However, as set forth in this section, it functions under most of the
rules and procedures of CHAMPUS. Because the purpose of the CHCBP is to
provide a continuation health care benefit for DoD beneficiaries losing
eligibility, it will be administered so that it appears, to the maximum
extent possible, to be part of CHAMPUS.
(b) General provisions. Except for any provisions the Director,
OCHAMPUS may have, the general provisions of section 199.1 shall apply
to the Continued Health Care Benefit Program as they do to CHAMPUS.
(c) Definitions. Except as may be specifically provided in this
section, to the extent terms defined in section 199.2 are relevant to
the administration of the Continued Health Care Benefit Program, the
definitions contained in that section shall apply to the CHCBP as they
do to CHAMPUS.
(d) Eligibility and enrollment.
(1) Eligibility. Enrollment in the Continued Health Care Benefit
Program is open to the following individuals:
(i) Members of armed forces, who:
(A) Are discharged or released from active duty (or full time
National Guard duty), whether voluntarily or involuntarily, under other
than adverse conditions;
(B) Immediately preceding that discharge or release, were entitled
to medical and dental care under 10 U.S.C. 1074(a) (except in the case
of a member discharged or released from full time National Guard duty);
and,
(C) After that discharge or release and any period of transitional
health care provided under 10 U.S.C. 1145(a) would not otherwise be
eligible for any benefit under 10 U.S.C. chapter 55,
(ii) A person who:
(A) Ceases to meet requirements for being considered an unmarried
dependent child of a member or former member of the armed forces under
10 U.S.C. 1072(2)(D);
(B) On the day before ceasing to meet those requirements, was
covered under a health benefits plan under 10 U.S.C. chapter 55, or
transitional health care under 10 U.S.C. 1145(a) as a dependent of the
member or former member; and,
(C) Would not otherwise be eligible for any benefits under 10
U.S.C. chapter 55,
(iii) A person who: (A) Is an unremarried former spouse of a member
or former member of the armed forces;
(B) On the day before the date of the final decree of divorce,
dissolution, or annulment was covered under a health benefits plan
under 10 U.S.C. chapter 55, or transitional health care under 10 U.S.C.
1145(a) as a dependent of the member or former member; and,
(C) Is not a dependent of the member or former member under 10
U.S.C. 1072 (2) (F) or (G) or ends a one-year period of dependency
under 10 U.S.C. 1072(2)(H).
(2) Notification of eligibility.
(i) The Department of Defense will notify persons eligible to
receive health benefits under the Continued Health Care Benefit
Program.
(ii) In the case of a member who becomes (or will become) eligible
for continued coverage, the Department of Defense shall notify the
member of their rights for coverage as part of preseparation counseling
conducted under 10 U.S.C. 1142.
(iii) In the case of a child of a member or former member who
becomes eligible for continued coverage:
(A) The member or former member may submit to the Department of
Defense a notice of the child's change in status (including the child's
name, address, and such other information needed; and
(B) The Department, within 14 days after receiving such
information, will inform the child of the child's rights under 10
U.S.C. 1142.
(iv) In the case of a former spouse of a member or former member
who becomes eligible for continued coverage, the Department of Defense
will notify the individual of eligibility for CHCBP when he or she
declares the change in marital status to a military personnel office.
(3) Election of coverage.
(i) In order to obtain continued coverage, written election by
eligible beneficiary must be made, within a prescribed time period. In
the case of a member discharged or released from active duty (or full
time National Guard duty), whether voluntarily or involuntarily; an
unremarried spouse of a member or former member; or a child emancipated
from a member or former member, the written election shall be submitted
to the Department of Defense before the end of the 60-day period
beginning on the later of:
(A) The date of the discharge or release of the member from active
duty or full-time National Guard duty;
(B) The date on which the period of transitional health care
applicable to the member under 10 U.S.C. 1145(a) ends; or
(C) The date the member receives the notification of eligibility.
(ii) A member of the armed forces who is eligible for enrollment
under paragraph (d)(1)(i) of this section may elect self-only or family
coverage. Family members who may be included in such family coverage
are the spouse and children of the member.
