View Rule

This interim final rule with comment will temporarily amend the TRICARE regulation at 32 CFR part 199 by: (1) adding freestanding End Stage Renal Disease facilities as a category of TRICARE-authorized institutional provider and modifying the reimbursement for such facilities; (2) adding coronavirus 2019 (COVID-19) Immunizers who are not otherwise an eligible TRICARE-authorized provider as providers eligible for reimbursement for COVID-19 vaccines and vaccine administration; (3) and adopting Medicare New COVID-19 Treatments Add-on Payments (NTCAPs).

Statement of Need:

Pursuant to the President’s emergency declaration and as a result of the COVID-19 pandemic, the Assistant Secretary of Defense for Health Affairs is temporarily modifying the following regulations (except for the modifications to paragraphs 199.6(b)(4)(xxi) and 199.14(a)(1)(iii)(E)( 7 ), which will not expire), but, in each case, only to the extent necessary to ensure that TRICARE beneficiaries have access to the most up-to-date care required for the prevention, diagnosis, and treatment of COVID-19, and that TRICARE continues to reimburse like Medicare, to the extent practicable, as required by statute.

The modifications to paragraphs 199.6(b)(4)(xxi) and 199.14(a)(1)(iii)(E)( 7 ) establish freestanding End Stage Renal Disease (ESRD) facilities as a category of TRICARE-authorized institutional provider and modify TRICARE reimbursement of freestanding ESRD facilities. These provisions will improve TRICARE beneficiary access to medically necessary dialysis and other ESRD services and supplies. These provisions also support the requirement that TRICARE reimburse like Medicare, and will help to alleviate regional health care shortages due to the COVID-19 pandemic by ensuring access to dialysis care in freestanding ESRD facilities rather than hospital outpatient departments.

The modification to paragraph 199.14(a)(iii)(E) adopts Medicare’s New COVID-19 Treatments Add-on Payment (NCTAP) for COVID-19 cases that meet Medicare’s criteria. This provision increases access to emerging COVID-19 treatments and supports the requirement that TRICARE reimburse like Medicare.

The modification to paragraph 199.6(d)(7) adds providers who administer COVID-19 vaccinations, but are not otherwise authorized under 199.6, as TRICARE-authorized providers. This provision increases access to COVID-19 vaccinations. This provision increases access to COVID-19 vaccines for eligible TRICARE beneficiaries and supports the United States (U.S.) public health goal of ending the COVID-19 pandemic.

Summary of the Legal Basis:

This rule is issued under 10 U.S.C. 1073 (a)(2) giving authority and responsibility to the Secretary of Defense to administer the TRICARE program.

Alternatives:

(1) No action

(2) The second alternative the Department of Defense considered was to adopt Medicare’s ESRD reimbursement methodology, the ESRD Prospective Payment System (PPS), in total. While this would have been completely consistent with the statutory provision to pay institutional providers using the same reimbursement methodology as Medicare, this alternative is not preferred because there is still a relatively low volume of TRICARE beneficiaries who receive dialysis services from freestanding ESRDs and who are not enrolled to Medicare. The cost of implementing the full ESRD PPS system is estimated to be at least $600,000.00 in start-up costs, plus ongoing administrative costs, to ensure all adjustments were made for each claim, plus additional special pricing software or algorithms. In contrast, we estimate that the option provided in this IFR can be implemented relatively quickly (within six months of publication), and for approximately $300,000.00 in start-up costs with lower ongoing administrative costs. Further, the flat rate will provide the ESRD facilities with predictability with regard to TRICARE payments and will reduce uncertainty and specialized coding or case-mix documentation requirements that may be required by the ESRD PPS, reducing the administrative burden on the provider.

To summarize, adopting the ESRD PPS was considered, but was deemed impracticable and overly burdensome to both the Government and providers due to the relative low volume of claims that will be priced and paid by TRICARE as primary under this system.

Anticipated Costs and Benefits:

Health Care and Administrative Costs

The Independent Cost A by Kennell and Associates, Inc., estimates a total of $6.8M. Only the ESRD provisions are expected to result in recurring incremental health care costs; the remaining two provisions are expected to result in one-time cost increases. For these temporary changes to the regulation, our cost estimate assumes that the majority of adults in the U.S. will be vaccinated by September 2021, based on the most recent information provided by Federal and state agencies, and, as a result, that the President’s emergency declaration and the public health emergency relating to the COVID-19 pandemic will end by September 2021. While this estimate would have the President’s emergency declaration end shortly after publication of the rule, the COVID-19 pandemic contains substantial uncertainty including the possibility of a virus variant resistant to current vaccines. As such, we find it appropriate to make these regulatory changes despite the potential short effective period, as the end of the pandemic is by no means a certainty.

Based on these factors, as well as the assumptions for each provision detailed below, we estimate that the total cost estimate for this Interim Final Rule (IFR) will be approximately $6.8M. This estimate includes approximately $0.9M in administrative costs and $5.9M in direct health care costs. $1.8M of the total cost impact is expected to be a one-time start-up cost for both the temporary and permanent provisions, while the permanent ESRD provisions are expected to result in $5M in incremental annual costs.

A breakdown of costs, by provision, is provided in the below table.

Risks:

None . This rule will promote the efficient functioning of the economy and markets by modifying the regulations to better reimburse health care providers for care provided during the COVID-19 pandemic, particularly as strain on the health care economy is being felt due to reductions in higher cost elective procedures. Additionally, this rule will increase the access of TRICARE beneficiaries to more providers administering COVID-19 vaccinations, which promotes the efficient functioning of the U.S. economy by quickening the pace at which the public receives COVID-19 vaccinations.