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supervision or observation, or any combination of these functions, are excluded.

(4) Dental care or orthodontic treatment is excluded.

(5) Nondomestic travel which originates or terminates outside of a State, as defined in § 199.2, is excluded.

(6) Deluxe travel accommodation price differential between the price for a type of accommodation which provides services or features which exceed the requirements of the beneficiary's condition for safe transport and the price for a type of accommodation without those deluxe features, is excluded.

(7) Equipment. Exclusions for durable medical equipment at §199.4(d)(3)(ii)(D) apply to all PFPWD allowable equipment.

(8) Medical devices. Prosthetic devices and medical equipment which do not meet the benefit requirements of § 199.4 are excluded.

(9) No obligation to pay. Services or items for which the beneficiary or sponsor has no legal obligation to pay, or for which no charge would be made if the beneficiary was not eligible for the CHAMPUS, are excluded.

(10) Public facility or Federal government. Services or items paid for, or eligible for payment, directly or indirectly by a Public Facility, as defined in §199.2, or by the Federal government, other than the Department of Defense, are excluded, except when such services or items are eligible for payment under a State plan for medical assistance under Title XIX of the Social Security Act (Medicaid).

(11) Study, grant, or research programs. Services and items provided as a part of a scientific clinical study, grant, or research program are excluded.

(12) Unproven drugs, devices, and medical treatments or procedures. Services and items whose safety and efficacy have not been established as described in $199.4 are unproven and cannot be cost-shared by CHAMPUS.

(13) Immediate family or household. Services or items provided or prescribed by a member of the beneficiary's immediate family, or a person living in the beneficiary's or sponsor's household, are excluded.

(14) Court or agency ordered care. Services or items ordered by a court or

other government agency that are not otherwise a legitimate PFPWD benefit are excluded.

(15) Excursions. Additional or special charges for excursions, other than otherwise allowable transportation, are excluded even though part of a program offered by an approved provider.

(16) Drugs and medicines. Drugs and medicines which do not meet the benefit requirements of $199.4 are excluded.

(17) Therapeutic absences. Therapeutic absences from an inpatient facility are excluded.

(e) Cost-share liability—(1) No deductible. PFPWD benefits are not subject to a deductible amount.

(2)(i) Sponsor cost-share liability. Regardless of the number of PFPWD eligible family members, the sponsor's cost share for allowed PFPWD benefits in a given month is according to the following table:

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(ii) The sponsor's cost-share will be applied, up to the amount given in the table in paragraph (e)(2)(i), to the first allowed charges in any given month. The government's share will be paid, up to the maximum amount(s) specified in paragraphs (e)(3) and (e)(4) of this section for allowed charges after the sponsor's cost-share has been applied.

(3) Government cost-share liability: member who sponsors one PFPWD beneficiary. The total government share of the cost of all PFPWD benefits provided in a given month to a beneficiary who is the sponsor's only PFPWD eligible family member may not exceed $1,000 after application of the allowable payment methodology. Any amount remaining after the Government's maximum share has been reached is the responsibility of the active duty sponsor.

(4) Government cost-share liability: member who sponsors more than one PFPWD beneficiary. The total government share of the cost of all PFPWD allowable benefits provided in a given month to a beneficiary who is one of two or more PFPWD eligible family members of the same sponsor shall be determined as follows:

(i) Maximum benefit limit determination for the first PFPWD eligible beneficiary. The $1,000 maximum monthly government PFPWD benefit amount shall apply only to the beneficiary incurring the least amount of allowable PFPWD expense in a given month, after application of the allowable payment methodology. If two or more PFPWD eligible beneficiaries have the same amount of allowable PFPWD expenses in a given month, the $1,000 maximum benefit in that month shall apply to only one PFPWD eligible beneficiary.

(ii) Maximum benefit limit determination for the remaining PFPWD eligible beneficiaries. After application of the Government's cost-share specified in paragraph (e)(4)(i) of this section, the government shall cost-share the entire remaining amount for all allowable services and items received in that month by the remaining PFPWD eligible beneficiaries.