(4) Enrollment. Enrollment in the Continued Health Care Benefit
will be accomplished by submission of an application to a Third Party
Administrator (TPA). Upon submittal of an application to the Third
Party Administrator, the enrollee must submit proof of eligibility.
(i) One of the following types of evidence will validate
eligibility for care:
(A) A Defense Enrollment Eligibility Reporting System (DEERS)
printout which indicates the appropriate sponsor status and the
sponsor's and dependent's eligibility dates'';
(B) A copy of a verified and approved DD Form 1172, ``Application
for Uniformed Services Identification and Privilege Card;'' and
(C) A front and back copy of a DD Form 1173, ``Uniformed Services
Identification and Privilege Card'' overstamped ``TA'' for Transition
Assistance Management Program.
(5) Period of coverage. Continued Health Care Benefit Program
coverage may not exceed beyond:
(i) For a member discharged or released from active duty (or full
time National Guard duty), whether voluntarily or involuntarily, the
date which is 18 months after the date the member ceases to be entitled
to care under 10 U.S.C. 1074(a) and any transitional care under 10
U.S.C. 1145.
(ii) In the case of an unmarried dependent child of a member or
former member, the date which is 36 months after the date on which the
person first ceases to meet the requirements for being considered an
unmarried dependent child under 10 U.S.C. 1072(2)(D).
(iii) In the case of an unremarried former spouse of a member or
former member, the date which is 36 months after the later of:
(A) The date on which the final decree of divorce, dissolution, or
annulment occurs; or
(B) If applicable, the date the one-year extension of dependency
under 10 U.S.C. 1072(2)(H) expires.
(iv) For the beneficiary who become eligible for Continued Health
Care Benefit Program by ceasing to meet the requirements for being
considered an unremarried dependent child of a member or former member,
health care coverage may not extend beyond the date which is 36 months
after the date the member becomes ineligible for medical and dental
care under 10 U.S.C. 1074(a) and any transitional health care under 10
U.S.C. 1145(a).
(v) Though beneficiaries have sixty-days (60) to elect coverage
under the CHCBP, upon enrolling, the period of coverage must begin the
day after entitlement to a military health care plan (including
transitional health care under section 1145(a)) ends.
(e) CHCBP Benefits.
(1) In general. Except as provided in paragraph (e)(2) of this
section, the provisions of section 199.4 shall apply to the Continued
Health Care Benefit Program as they do to CHAMPUS.
(2) Exceptions. The following provisions of section 199.4 are not
applicable to the Continued Health Care Benefit Program:
(i) Paragraph (a)(2) concerning eligibility:
(ii) All provisions regarding nonavailability statements or
requirements to use facilities of the uniformed services.
(3) Beneficiary liability. For purposes of beneficiary liability,
CHAMPUS deductible and cost sharing requirements, for separating active
duty members and active duty dependents who lose CHAMPUS eligibility,
paragraph 199.4(f)(2) applies. For all others, paragraph 199.4(f)(3)
applies. For catastrophic caps, limits by beneficiary category are the
same as those established for basic CHAMPUS.
(f) Authorized providers. The provisions of section 199.6 shall
apply to the Continued Health Care Benefit Program as they do to
CHAMPUS.
(g) Claims submission, review, and payment. The provisions of
section 199.7 shall apply to the Continued Health Care Benefit program
as they do CHAMPUS, except that no provisions regarding nonavailability
statements shall apply.
(h) Double coverage. The provisions of section 199.8 shall apply to
the Continued Health Care Benefit Program as they do to CHAMPUS.
(i) Administrative remedies for fraud, abuse and conflict of
interest. The provisions of section 199.9 shall apply to the Continued
Health Care Benefit Program as they do to CHAMPUS.
(j) Appeal and hearing procedures. The provisions of section 199.10
shall apply to the Continue Health Care Benefit Program as they do to
CHAMPUS.
