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DOD/DODOASHA RIN: 0720-AB85 Publication ID: Fall 2023 
Title: Expanding TRICARE Access to Care in Response to the COVID-19 Pandemic 

This rule finalizes an interim final rule that amended 32 CFR part 199 by: (1) adding freestanding End Stage Renal Disease (ESRD) facilities as a category of TRICARE-authorized institutional provider and modifying the reimbursement for such facilities; and (2) temporarily adopting Medicare’s New COVID-19 Treatments Add-on Payment (NCTAP).  The ESRD provisions are permanent, and the temporary NCTAP provisions expire at the end of the fiscal year in which the Secretary of Health and Human Services’ declared coronavirus disease 2019 (COVID-19) public health emergency ends.

Agency: Department of Defense(DOD)  Priority: Other Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 32 CFR 199   
Legal Authority: 5 U.S.C. 301    10 U.S.C. ch. 55   
Legal Deadline:  None

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.


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.


(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:

$8.08 million. 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. 

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.


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.

Action Date FR Cite
Interim Final Rule  01/12/2023  88 FR 1992   
Interim Final Rule Effective  01/12/2023 
Interim Final Rule Comment Period End  03/13/2023 
Final Action  06/00/2024 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: No  Federalism: No 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Agency Contact:
Elan Green
Department of Defense
Office of Assistant Secretary for Health Affairs
16401 East Centretech Parkway,
Aurora, CO 80011
Phone:303 676-3907