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(D) Services for which a beneficiary (x) Maintain contemporaneous clinwould be entitled to payment but for a ical records that substantiate the clinreduction or denial in payment as a re- ical rationale for each course of treatsult of quality review; and

ment, periodic evaluation of the effi(E) Services rendered during a period cacy of treatment, and the outcome at in which the provider was not in com- completion or discontinuation of treatpliance with one or more conditions of ment; authorization;

(xi) Refer CHAMPUS beneficiaries (ii) Comply with the applicable provi

only to providers with which the refersions of this part

related ring provider does not have an ecoCHAMPUS administrative policy; nomic interest, as defined in $ 199.2; and (iii) Accept the CHAMPUS deter

(xii) Limit services furnished under mined allowable payment combined

arrangement to those for which receipt with the cost-share, deductible, and

of payment by the CHAMPUS authorother health insurance amounts pay

ized provider discharges the payment able by, or on behalf of, the bene

liability of the beneficiary. ficiary, as full payment for CHAMPUS

(14) Implementing instructions. The Diallowed services;

rector, OCHAMPUS, or a designee, (iv) Collect from the CHAMPUS ben

shall issue CHAMPUS policies, instruc

tions, procedures, and guidelines, as eficiary those amounts that the bene

may be necesssary to implement the ficiary has a liability to pay for the

intent of this section. CHAMPUS deductible and cost-share;

(15) Exclusion. Regardless of any pro(v) Permit access by the Director,

vision in this section, a provider who is OCHAMPUS, or designee, to the clin

suspended, excluded, or terminated ical record of any CHAMPUS bene

under $199.9 of this part is specifically ficiary, to the financial and organiza

excluded as an authorized CHAMPUS tional records of the provider, and to

provider. reports of evaluations and inspections

(b) Institutional providers—(1) General. conducted by state, private agencies or

Institutional providers are those proorganizations;

viders who bill for services in the name (vi) Provide the Director, of an organizational entity (such as OCHAMPUS, or designee, prompt writ- hospital and skilled nursing facility), ten notification of the provider's em- rather than in the name of a person. ployment of an individual who, at any

The term "institutional provider” does time during the twelve months pre

not include professional corporations ceding such employment,

or associations qualifying as a domesployed in a managerial, accounting, au

tic corporation under $ 301.7701-5 of the diting, or similar capacity by an agen- Internal Revenue Service Regulations cy or organization which is responsible, nor does it include other corporations directly or indirectly for decisions re

that provide principally professional garding Department of Defense pay- services. Institutional providers may ments to the provider;

provide medical services and supplies (vii) Cooperate fully with a des

on either an inpatient or outpatient ignated utilization and clinical quality basis. management organization which has a (i) Preauthorization. Preauthorization contract with the Department of De- may be required by the Director, fense for the geographic area in which OCHAMPUS for any health care service the provider renders services;

for which payment is sought under (viii) Obtain written authorization CHAMPUS. (See $199.4 and 199.15 for before rendering designated services or further

information items for which CHAMPUS cost-share preauthorization requirements.) may be expected;

(ii) Billing practices. (ix) Maintain clinical and other (A) Each institutional billing, includrecords related to individuals for whom ing those institutions subject to the CHAMPUS payment was made for serv- CHAMPUS DRG-based reimbursement ices rendered by the provider, or other- method or a CHAMPUS-determined allwise under arrangement, for a period of inclusive rate reimbursement method, 60 months from the date of service; must be itemized fully and sufficiently




descriptive for the CHAMPUS to make a determination of benefits.

(B) Institutional claims subject to the CHAMPUS DRG-based reimbursement method or a CHAMPUS-determined all-inclusive rate reimbursement method, may be submitted only after the beneficiary has been discharged or transferred from the institutional provider's facility or program.

(C) Institutional claims for Residential Treatment Centers and all other institutional providers, except those listed in (B) above, should be submitted to the appropriate CHAMPUS fiscal intermediary at least every 30 days.

