32 Cfr 199.6

Office of the Secretary of Defense

§ 199.6

meet the needs of their qualifying condition. Such requirement shall apply to
beneficiaries who request authorization
for training, rehabilitation, special
education, assistive technology, and institutional care in private nonprofit,
public, and state institutions and facilities, and if appropriate, transportation to and from such institutions
and facilities. The maximum Government cost-share for services that require demonstration of public facility
non-availability or inadequacy is limited to $2,500 per month per beneficiary. State-administered plans for
medical assistance under Title XIX of
the Social Security Act (Medicaid) are
not considered available and adequate
facilities for the purpose of this section.
(B) 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.
(C) Written certification, in accordance with information requirements,
formats, and procedures established by
the director, TRICARE Management
Activity or designee that requested
ECHO services or items cannot be obtained from public facilities because
the services or items are not available
and adequate, is a prerequisite for
ECHO benefit payment for training, rehabilitation, special education, assistive technology, and institutional care
in private nonprofit, public, and state
institutions and facilities, and if appropriate, transportation to and from such
institutions and facilities.
(1) An administrator or designee of a
public facility may make such certification for a beneficiary residing within
the service area of that public facility.
(2) The Director, TRICARE Management Activity or designee may determine, on a case-by-case basis, that apparent public facility availability or
adequacy for a requested type of service or item cannot be substantiated for
a specific beneficiary’s request for
ECHO benefits and therefore is not
available.
(i) A case-specific determination
shall be based upon a written statement by the beneficiary (or sponsor or

guardian acting on behalf of the beneficiary)
which
details
the
circumstances wherein a specific individual representing a specific public facility refused to provide a public facility use certification, and such other information as the Director, TRICARE
Management Activity or designee determines to be material to the determination.
(ii) A case-specific determination of
public facility availability by the Director, TRICARE Management Activity or designee is conclusive and is not
appealable under § 199.10.
(4) Repair or maintenance of beneficiary owned durable equipment is exempt from the public facility use certification requirements.
(5) The requirements of this paragraph (i)(4)(v) notwithstanding, no public facility use certification is required
for services and items that are provided under Part C of the Individuals
with Disabilities Education Act in accordance with the Individual Family
Services Plan and that are otherwise
allowable under the ECHO.
(i) Implementing instructions. The Director, TRICARE Management Activity or designee shall issue TRICARE
policies,
instructions,
procedures,
guidelines, standards, and criteria as
may be necessary to implement the intent of this section.
(j) Implementation transition. Pending
administrative actions necessary for
the effective implementation of this
section following its publication in the
FEDERAL REGISTER on August 20, 2004,
this section as it existed prior to August 20, 2004, shall remain in effect for
a period of not less than 30 days following its publication in the FEDERAL
REGISTER.
[69 FR 51564, Aug. 20, 2004]

§ 199.6 TRICARE—authorized
viders.

(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

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§ 199.6

32 CFR Ch. I (7–1–06 Edition)

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

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Office of the Secretary of Defense

§ 199.6

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
circumstances:
(i) Mandatory participation. (A) An institutional provider in § 199.6(b), in
order to be an authorized provider
under TRICARE, must be a participating provider for all claims.

(B) A SNF or a HHA, in order to be
an
authorized
provider
under
TRICARE, must enter into a participation agreement with TRICARE for all
claims.
(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.
(iii) Claim-by-claim participation. Individual providers that are not participating providers pursuant to paragraph
(a)(8)(ii) of this section may elect to
participate on a claim-by-claim basis.
They may do so by signing the appropriate space on the claims form and
submitting it to the appropriate

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32 CFR Ch. I (7–1–06 Edition)

TRICARE contractor on behalf of the
beneficiary.
(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 including providers salaried or under contract by an
institutional provider and other providers who are not participating providers may not balance bill a beneficiary an amount that exceeds the applicable balance billing limit. The balance billing limit shall be the same
percentage as the Medicare limiting
charge percentage for nonparticipating
practitioners and suppliers.
(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;
(D) Services for which a beneficiary
would be entitled to payment but for a
reduction or denial in payment as a result of quality review; and
(E) Services rendered during a period
in which the provider was not in compliance with one or more conditions of
authorization;
(ii) Comply with the applicable provisions of this part and related
CHAMPUS administrative policy;
(iii) Accept the CHAMPUS determined allowable payment combined
with the cost-share, deductible, and

