Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)/TRICARE: Pilot Program for Refills of Maintenance Medications for TRICARE for Life Beneficiaries Through the TRICARE Mail Order Program, 75245-75248 [2013-29434]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Rules and Regulations]
[Pages 75245-75248]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29434]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[Docket ID: DoD-2013-HA-0085]
RIN 0720-AB60


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS)/TRICARE: Pilot Program for Refills of Maintenance Medications 
for TRICARE for Life Beneficiaries Through the TRICARE Mail Order 
Program

AGENCY: Office of the Secretary, Department of Defense (DoD).

ACTION: Interim final rule.

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SUMMARY: This interim final rule implements Section 716 of the National 
Defense Authorization Act for Fiscal Year 2013 which establishes a five 
year pilot program that would generally require TRICARE for Life 
beneficiaries to obtain all refill prescriptions for covered 
maintenance medications from the TRICARE mail order program or military 
treatment facility pharmacies. Covered maintenance medications are 
those that involve recurring prescriptions for chronic conditions, but 
do not include medications to treat acute conditions. Beneficiaries may 
opt out of the pilot program after one year of participation. This rule 
includes procedures to assist beneficiaries in transferring covered 
prescriptions to the mail order pharmacy program. This regulation is 
being issued as an interim final rule in order to comply with the 
express statutory intent that the program begin early in calendar year 
2013. Public comments, however, are invited and will be considered for 
possible revisions to this rule for the second year of the program.

DATES: This rule is effective February 14, 2014. Written comments 
received at the address indicated below by February 10, 2014 will be 
considered and addressed in the final rule.

ADDRESSES: You may submit comments, identified by docket number and/or 
RIN number and title, by any of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov.

Follow the instructions for submitting comments.

    Mail: Federal Docket Management System Office, 4800 Mark Center 
Drive, Suite 02G09, Alexandria, VA 22350.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
Federal Register document. The general policy for comments and other 
submissions from members of the public is to make these submissions 
available for public viewing on the Internet at https://www.regulations.gov as they are received without change, including any 
personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Rear Admiral Thomas McGinnis, Chief, 
Pharmacy Operations Directorate, TRICARE Management Activity, telephone 
703-681-2890.

SUPPLEMENTARY INFORMATION:

A. Executive Summary

1. Purpose

    This interim final rule implements section 716 of the National 
Defense Authorization Act for Fiscal Year 2013, which establishes a 
five year pilot program requiring TRICARE for Life beneficiaries to 
obtain all prescription refills for select maintenance medications from 
the TRICARE mail order program or military treatment facilities.

[[Page 75246]]

    The legal authority for this rule is section 716 of the National 
Defense Authorization Act for Fiscal Year 2013. Subsection (d) of that 
law requires the issuance of this rule.

2. Summary of the Major Provisions of the Interim Final Rule

    TRICARE for Life beneficiaries are required to obtain all 
prescription refills for select maintenance medications from the 
TRICARE mail order program (where beneficiary copayments are much lower 
than in retail pharmacies) or military treatment facilities (where 
there are no copayments). TRICARE for Life beneficiaries are those 
TRICARE beneficiaries enrolled in the Medicare wraparound coverage 
option of the TRICARE program. Covered maintenance medications are 
those prescribed for chronic, long-term conditions that are taken on a 
regular, recurring basis, but do not include medications to treat acute 
conditions. TRICARE will follow best commercial practices, including 
that beneficiaries will be notified of the new rules and mechanisms to 
allow them to receive adequate medication during their transition to 
mail for their refills. The statute and rule authorize a waiver of the 
mail order requirement based on patient needs and other appropriate 
circumstances. Beneficiaries may opt out of the program after one year 
of participation. The program will expire December 31, 2017, unless 
extended by Congress.

3. Costs and Benefits

    The effect of the statutory requirement, implemented by this rule, 
is to shift a volume of prescriptions from retail pharmacies to the 
mail order pharmacy program. This will produce savings to the 
Department of approximately $120 million during the initial year of the 
demonstration and savings to beneficiaries of approximately $28 million 
in reduced copayments during the initial year of the demonstration. 
Savings to both Department and the beneficiaries are expected to 
increase approximately four percent per year during the remainder of 
the demonstration.

