[Federal Register: April 16, 2003 (Volume 68, Number 73)]
[Proposed Rules]
[Page 18575-18579]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ap03-20]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
RIN 0720-AA77
TRICARE; Changes Included in the National Defense Authorization
Act for Fiscal Year 2002, (NDAA-02), and a Technical Correction
Included in the NDAA-03
AGENCY: Office of the Secretary, DoD.
ACTION: Proposed rule.
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SUMMARY: This rule proposes several changes to the TRICARE program that
were enacted by Congress in the NDAA-02 (December 28, 2001).
Specifically, revisions to the definition of durable medical equipment
(DME); adoption of the same pricing methods for durable medical
equipment, prosthetics, orthotics and supplies (DMEPOS) as are in
effect for the Medicare program; clarification that rehabilitative
therapy is a TRICARE benefit; addition of augmentative communication
devices (ACD)/speech generating devices (SGD) as a TRICARE benefit;
addition of hearing aids for family members of active duty members as a
TRICARE benefit; revisions to the definition of prosthetics; permanent
authority for transitional health care for certain members separated
from active duty; and revisions to the time period of eligibility for
transitional health care.
This proposed rule also addresses a technical correction found in
section 706 of the NDAA-03 relating to transitional health care for
dependents of certain members separated from active duty.
Public comments are invited and will be considered for possible
revisions to the final rule.
DATES: Written comments will be accepted until June 16, 2003.
ADDRESSES: Forward comments to Medical Benefits and Reimbursement
Systems, TRICARE Management Activity, 16401 East Centretech Parkway,
Aurora, Colorado 80011-9066.
FOR FURTHER INFORMATION CONTACT: Ann N. Fazzini, Medical Benefits and
Reimbursement Systems, TRICARE Management Activity, telephone, (303)
676-3803. Questions regarding payment of specific claims should be
addressed to the appropriate TRICARE contractor.
SUPPLEMENTARY INFORMATION:
I. Durable Medical Equipment (DME)
Section 703 of the NDAA-02, Pub. L. 107-107, provides authority for
any durable medical equipment that can improve, restore, or maintain
the function of a malformed, diseased, or injured body part, or can
otherwise minimize or prevent the deterioration of the patient's
function or condition. It also provides authority for any durable
medical equipment that can maximize the patient's function consistent
with the patient's physiological or medical needs. Although the wording
is not identical, TRICARE's policies and definitions in place at this
time currently provide coverage within these criteria. Nonetheless, we
are revising the current DME definition by adding the phrases found in
the NDAA-02 to the regulatory definition of DME in order to ensure
consistency between the law and the regulation.
Section 703 also makes available coverage to customize or
accessorize durable medical equipment if it is essential for achieving
therapeutic benefit for the patient; making the equipment serviceable;
or otherwise assuring the proper functioning of the equipment. Our
policies in place at this time provide coverage within these criteria.
Specifically, TRICARE's current policy regarding Durable Medical
Equipment includes a provision to allow customization, accessories, and
[[Page 18576]]
supplies that are essential to provide therapeutic benefit, or to
assure the proper functioning of the equipment or to make the equipment
serviceable. Nonetheless, we are revising the current DME definition by
adding the NDAA-02 language to the regulatory definition of DME in
order to ensure consistency between the law and the regulation.
II. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
(DMEPOS) Reimbursement
Section 707 of the NDAA-02, Pub. L. 107-107, changed the statutory
authorization (in 10 U.S.C. 1079(j)(2)) that TRICARE payment methods
``may be'' determined to the extent practicable in accordance with
Medicare payment rules to a mandate that TRICARE payment methods
``shall be'' so determined. As a result, TRICARE proposes to adopt
Medicare's pricing of Durable Medical Equipment, Prosthetic, Orthotics,
and Supplies (DMEPOS). Under Medicare, DMEPOS prices are established by
using fee schedules, reasonable charge or average wholesale pricing
(AWP). Most payments of DME are based on a fee schedule. A standard fee
is established for each DMEPOS item by state. Payment is calculated
using either the fee schedule amount or the actual charge submitted on
the claim, whichever is lower. The fee schedule allowances include the
application of national floors and ceilings. Reasonable charge
allowances by Medicare are stipulated by Medicare law and not left to
the discretion of the Medicare carrier. Medicare law specifically
states that the amount allowed by Medicare must be the lowest of: The
actual charge, the suppliers customary charge or the 50th percentile of
arrayed and weighted customary charges in the absence of a customary
charge for the specific service rendered; the prevailing charge, the
Inflation-Indexed Charge or the Lowest Charge Level.
