[Federal Register: February 10, 2003 (Volume 68, Number 27)]
[Rules and Regulations]
[Page 6617-6621]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10fe03-10]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
RIN-0720-AA52
TRICARE Program; Double Coverage; Third-Party Recoveries
AGENCY: Office of the Secretary, DoD.
ACTION: Final rule.
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SUMMARY: This final rule implements section 711 of the Strom Thurmond
National Defense Authorization Act for Fiscal Year 1999, as amended by
section 716(c)(2) of the National Defense Authorization Act for Fiscal
Year 2000, which allows the Secretary of Defense to authorize certain
TRICARE claims to be paid, even though other health insurance may be
primary payer, with authority to collect from the other health
insurance (third-party payer) the TRICARE costs incurred on behalf of
the beneficiary.
DATES: This final rule is effective March 12, 2003.
ADDRESSES: TRICARE Management Activity (TMA), Office of General
Counsel, 16401 East Centretech Parkway, Aurora, CO 80011-9043.
FOR FURTHER INFORMATION CONTACT: Stephen Isaacson Medical Benefits and
Reimbursement Systems, TMA, (303)-676-3572.
SUPPLEMENTARY INFORMATION:
I. Summary of Final Rule Provisions
This final rule changes the TRICARE ``double coverage'' provisions
authorizing payment of claims when a third-party payer, other than a
primary medical insurer, is involved rather than delaying TRICARE
payments pending payment by the third-party payer. In addition, this
final rule changes the TRICARE ``third-party recoveries'' provisions
incorporating the authority to collect from third-party payers the
TRICARE costs for health care services incurred on behalf of the
patient/
[[Page 6618]]
beneficiary. The radar should refer to the proposed rule that was
published on October 19, 1999 (64 FR 56283), for more detailed
information regarding these changes.
II. Public Comments
We provided a 60-day comment period on the proposed rule. We
received no public comments.
III. Changes in the Final Rule
We have made changes in the final rule based on section 716 of the
National Defense Authorization Act for Fiscal Year 2000, Pub. L. 106-
65, which was passed subsequent to preparation of the proposed rule. We
have removed paragraph (c)(2)(iii) of Section 199.8 as originally set
forth in the proposed rule. The essence of this change is to remove the
proposed requirement for contractors to assign the government any
rights to seek recovery from third-party payers. Based on the section
716 of the National Defense Authorization Act for Fiscal Year 2000, it
is clear that the government, rather than the contractor, has the
authority to collect amounts paid on behalf of TRICARE beneficiaries
for which there is a liable third party.
Based on Section 8118 of the Fiscal Year 2000 Department of Defense
Appropriations Act, we also have eliminated the change to paragraph
(d)(2) of Section 199.8 established Medicaid as primary payer to
TRICARE under the case management program that is set out in Part
199.4(i). As a result, TRICARE will continue to be primary to Medicaid
in all situations including case management.
IV. Regulatory Procedures
Executive Order (EO) 12866 requires that a comprehensive regulatory
impact analysis be performed on any economically significant regulatory
action, defined as one that would result in an annual effect of $100
million or more on the national economy or which would 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 that would
have a significant impact on a substantial number of small entities.
This rule has been designated as significant rule and has been
reviewed by the Office of Management and Budget as required under the
provisions of E.O. 12866. In addition, we certify that this final rule
will not significantly affect a substantial number of small entities.
Paperwork Reduction Act.
This final rule, as written, imposes no burden as defined by the
Paperwork Reduction Act of 1995. If, however, any program implemented
under this final rule causes such a burden to be imposed, approval will
be sought of the Office of Management and Budget in accordance with the
Act prior to implementation.
List of Subjects in 32 CFR Part 199
Claims, Handicapped, Health insurance, and 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: 5 U.S.C. 301; 10 U.S.C. Chapter 55.
2. Section 199.2(b) is amended by adding new definitions automobile
liability insurance, no-fault insurance, and third-party payer in
alphabetical order:
Sec. 199.2 Definitions.
* * * * *
Automobile liability insurance. Automobile liability insurance
means insurance against legal liability for health and medical expenses
resulting from personal injuries arising from operation of a motor
vehicle. Automobile liability insurance includes:
(1) Circumstances in which liability benefits are paid to an
injured party only when the insured party's tortious acts are the cause
of the injuries; and
(2) Uninsured and underinsured coverage, in which there is a third-
party tortfeasor who caused the injuries (i.e., benefits are not paid
on a no-fault basis), but the insured party is not the tortfeasor.
