HEALTH CARE DEMONSTRATION PROJECT FOR THE AREA OF NEWPORT. RHODE ISLAND.

SEC. 731. HEALTH CARE DEMONSTRATION PROJECT FOR THE AREA OF NEWPORT. RHODE ISLAND. (a) Demonstration Project Required.—In order to control the cost of medical care, the Secretary of Defense shall undertake a demonstration project to provide for the delivery of inpatient medical services in the Newport, Rhode Island, area to members of the Armed Forces on active duty and covered beneficiaries under chapter 55 of title 10, United States Code, based on an external partnership agreement or agreements with civilian health care facilities and providers. To the maximum extent possible, the Secretary shall negotiate such agreements on a discounted basis at rates less than those prescribed for diagnosis related-groups. (b) Waiver of CHAMPUS Copayment.—(1) In order to encourage participation by covered beneficiaries in the demonstration project required by this section, the Secretary of Defense may permit a health care facility or provider participating in the project to reduce or waive the cost-sharing requirements of sections 1079 and 1086 of title 10, United States Code, if the Secretary determines that it is cost-effective to permit such reduction or waiver. (2) If a health care facility or provider participating in this demonstration project reduces or waives cost-sharing requirements for health care services, the Secretary of Defense may require the facility or provider to certify that the amount charged to the Federal Government for such health care was not increased above the amount that the facility or provider would have charged the Federal Government for such health care had the payment not been reduced or waived. The Secretary of Defense may further require a health 105 STAT. 1407care facility or provider to provide information to the Secretary to show the compliance of the facility or provider with this paragraph. (c) Negotiations Regarding Waiver of Medicare Copayments.—The Secretary of Defense shall initiate negotiations with the Secretary of Health and Human Services for the purpose of reaching an agreement under which the Secretary of Health and Human Services would permit a waiver of the deductible and copayment under medicare program for covered beneficiaries in the demonstration project required by this section on the same basis as the waiver permitted by the Secretary of Defense.