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DOD Proposes Rule to Improve Mental Health and Substance Abuse Coverage Under Tricare


Email Alert

February 22, 2016

By Joseph Kelly*

On February 1, the U.S. Department of Defense (DOD) proposed a rule intended to improve and expand coverage for mental health and substance abuse treatment to beneficiaries under the TRICARE program. The proposed rule seeks to: (1) eliminate limitations on mental health (MH) and substance use disorder (SUD) treatment benefits to establish parity with other Tricare benefits; (2) expand coverage of MH and SUD treatment to include intensive outpatient programs (IOPs) and opioid use disorder; (3) streamline provider authorization; and (4) develop reimbursement methodologies for newly covered treatment.

Elimination of Limitations and Cost-Sharing Parity for MH and SUD Treatment

DOD notes that current federal parity requirements, including under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and Affordable Care Act (ACA), do not apply to TRICARE. Rather, as DOD explains, the MHPAEA and ACA “serve as models”1 for the changes in benefits coverage under the proposed rule. To this end, the proposed rule would eliminate TRICARE qualitative and quantitative limitations to MH and SUD treatment “consistent with the principles of mental health parity,”2 including:

  • Annual limitations of 30 days (45 days for children) on stays at inpatient MH facilities and 150 days at residential treatment centers;
  • The 60–day partial hospitalization limitation;
  • Annual and lifetime limitations on SUD treatment;
  • Presumptive limitations on outpatient services including on weekly psychotherapy visits and SUD family therapy sessions per benefit period; and
  • Limitations on the smoking cessation program.

Until December 2014, the inpatient coverage limitations were statutorily mandated. The National Defense Authorization Act (NDAA) for Fiscal Year 2015 amended 10 U.S.C. § 1079 to remove these limitations, paving the way for broader coverage of the inpatient benefit under the proposed rule. The NDAA also made a second key change to § 1079: elimination of DOD’s authority to impose separate patient cost-sharing requirements for TRICARE MH and SUD treatment and medical/surgical benefits. The proposed rule, in turn, aligns cost-sharing requirements for MH and SUD treatment with that for other TRICARE benefits.

DOD further proposes to eliminate the categorical exclusion of treatment of gender dysphoria. The proposed rule permits coverage for all non-surgical, medically necessary, and appropriate care in treatment of gender dysphoria. This change comes in the wake of the Chelsea Manning case. In September 2014, Manning sued DOD in federal court alleging that, although U.S. Army doctors had diagnosed her with gender dysphoria, the agency unconstitutionally denied her treatment for her condition. In February 2015, DOD agreed to provide Manning with hormone therapy. Under the proposed rule, TRICARE would cover psychotherapy, pharmacotherapy, and hormone replacement therapy, to the extent medically necessary. Surgery remains subject to a statutory prohibition under § 1079(a)(11).

Expansion of Coverage to Include MH and SUD IOP and Opioid Use Disorder

The proposed rule would expand coverage to include IOPs for MH and SUD treatment, care in Opioid Treatment Programs (OTPs), and other outpatient SUD treatment by TRICARE authorized providers. DOD concludes that current Tricare coverage does not fully reflect the complete range of contemporary treatment approaches—particularly community-based care— widely endorsed in the industry. The proposed changes would establish MH and SUD IOPs, OTPs (a form of outpatient therapy), and office-based opioid treatment (OBOT) as new categorical benefits. Notably, under the proposed rule, coverage for IOP, OTP, and OBOT for SUD would include the provision of medication–assisted treatment (e.g., methadone, buprenorphine, naltrexone) where appropriate.

Streamlining MH and SUD Provider Authorization

DOD acknowledges that TRICARE’s provider authorization process, established over 20 years ago, is antiquated and overly restrictive. The proposed rule would move provider authorization from a certification procedure that is based on “detailed, lengthy, stand-alone TRICARE requirements,”3 to a model that defers to nationally recognized accreditation. Under the proposed rule a provider may become Tricare authorized if it is accredited by a Tricare-approved body and executes a Tricare participation agreement.

Reimbursement Methodologies for Newly Recognized Treatment

Under the proposed rule, IOP and methadone OTP reimbursement would use bundled per diem rates based on intensity, frequency, and duration of services and/or drugs. OTP reimbursement may vary between fee-for-service and per diem bundled rates depending on the medication included in the course of treatment. DOD requests comments on these methodologies since there are no applicable Medicare reimbursement rules to follow.

DOD estimates the net increase in costs as a result of these revisions to be $55 million. The notice and comment period expires on April 1.

*We would like to thank Joseph T. Kelley III (Kelley Partners Ltd., Philadelphia, PA) and Charlotte A. Combre (Baker & Hostetler LLP, Atlanta, GA) for respectively authoring and reviewing this email alert.

1 81 Fed. Reg. 5061 (February 1, 2016).
2 Id. at 5062.
3 Id. at 5068.

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