* * * * *
No-fault insurance. No-fault insurance means an insurance contract
providing compensation for health and medical expenses relating to
personal injury arising from the operation of a motor vehicle in which
the compensation is not premised on whom may have been responsible for
causing such injury. No-fault insurance includes personal injury
protection and medical payments benefits in cases involving personal
injuries resulting from operation of a motor vehicle.
* * * * *
Third-party payer. Third-payer means an entity that provides an
insurance, medical service, or health plan by contract or agreement,
including an automobile liability insurance or no fault insurance
carrier and a worker's compensation program or plan, and any other plan
or program (e.g., homeowners insurance) that is designed to provide
compensation or coverage for expenses incurred by a beneficiary for
medical services or supplies. For purposes of the definition of
``third-party payer,'' an insurance, medical service, or health plan
includes a preferred provider organization, an insurance plan described
as Medicare supplemental insurance, and a personal injury protection
plan or medical payments benefit plan for personal injuries resulting
from the operation of a motor vehicle.
Note: TRICARE is secondary payer to all third-party payers.
Under limited circumstances described in Sec. 199.8(c)(2) of this
part, TRICARE payment may be authorized to be paid in advance of
adjudication of the claim by certain third-party payers. TRICARE
advance payments will not be made when a third-party provider is
determined to be a primary medical insurer under Sec. 199.8(c)(3)
of this part.''
* * * * *
3. Section 199.8 is amended by revising paragraphs (a), (c)(1), and
(d)(3), redesignating paragraphs (b)(3), (c)(2) and (c)(3) as
paragraphs (b)(4), (c)(4) and (c)(5), respectively, and adding new
paragraphs (b)(3), (c)(2), and (c)(3) to read as follows:
Sec. 199.8 Double coverage.
(a) Introduction. (1) In enacting TRICARE legislation, Congress
clearly has intended that TRICARE be the secondary payer to all health
benefit, insurance and third-party payer plans. 10 U.S.C. 1079(j)(1)
specifically provides that a benefit may not be paid under a plan
(CHAMPUS) covered by this section in the case of a person enrolled in,
or covered by, any other insurance, medical service, or health plan,
including any plan offered by a third-party payer (as defined in 10
U.S.C. 1095(h)(1)) to the extent that the benefit is also a benefit
under the other plan, except in the case of a plan administered under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(2) The provision in paragraph (a)(1) of this section is made
applicable specifically to retired members, dependents, and survivors
by 10 U.S.C. 1086(g). The underlying intent, in addition to preventing
waste of Federal resources, is to ensure that TRICARE beneficiaries
receive maximum benefits while ensuring that the combined payments of
TRICARE and other health and insurance plans do not exceed the total
charges.
* * * * *
[[Page 6619]]
(b) * * *
(3) Third-party payer. A third-party payer means an entity that
provides an insurance, medical service, or health plan by contract or
agreement, including an automobile liability insurance or no-fault
insurance carrier and a workers' compensation program or plan, and any
other plan or program (e.g., homeowners insurance, etc.) that is
designed to provide compensation or coverage for expenses incurred by a
beneficiary for medical services or supplies. For purposes of the
definition of ``third-party payer,'' an insurance, medical service or
health plan includes a preferred provider organization, an insurance
plan described as Medicare supplemental insurance, and a personal
injury protection plan or medical payments benefit plan for personal
injuries resulting from the operation of a motor vehicle.
* * * * *
(c) * * *
(1) TRICARE last pay. For any claim that involves a double coverage
plan as defined in paragraph (b) of this section, TRICARE shall be last
pay except as may be authorized by the Director, TRICARE Management
Activity, or a designee, pursuant to paragraph (c)(2) of this section.
That is, TRICARE benefits may not be extended until all other double
coverage plans have adjudicated the claim.
(2) TRICARE advance payment. The Director, TRICARE Management
Activity, or a designee, may authorize payment of a claim in advance of
adjudication of the claim by a double coverage plan and recover, under
Sec. 199.12, the TRICARE costs of health care incurred on behalf of
the covered beneficiary under the following conditions:
(i) The claim is submitted for health care services furnished to a
covered beneficiary; and,
(ii) The claim is identified as involving services for which a
third-party payer, other than a primary medical insurer, may be liable.
