ADDITIONAL REQUIREMENTS FOR CHAMPUS REFORM INITIATIVE

SEC. 732. ADDITIONAL REQUIREMENTS FOR CHAMPUS REFORM INITIATIVE (a) Evaluation Methodology Required for Demonstration Phase of CHAMPUS Reform Initiative.—(1) Section 702(a) of the National Defense Authorization Act for Fiscal Year 1987 (Public Law 99–661; 100 Stat. 3899) is amended by adding at the end the following new paragraph: “(4) The Secretary of Defense shall develop a methodology to be used in evaluating the results of the demonstration project required by paragraph (1) and shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on such methodology.” (2) Clause (i) of section 702(c)(1)(C) of such Act is amended by inserting before the semicolon the following: “, evaluated in accordance with the methodology developed under subsection (a)(4)”. (b) One Contract Per Contractor Allowed Under Solicitation for Demonstration Phase of CHAMPUS Reform Initiative.—No contractor may be awarded more than one contract for subregions I, II, and III under Solicitation No. MDA903-87-R-0047 (issued for the CHAMPUS reform initiative demonstration project required by section 702(a) of the National Defense Authorization Act for Fiscal Year 1987). (c) Limitations on Issuance of Requests for Proposals.—Section 702(c) of the National Defense Authorization Act for Fiscal Year 1987 is amended by adding at the end the following new paragraph: “(2) The Secretary may not issue a request for proposals with respect to the second (or any subsequent) phase of the CHAMPUS reform initiative until— “(A) all principal features of the demonstration project, including networks of providers of health care, have been in operation for not less than one year; and “(B) the expiration of 60 days after the date on which the report described in paragraph (1)(C) has been received by the committees referred to in such paragraph.” (d) Report on Risk Assumption.—No later than 30 days after the date of the enactment of this Act, the Secretary of Defense shall 101 STAT. 1120 submit to the Committees on Armed Services of the Senate and House of Representatives a report on— (1) the level of risk, as of the date of the report, to be assumed by contractors under the request for proposals for the CHAMPUS reform initiative demonstration project required by section 702(a) of the National Defense Authorization Act for Fiscal Year 1987; and (2) whether any alteration in that level of risk has been made from the time that the original request for proposals was issued. (e) Requirement for Availability of Additional Insurance Coverage.—(1) The Secretary of Defense shall make every effort to enter into an agreement, similar to the one being negotiated with a private insurer on the date of the enactment of this Act, that would provide an insurance plan that meets the requirements described in paragraph (3). (2) If an agreement referred to in paragraph (1) is not entered into before a request for proposals with respect to the second phase of the CHAMPUS reform initiative is issued, the Secretary shall provide for an insurance plan which meets the requirements described in paragraph (3) through either of the following means: (A) By including, in any request for proposals with respect to the second (and any subsequent) phase of the CHAMPUS reform initiative, a requirement for the contractor to offer an option to elect an insurance plan which meets the requirements described in paragraph (3). (B) By including, in any request for proposals for a contract to process claims for CHAMPUS, a requirement for the contractor (known as a fiscal intermediary) to offer an option to elect an insurance plan which meets the requirements described in paragraph (3). (3) The insurance plan requirements referred to in paragraphs (1) and (2) are the following: (A) At the election of the individual, the plan shall be available to an individual losing eligibility (by reason of discharge, release from active duty, a change in family status (including divorce or annulment, or, in the case of a child, reaching age 22), or other similar reason) to be a covered beneficiary under chapter 55 of title 10, United States Code. (B) The plan shall provide for coverage of benefits similar to the coverage of benefits available to the individual under CHAMPUS, regardless of any pre-existing condition. (C) The plan shall provide that enrollees in the plan shall pay the full periodic charges for the benefit coverage. (f) Funding Limitations.—(1) None of the funds appropriated or otherwise made available to the Department of Defense may be obligated or expended for the purpose of entering into a contract for the demonstration phase of the CHAMPUS reform initiative required by section 702(a)(1) of the National Defense Authorization Act for Fiscal Year 1987 until the requirements of section 702(a)(4) of such Act (as added by subsection (a)) are met. (2) None of the funds appropriated or otherwise made available to the Department of Defense may be obligated or expended for the purpose of requesting a proposal for the second (or any subsequent) phase of the CHAMPUS reform initiative as described in section 702(c) of the National Defense Authorization Act for Fiscal Year 1987 until the requirements of paragraph (2) of section 702(c) of such Act (as added by subsection (c)) are met. 101 STAT. 1121 (g) CHAMPUS Defined.—In this section, the term “CHAMPUS” has the meaning given such term by section 1072(4) of title 10, United States Code.