B. Background

    In Fiscal Year 2012, 70 million prescriptions were filled for 
TRICARE beneficiaries through the TRICARE retail pharmacy benefit at a 
net cost of $3.8 billion to the government. Of those prescriptions, 33 
million or 47% were filled for TRICARE for Life beneficiaries at a cost 
of $2.2 billion to the government. On average, the government pays 17% 
less for maintenance medication prescriptions filled in the mail order 
program than through the retail program. Not all prescriptions filled 
through the retail program are maintenance/chronic medications. Those 
that are not are excluded from the program. However, there is potential 
for significant savings to the government by shifting a portion of the 
TRICARE for Life prescription refills to the mail order program. In 
addition, there will be significant savings to the TRICARE for Life 
beneficiaries who will receive up to a 90 day refill at no charge for 
generics in the mail order program compared to a $5 copay for only up 
to a 30 day refill in retail. The savings is even greater for brand-
name prescriptions: $13 for up to 90 days in mail versus $17 for up to 
30 days in retail, meaning that for a 90-day supply the copayment 
comparison is $13 in mail to $51 in retail. The non-formulary copayment 
comparison is $43 for up to 90 days in mail compared to $44 for only up 
to 30 days in retail.

C. Provisions of the Interim Final Rule

    The interim final rule adds a new paragraph (r) to 32 CFR 199.21. 
The new paragraph (r) establishes rules for the new program of refills 
of maintenance medications for TRICARE for Life beneficiaries through 
the mail order pharmacy program. Paragraph (r)(1) requires that for 
covered maintenance medications, TRICARE for Life beneficiaries are 
generally required to obtain their prescription refills through the 
national mail order pharmacy program or through military treatment 
facility pharmacies. TRICARE for Life beneficiaries are those enrolled 
in the Medicare wraparound coverage option of the TRICARE program.
    Paragraph (r)(2) provides that the Director, TMA will establish, 
maintain, and periodically revise and update a list of covered 
maintenance medications, which will be accessible through the TRICARE 
Pharmacy Program Web site and by telephone through the TRICARE Pharmacy 
Program Service Center. Each medication included on the list will be a 
medication prescribed for a chronic, long-term condition that is taken 
on a regular, recurring basis. It will be clinically appropriate and 
cost effective to dispense the medication from the mail order pharmacy. 
It will be available for an initial filling of a 30-day or less supply 
through retail pharmacies, and will be generally available at military 
treatment facility pharmacies for initial fill and refills. It will be 
available for refill through the national mail-order pharmacy.
    Paragraph (r)(3) provides that a refill is a subsequent filling of 
an original prescription under the same prescription number or other 
authorization as the original prescription, or a new original 
prescription issued at or near the end date of an earlier prescription 
for the same medication for the same patient.
    Paragraph (r)(4) provides that a waiver of the general requirement 
to obtain maintenance medication prescription refills from the mail 
order pharmacy or military treatment facility pharmacy will be granted 
in several circumstances. There is a blanket waiver for prescription 
medications that are for acute care needs. There is also a blanket 
waiver for prescriptions covered by other health insurance. There is a 
case-by-case waiver to permit prescription maintenance medication 
refills at a retail pharmacy when necessary due to personal need or 
hardship, emergency, or other special circumstance, for example, for 
nursing home residents. This waiver is obtained through an 
administrative override request to the TRICARE pharmacy benefits 
manager under procedures established by the Director, TMA.
    Paragraph (r)(5) establishes procedures for the effective operation 
of the program. The Department will implement the program by utilizing 
best commercial practices to the extent practicable. An effective 
communication plan that includes efforts to educate beneficiaries in 
order to optimize participation and satisfaction will be implemented. 
Beneficiaries with active prescriptions for a medication on the 
maintenance medication list will be notified that their medication is 
covered under the program. Beneficiaries will be advised that they may 
receive up to two 30 day fills at retail while they transition their 
prescription to the mail order program. The beneficiary will be 
contacted after each of these two fills reminding the beneficiary that 
the prescription must be transferred to mail. Requests for a third fill 
at retail will be blocked and the beneficiary advised to call the 
pharmacy benefits manager (PBM) for assistance. The PBM will provide a 
toll free number to assist beneficiaries in transferring their 
prescriptions from retail to the mail order program. With the 
beneficiary's permission, the PBM will contact the physician or other 
health care provider who prescribed the medication to assist in 
transferring the prescription to the mail order program. In any case in 
which a beneficiary is required to obtain a maintenance medication 
prescription refill from the national mail-order pharmacy program and 
attempts instead to refill such medications at a retail pharmacy, the 
PBM will also maintain

