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center program prior to delivery, adjudicated as individual professional services and items.

(6) The beneficiary's share of the total reimbursement to a birthing center is limited to the cost-share amount plus the amount billed for non-covered services and supplies.

(f) Reimbursement of Residential Treatment Centers. The CHAMPUS rate is the per diem rate that CHAMPUS will authorize for all mental health services rendered to a patient and the patient's family as part of the total treatment plan submitted by a CHAMPUS-approved RTC, and approved by the Director, OCHAMPUS, or designee.

(1) The all-inclusive per diem rate for RTCs operating or participating in CHAMPUS during the base period of July 1, 1987, through June 30, 1988, will be the lowest of the following conditions:

(i) The CHAMPUS rate paid to the RTC for all-inclusive services as of June 30, 1988, adjusted by the Consumer Price Index—Urban (CPI-U) for medical care as determined applicable by the Director, OCHAMPUS, or designee; or

(ii) The per diem rate accepted by the RTC from any other agency or organization (public or private) that is high enough to cover one-third of the total patient days during the 12-month period ending June 30, 1988, adjusted by the CPI-U; or

NOTE: The per diem rate accepted by the RTC from any other agency or organization includes the rates accepted from entities such

Government contractors in CHAMPUS demonstration projects.

(iii) An OCHAMPUS determined capped per diem amount not to exceed the 80th percentile of all established CHAMPUS RTC rates nationally, weighted by total CHAMPUS days provided at each rate during the base period discussed in paragraph (f)(1) of this section.

(2) The all-inclusive per diem rates for RTCs which began operation after June 30, 1988, or began operation before July 1, 1988, but had less than 6 months of operation by June 30, 1988, will be calculated based on the lower of the per diem rate accepted by the RTC that is high enough to cover one-third of the total patient days during its first 6 to 12 consecutive months of operation, or

the CHAMPUS determined capped amount. Rates for RTCs beginning operation prior to July 1, 1988, will be adjusted by an appropriate CPI-U inflation factor for the period ending June 30, 1988. A period of less than 12 months will be used only when the RTC has been in operation for less than 12 months. Once a full 12 months is available, the rate will be recalculated.

(3) For care on or after April 6, 1995, the per diem amount may not exceed a cap of the 70th percentile of all established Federal fiscal year 1994 RTC rates nationally, weighted by total CHAMPUS days provided at each rate during the first half of Federal fiscal year 1994, and updated to FY95. For Federal fiscal years 1996 and 1997, the cap shall remain unchanged. For Federal fiscal years after fiscal year 1997, the cap shall be adjusted by the Medicare update factor for hospitals and units exempt from the Medicare prospective payment system.

(4) All educational costs, whether they include routine education or special education costs, are excluded from reimbursement except when appropriate education is not available from, or not payable by, a cognizant public entity.

(i) The RTC shall exclude educational costs from its daily costs.

(ii) The RTC's accounting system must be adequate to assure CHAMPUS is not billed for educational costs.

(iii) The RTC may request payment of educational costs on an individual

basis from the Director, OCHAMPUS, or designee, when appropriate education is not available from, or not payable by, a cognizant public entity. To qualify for reimbursement of educational costs in individual cases, the RTC shall comply with the application procedures established by the Director, OCHAMPUS, or designee, including, but not limited to, the following:

(A) As part of its admission procedures, the RTC must counsel and assist the beneficiary and the beneficiary's family in the necessary procedures for assuring their rights to a free and appropriate public education.

(B) The RTC must document any reasons why an individual beneficiary cannot attend public educational facilities

as

case

and, in such a case, why alternative educational arrangements have not been provided by the cognizant public entity.

(C) If reimbursement of educational costs is approved for an individual beneficiary by the Director, OCHAMPUS, or designee, such educational costs shall be shown separately from the RTC's daily costs on the CHAMPUS claim. The amount paid shall not exceed the RTC's most-favorable rate to any other patient, agency, or organization for special or general educational services whichever is appropriate.

(D) If the RTC fails to request CHAMPUS approval of the educational costs on an individual case, the RTC agrees not to bill the beneficiary or the beneficiary's family for any amounts disallowed by CHAMPUS. Requests for payment of educational costs must be referred to the Director, OCHAMPUS, or designee for review and a determination of the applicability of CHAMPUS benefits.