(3) Primary medical insurer. For purposes of paragraph (c)(2) of
this section, a ``primary medical insurer'' is an insurance plan,
medical service or health plan, or a third-party payer under this
section, the primary or sole purpose of which is to provide or pay for
health care services, supplies, or equipment. The term ``primary
medical insurer'' does not include automobile liability insurance, no-
fault insurance, workers' compensation program or plan, homeowners
insurance, or any other similar third-party payer as may be designated
by the Director, TRICARE Management Activity, or a designee, in any
policy guidance or instructions issued in implementation of this Part.
* * * * *
(d) * * *
(3) TRICARE and Workers' Compensation. TRICARE benefits are not
payable for a work-related illness or injury that is covered under a
workers' compensation program. Pursuant to paragraph (c)(2) of this
section, however, the Director, TRICARE Management Activity, or a
designee, may authorize payment of a claim involving a work-related
illness or injury covered under a workers' compensation program in
advance of adjudication and payment of the workers' compensation claim
and then recover, under Sec. 199.12, the TRICARE costs of health care
incurred on behalf of the covered beneficiary.
* * * * *
4. Section 199.12 is revised as follows:
Sec. 199.12 Third party recoveries.
(a) General. This section deals with the right of the United States
to recover from third-parties the costs of medical care furnished to or
paid on behalf of TRICARE beneficiaries. These third-parties may be
individuals or entities that are liable for tort damages to the injured
TRICARE beneficiary or a liability insurance carrier covering the
individual or entity. These third-parties may also include other
entities who are primarily responsible to pay for the medical care
provided to the injured beneficiary by reason of an insurance policy,
workers' compensation program or other source of primary payment.
Authority. (1) Third-party payers. This part implements the
provisions of 10 U.S.C. 1095b which, in general, allow the Secretary of
Defense to authorize certain TRICARE claims to be paid, even though a
third-party payer may be primary payer, with authority to collect from
the third-party payer the TRICARE costs incurred on behalf of the
beneficiary. (See Sec. 199.2 for definition of ``third-party payer.'')
Therefore, 10 U.S.C. 1095b establishes the statutory obligation of
third-party payers to reimburse the United States the costs incurred on
behalf of TRICARE beneficiaries who are also covered by the third-party
payer's plan.
(2) Federal Medical Care Recovery Act. (i) In general. In many
cases covered by this section, the United States has a right to collect
under both 10 U.S.C. 1095b and the Federal Medical Care Recovery Act
(FMCRA), Public Law 87-693 (42 U.S.C. 2651 et. seq.). In such cases,
the authority is concurrent and the United States may pursue collection
under both statutory authorities.
(ii) Cases involving tort liability. In cases in which the right of
the United States to collect from an automobile liability insurance
carrier is premised on establishing some tort liability on some third
person, matters regarding the determination of such tort liability
shall be governed by the same substantive standards as would be applied
under the FMCRA including reliance on state law for determinations
regarding tort liability. In addition, the provisions of 28 CFR part 43
(Department of Justice regulations pertaining to the FMCRA) shall apply
to claims made under the concurrent authority of the FMCRA and 10
U.S.C. 1095b. All other matters and procedures concerning the right of
the United States to collect shall, if a claim is made under the
concurrent authority of the FMCRA and this section, be governed by 10
U.S.C. 1095b and this part.
(c) Appealability. This section describes the procedures to be
followed in the assertion and collection of third-party recovery claims
in favor of the United States arising from the operation of TRICARE.
Actions taken under this section are not initial determinations for the
purpose of the appeal procedures of Sec. 199.10 of this part. However,
the proper exercise of the right to appeal benefit or provider status
determinations under the procedures set forth in Sec. 199.10 may
affect the processing of federal claims arising under this section.
Those appeal procedures afford a TRICARE beneficiary or participating
provider an opportunity for administrative appellate review in cases in
which benefits have been denied and in which there is a significant
factual dispute. For example, a TRICARE contractor may deny payment for
services that are determined to be excluded as TRICARE benefits because
they are found to be not medically necessary. In that event the TRICARE
contractor will offer an administrative appeal as provided in Sec.
199.10 of this part on the medical necessity issue raised by the
adverse benefit determination. If the care in question results from an
accidental injury and if the appeal results in a reversal of the
initial determination to deny the benefit, a third-party recovery claim
may arise as a result of the appeal decision to pay the benefit.
However, in no case is the decision to initiate such a claim itself
appealable under Sec. 199.10.
