mental health services provided as residential treatment care, unless coverage for such services is granted by a waiver by the Director, OCHAMPUS, or a designee. In cases involving the day limitations, waivers shall be handled in accordance with paragraphs (b)(8) or (b)(9) of this section. For services prior to October 1, 1991, services in excess of 60 days in any calendar year unless additional coverage is granted by the Director, OCHAMPUS, or a designee.

(73) Economic interest in connection with mental health admissions. Inpatient mental health services (including both acute care and RTC services) are excluded for care received when a patient is referred to a provider of such services by a physician (or other health care professional with authority to admit) who has an economic interest in the facility to which the patient is referred, unless a waiver is granted. Requests for waiver shall be considered under the same procedure and based on the same criteria as used for obtaining preadmission authorization (or continued stay authorization for emergency admissions), with the only additional requirement being that the economic interest be disclosed as part of the request. The same reconsideration and appeals procedures that apply to day limit waivers shall also apply to decisions regarding requested waivers of the economic interest exclusion. However, a provider may appeal a reconsidered determination that an economic relationship constitutes an economic interest within the scope of the exclusion to the same extent that a provider may appeal determinations under §199.15(1)(3). This exclusion does not apply to services under the Program for Persons with Disabilities (§ 199.5) or provided as partial hospital care. If a situation arises where a decision is made to exclude CHAMPUS payment solely on the basis of the provider's economic interest, the normal CHAMPUS appeals process will be available.

(74) Not specifically listed. Services and supplies not specifically listed as a benefit in this part. This exclusion is not intended to preclude extending benefits for those services or supplies specifically determined to be covered within the intent of this part by the

Director, OCHAMPUS, or a designee, even though not otherwise listed.

NOTE: The fact that a physician may prescribe, order, recommend, or approve a service or supply does not, of itself, make it medically necessary or make the charge an allowable expense, even though it is not listed specifically as an exclusion.

(h) Payment and liability for certain potentially excludable services under the Peer Review Organization program—(1) Applicability. This subsection provides special rules that apply only to services retrospectively determined under the Peer Review organization (PRO) program (operated pursuant to §199.15) to be potentially excludable (in whole or in part) from the basic program under paragraph (g) of this section. Services may be excluded by reason of being not medically necessary (paragraph (g)(1) of this section), at an inappropriate level (paragraph (g)(3) of this section), custodial care (paragraph (g)(7) of this section) or other reason relative to reasonableness, necessity or appropriateness (which services shall throughout the remainder of this subsection, be referred to as "not medically necessary"). (Also throughout the remainder of the subsection, "services" includes items and "provider" includes supplier). This paragraph does not apply to coverage determinations made by OCHAMPUS or the fiscal intermediaries which are not based on medical necessity determinations made under the PRO program.

(2) Payment for certain potentially excludable expenses. Services determined under the PRO program to be potentially excludable by reason of the exclusions in paragraph (g) of this section for not medically necessary services will not be determined to be excludable if neither the beneficiary to whom the services were provided nor the provider (institutional or individual) who furnished the services knew, or could reasonably have been expected to know, that the services were subject to those exclusions. Payment may be made for such services as if the exclusions did not apply.

(3) Liability for certain excludable services. In any case in which items or services are determined excludable by the PRO program by reason of being not medically necessary and payment may not be made under paragraph (h)(2) of

this section because the requirements of paragraph (h)(2) of this section are not met, the beneficiary may not be held liable (and shall be entitled to a full refund from the provider of the amount excluded and any cost share amount already paid) if:

(i) The beneficiary did not know and could not reasonably have been expected to know that the services were excludable by reason of being not medically necessary; and

(ii) The provider knew or could reasonably have been expected to know that the items or services were excludable by reason of being not medically necessary.

(4) Criteria for determining that beneficiary knew or could reasonably have been expected to have known that services were excludable. A beneficiary who receives services excludable by reason of being not medically necessary will be found to have known that the services were excludable if the beneficiary has been given written notice that the services were excludable or that similar or comparable services provided on a previous occasion were excludable and that notice was given by the OCHAMPUS, CHAMPUS PRO or fiscal intermediary, a group or committee responsible for utilization review for the provider, or the provider who provided the services.