(5) Subject to the applicable RTC cap, adjustments to the RTC rates may be made annually.

(i) For Federal fiscal years through 1995, the adjustment shall be based on the Consumer Price Index-Urban (CPIU) for medical care as determined applicable by the Director, OCHAMPUS.

(ii) For purposes of rates for Federal fiscal years 1996 and 1997:

(A) For any RTC whose 1995 rate was at or above the thirtieth percentile of all established Federal fiscal year 1995 RTC rates normally, weighted by total CHAMPUS days provided at each rate during the first half of Federal fiscal year 1994, that rate shall remain in effect, with

additional update, throughout fiscal years 1996 and 1997; and

(B) For any RTC whose 1995 rate was below the 30th percentile level determined under paragraph (f)(5)(ii)(A) of this section, the rate shall be adjusted by the lesser of: the CPI-U for medical care, or the amount that brings the rate up to that 30th percentile level.

(iii) For subsequent Federal fiscal years after fiscal year 1997, RTC rates shall be updated by the Medicare update factor for hospitals and units exempt from the Medicare prospective payment system.

(6) For care provided on or after July 1, 1995, CHAMPUS will not pay for days in which the patient is absent on leave from the RTC. The RTC must identify these days when claiming reimbursement.

(g) Reimbursement of hospice programs. Hospice care will be reimbursed at one of four predetermined national CHAMPUS rates based on the type and intensity of services furnished to the beneficiary. A single rate is applicable for each day of care except for continuous home care where payment is based on the number of hours of care furnished during a 24-hour period. These rates will be adjusted for regional differences in wages using wage indices for hospice care.

(1) National hospice rates. CHAMPUS will use the national hospice rates for reimbursement of each of the following levels of care provided by or under arrangement with a CHAMPUS approved hospice program:

(1) Routine home care. The hospice will be paid the routine home care rate for each day the patient is at home, under the care of the hospice, and not receiving continuous home care. This rate is paid without regard to the volume or intensity of routine home care services provided on any given day.

(ii) Continuous home care. The hospice will be paid the continuous home care rate when continuous home care is provided. The continuous home care rate is divided by 24 hours in order to arrive at an hourly rate.

(A) A minimum of 8 hours of care must be provided within a 24-hour day starting and ending at midnight.

(B) More than half of the total actual hours being billed for each 24-hour period must be provided by either a registered or licensed practical nurse.

(C) Homemaker and home health aide services may be provided to supplement the nursing care to enable the beneficiary to remain at home.

(D) For every hour or part of an hour of continuous care furnished, the hourly rate will be reimbursed to the hospice up to 24 hours a day.

(iii) Inpatient respite care. The hospice will be paid at the inpatient respite care rate for each day on which the beneficiary is in an approved inpatient facility and is receiving respite care.

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(A) Payment for respite care may be ing and/or deductibles for hospice phymade for a maximum of 5 days at a sician services. time, including the date of admission (2) Physician payments will be countbut not counting the date of discharge. ed toward the hospice cap limitation. The necessity and frequency of respite (11) Independent attending physician. care will be determined by the hospice Patient care services rendered by an interdisciplinary group with input independent attending physician (a from the patient's attending physician physician who is not considered emand the hospice's medical director. ployed by or under contract with the

(B) Payment for the sixth and any hospice) are not part of the hospice subsequent days is to be made at the benefit. routine home care rate.

(A) Attending physician may bill in (iv) General inpatient care. Payment his/her own right. at the inpatient rate will be made when (B) Services will be subject to the apgeneral inpatient care is provided for propriate allowable charge methodpain control or acute or chronic symp- ology. tom management which cannot be (C) Reimbursement is not counted tomanaged in other settings. None of the ward the hospice cap limitation. other fixed payment rates (i.e., routine (D) Services provided by an indehome care) will be applicable for a day pendent attending physician must be on which the patient receives general coordinated with any direct care servinpatient care except on the date of ices provided by hospice physicians. discharge.