(2) Nondiscrimination policy. Except as provided below, payment may not be made for inpatient or outpatient care provided and billed by an institutional provider found by the Federal Government to practice discrimination in the admission of patients to its services on the basis of race, color, or national origin. Reimbursement may not be made to a beneficiary who pays for care provided by such a facility and submits a claim for reimbursement. In the following circumstances, the Secretary of Defense, or a designee, may authorize payment for care obtained in an ineligible facility:

(i) Emergency care. Emergency inpatient or outpatient care.

(ii) Care rendered before finding of a violation. Care initiated before a finding of a violation and which continues after such violation when it is determined that a change in the treatment facility would be detrimental to the health of the patient, and the attending physician so certifies.

(iii) Other facility not available. Care provided in an ineligible facility because an eligible facility is not available within a reasonable distance.

(3) Procedures for qualifying as CHAMPUS-approved institutional provider. General and special hospitals otherwise meeting the qualifications outlined in paragraphs (b)(4) (i), (ii), and (iii), of this section are not required to request CHAMPUS approval formally.

(i) JCAH accreditation status. Each CHAMPUS fiscal intermediary shall keep informed as to the current JCAH accreditation status of all hospitals and skilled nursing facilities in its

area; and the provider's status under Medicare, particularly with regard to compliance with title VI of the Civil Rights Act of 1964 (42 U.S.C. 20000(1)). The Director, OCHAMPUS, or a designee, shall specifically approve all other authorized institutional providers providing services to CHAMPUS beneficiaries. At the discretion of the Director, OCHAMPUS, any facility that is certified and participating as a provider of services under title XVIII of the Social Security Act (Medicare), may be deemed to meet CHAMPUS requirements. The facility must be providing a type and level of service that is authorized by this part.

(ii) Required to comply with criteria. Facilities seeking CHAMPUS approval will be expected to comply with appropriate criteria set forth in paragraph (b)(4) of this section. They also are required

to complete and submit CHAMPUS Form 200, "Required Information Facility Determination Instructions,” and provide such additional information as may be requested by OCHAMPUS. An onsite evaluation, either scheduled or unscheduled, may be conducted at the discretion of the Director, OCHAMPUS, or a designee. The final determination regarding approval, reapproval, or disapproval of a facility will be provided in writing to the facility and the appropriate CHAMPUS fiscal intermediary.

(iii) Notice of peer review rights. All health care facilities subject to the DRG-based payment system shall provide CHAMPUS beneficiaries, upon admission, with information about peer review including their appeal rights. The notices shall be in a form specified by the Director, OCHAMPUS.

(iv) Surveying of facilities. The surveying of newly established institutional providers and the periodic resurveying of all authorized institutional providers is a continuing process conducted by OCHAMPUS.

(v) Institutions not in compliance with CHAMPUS standards. If a determination is made that an institution is not in compliance with one or more of the standards applicable to its specific category of institution, CHAMPUS shall take immediate steps to bring about compliance or terminate the approval


law provides for the licensing of hospitals, the hospital:

(1) Is licensed pursuant to such law,



as an authorized institution in accordance with $199.9(1)(2).

(vi) Participation agreements required for some hospitals which are not Medicare-participating. Notwithstanding the provisions of this paragraph (B)(3), a hospital which is subject to the CHAMPUS DRG-based payment system but which is not Medicareparticpating hospital must request and sign an agreement with OCHAMPUS. By signing the agreement, the hospital agrees to participate on all CHAMPUS inpatient claims and accept the requirements for a participating provider as contained in paragraph (a)(8) of $ 199.6. Failure to sign such an agreement shall disqualify such hospital as a CHAMPUS-approved institutional provider.

(4) Categories of institutional providers. The following categories of institutional providers may be reimbursed by CHAMPUS for services provided CHAMPUS beneficiaries subject to any and all definitions, conditions, limitation, and exclusions specified or enumerated in this part.

(i) Hospitals, acute care, general and special. An institution that provides inpatient services, that also may provide outpatient services (including clinical and ambulatory surgical services), and that:

(A) Is engaged primarily in providing to inpatients, by or under the supervision of physicians, diagnostic and therapeutic services for the medical or surgical diagnosis and treatment of illness, injury, or bodily malfunction (including maternity).