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§ 199.6

other health insurance amounts payable by, or on behalf of, the beneficiary, as full payment for CHAMPUS
allowed services;
(iv) Collect from the CHAMPUS beneficiary those amounts that the beneficiary has a liability to pay for the
CHAMPUS deductible and cost-share;
(v) Permit access by the Director,
OCHAMPUS, or designee, to the clinical record of any CHAMPUS beneficiary, to the financial and organizational records of the provider, and to
reports of evaluations and inspections
conducted by state, private agencies or
organizations;
(vi)
Provide
the
Director,
OCHAMPUS, or designee, prompt written notification of the provider’s employment of an individual who, at any
time during the twelve months preceding such employment, was employed in a managerial, accounting, auditing, or similar capacity by an agency or organization which is responsible,
directly or indirectly for decisions regarding Department of Defense payments to the provider;
(vii) Cooperate fully with a designated utilization and clinical quality
management organization which has a
contract with the Department of Defense for the geographic area in which
the provider renders services;
(viii) Obtain written authorization
before rendering designated services or
items for which CHAMPUS cost-share
may be expected;
(ix) Maintain clinical and other
records related to individuals for whom
CHAMPUS payment was made for services rendered by the provider, or otherwise under arrangement, for a period of
60 months from the date of service;
(x) Maintain contemporaneous clinical records that substantiate the clinical rationale for each course of treatment, periodic evaluation of the efficacy of treatment, and the outcome at
completion or discontinuation of treatment;
(xi) Refer CHAMPUS beneficiaries
only to providers with which the referring provider does not have an economic interest, as defined in § 199.2; and
(xii) Limit services furnished under
arrangement to those for which receipt
of payment by the CHAMPUS author-

ized provider discharges the payment
liability of the beneficiary.
(14) Implementing instructions. The Director, OCHAMPUS, or a designee,
shall issue CHAMPUS policies, instructions, procedures, and guidelines, as
may be necessary to implement the intent of this section.
(15) Exclusion. Regardless of any provision in this section, a provider who is
suspended, excluded, or terminated
under § 199.9 of this part is specifically
excluded as an authorized CHAMPUS
provider.
(b) Institutional providers—(1) General.
Institutional providers are those providers who bill for services in the name
of an organizational entity (such as
hospital and skilled nursing facility),
rather than in the name of a person.
The term ‘‘institutional provider’’ does
not include professional corporations
or associations qualifying as a domestic corporation under § 301.7701–5 of the
Internal Revenue Service Regulations
nor does it include other corporations
that provide principally professional
services. Institutional providers may
provide medical services and supplies
on either an inpatient or outpatient
basis.
(i) Preauthorization. Preauthorization
may be required by the Director,
OCHAMPUS for any health care service
for which payment is sought under
CHAMPUS. (See §§ 199.4 and 199.15 for
further
information
on
preauthorization requirements.)
(ii) Billing practices.
(A) Each institutional billing, including those institutions subject to the
CHAMPUS DRG-based reimbursement
method or a CHAMPUS-determined allinclusive rate reimbursement method,
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

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32 CFR Ch. I (7–1–06 Edition)

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 a
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. 2000d(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 re-

quirements. 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
as an authorized institution in accordance with § 199.9(f)(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 a Medicare-participating 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

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§ 199.6

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
law provides for the licensing of hospitals, the hospital:
(1) Is licensed pursuant to such law,
or
(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 nec-

essary in the interest of the health and
safety of patients who are admitted to
and furnished services in the institution.
(ii) Organ transplant centers. To obtain TRICARE approval as an organ
transplant center, the center must be a
Medicare approved transplant center or
meet the criteria as established by the
Executive Director, TMA, or a designee.
(iii)
Organ
transplant
consortia.
TRICARE shall approve individual pediatric organ transplant centers that
meet the criteria established by the
Executive Director, TMA, or a designee.
(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.

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(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?
(2) Can the services being provided be
provided more economically in another
facility or on an outpatient basis?
(3) Are the charges reasonable?
(4) Is the care primarily custodial or
domiciliary? (Custodial or domiciliary
care of the permanently mentally ill or
retarded is not a benefit under the
Basic Program.)
(D) Although psychiatric hospitals
are accredited under the JCAHO AMH
standards, their medical records must
be maintained in accordance with the
JCAHO Consolidated Standard Manual
for Child, Adolescent, and Adult Psychiatric, Alcoholism, and Drug Abuse
Facilities and Facilities Serving the
Mentally Retarded, along with the requirements set forth in § 199.7(b)(3). The
hospital is responsible for assuring
that patient services and all treatment
are accurately documented and completed in a timely manner.
(v) Hospitals, long-term (tuberculosis,
chronic care, or rehabilitation). To be
considered a long-term hospital, an institution for patients that have tuberculosis or chronic diseases must be an
institution (or distinct part of an institution) primarily engaged in providing
by or under the supervision of a physician appropriate medical or surgical
services for the diagnosis and active
treatment of the illness or condition in
which the institution specializes.
(A) In order for the service of longterm hospitals to be covered, the hospital must comply with the provisions
outlined in paragraph (b)(4)(i) of this
section. In addition, in order for services provided by such hospitals to be
covered by CHAMPUS, they must be
primarily for the treatment of the presenting illness.
(B) Custodial or domiciliary care is
not coverable under CHAMPUS, even if