(f) Benefit payment—(1) Equipment. The allowable amount for equipment shall be calculated in the same manner as durable medical equipment allowable through § 199.4.

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quest for authorization of equipment, specify that the allowable cost of the equipment be prorated. Equipment expense proration permits the allowable cost of an item of PFPWD authorized equipment to be apportioned so that no portion of the allowable cost exceeds the monthly benefit limit and allows each apportioned amount to be separately authorized as a benefit during subsequent contiguous months.

(i) Maximum period. The maximum number of contiguous months during which a prorated amount may be authorized for cost-share shall be the lesser of:

(A) The number of months calculated by dividing the initial allowable cost for the item of equipment by $1,000 and doubling the resulting quotient; or

(B) The number of months of useful equipment life for the requesting beneficiary, as determined by the Director, OCHAMPUS, or designee.

(ii) Cost-share. A cost-share is applicable in any month in which a prorated amount is authorized, subject to the cost-share provisions for sponsor with two or more PFPWD eligible beneficiaries.

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(iii) Termination. Prorated payments shall be terminated as of the first day of the month following the death of a beneficiary or as of the effective date of a beneficiary's loss of PFPWD eligibility for any other reason.

(4) For-profit institutional care provider. Institutional care provided by a for-profit entity may be allowed only when the care for a specific PFPWD beneficiary:

(i) Is contracted for by a public facility, as defined in §199.2, as a part of a publicly funded long-term inpatient care program; and

(ii) Is provided based upon the PFPWD beneficiary's being eligible for the publicly funded program which has contracted for the care; and

(iii) Is authorized by the public facility as a part of a publicly funded program; and

(iv) Would cause a cost-share liability in the absence of CHAMPUS eligibility; and

(v) Produces a PFPWD beneficiary cost-share liability that does not exceed the maximum charge by the provider to the public facility for the contracted level of care.

(g) Implementing instructions. The Director, OCHAMPUS, or a designee, shall issue CHAMPUS policies, instructions, procedures, guidelines, standards, and criteria as may be necessary to implement the intent of this section.

[62 FR 35093, June 30, 1997, as amended at 62 FR 42904, Aug. 11, 1997]

§ 199.6 Authorized providers.

(a) General. This section sets forth general policies and procedures that are the basis for the CHAMPUS costsharing of medical services and supplies provided by institutions, individuals, or other types of providers. Providers seeking payment from the Federal Government through programs such as CHAMPUS have a duty to familiarize themselves with, and comply with, the program requirements.

(1) Listing of provider does not guarantee payment of benefits. The fact that a type of provider is listed in this section is not to be construed to mean that CHAMPUS will automatically pay a claim for services or supplies provided by such a provider. The provider who actually furnishes the service(s) must, in fact, meet all licensing and other requirements established by this part to be an authorized provider; the provider must not be the subject of sanction under § 199.9; and, cost-sharing of the services must not otherwise be prohibited by this part. In addition, the patient must in fact be an eligible beneficiary and the services or supplies billed must be authorized and medically necessary, regardless of the standing of the provider.

(2) Outside the United States or emergency situations within the United States. Outside the United States or within the United States and Puerto Rico in emergency situations, the Director, OCHAMPUS, or a designee, after review of the facts, may provide payment to or on behalf of a beneficiary who receives otherwise covered services or supplies from a provider of service that does not meet the standards described in this part.

NOTE: Only the Secretary of Defense, the Secretary of Health and Human Services, or the Secretary of Transportation, or their designees, may authorize (in emergency situations) payment to civilian facilities in the United States that are not in compliance with title VI of the Civil Rights Act of 1964. For the purpose of the Civil Rights Act only, the United States includes the 50 states, the District of Columbia, Puerto Rico, Virgin Islands, American Samoa, Guam, Wake Island, Canal Zone, and the territories and possessions of the United States.