III. Rehabilitative Therapy
Section 704 of the NDAA-02, Pub. L. 107-107, authorizes providing
rehabilitative therapy to improve, restore, or maintain function, or to
minimize or prevent deterioration of function, of a patient when
prescribed by a physician. We interpret the term ``rehabilitative
therapies'' to include physical therapy, speech therapy, and
occupational therapy. We are adding a definition of rehabilitative
therapy to our regulation and incorporating the NDAA-02 language found
in section 704 into the definition. Physical, speech, and occupational
therapies are currently covered by TRICARE to improve and/or restore
function. Additionally, current policies provide no restrictions on
medically necessary and appropriate therapies--in other words, there is
no dollar limit on the care nor is care restricted to a specific number
of visits.
Section 701 of the NDAA-02, Pub. L. 107-107, provides a definition
of custodial care as treatment or services regardless of who recommends
such treatment of services or where such services are provided that (a)
can be rendered safely and reasonably by a person who is not medically
skilled; or (b) is or are designed mainly to help the patient with
activities of daily living. The definition was revised by the interim
final rule published in the Federal Register, 67 FR 40602, June 13,
2002.
We read the language in section 704 of the NDAA-02 in conjunction
with the language in Section 701(c) of the NDAA-02 and conclude when
TRICARE will cover rehabilitative therapies. That is, rehabilitative
therapies shall be covered to improve, restore, or maintain function,
or to minimize or prevent deterioration of function, of a patient when
prescribed by a physician. The rehabilitative therapy must be medically
necessary and appropriate, necessary to the establishment of a safe and
effective maintenance program in connection with a specific medical
condition, and not custodial care.
IV. Augmentative Communication Devices (ACD)/Speech Generating Device
(SGD)
Section 702 of the NDAA-02, Pub. L. 107-107, provides that an
``augmentative communication device may be provided as a voice
prosthesis'' under TRICARE. We propose a policy that is in line with
the policy developed by the Centers for Medicare and Medicaid Services
(CMS). We further propose using the same terminology used by Medicare
when referring to this type of device--CMS refers to ``augmentative
communication devices'' as ``speech generating devices''. In order to
facilitate consistent terminology in the industry, we propose adopting
the term ``speech generating device (SGD)''. In proposing this policy,
we have also taken into consideration recommendations provided to us by
the American Speech-Language-Hearing Association in defining this
benefit.
V. Hearing Aids
Section 702 of the NDAA-02, Pub. L. 107-107, provides for coverage
of a hearing aid if a family member of an active duty member has a
``profound'' hearing loss as determined under standards prescribed in
regulations by the Secretary of Defense in consultation with the
administering Secretaries. There is no industry standard or industry
definition of ``profound'' hearing loss so we have developed one for
TRICARE purposes and welcome comments regarding our proposed
definition.
The policy proposed in this rule enhances current TRICARE coverage
of hearing aids by: (1) Offering a hearing aid benefit via the TRICARE
Basic Program to family members of an active duty member when the
family member has a ``profound'' hearing loss; (2) differentiating
hearing thresholds for adults and children; and, (3) revising the
hearing threshold levels currently in TRICARE policy.
VI. Prosthetics
Section 702 of NDAA-02, Pub. L. 107-107, gives the Department the
discretion to provide a prosthetic device that includes the following:
(1) Any accessory or item of supply that is used in conjunction with
the device for the purpose of achieving therapeutic benefit and proper
functioning. (2) Services necessary to train the recipient of the
device in the use of the device. (3) Repair of the device for normal
wear and tear or damage. (4) Replacement of the device if the device is
lost or irreparably damaged or the cost of repair would exceed 60
percent of the cost of replacement. (5) A prosthetic device customized
for a patient may be provided under this section only by a prosthetic
practitioner who is qualified to customize the device, as determined
under regulations prescribed by the Secretary of Defense in consult
with the other Secretaries.