rendered in an otherwise authorized
long-term hospital.
(C) The controlling factor in determining whether a beneficiary’s stay in
a long-term hospital is coverable by
CHAMPUS is the level of professional
care, supervision, and skilled nursing
care that the beneficiary requires, in
addition to the diagnosis, type of condition, or degree of functional limitations. The type and level of medical
services required or rendered is controlling for purposes of extending
CHAMPUS benefits; not the type of
provider or condition of the beneficiary.
(vi) Skilled nursing facility. A skilled
nursing facility is an institution (or a
distinct part of an institution) that is
engaged primarily in providing to inpatients medically necessary skilled
nursing care, which is other than a
nursing home or intermediate facility,
and which:
(A) Has policies that are developed
with the advice of (and with provisions
for review on a periodic basis by) a
group of professionals, including one or
more physicians and one or more registered nurses, to govern the skilled
nursing care and related medical services it provides.
(B) Has a physician, a registered
nurse, or a medical staff responsible for
the execution of such policies.
(C) Has a requirement that the medical care of each patient must be under
the supervision of a physician, and provides for having a physician available
to furnish necessary medical care in
case of an emergency.
(D) Maintains clinical records on all
patients.
(E) Provides 24-hour skilled nursing
service that is sufficient to meet nursing needs in accordance with the policies developed as provided in paragraph
(b)(4)(iv)(A) of this section, and has at
least one registered professional nurse
employed full-time.
(F) Provides appropriate methods and
procedures for the dispensing and administering of drugs and biologicals.
(G) Has in effect a utilization review
plan that is operational and functioning.
(H) In the case of an institution in a
state in which state or applicable local

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law provides for the licensing of this
type facility, the institution:
(1) Is licensed pursuant to such law,
or
(2) Is approved by the agency of such
state or locality responsible for licensing such institutions as meeting the
standards established for such licensing.
(I) Has in effect an operating plan
and budget.
(J) Meets such provisions of the most
current edition of the Life Safety
Code 8 as are applicable to nursing facilities; except that if the Secretary of
Health and Human Services has
waived, for such periods, as deemed appropriate, specific provisions of such
code which, if rigidly applied, would result in unreasonable hardship upon a
nursing facility.
(K) Is an authorized provider under
the Medicare program, and meets the
requirements of Title 18 of the social
Security Act, sections 1819(a), (b), (c),
and (d) (42 U.S.C. 1395i–3(a)–(d)).
NOTE: If a pediatric SNF is certified by
Medicaid, it will be considered to meet the
Medicare certification requirement in order
to be an authorized provider under
TRICARE.

(vii) Residential treatment centers. This
paragraph (b)(4)(vii) establishes standards and requirements for residential
treatment centers (RTCs).
(A) Organization and administration—
(1) Definition. A Residential Treatment
Center (RTC) is a facility or a distinct
part of a facility that provides to beneficiaries under 21 years of age a medically supervised, interdisciplinary program of mental health treatment. An
RTC is appropriate for patients whose
predominant symptom presentation is
essentially stabilized, although not resolved, and who have persistent dysfunction in major life areas. The extent
and pervasiveness of the patient’s problems require a protected and highly
structured therapeutic environment.
Residential treatment is differentiated
from:
(i) Acute psychiatric care, which requires medical treatment and 24-hour
availability of a full range of diag8 Compiled and published by the National
Fire Protection Association, Batterymarch
Park, Quincy, Massachusetts 02269.

nostic and therapeutic services to establish and implement an effective
plan of care which will reverse lifethreatening and/or severely incapacitating symptoms;
(ii) Partial hospitalization, which
provides a less than 24-hour-per-day,
seven-day-per-week treatment program
for patients who continue to exhibit
psychiatric problems but can function
with support in some of the major life
areas;
(iii) A group home, which is a professionally directed living arrangement
with the availability of psychiatric
consultation and treatment for patients with significant family dysfunction and/or chronic but stable psychiatric disturbances;
(iv) Therapeutic school, which is an
educational program supplemented by
psychological and psychiatric services;
(v) Facilities that treat patients with
a primary diagnosis of chemical abuse
or dependence; and
(vi) Facilities providing care for patients with a primary diagnosis of mental retardation or developmental disability.
(2) Eligibility.
(i) Every RTC must be certified pursuant
to
CHAMPUS
certification
standards. Such standards shall incorporate the basic standards set forth in
paragraphs (b)(4)(vii) (A) through (D) of
this section, and shall include such additional elaborative criteria and standards as the Director, OCHAMPUS determines are necessary to implement
the basic standards.
(ii) To be eligible for CHAMPUS certification, the facility is required to be
licensed and fully operational for six
months (with a minimum average daily
census of 30 percent of total bed capacity) and operate in substantial compliance with state and federal regulations.
(iii) The facility is currently accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) under the current edition of the Manual for Mental Health,
Chemical Dependency, and Mental Retardation/Developmental
Disabilities
Services which is available from
JCAHO, P.O. Box 75751, Chicago, IL
60675.