(d) Statutory obligation of third-party payer to pay. (1) Basic
Rule. Pursuant to 10 U.S.C. 1095b, when the Secretary of Defense
authorizes certain TRICARE
[[Page 6620]]
claims to be paid, even though a third-party payer may be primary payer
(as specified under Sec. 199.8(c)(2)), the right to collect from a
third-party payer the TRICARE costs incurred on behalf of the
beneficiary is the same as exists for the United States to collect from
third-party payers the cost of care provided by a facility of the
uniformed services under 10 U.S.C. 1095 and part 220 of this title.
Therefore the obligation of a third-party payer to pay is to the same
extent that the beneficiary would be eligible to receive reimbursement
or indemnification from the third-party payer if the beneficiary were
to incur the costs on the beneficiary's own behalf.
(2) Application of cost shares. If the third-party payer's plan
includes a requirement for a deductible or copayment by the beneficiary
of the plan, then the amount the United States may collect from the
third-party payer is the cost of care incurred on behalf of the
beneficiary less the appropriate deductible or copayment amount.
(3) Claim from the United States exclusive. The only way for a
third-party payer to satisfy its obligation under 10 U.S.C. 1095b is to
pay the United States or authorized representative of the United
States. Payment by a third-party payer to the beneficiary does not
satisfy 10 U.S.C. 1095b.
(4) Assignment of benefits not necessary. The obligation of the
third-party to pay is not dependent upon the beneficiary executing an
assignment of benefits to the United States.
(e) Exclusions impermissible. (1) Statutory requirement. With the
same right to collect from third-party payers as exists under 10 U.S.C.
1095(b), no provision of any third-party payer's plan having the effect
of excluding from coverage or limiting payment for certain care if that
care is provided or paid by the United States shall operate to prevent
collection by the United States.
(2) Regulatory application. No provision of any third-party payer's
plan or program purporting to have the effect of excluding or limiting
payment for certain care that would not be given such effect under the
standards established in part 220 of this title to implement 10 U.S.C.
1095 shall operate to exclude or limit payment under 10 U.S.C. 1095b or
this section.
(f) Records available. When requested, TRICARE contractors or other
representatives of the United States shall make available to
representatives of any third-party payer from which the United States
seeks payment under 10 U.S.C. 1095b, for inspection and review,
appropriate health care records (or copies of such records) of
individuals for whose care payment is sought. Appropriate records which
will be made available are records which document that the TRICARE
costs incurred on behalf of beneficiaries which are the subject of the
claims for payment under 10 U.S.C. 1095b were incurred as claimed and
the health care service were provided in a manner consistent with
permissible terms and conditions of the third-party payer's plan. This
is the sole purpose for which patient care records will be made
available. Records not needed for this purpose will not be made
available.
(g) Remedies. Pursuant to 10 U.S.C. 1095b, when the Director,
TRICARE Management Activity, or a designee, authorizes certain TRICARE
claims to be paid, even though a third-party payer may be primary
payer, the right to collect from a third-party payer the TRICARE costs
incurred on behalf of the beneficiary is the same as exists for the
United States to collect from third-party payers the cost of care
provided by a facility of the uniformed services under 10 U.S.C. 1095.
(1) This includes the authority under 10 U.S.C. 1095(e)(1) for the
United States to institute and prosecute legal proceedings against a
third-party payer to enforce a right of the United States under 10
u.S.C. 1095b and this section.
(2) This also includes the authority under 10 u.S.C. 1095(e)(2) for
an authorized representative of the United States to compromise, settle
or waive a claim of the United States under 10 U.S.C. 1095b and this
section.
(3) The authorities provided by the Federal Claims Collection Act
of 1966, as amended (31 U.S.C. 3701 et. seq.) and any implementing
regulations (including Sec. 199.11) regarding collection of
indebtedness due the United States shall also be available to effect
collections pursuant to 10 U.S.C. 1095b and this section.
(h) Obligations of beneficiaries. To insure the expeditious and
efficient processing of third-party payer claims, any person furnished
care and treatment under TRICARE, his or her guardian, personal
representative, counsel, estate, dependents or survivors shall be
required:
(1) To provide information regarding coverage by a third-party
payer plan and/or the circumstances surrounding an injury to the
patient as a conditional precedent of the processing of a TRICARE claim
involving possible third-party payer coverage.