TRICARE currently offers benefits for the above criteria 1, 2, 3,
and 5. Regarding criterion (4), TRICARE currently allows for
replacement when required due to growth or change in the patient's
condition. Nonetheless, our policies will be revised to ensure
consistency with the language found in section 702.
Regarding criterion 5, TRICARE has no specific provider
requirements for a prosthetic practitioner to be qualified to customize
the device. Rather, otherwise authorized providers currently provide
prostheses and customization of prostheses. We are aware that CMS has
established a Negotiated Rulemaking Committee on Special Payment
Provisions and Requirements for Prosthetics and Certain Custom-
Fabricated Orthotics. The purpose of this committee is to advise CMS on
developing a proposed rule that would establish payment provisions and
[[Page 18577]]
requirements for providers of prostheses and custom-fabricated
orthotics under the Medicare program. Once the Committee provides their
findings, we will review them for consideration under the TRICARE
program. In the meantime, we will continue to allow prostheses
customization by otherwise authorized TRICARE providers.
This proposed rule also updates the definition of prosthetic
device, and adds definitions for prosthetics and prosthetic supplies.
This brings us in line with industry standards.
VII. Transitional Health Care
Section 736 of the NDAA-02, Pub. L. 107-107, makes permanent the
authority for transitional health care benefits for certain members by
deleting the expiration date that was in place for transitional health
care benefits. Prior to Pub. L. 107-107, transitional health care
benefits were to expire on December 31, 2001. Section 736 also extended
coverage for either 60 or 120 days based on years of service to those
eligible for transitional health care benefits. Further, it deleted
coverage for dependents of those eligible for transitional coverage,
but the Department of Defense created a demonstration project to
include coverage for such dependents.
Section 706 of the National Defense Authorization Act for Fiscal
Year 03 (NDAA-03) re-inserted transitional health care coverage
benefits for dependents and deemed the provision to have been enacted
as part of section 736 of the NDAA-02. Consequently, there is no need
for this rule to include regulatory language addressing the removal of
dependents from transitional health care coverage.
VIII. Regulatory Procedures
Section 801 of title 5, United States Code, and Executive Order
12866 requires certain regulatory assessments and procedures for any
major rule or 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 which would
have a significant impact on a substantial number of small entities.
This is not a major rule under 5 U.S.C. 801. It is a significant
regulatory action but not economically significant, 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 proposed
rule will not significantly affect a substantial number of small
entities.
Paperwork Reduction Act
This rule, as written, imposes no burden as defined by the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3511). If, however, any
program implemented under this rule causes such a burden to be imposed,
approval thereof will be sought from the Office of Management and
Budget in accordance with the Act, prior to implementation.
List of Subjects in 32 CFR Part 199
Claims, Dental health, Health care, Health insurance, Individuals
with disabilities, 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 proposed to be amended by revising the
definitions of ``Durable medical equipment'', and ``Prosthetic device
(prosthesis)'', by adding definitions of ``Augmentative Communication
Device'', ``Profound hearing loss''; ``Prosthetic'', ``Prosthetic
supplies'', ``Rehabilitative therapy'', and ``Speech generating
device'' in alphabetical order to read as follows:
Sec. 199.2 Definitions.
* * * * *
(b) * * *
Augmentative communication device. See Speech generating device.
* * * * *
Durable medical equipment. Equipment for which the allowable charge
is over $100 and which:
(1) Is medically necessary for the treatment of a covered illness
or injury;
(2) Improves, restores, or maintains the function of a malformed,
diseased, or injured body part, or can otherwise minimize or prevent
the deterioration of the patient's function or condition;
(3) Can maximize the patient's function consistent with the
patient's physiological or medical needs.
(4) Is primarily and customarily designed and intended to serve a
medical purpose rather than primarily for transportation, comfort, or
convenience.
