To remove certain restrictions on participation in the demonstration project conducted by the Secretary of Defense to provide health care for Medicare-eligible Department of Defense beneficiaries under the Federal Employees Health Benefits program, and to extend the period for carrying out such project.

Revises a demonstration project under which the Secretary of Defense provides health care for Medicare-eligible beneficiaries of current and former military personnel under the Federal Employees Health Benefits (FEHB) program to: (1) remove the requirement that such a beneficiary must reside within one of the areas covered by the project; (2) extend such project from three to five years; and (3) require a military medical facility providing health care to a covered beneficiary to be reimbursed by the applicable FEHB health plan.