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This final rule implements the primary features of section 701 and partially implements several other sections of the National Defense Authorization Act for Fiscal Year 2017 (NDAA-17). The law makes significant changes to the TRICARE program, especially to the health maintenance organization (HMO)like health plan, known as TRICARE Prime; to the preferred provider organization health plan, previously called TRICARE Extra and now to be called TRICARE Select; and to the third health care option, known as TRICARE Standard, which was terminated as of December 31, 2017, and replaced by TRICARE Select. The statute also adopts a new health plan enrollment system under TRICARE and new provisions for access to care, high value services, preventive care, and healthy lifestyles. In implementing the statutory changes, this finalizes a number of improvements to TRICARE. Specifically, this rule will enhance beneficiary access to health care services, including increased geographic coverage for the TRICARE Select provider network, reduced administrative hurdles for TRICARE Prime enrollees to obtain urgent care services and specialty care referrals, and promotes high value services and medications and telehealth services. It also expanded TRICARE coverage of preventive care services and prevention and treatment of obesity and refining cost-benefit assessments for TRICARE plan specifications that remain under DoD's discretion.

Statement of Need:

This rule implements the primary features of section 701 and partially implements several other sections of the National Defense Authorization Act for Fiscal Year 2017 (NDAA-17). The law makes significant changes to the TRICARE program, especially to the health maintenance organization (HMO)-like health plan, known as TRICARE Prime; to the preferred provider organization health plan, previously called TRICARE Extra and now to be called TRICARE Select; and to the third health care option, known as TRICARE Standard, which will be terminated as of December 31, 2017, and replaced by TRICARE Select. The statute also adopts a new health plan enrollment system under TRICARE and new provisions for access to care, high-value services, preventive care, and healthy lifestyles. In implementing the statutory changes, this rule makes a number of improvements to TRICARE.

In implementing section 701 and partially implementing several other sections of NDAA-17, this interim final rule advances all four components of the Military Health System's quadruple aim of stronger readiness, better care, healthier people, and smarter spending. The aim of stronger readiness is served by reinforcing the vital role of the TRICARE Prime health plan to refer patients, particularly those needing specialty care, to military medical treatment facilities in order to ensure that military health care providers maintain clinical currency and proficiency in their professional fields. The objective of better care is enhanced by a number of improvements in beneficiary access to health care services, including geographical coverage for the TRICARE Select provider network, reduced administrative hurdles for TRICARE Prime enrollees to obtain urgent care services and specialty care referrals, and promotion of high-value services and medications and telehealth services. The goal of healthier people is advanced by expanding TRICARE coverage of preventive care services and prevention and treatment of obesity. And the aim of smarter spending is furthered by sharpening cost-benefit assessments for TRICARE plan specifications that remain under the DoD's discretion.

Summary of the Legal Basis:

This rule is required to implement or partially implement several sections of NDAA-17, including 701, 706, 715, 718, and 729. The legal authority for this rule also includes chapter 55 of title 10, United States Code.

Alternatives:

None.

Anticipated Costs and Benefits:

This rule is not anticipated to have an annual effect on the economy of $100M or more, thus it is not an economically significant rule under the Executive Order and the Congressional Review Act. The rule includes estimated program costs associated with implementation that include administrative startup costs ($11M) information systems changes ($10M). Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, seeks to control costs associated with the government imposition of private expenditures required to comply with Federal regulations and to reduce regulations that impose such costs. Consistent with the analysis of transfer payments under OMB Circular A-4, this rule does not involve regulatory costs subject to Executive Order 13771.

Risks:

The rule does not impose any risks.  The risks lie in not implementing statutorily required changes.