(B) Maintains clinical records on all inpatients (and outpatients if the facility operates an outpatient department or emergency room).

(C) Has bylaws in effect with respect to its operations and medical staff.

(D) Has a requirement that every patient be under the care of a physician.

(E) Provides 24-hour nursing service rendered or supervised by a registered professional nurse, and has a licensed practical nurse or registered professional nurse on duty at all times.

(F) Has in effect a hospital utilization review plan that is operational and functioning.

(G) In the case of an institution in a state in which state or applicable local

(2) Is approved by the agency of such state or locality responsible for licensing hospitals as meeting the standards established for such licensing.

(H) Has in effect an operating plan and budget.

(I) Is accredited by the JCAH or meets such other requirements as the Secretary of Health and Human Services, the Secretary of Transportation, or the Secretary of Defense finds necessary in the interest of the health and safety of patients who are admitted to and furnished services in the institution.

(ii) Liver transplantation centers. (A) CHAMPUS shall provide coverage for liver transplantation procedures performed only by experienced transplant surgeons at centers complying with the provisions outlined in paragraph (b)(4)(i) of this section and meeting the following criteria:

(1) The center is a tertiary care facility affiliated with an academic health center. The center must have accredited programs in graduate medical education related to the function of liver transplantation such as internal medicine, pediatrics, surgery, and anesthesiology;

(2) The center has an active solid organ transplantation program (involving liver transplants as well as other organs);

(3) The transplantation center must have at least a 50 percent one-year survival rate for ten cases. At the time CHAMPUS approval is requested, the transplant center must provide evidence that at least ten liver transplants have been performed at the center and that at least 50 percent of those transplanted patients have survived one year following surgery. A 50 percent one-year survival rate for all subsequent liver transplantations must be maintained for continued CHAMPUS approval;

(4) The center has allocated sufficient operating room, recovery room, laboratory, and blood bank support and a sufficient number of intensive care and general surgical beds and specialized staff for these areas;

(5) The center participates in a donor procurement program and network;

(6) The center systematically collects and shares data on its transplant program;

(7) The center has an interdisciplinary body to determine the suitability of candidates for transplantation on an equitable basis;

(8) The transplantation surgeon is specifically trained for liver grafting and must assemble and train a team to function whenever a donor liver is available;

(9) The transplantation center must have on staff board eligible or board certified physicians and other experts in the field of hepatology, pediatrics, infectious disease, nephrology with dialysis capability, pulmonary medicine with respiratory therapy support, pathology, immunology, and anesthesiology to complement a qualified transplantation team;

(10) The transplantation center has the assistance of appropriate microbiology, clinical chemistry, and radiology support;

(11) The transplantation center has blood bank support to accommodate normal demands and the transplant procedure; and

(12) The transplantation center includes the availability of psychiatric and social services support for patients and family.

(B) In order to receive approval as a CHAMPUS authorized liver transplant center, a center must submit a request to the Director, CHAMPUS, or a designee. The CHAMPUS authorized liver transplant center shall agree to the following:

(1) Bill for all services and supplies related to the liver transplantation performed by its staff and bill also for services rendered by the donor hospital following declaration of brain death and after all existing legal requirements for excision of the donor organ have been met; and

(2) The center shall agree to submit all charges on the basis of fully itemized bills. This means that each service and supply and the charge for each is individually identified.

(iii) Heart transplantation centers. (A) CHAMPUS shall provide coverage for heart transplantation procedures per

formed only by experienced transplant surgeons at centers complying with provisions outlined in paragraph (b)(4)(i) of this section and meeting the following criteria:

(1) The center has experts in the fields of cardiology, cardiovascular surgery, anesthesiology, immunology, infectious disease, nursing, social services and organ procurement to complement the transplant team;

(2) The center has an active cardiovascular medical and surgical program as evidenced by a minimum of 500 cardiac catheterizations and coronary arteriograms and 250 open heart procedures per year;

(3) The center has an anesthesia team that is available at all times;