(3) Dual Compensation/Conflict of Interest. Title 5, United States Code, section 5536 prohibits medical personnel who are active duty Uniformed Service members or civilian employees of the Government from receiving additional Government compensation above their normal pay and allowances for medical care furnished. In addition, Uniformed Service members and civilian employees of the Government are generally prohibited by law and agency regulations and policies from participating in apparent or actual conflict of interest situations in which a potential for personal gain exists or in which there is an appearance of impropriety or incompatibility with the performance of their official duties or responsibilities. The Departments of Defense, Health and Human Services, and Transportation have a responsibility, when disbursing appropriated funds in the payment of CHAMPUS benefits, to ensure that the laws and regulations are not violated. Therefore, active duty Uniformed Service members (including a reserve member while on active duty and civilian employees of the United States Government shall not be authorized to be CHAMPUS providers. While individual employees of the Government may be able to demonstrate that the furnishing of care to CHAMPUS beneficiaries may not be incompatible with their official duties and responsibilities, the processing of millions of CHAMPUS claims each year does not enable Program administrators to efficiently review the status of the provider on each claim to ensure that no conflict of interest or dual compensation situation exists. The problem is further complicated given the numerous interagency agreements (for example, resource sharing arrangements between the Department of Defense and the Veterans Administration

in the provision of health care) and other unique arrangements which exist at individual treatment facilities around the country. While an individual provider may be prevented from being an authorized CHAMPUS provider even though no conflict of interest or dual compensation situation exists, it is essential for CHAMPUS to have an easily administered, uniform rule which will ensure compliance with the existing laws and regulations. Therefore, a provider who is an active duty Uniformed Service member or civilian employee of the Government shall not be an authorized CHAMPUS provider. In addition, a provider shall certify on each CHAMPUS claim that he/she is not an active duty Uniformed Service member or civilian employee of the Government.

(4) [Reserved]

(5) Utilization review and quality assurance. Providers approved as authorized CHAMPUS providers have certain obligations to provide services and supplies under CHAMPUS which are (i) furnished at the appropriate level and only when and to the extent medically necessary under the criteria of this part; (ii) of a quality that meets professionally recognized standards of health care; and, (iii) supported by adequate medical documentation as may be reasonably required under this part by the Director, OCHAMPUS, or designee, to evidence the medical necessity and quality of services furnished, as well as the appropriateness of the level of care. Therefore, the authorization of CHAMPUS benefits is contingent upon the services and supplies furnished by any provider being subject to pre-payment or post-payment utilization and quality assurance review under professionally recognized standards, norms, and criteria, as well as any standards or criteria issued by the Director, OCHAMPUS, or a designee, pursuant to this part. (Refer to §§199.4, 199.5, and 199.7 of this part.)

(6) Exclusion of beneficiary liability. In connection with certain utilization review, quality assurance and preauthorization requirements of section 199.4 of this part, providers may not hold patients liable for payment for certain services for which CHAMPUS payment is disallowed.

With respect to such services, providers may not seek payment from the patient or the patient's family. Any such effort to seek payment is a basis for termination of the provider's authorized status.

(7) Provider required. In order to be considered for benefits, all services and supplies shall be rendered by, prescribed by, or furnished at the direction of, or on the order of a CHAMPUSauthorized provider practicing within the scope of his or her license.

(8) Participating providers. A CHAMPUS-authorized provider is a participating provider, as defined in §199.2 under the following cir

cumstances:

(i) Mandatory participation. (A) All Medicare-participating hospitals must be CHAMPUS participating providers for all inpatient CHAMPUS claims.

(B) Hospitals that are not Medicareparticipating but are subject to the CHAMPUS-DRG-based payment methodology or the CHAMPUS mental health payment methodology as established by § 199.14(a), must enter into a participation agreement with CHAMPUS for all inpatient claims in order to be a CHAMPUS-authorized provider.

(C) Corporate services providers authorized as CHAMPUS providers under the provisions of paragraph (f) of this section must enter into a participation agreement as provided by the Director, OCHAMPUS, or designee.