(2) To furnish such additional information as may be requested
concerning the circumstances giving rise to the injury or disease for
which care and treatment are being given and concerning any action
instituted or to be instituted by or against a third person; and,
(3) To cooperate in the prosecution of all claims and actions by
the United States against such third person.
(i) Reponsibility for recovery. The Director, TRICARE Management
Activity, or a designee, is responsible for insuring that TRICARE
claims arising under 10 U.S.C. 1095b and this section (including claims
involving the FMCRA) are properly referred to and coordinated with
designated claims authorities of the uniformed services who shall
assert and recover TRICARE costs incurred on behalf of beneficiaries.
Generally, claims arising under this section will be processed as
follows:
(1) Identification and referral. In most cases where civilian
providers provide medical care and payment for such care has been by a
TRICARE contractor, initial identification of potential third-party
payers will be by the TRICARE contractor. In such cases, the TRICARE
contractor is responsible for conducting a preliminary investigation
and referring the case to designated appropriate claims authorities of
the Uniformed Services.
(2) Processing TRICARE claims. When the TRICARE contractor
initially identifies a claim as involving a potential third-party
payer, it shall request additional information concerning the
circumstances of the injury or disease and/or the identify of any
potential third-party payer from the beneficiary or other responsible
party unless adequate information is submitted with the claim. The
TRICARE claim will be suspended and no payment issued pending receipt
of the requested information. If the requested information is not
received, the claim will be denied. A TRICARE beneficiary may expedite
the processing of his or her TRICARE claim by submitting appropriate
information with the first claim for treatment of an accidental injury.
Third-party payer information normally is required only once concerning
any single accidental injury on episode of care. Once the third-party
payer information pertaining to a single incident or episode of care is
received, subsequent claims associated with the same incident or
episode of care may be processed to payment in the usual manner. If,
however, the requested third-party payer information is not received,
subsequent claims involving the same incident or episode of care will
be suspended or denied as stated above.
(3) Ascertaining total potential liability. It is essential that
the appropriate claims responsible for
[[Page 6621]]
asserting the claim against the third-party payer recive from the
TRICARE contractor a report of all amounts expended by the United
States for care resulting from the incident upon which potential
liability in the third party is based (including amounts paid by
TRICARE for both inpatient and outpatient care). Prior to assertion and
final settlement of a claim, it will be necessary for the responsible
claims authority to secure from the TRICARE contractor updated
information to insure that all amounts expended under TRICARE are
included in the government's claim. It is equally important that
information on future medical payments be obtained through the
investigative process and included as a part of the government's claim.
No TRICARE-related claim will be settled, compromised or waived without
full consideration being given to the possible future medical payment
aspects of the individual case.
(j) Reporting requirements. Pursuant to 10 U.S.C. 1079a, all
refunds and other amounts collected in the administration of TRICARE
shall be credited to the appropriation available for that program for
the fiscal year in which the refund or amount is collected. Therefore,
the Department of Defense requires an annual report stating the number
and dollar amount of claims asserted against, and the number and dollar
amount of recoveries from third-party payers (including FMCRA
recoveries) arising from the operation of the TRICARE. To facilitate
the preparation of this report and to maintain program integrity, the
following reporting requirements are established:
(1) TRICARE contractors. Each TRICARE contractor shall submit on or
before January 31 of each year an annual report to the Director,
TRICARE Management Activity, or a designee, covering the 12 months of
the previous calendar year. This report shall contain, as a minimum,
the number and total dollar of cases of potential third-party payer/
FMCRA liability referred to uniformed services claims authorities for
further investigation and collection. These figures are to be itemized
by the states and uniformed services to which the cases are referred.
(2) Uniformed Services. Each uniformed service will submit to the
Director, TRICARE Management Activity, or designee, an annual report
covering the 12 calendar months of the previous year, setting forth, as
a minimum, the number and total dollar amount of cases involving
TRICARE payments received from TRICARE contractors, the number and
dollar amount of cases involving TRICARE payments received from other
sources, and the number and dollar amount of claims actually asserted
against, and the dollar amount of recoveries from, third-payment payers
or under the FMCRA. The report, itemized by state and foreign claims
jurisdictions, shall be provided no later than February 28 of each
year.
(3) Implementation of the reporting requirements. The Director,
TRICARE Management Activity, or a designee shall issue guidance for
implementation of the reporting requirements prescribed by this
section.
Dated: February 4, 2003.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-3159 Filed 2-7-03; 8:45 am]
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