(E) The hospice must notify the (v) Date of discharge. For the day of CHAMPUS contractor of the name of discharge from an inpatient unit, the the physician whenever the attending appropriate home care rate is to be physician is not a hospice employee. paid unless the patient dies as an inpa- (iii) Voluntary physician services. No tient. When the patient is discharged payment will be allowed for physician deceased, the inpatient rate (general or services furnished voluntarily (both respite) is to be paid for the discharge physicians employed by, and under date.

contract with, the hospice and inde(2) Use of Medicare rates. CHAMPUS pendent attending physicians). Physiwill use the most current Medicare cians may not discriminate against rates to reimburse hospice programs CHAMPUS beneficiaries; e.g., desfor services provided to CHAMPUS ignate all services rendered to nonbeneficiaries. It is CHAMPUS' intent CHAMPUS patients as volunteer and at to adopt changes in the Medicare reim- the same time bill for CHAMPUS pabursement methodology as they occur; tients. e.g., Medicare's adoption of an updated, (4) Unrelated medical treatment. Any more accurate wage index.

covered CHAMPUS services not related (3) Physician reimbursement. Payment to the treatment of the terminal condiis dependent on the physician's rela- tion for which hospice care was elected tionship with both the beneficiary and will be paid in accordance with standthe hospice program.

ard reimbursement methodologies; i.e., (i) Physicians employed by, or payment for these services will be subtracted with, the hospice. (A) Adminis- ject to standard deductible and costtrative and supervisory activities (i.e., sharing provisions under the establishment, review and updating of CHAMPUS. A determination must be plans of care, supervising care and made whether or not services provided services, and establishing governing are related to the individual's terminal policies) are included in the adjusted illness. Many illnesses may occur when national payment rate.

an individual is terminally ill which (B) Direct patient care services are are brought on by the underlying conpaid in addition to the adjusted na- dition of the ill patient. For example, tional payment rate.

it is not unusual for a terminally ill (1) Physician services will be reim- patient to develop pneumonia or some bursed an amount equivalent to 100 other illness as a result of his or her percent of the CHAMPUS' allowable weakened condition. Similarly, the setcharge; i.e., there will be no cost-shar- ting of bones after fractures occur in a

con

bone cancer patient would be treat- beneficiaries, the total payment for inment of a related condition. Thus, if patient care is determined follows: the treatment or control of an upper (A) Calculate the ratio of the maxrespiratory tract infection is due to the

imum number of allowable inpatient weakened state of the terminal pa- days of the actual number of inpatient tient, it will be considered a related

care days furnished by the hospice to condition, and as such, will be included Medicare patients. in the hospice daily rates.

(B) Multiply this ratio by the total (5) Cap amount. Each CHAMPUS-ap

reimbursement for inpatient care made proved hospice program will be subject

by the CHAMPUS contractor. to a cap on aggregate CHAMPUS pay

(C) Multiply the number of actual inments from November 1 through Octo

patient days in excess of the limitation ber 31 of each year, hereafter known as

by the routine home care rate. "the cap period."

(D) Add the amounts calculated in (i) The cap amount will be adjusted annually by the percent of increase or

paragraphs (g)(6)(i) (B) and (C) of this

section. decrease in the medical expenditure category of the Consumer Price Index (ii) Compare the total payment for for all urban consumers (CPI-U).

inpatient care calculated in paragraph (ii) The aggregate cap amount (i.e.,

(g)(6)(i)(D) of this section to actual the statutory cap amount times the payments made to the hospice for inpanumber of CHAMPUS beneficiaries

tient care during the cap period. electing hospice care during the cap pe- (iii) Payments in excess of the inpariod) will be compared with total ac- tient limitation must be refunded by tual CHAMPUS payments made during the hospice program. the same cap period.

(7) Hospice reporting responsibilities. (iii) Payments in excess of the cap The hospice is responsible for reporting amount must be refunded by the hos- the following data within 30 days after pice program. The adjusted cap amount the end of the cap period: will be obtained from the Health Care

(i) Total reimbursement received and Financing Administration (HCFA) receivable

for

services furnished prior to the end of each cap period. CHAMPUS beneficiaries during the cap (iv) Calculation of the cap amount

period, including physician's services for a hospice which has not partici- not of an administrative or general supated in the program for an entire cap

pervisory nature. year (November 1 through October 31)

(ii) Total reimbursement received will be based on a period of at least 12

and receivable for general inpatient months but no more than 23 months.

care and inpatient respite care furFor example, the first cap period for a

nished to CHAMPUS beneficiaries durhospice entering the program on Octo

ing the cap period. ber 1, 1994, would run from October 1,

(iii) Total number of inpatient days 1994 through October 31, 1995. Simi

furnished to CHAMPUS hospice palarly, the first cap period for hospice providers entering the program after

tients (both general inpatient and inpaNovember 1, 1993 but before November

tient respite days) during the cap pe1, 1994 would end October 31, 1995.