(ii) Voluntary participation-(A) Total claims participation: The participating provider program. A CHAMPUS-authorized provider that is not required to participate by this part may become a participating provider by entering into an agreement or memorandum of understanding (MOU) with the Director, OCHAMPUS, or designee, which includes, but is not limited to, the provisions of paragraph (a)(13) of this section. The Director, OCHAMPUS, or designee, may include in a participating provider agreement/MOU provisions that establish between CHAMPUS and a class, category, type, or specific provider, uniform procedures and conditions which encourage provider participation while improving beneficiary access to benefits and contributing to CHAMPUS efficiency.

Such provisions shall be otherwise allowed by this part or by DoD Directive or DoD Instruction specifically pertaining to CHAMPUS claims participation. Participating provider program provisions may be incorporated into an agreement/MOU to establish a specific CHAMPUS-provider relationship, such as a preferred provider arrangement.

(B) Claim-specific participation. A CHAMPUS-authorized provider that is not required to participate and that has not entered into a participation agreement pursuant to paragraph (a)(8)(ii)(A) of this section may elect to be a participating provider on a claimby-claim basis by indicating "accept assignment" on each claim form for which participation is elected.

(9) Limitation to authorized institutional provider designation. Authorized institutional provider status granted to a specific institutional provider applicant does not extend to any institution-affiliated provider, as defined in § 199.2, of that specific applicant.

(10) Authorized provider. A hospital or institutional provider, physician, or other individual professional provider, or other provider of services or supplies specifically authorized in this chapter to provide benefits under CHAMPUS. In addition, to be an authorized CHAMPUS provider, any hospital which is a CHAMPUS participating provider under paragraph (a)(7) of this section, shall be a participating provider for all care, services, or supplies furnished to an active duty member of the uniformed services for which the active duty member is entitled under 10 U.S.C. 1074(c). As a participating provider for active duty members, the CHAMPUS authorized hospital shall provide such care, services, and supplies in accordance with the payment rules of § 199.16 of this part. The failure of any CHAMPUS participating hospital to be a participating provider for any active duty member subjects the hospital to termination of the hospital's status as a CHAMPUS authorized provider for failure to meet the qualifications established by this part. (11) Balance billing limits.

(i) In general. Individual providers who are not Participating Providers may not balance bill a beneficiary an amount which exceeds the applicable

balance billing limit. The balance billing limit shall be the same percentage as the Medicare limiting charge percentage for nonparticipating physicians.

(ii) Waiver. The balance billing limit may be waived by the Director, OCHAMPUS on a case-by-case basis if requested by a CHAMPUS beneficiary. A decision by the Director, OCHAMPUS to waive or not waive the limit in any particular case is not subject to the appeal and hearing procedures of § 199.10.

(iii) Compliance. Failure to comply with the balance billing limit shall be considered abuse and/or fraud and grounds of exclusion or suspension of the provider under § 199.9.

(12) Medical records. CHAMPUS-authorized provider organizations and individuals providing clinical services shall maintain adequate clinical records to substantiate that specific care was actually furnished, was medically necessary, and appropriate, and identify(ies) the individual(s) who provided the care. This applies whether the care is inpatient or outpatient. The minimum requirements for medical record documentation are set forth by all of the following:

(i) The cognizant state licensing authority;

(ii) The Joint Commission on Accreditation of Healthcare Organizations, or the appropriate Qualified Accreditation Organization as defined in § 199.2;

(iii) Standards of practice established by national medical organizations; and (iv) This part.

(13) Participation agreements. A participation agreement otherwise required by this part shall include, in part, all of the following provisions requiring that the provider shall:

(i) Not charge a beneficiary for the following:

(A) Services for which the provider is entitled to payment from CHAMPUS;

(B) Services for which the beneficiary would be entitled to have CHAMPUS payment made had the provider complied with certain procedural requirements.

(C) Services not medically necessary and appropriate for the clinical management of the presenting illness, injury, disorder or maternity;

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