(5) Criteria for determining that provider knew or could reasonably have been expected to have known that services were excludable. An institutional or individual provider will be found to have known or been reasonably expected to have known that services were excludable under this subsection under any one of the following circumstances:

(i) The PRO or fiscal intermediary had informed the provider that the services provided were excludable or that similar or reasonably comparable services were excludable.

(ii) The utilization review group or committee for an institutional provider or the beneficiary's attending physician had informed the provider that the services provided were excludable.

(iii) The provider had informed the beneficiary that the services were excludable.

(iv) The provider had received written materials, including notices, manual issuances, bulletins, guides, directives or other materials, providing notification of PRO screening criteria specific to the condition of the beneficiary. Attending physicians who are members of the medical staff of an institutional provider will be found to have also received written materials provided to the institutional provider.

(v) The services that are at issue are the subject of what are generally considered acceptable standards of practice by the local medical community.

(vi) Preadmission authorization was available but not requested, or concurrent review requirements were not followed.

(i) Case management program. (1) In general. Case management, as it applies to this program, provides a collaborative process among the case manager, beneficiary, primary caregiver, professional health care providers and funding sources to meet the medical needs of an individual with an extraordinary condition. It is designed to promote quality and cost-effective outcomes through assessment, planning, implementing, monitoring and evaluating the options and services required. Payment for services or supplies limited or not otherwise covered by the basic TRICARE/CHAMPUS program

may be authorized when they are provided in accordance with paragraph (i) of this section. Waiver of benefit limits/exclusions may be cost-shared where it is demonstrated that the absence of such services would result in the exacerbation of an existing extraordinary condition, as defined in §199.2, to the extent that such services are a cost-effective alternative to the basic TRICARE/CHAMPUS program.

(2) Applicability of case management program. A CHAMPUS eligible beneficiary may participate in the case management program if he/she has an extraordinary condition, which is disabling and requires extensive utilization of TRICARE resources. The medical or psychological condition must also:

(i) Be contained in the latest revision of the International Classification of Diseases Clinical Modification, or the

Diagnostic and Statistical Manual of Mental Disorders;

(ii) Meet at least one of the following:

(A) Demonstrate a prior history of high CHAMPUS costs in the year immediately preceding eligibility for the case management program; or

(B) Require clinically appropriate services or supplies from multiple providers to address an extraordinary condition; and

(iii) Can be treated more appropriately and cost effectively at a less intensive level of care.

(3) Prior authorization required. Services or supplies allowable as a benefit exception under this Section shall be cost-shared only when a beneficiary's entire treatment has received prior authorization through an individual case management program.

(4) Cost effective requirement. Treatment must be determined to be cost effective by comparison to alternative treatment that would otherwise be required or when compared to existing reimbursement methodology. Treatment must meet the requirements of appropriate medical care as defined in $199.2.

(5) Limited waiver of exclusions and limitations. Limited waivers of exclusions and limitations normally applicable to the basic program may be granted for specific services or supplies only when a beneficiary's entire treatment has received prior authorization through the individual case management program described in paragraph (i) of this section. The Director, OCHAMPUS may grant a patient-specific waiver of benefit limits for services or supplies in the following categories, subject to the waiver requirements of this section.

(i) Durable equipment. The cost of a device or apparatus which does not qualify as Durable Medical Equipment (as defined in §199.2) or back-up durable medical equipment may be shared when determined by the Director, OCHAMPUS to be cost-effective and clinically appropriate.

(ii) Custodial care. The cost of services or supplies rendered to a beneficiary that would otherwise be excluded as custodial care (as defined in $199.2) may be cost-shared for a max

imum lifetime period of 365 days when determined by the Director,

OCHAMPUS, to be cost effective and clinically appropriate. To qualify for a waiver of benefit limits of custodial care, the patient must meet all eligibility requirements of paragraph (i) of this section, including that the absence of the waived services would result in the exacerbation of an existing extraordinary condition. In addition:

(A) The proposed treatment must be cost effective and clinically appropriate as determined by the individual case manager. For example, the treatment would be determined to be cost effective by comparison to alternative care that would otherwise be required or when compared to existing reimbursement methodology.

(B) For patients receiving care at home, there must be a primary caregiver or the patient is capable of selfsupport.