riod. (6) Inpatient limitation. During the 12

(iv) Total number of CHAMPUS hosmonth period beginning November 1 of

pice days (both inpatient and home each year and ending October 31, the care) during the cap period. aggregate number of inpatient days, (v) Total number of beneficiaries both for general inpatient care and res- electing hospice care. The following pite care, may not exceed 20 percent of

rules must be adhered to by the hospice the aggregate total number of days of in determining the number of hospice care provided to all CHAMPUS CHAMPUS beneficiaries who have beneficiaries during the same period. elected hospice care during the period:

(i) If the number of days of inpatient (A) The beneficiary must not have care furnished to CHAMPUS bene- been counted previously in either anficiaries exceeds 20 percent of the total other hospice's cap or another reportdays of hospice care to CHAMPUS ing year.

(B) The beneficiary must file an initial election statement during the period beginning September 28 of the previous cap year through September 27 of the current cap year in order to be counted as an electing CHAMPUS beneficiary during the current cap year.

(C) Once a beneficiary has been included in the calculation of a hospice cap amount, he or she may not be included in the cap for that hospice again, even if the number of covered days in a subsequent reporting period exceeds that of the period where the beneficiary was included.

(D) There will be proportional application of the cap amount when a beneficiary elects to receive hospice benefits from two or more different CHAMPUS-certified hospices. A calculation must be made to determine the percentage of the patient's length of stay in each hospice relative to the total length of hospice stay.

(8) Reconsideration of cap amount and inpatient limit. A hospice dissatisfied with the contractor's calculation and application of its cap amount and/or inpatient limitation may request and obtain a contractor review if the amount of program reimbursement in

controversy-with respect matters which the hospice has a right to review-is at least $1000. The administrative review by the contractor of the calculation and application of the cap amount and inpatient limitation is the only administrative review available. These calculations are not subject to the appeal procedures set forth in $ 199.10. The methods and standards for calculation of the hospice payment rates established by CHAMPUS, as well as questions as to the validity of the applicable law, regulations CHAMPUS decisions, are not subject to administrative review, including the appeal procedures of $ 199.10.

(9) Beneficiary cost-sharing. There are no deductibles under the CHAMPUS hospice benefit. CHAMPUS pays the full cost of all covered services for the terminal illness, except for small costshare amounts which may be collected by the individual hospice for outpatient drugs and biologicals and inpatient respite care.

(i) The patient is responsible for 5 percent of the cost of outpatient drugs

or $5 toward each prescription, whichever is less. Additionally, the cost of prescription drugs (drugs or biologicals) may not exceed that which a prudent buyer would pay in similar circumstances; that is, a buyer who refuses to pay more than the going price for an item or service and also seeks to economize by minimizing costs.

(ii) For inpatient respite care, the cost-share for each respite care day is equal to 5 percent of the amount CHAMPUS has estimated to be the cost of respite care, after adjusting the national rate for local wage differences.

(iii) The amount of the individual cost-share liability for respite care during a hospice cost-share period may not exceed the Medicare inpatient hospital deductible applicable for the year in which the hospice cost-share period began. The individual hospice costshare period begins on the first day an election is in effect for the beneficiary and ends with the close of the first period of 14 consecutive days on each of which an election is not in effect for the beneficiary.

(h) Reimbursement of individual health care professionals and other non-institutional, non-professional provers. The CHAMPUS-determined reasonable charge (the amount allowed by CHAMPUS) for the service of an individual health care professional or other non-institutional, non-professional provider (even if employed by or under contract to an institutional provider) shall be determined by one of the following methodologies, that is, whichever is in effect in the specific geographic location at the time covered services and supplies are provided to a CHAMPUS beneficiary.

(1) Allowable charge method—(i) Introduction—(A) In general. The allowable charge method is the preferred and primary method for reimbursement of individual health care professionals and other non-institutional health care providers (covered by 10 U.S.C. 1079(h)(1)). The allowable charge for authorized care shall be the lower of the billed charge or the local CHAMPUS Maximum Allowable Charge (CMAC).

(B) CHAMPUS Maximum Allowable Charge. Beginning in calendar year

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