(4) The center has infectious disease services with both the professional skills and the laboratory resources that are needed to discover, identify, and manage a whole range of organisms;

(5) The center has a nursing service team trained in the hemodynamic support of the patient and in managing immunosuppressed patients;

(6) The center has pathology resources that are available for studying and reporting the pathological responses of transplantation;

(7) The center has legal counsel familiar with transplantation laws and regulations;

(8) The commitment of the transplant center must be at all levels and broadly evident throughout the facility;

(9) Responsible team members must be board certified or board eligible in their respective disciplines;

(10) Component teams must be integrated into a comprehensive transplant team with clearly defined leadership and responsibility;

(11) The center has adequate social service resources;

(12) The transplant center must comply with applicable State transplant laws and regulations;

(13) The transplant center must safeguard the rights and privacy of patients;

(14) The transplant center must have adequate patient management plans and protocols;

(15) The center participates in a donor procurement program and network;

(16) The center systematically collects and shares data on its transplant program;

(17) The center has an interdisciplinary body to determine the suitability of candidates for transplantation on an equitable basis;

(18) The center has extensive blood bank support;

(19) The center must have an established heart transplantation program with documented evidence of 12 or more heart transplants in each of the two consecutive preceding 12-month periods prior to application and 12 heart transplants prior to that; and

(20) The center must demonstrate actuarial survival rates of 73 percent for one year and 65 percent for two years for patients who have had heart transplants since January 1, 1982, at that facility.

(B) CHAMPUS approval will lapse if either the number of heart transplants falls below 8 in 12 months or if the oneyear survival rate falls below 60 percent for a consecutive 24-month period.

(C) CHAMPUS-approval may also be extended for a heart transplant center that meets other certification or accreditation standards provided the standards are equivalent to or exceed the criteria listed above and have been approved by the Director, OCHAMPUS.

(D) In order to receive approval as a CHAMPUS heart transplant center, a facility must submit a request to the Director, OCHAMPUS, or a designee. The CHAMPUS-authorized heart transplant center shall agree to the following:

(1) Bill for all services and supplies related to the heart transplantation performed by its staff and bill also for services rendered by the donor hospital following declaration of brain death;

(2) Submit all charges on the basis of fully itemized bills. Each service and supply must be individually identified and the first claim submitted for the heart transplantation must include a copy of the admission history and physical examination; and

(3) Report any significant decrease in the experience level or survival rates and loss of key members of the trans

plant team to the Director, OCHAMPUS.

(iv) Hospitals, psychiatric. A psychiatric hospital is an institution which is engaged primarily in providing services to inpatients for the diagnosis and treatment of mental disorders.

(A) There are two major categories of psychiatric hospitals:

(1) The private psychiatric hospital category includes both proprietary and the not-for-profit nongovernmental institutions.

(2) The second category is those psychiatric hospitals that are controlled, financed, and operated by departments or agencies of the local, state, or Federal Government and always are operated on a not-for-profit basis.

(B) In order for the services of a psychiatric hospital to be covered, the hospital shall comply with the provisions outlined in paragraph (b)(4)(i) of this section. All psychiatric hospitals shall be accredited under the JCAHO Accreditation Manual for Hospitals (AMH) standards in order for their services to be cost-shared under CHAMPUS. In the case of those psychiatric hospitals that are not JCAHOaccredited because they have not been in operation a sufficient period of time to be eligible to request an accreditation survey by the JCAHO, the Director, OCHAMPUS, or a designee, may grant temporary approval if the hospital is certified and participating under Title XVIII of the Social Security Act (Medicare, Part A). This temporary approval expires 12 months from the date on which the psychiatric hospital first becomes eligible to request an accreditation survey by the JCAHO.

(C) Factors to be considered in determining whether CHAMPUS will costshare care provided in a psychiatric hospital include, but are not limited to, the following considerations:

(1) Is the prognosis of the patient such that care provided will lead to resolution or remission of the mental illness to the degree that the patient is of no danger to others, can perform routine daily activities, and can be expected to function reasonably outside the inpatient setting?

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