(5) Can withstand repeated use;
(6) Provides the medically appropriate level of performance and
quality for the medical condition present (that is, nonluxury or
nondeluxe);
(7) Is other than spectacles, eyeglasses, contact lenses, or other
optical devices, hearing aids (unless otherwise provided as a covered
TRICARE benefit), or other communication devices (unless otherwise
provided as a covered TRICARE benefit); and
(8) Is other than exercise equipment, spas, whirlpools, hot tubs,
swimming pools or other such items.
* * * * *
Profound hearing loss (adults). An ``adult'' (a spouse as defined
in section 199.3(b) of this part of a member of the Uniformed Services
on active duty for 30 days) with a hearing threshold of:
(1) 40 dB HL or greater in one or both ears when tested at 500,
1,000, 1,500, 2,000, 3,000 or 4,000Hz; or
(2) 26 dB HL or greater in one or both ears at any three or more of
those frequencies; or
(3) A speech recognition score less than 94 percent.
Profound hearing loss (children). A ``child'' (an unmarried child
of an active duty member who otherwise meets the criteria (including
age requirements) in section 199.3 of this part) with a 26dB or greater
hearing threshold level in one or both ears when tested in the
frequency range at 500, 1,000, 2,000, 3,000, or 4,000 Hz.
* * * * *
Prosthetic. Artificial legs, arms, and eyes.
Prosthetic device (prosthesis). Devices (other than a dental
device) which replace all or part of an internal body organ (including
contiguous tissue), or replace all or part of the function of a
permanently inoperative or malfunctioning internal body organ are
covered when furnished on a physician's order. Examples of prosthetic
devices include cardiac pacemakers, breast prostheses (including a
surgical brassiere) for post mastectomy patients, maxillofacial devices
and devices which replace all or part of the ear or nose.
Prosthetic supplies. Supplies that are necessary for the effective
use of a prosthetic device.
* * * * *
Rehabilitative therapy. Speech therapy, occupational therapy, and
physical therapy to improve, restore, or maintain function, or to
minimize or prevent deterioration of function, of a patient and
prescribed by a physician.
* * * * *
Speech generating device. (1) Speech aids that provide an
individual who has severe speech impairment with the ability to meet
his functional speaking needs. Such devices are considered
[[Page 18578]]
prosthetic devices and are characterized by:
(i) Being a dedicated speech device, used solely by the individual
who has severe speech impairment:
(ii) May have digitized speech output, using pre-recorded messages,
less than or equal to 8 minutes recording time;
(iii) May have synthesized speech output, which requires message
formulation by spelling and device access by physical contact with the
device-direct selection techniques;
(iv) May have synthesized speech output, which permits multiple
methods of message formulation and multiple methods of device access;
or
(v) May be software that allows a laptop computer, desktop computer
or personal digital assistant (PDA) to function as a speech generating
device.
(2) Examples of devices that do not meet the above definition and
are excluded from coverages as SGDs include, but are not limited to:
(i) Devices that are not dedicated speech devices, but are devices
that are capable of running software for purposes other than for speech
generation, e.g., devices that can also run a word processing package,
an accounting program, or perform other non-medical functions.
(ii) Laptop computers, desktop computers, or PDAs, which may be
programmed to perform the same function as a speech generating device,
are non-covered since they are not primarily medical in nature and do
not meet the definition of prosthetic, prosthetic device, prosthetic
supply, or durable medical equipment.
(iii) A device that is useful to someone without severe speech
impairment is not considered an SGD.
* * * * *
3. Section 199.3 is proposed to be amended by revising paragraph
(e) to read as follows:
Sec. 199.3 Eligibility.
* * * * *
(e) Eligibility Under the Transitional Assistance Management
Program (TAMP). (1) Transitional health care benefits under TRICARE are
authorized for the following eligibles:
(i) A member who is involuntarily separated from active duty and
the dependents of the member.
(ii) A member of a reserve component who is separated from active
duty to which called or ordered in support of a contingency operation
if the active duty is active duty for a period of more than 30 days and
the dependents of the member.
(iii) A member who is separated from active duty for which the
member is involuntarily retained under 10 U.S.C. 12305, in support of a
contingency operation and the dependents of the member.
(iv) A member who is separated from active duty pursuant to a
voluntary agreement of the member to remain on active duty for a period
of less than one year in support of a contingency operation and the
dependents of the member.