[[Page 75247]]

the toll free number to assist the beneficiary. This assistance may 
include information on how to request a waiver or in taking any other 
appropriate action to meet the beneficiary's needs and to implement the 
program. The PBM will ensure that a pharmacist is available at all 
times through the toll-free telephone number to answer beneficiary 
questions or provide other appropriate assistance.
    Paragraph (r)(6) provides that any beneficiary who has been covered 
by the program for a period of at least one year may opt out of 
continuing to participate in the program. For this purpose, the 
starting date for this one-year period is the first date after the 
effective date of this regulation on which the beneficiary had a 
maintenance medication prescription filled through the mail order 
pharmacy program. The beneficiary may exercise his or her right to opt 
out of the program by contacting the PBM. Following an opt out, the 
beneficiary may obtain prescriptions from a retail pharmacy, subject to 
the normal limitations and procedures under the TRICARE Pharmacy 
Benefits Program. Beneficiaries may also, if they wish, obtain refills 
from military treatment facility pharmacies and the mail order pharmacy 
program.
    Paragraph (r)(7) provides that the program and its requirements 
will expire December 31, 2017, unless Congress enacts a statutory 
extension of the program. If this happens, the program will 
automatically continue, with any adjustments or modifications required 
by law.

D. Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders (EOs) 12866 and 13563 require that a comprehensive 
regulatory impact analysis be performed on any economically significant 
regulatory action, defined primarily as one that would result in an 
effect of $100 million or more in any one year. The DoD has examined 
the economic and policy implications of this interim rule and has 
concluded that it is an economically significant regulatory action 
under the Executive Orders. The pilot program will produce savings to 
the Department of approximately $120 million during the initial year of 
the demonstration and savings to beneficiaries of approximately $28 
million in reduced copayments during the initial year of the 
demonstration. Savings to both Department and the beneficiaries are 
expected to increase approximately four percent per year during the 
remainder of the demonstration.

Congressional Review Act, 5 U.S.C. 801, et seq.

    Under the Congressional Review Act, a major rule may not take 
effect until at least 60 days after submission to Congress of a report 
regarding the rule. A major rule is one that would have an annual 
effect on the economy of $100 million or more or have certain other 
impacts. This interim rule is a major rule under the Congressional 
Review Act.

Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    This rule does not contain a Federal mandate that may result in the 
expenditure by State, local and tribunal governments, in aggregate, or 
by the private sector, of $100 million or more (adjusted for inflation) 
in any one year.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    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 interim rule does not have a significant impact on a substantial 
number of small entities.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    This interim rule contains no new information collection 
requirements subject to the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. 3501-3511).

Executive Order 13132, ``Federalism''

    This interim rule does not have federalism implications, as set 
forth in Executive Order 13132. This rule does not have substantial 
direct effects on the States; the relationship between the National 
Government and the States; or the distribution of power and 
responsibilities among the various levels of Government.

Public Comments Invited

    This rule is being issued as an interim final rule based on the 
express Congressional intent in the Conference Report accompanying the 
final version of the bill, that the provision enacted was to ``require 
the Secretary to conduct the 5-year mail-order pilot program for 
TRICARE for Life beneficiaries.'' Because of the statutory sunset date 
of December 31, 2017, it is the clear Congressional intent that the 
program begin as soon as possible in calendar year 2013. DoD invites 
public comments on all provisions of the rule. They will be considered 
for possible revisions to the program for the second and subsequent 
years of operation.
    Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

0
1. The authority citation for part 199 continues to read as follows:

    Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55.


0
2. Section 199.21 is amended by revising the section heading and adding 
a new paragraph (r) to read as follows:


Sec.  199.21.  TRICARE Pharmacy Benefits Program.

* * * * *
    (r) Refills of maintenance medications for TRICARE for Life 
beneficiaries through the mail order pharmacy program--(1) In general. 
Consistent with section 716 of the National Defense Authorization Act 
for Fiscal Year 2013, this paragraph requires that for covered 
maintenance medications, TRICARE for Life beneficiaries are generally 
required to obtain their prescription through the national mail-order 
pharmacy program or through military treatment facility pharmacies. For 
purposes of this paragraph, TRICARE for Life beneficiaries are those 
enrolled in the Medicare wraparound coverage option of the TRICARE 
program made available to the beneficiary under section 1086(d) of 
title 10, United States Code.
    (2) Medications covered. The Director, TMA will establish, 
maintain, and periodically revise and update a list of covered 
maintenance medications subject to the requirement of paragraph (r)(1) 
of this section. The current list will be accessible through the 
TRICARE Pharmacy Program Internet Web site and by telephone through the 
TRICARE Pharmacy Program Service Center. Each medication included on 
the list will meet the following requirements:
    (i) It will be a medication prescribed for a chronic, long-term 
condition that is taken on a regular, recurring basis.
    (ii) It will be clinically appropriate to dispense the medication 
from the mail order pharmacy.
    (iii) It will be cost effective to dispense the medication from the 
mail order pharmacy.
    (iv) It will be available for an initial filling of a 30-day or 
less supply through retail pharmacies.
    (v) It will be generally available at military treatment facility 
pharmacies for initial fill and refills.