(iii) Domiciliary care. The cost of services or supplies rendered to be a beneficiary what would otherwise be excluded as domiciliary care (as defined in §199.2) may be shared when determined by the Director, OCHAMPUS to be cost effective and clinically appropriate. Waivers for domiciliary care are subject to the same requirements as paragraphs (i)(5)(ii) of this section.

(iv) In home services. The cost of the following in-home services may be shared when determined by the Director, OCHAMPUS to be cost effective and clinically appropriate: nursing care, physical, occupational, speech therapy, medical social services, intermittent or part-time services of a home health aide, beneficiary transportation required for treatment plan implementation, and training for the beneficiary and primary caregiver sufficient to allow them to assume all feasible responsibility for the care of the beneficiary that will facilitate movement of the beneficiary to the least resource-intensive, clinically appropriate setting. (Qualifications for home health aides shall be based on the standards at 42 CFR 848.36.)

(6) Case management acknowledgment. The beneficiary, or representative, and the primary caregiver shall sign a case management acknowledgment as a prerequisite to prior authorization of case

beneficiary's sponsor, to be readjudicated according to the provisions of $199.4. The Director, OCHAMPUS, or designee, shall allow readjudication when the sponsor's family's CHAMPUS benefit year cost-share liability would be reduced by such readjudication. Such requests are subject to the claims filing deadline provisions of § 199.7. The determination regarding readjudication is conclusive and may not be appealed.

(3) Application required. A beneficiary shall establish PFPWD eligibility as a prerequisite to authorization or payment of any PFPWD benefits. Subsequent review of the PFPWD qualifying condition to confirm continued eligibility shall be made in accordance with the prognosis for a change in severity such that the condition would not likely continue to be a PFPWD qualifying condition.

(4) Benefit authorization. To establish whether a requested service or item is a PFPWD benefit, the beneficiary (or sponsor or guardian acting on the behalf of the beneficiary) shall provide such information about how the requested benefit will contribute to confirming, arresting, or reducing the disabling effects of the qualifying condition as the Director, OCHAMPUS, or designee, determines necessary for benefit adjudication.

(i) Written authorization. The Director, OCHAMPUS, or designee, may require written authorization for any PFPWD category or type of service or item as a prerequisite for adjudication of related claims.

(ii) Format. An authorization issued by the Director, OCHAMPUS, or designee, shall specify, such description, dates, amounts, requirements, limitations or information as necessary for exact identification of approved benefits and efficient adjudication of resulting claims.

(iii) Valid period. An authorization for a particular PFPWD service or item shall not exceed six consecutive months.

(iv) Authorization waiver. The Director, OCHAMPUS, or designee, shall waive the requirement for a written CHAMPUS authorization for rendered PFPWD services or items that, except for the absence of the written

CHAMPUS authorization, would be allowable as a PFPWD benefit.

(v) Public facility use. A PFPWD beneficiary residing within a State, as defined in §199.2, must demonstrate that a public facility, as defined in §199.2, funds, except funds administered under a State plan for medical assistance under Title XIX of the Social Security Act (Medicaid) is not available or adequate, as defined in § 199.2, to meet the qualifying condition related need.

(A) Equipment repair or maintenance for beneficiary owned equipment shall be considered not available when the equipment is a type allowable as a benefit.

(B) A beneficiary shall not be required to change the provider of public facility funded therapy when public facility funding is depleted during that beneficiary's course of therapy and when such a change is determined by the Director, OCHAMPUS, or designee, to be clinically contraindicated. When contraindicated, other public facilities for the therapy shall not be considered adequate for the beneficiary.

(5) Public facility use certification. Written certification, in accord with information requirements, formats, and procedures established by the Director, OCHAMPUS, or designee that requested PFPWD services or items cannot be obtained from public facilities because the services or items are not available, or if available, are not adequate, is a prerequisite for PFPWD benefit payment.

(i) A Military Treatment Facility (MTF) Commander, or designee, may make such certification for a beneficiary residing within a defined geographic area.

(ii) An administrator of a public facility, or designee, may make such certification for a beneficiary residing within the service area of that public facility.

(iii) The domicile of the beneficiary shall be the basis for the determination of public facility availability when the sponsor and beneficiary are separately domiciled due to the sponsor's move to a new permanent duty station or due to legal custody requirements.

(iv) The Director, OCHAMPUS, or designee, may determine, on a case-bycase basis, that apparent public facility