(2) Time period of eligibility. Transitional health care shall be
available for a specified period of time for members and dependents
beginning on the date which the member is separated as follows:
(i) For members separated with less than 6 years of service, 60
days.
(ii) For members separated with 6 or more years of active service,
120 days.
* * * * *
4. Section 199.4 is proposed to be amended by revising paragraph
(d)(3)(ii)(A), paragraph (d)(3)(vii), the text of paragraph (g)(41)
preceding the note, paragraph (g)(47), paragraph (g)(51) and by adding
new paragraph (e)(23), new paragraph (e)(24), and new paragraph (e)(25)
to read as follows:
Sec. 199.4 Basic program benefits.
* * * * *
(d) * * *
(3) * * *
(ii) * * *
(A) Scope of benefit. Subject to the exceptions in paragraphs (B)
and (C) below, only durable medical equipment (DME) which is ordered by
a physician for the specific use of the beneficiary, and which complies
with the definition of ``Durable Medical Equipment'' in Sec. 199.2 of
this part, and which is not otherwise excluded by this Regulation
qualifies as a Basic Program Benefit. In addition, any customization of
durable medical equipment owned by the patient is authorized to be
provided to the patient and any accessory or item of supply for any
such authorized durable medical equipment, may be provided to the
patient if the customization, accessory, or item of supply is essential
for--
(1) Achieving therapeutic benefit for the patient
(2) Making the equipment serviceable; or
(3) Otherwise assuring the proper functioning of the equipment.
* * * * *
(vii) Prosthetics, prosthetic devices, and prosthetic supplies, as
determined by the Secretary of Defense to be necessary because of
significant conditions resulting from trauma, congenital anomalies, or
disease. Additionally, the following are covered:
(A) Any accessory or item of supply that is used in conjunction
with the device for the purpose of achieving therapeutic benefit and
proper functioning;
(B) Services necessary to train the recipient of the device in the
use of the device;
(C) Repair of the device for normal wear and tear or damage;
(D) Replacement of the device if the device is lost or irreparably
damaged or the cost of repair would exceed 60 percent of the cost of
replacement.
* * * * *
(e) * * *
(23) A speech generating device (SGD) as defined in Sec. 199.2 of
this part is covered as a voice prosthesis. The prosthesis provisions
found in paragraph (d)(3)(vii) of this section apply.
(24) A hearing aid, but only for a dependent of a member of the
uniformed services on active duty and only if the dependent has a
profound hearing loss as defined in Sec. 199.2 of this part. Medically
necessary and appropriate services and supplies, including hearing
examinations, required in connection with this hearing aid benefit are
covered.
(25) Rehabilitation therapy as defined in Sec. 199.2 of this part
to improve, restore, or maintain function, or to minimize or prevent
deterioration of function, of a patient when prescribed by a physician.
The rehabilitation therapy must be medically necessary and appropriate,
must be necessary to the establishment of a safe and effective
maintenance program in connection with a specific medical condition,
and must not be custodial care.
* * * * *
(g) * * *
(41) Hair transplants, wigs, hair pieces, or cranial prosthesis.
Note: * * *
* * * * *
(47) Eye and hearing examinations. Eye and hearing examinations
except as specifically provided in paragraphs (c)(2)(xvi), (c)(3)(xi),
and (e)(24) of this section, or except when rendered in connection with
medical or surgical treatment of a covered illness or injury.
* * * * *
(51) Hearing aids. Hearing aids or other auditory sensory enhancing
devices, except those allowed in paragraph (e)(24) of this section.
* * * * *
4. Section 199.14 is proposed to be amended by redesignating
paragraphs (k) through (n) as paragraphs (l) through (o) and adding a
new paragraphs (k) to read as follows:
[[Page 18579]]
Sec. 199.14 Provider reimbursement methods.
* * * * *
(k) Reimbursement of Durable Medical Equipment, Prosthetics,
Orthotics and Supplies (DMEPOS). Reimbursement of DMEPOS is based on
the same amounts established under the Medicare DMEPOS fee schedule
under 42 CFR part 414, subpart D.
* * * * *
Dated: April 9, 2003.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-9153 Filed 4-15-03; 8:45 am]
BILLING CODE 5001-08-M