[[Page 75248]]

    (vi) It will be available for refill through the national mail-
order pharmacy program.
    (3) Refills covered. For purposes of the program under paragraph 
(r)(1), a refill is:
    (i) A subsequent filling of an original prescription under the same 
prescription number or other authorization as the original 
prescription; or
    (ii) A new original prescription issued at or near the end date of 
an earlier prescription for the same medication for the same patient.
    (4) Waiver of requirement. A waiver of the general requirement to 
obtain maintenance medication prescription refills from the mail order 
pharmacy or military treatment facility pharmacy will be granted in the 
following circumstances:
    (i) There is a blanket waiver for prescription medications that are 
for acute care needs.
    (ii) There is a blanket waiver for prescriptions covered by other 
health insurance.
    (iii) There is a case-by-case waiver to permit prescription 
maintenance medication refills at a retail pharmacy when necessary due 
to personal need or hardship, emergency, or other special circumstance. 
This waiver is obtained through an administrative override request to 
the TRICARE pharmacy benefits manager under procedures established by 
the Director, TMA.
    (5) Procedures. Under the program established by paragraph (r)(1) 
of this section, the Director, TMA will establish procedures for the 
effective operation of the program. Among these procedures are the 
following:
    (i) The Department will implement the program by utilizing best 
commercial practices to the extent practicable.
    (ii) An effective communication plan that includes efforts to 
educate beneficiaries in order to optimize participation and 
satisfaction will be implemented.
    (iii) Beneficiaries with active retail prescriptions for a 
medication on the maintenance medication list will be notified that 
their medication is covered under the program. Beneficiaries will be 
advised that they may receive up to two 30 day fills at retail while 
they transition their prescription to the mail order program. The 
beneficiary will be contacted after each of these two fills reminding 
the beneficiary that the prescription must be transferred to mail.
    (iv) Requests for a third fill at retail will be blocked and the 
beneficiary advised to call the pharmacy benefits manager (PBM) for 
assistance.
    (v) The PBM will provide a toll free number to assist beneficiaries 
in transferring their prescriptions from retail to the mail order 
program. With the beneficiary's permission, the PBM will contact the 
physician or other health care provider who prescribed the medication 
to assist in transferring the prescription to the mail order program.
    (vi) In any case in which a beneficiary required under paragraph 
(r) of this section to obtain a maintenance medication prescription 
refill from national mail order pharmacy program and attempts instead 
to refill such medications at a retail pharmacy, the PBM will also 
maintain the toll free number to assist the beneficiary. This 
assistance may include information on how to request a waiver, 
consistent with paragraph (r)(4)(iii) of this section, or in taking any 
other appropriate action to meet the beneficiary's needs and to 
implement the program.
    (vii) The PBM will ensure that a pharmacist is available at all 
times through the toll-free telephone number to answer beneficiary 
questions or provide other appropriate assistance.
    (6) Nonparticipation through opt-out from program. Any beneficiary 
who has been covered by the program under paragraph (r)(1) of this 
section for a period of at least one year may opt out of continuing to 
participate in the program.
    (i) For this purpose, the starting date for this one-year period is 
the first date after the effective date of paragraph (r)(1) of this 
section on which the beneficiary had a maintenance medication 
prescription filled through the mail order pharmacy program.
    (ii) The beneficiary may exercise his or her right to opt out of 
the program by contacting the PBM.
    (iii) Following an opt out, the beneficiary may obtain 
prescriptions from a retail pharmacy, subject to limitations under the 
TRICARE Pharmacy Benefits Program other than those under paragraph (r) 
of this section. These beneficiaries may also, if they wish, obtain 
refills from military treatment facility pharmacies and the mail order 
pharmacy program.
    (7) Expiration of program. The program and requirements established 
under paragraph (r)(1) of this section will expire December 31, 2017, 
unless Congress enacts a statutory extension of the program. If this 
happens, the program will automatically continue, with any adjustments 
or modifications required by law.

    Dated: December 5, 2013.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2013-29434 Filed 12-10-13; 8:45 am]
BILLING CODE 5001-06-P