(k) Overpayment recovery. The provisions of section 199.11 shall
apply to the Continued Health Care Benefit Program as they do to
CHAMPUS.
(l) Third Party recoveries. The provisions of section 199.12 shall
apply to the Continued Health Care Benefit Program as they do to
CHAMPUS.
(m) Provider reimbursement methods. The provisions of section
199.14 shall apply to the continued Health Care Benefit Program as they
do to CHAMPUS.
(n) Peer Review Organization Program. The provisions of section
199.15 shall apply to the Continued Health Care Benefit Program as they
do to CHAMPUS.
(o) Preferred provider organization programs available. Any
preferred provider organization program under this part that provides
for reduced cost sharing for using designated providers, such as the
``TRICARE Extra'' option under section 199.17, shall be available to
participants in the Continued Health Care Benefit Program as it is to
CHAMPUS beneficiaries.
(p) Special programs not applicable.
(1) In general. Special programs established under this Part that
are not part of the basic CHAMPUS program established pursuant to 10
U.S.C. 1079 and 1086 are not, unless specifically provided in this
section, available to participants in the Continued Health Care Benefit
Program.
(2) Examples. The special programs referred to in paragraph (p)(1)
of this section include:
(i) The Program for the Handicapped under section 199.5;
(ii) The Active Duty Dependents Dental Plan under section 199.13;
(iii) The Supplemental Health Care Program for active duty members
under section 199.16;
(iv) The TRICARE Enrollment Program under section 199.17, except
for TRICARE Extra program under that section; and
(v) The special programs for civilian sector services in lieu of
military hospital services under section 199.19.
(3) Exemptions to the restriction. In addition to the provision to
make TRICARE Extra available to CHCBP beneficiaries, the following two
demonstration projects are also available to CHCBP enrollees:
(i) Home Health Care Demonstration; and
(ii) Home Health Care-Case Management Demonstration.
(q) Premiums.
(1) Rates. Premium rates will be established by the Assistant
Secretary of Defense (Health Affairs) for two rate groups--individual
and family. Eligible beneficiaries will select the level of coverage
they require and pay the appropriate premium payment. The rates shall
be based on Federal Employee Health Benefit Program employee and agency
contributions which would be required for a comparable health benefits
plan, plus an administrative fee. The administrative fee, not to exceed
ten percent of the basic premium amount, shall be determined based on
actual expected administrative costs for administration of the program.
Premiums may be revised annually and shall be published annually for
each fiscal year. Premiums will be paid by enrollees quarterly.
(2) Effects of failure to make premium payments. Failure by
enrollees to submit timely and proper premium payments will result in
denial of continued enrollment and denial of payment of medical claims.
Premium payments which are late 30 days or more past the start of the
quarter for which payment is due will result in the ending of
beneficiary enrollment. Beneficiaries denied continued enrollment due
to lack of premium payments will not be allowed to reenroll. In such a
case, benefit coverage will cease at the end of the ninety day (90)
period for which a premium payment was received. Enrollees will be held
liable for medical claims costs in this instance.
(r) Transitional provisions. The Department of Defense shall
provide for a period of enrollment for members and former member of the
uniformed services for whom the availability of transitional health
care under 10 U.S.C. 1145(a) expires before the October 1, 1994,
implementation of the Continued Health Care Benefit Program.
(1) Enrollment in the U.S. VIP program will continue up to October
1, 1994. Policies written prior to October 1, 1994, will remain in
effect until the end of the policy life.
(2) After the October 1, 1994, implementation of the Continued
Health Care Benefit Program, beneficiaries who enrolled in the U.S. VIP
program prior to October 1, 1994, may elect to cancel their U.S. VIP
policy and enroll in the CHCBP.
(s) Procedures. The Director, OCHAMPUS, may establish other rules
and procedures for the administration of the Continued Health Care
Benefits Program.
Dated: March 31, 1994.
L.M. Bynum,
Alternative OSD Federal Register Liaison Officer, Department of
Defense.
[FR Doc. 94-8113 Filed 4-5-94; 8:45 am]
BILLING CODE 5000-04-M