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(iv) The facility has a written participation agreement with OCHAMPUS.
The RTC is not a CHAMPUS-authorized provider and CHAMPUS benefits
are not paid for services provided until
the date upon which a participation
agreement is signed by the Director,
OCHAMPUS.
(3) Governing body.
(i) The RTC shall have a governing
body which is responsible for the policies, bylaws, and activities of the facility. If the RTC is owned by a partnership or single owner, the partners or
single owner are regarded as the governing body. The facility will provide
an up-to-date list of names, addresses,
telephone numbers and titles of the
members of the governing body.
(ii) The governing body ensures appropriate and adequate services for all
patients and oversees continuing development and improvement of care.
Where business relationships exist between the governing body and facility,
appropriate conflict-of-interest policies
are in place.
(iii) Board members are fully informed about facility services and the
governing body conducts annual review
of its performance in meeting purposes,
responsibilities, goals and objectives.
(4) Chief executive officer. The chief
executive officer, appointed by and
subject to the direction of the governing body, shall assume overall administrative responsibility for the operation of the facility according to
governing body policies. The chief executive officer shall have five years’
administrative experience in the field
of mental health. On October 1, 1997,
the CEO shall possess a degree in business administration, public health,
hospital administration, nursing, social work, or psychology, or meeting
similar educational requirements as
prescribed
by
the
Director,
OCHAMPUS.
(5) Clinical Director. The clinical director, appointed by the governing
body, shall be a psychiatrist or doctoral level psychologist who meets applicable CHAMPUS requirements for
individual professional providers and is
licensed to practice in the state where
the residential treatment center is located. The clinical director shall possess requisite education and experi-

ence, credentials applicable under state
practice and licensing laws appropriate
to the professional discipline, and a
minimum of five years’ clinical experience in the treatment of children and
adolescents. The clinical director shall
be responsible for planning, development, implementation, and monitoring
of all clinical activities.
(6) Medical director. The medical director, appointed by the governing
body, shall be licensed to practice medicine in the state where the residential
treatment center is located and shall
possess requisite education and experience, including graduation from an accredited school of medicine or osteopathy, an approved residency in psychiatry and a minimum of five years clinical experience in the treatment of
children and adolescents. The Medical
Director shall be responsible for the
planning, development, implementation, and monitoring of all activities
relating to medical treatment of patients. If qualified, the Medical Director may also serve as Clinical Director.
(7) Medical or professional staff organization. The governing body shall establish a medical or professional staff organization to assure effective implementation of clinical privileging, professional conduct rules, and other activities directly affecting patient care.
(8) Personnel policies and records. The
RTC shall maintain written personnel
policies, updated job descriptions and
personnel records to assure the selection of qualified personnel and successful job performance of those personnel.
(9) Staff development. The facility
shall provide appropriate training and
development programs for administrative, professional support, and direct
care staff.
(10) Fiscal accountability. The RTC
shall assure fiscal accountability to applicable government authorities and
patients.
(11) Designated teaching facilities. Students, residents, interns or fellows providing direct clinical care are under
the supervision of a qualified staff
member approved by an accredited university. The teaching program is approved by the Director, OCHAMPUS.

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(12) Emergency reports and records. The
facility notifies OCHAMPUS of any serious occurrence involving CHAMPUS
beneficiaries.
(B) Treatment services—(1) Staff composition. (i) The RTC shall follow written plans which assure that medical
and clinical patient needs will be appropriately addressed 24 hours a day,
seven days a week by a sufficient number of fully qualified (including license,
registration or certification requirements, educational attainment, and
professional experience) health care
professionals and support staff in the
respective disciplines. Clinicians providing individual, group, and family
therapy meet CHAMPUS requirements
as qualified mental health providers
and operate within the scope of their
licenses. The ultimate authority for
planning, development, implementation, and monitoring of all clinical activities is vested in a psychiatrist or
doctoral level psychologist. The management of medical care is vested in a
physician.
(ii) The RTC shall ensure adequate
coverage by fully qualified staff during
all hours of operation, including physician availability, other professional
staff coverage, and support staff in the
respective disciplines.
(2) Staff qualifications. The RTC will
have a sufficient number of qualified
mental health providers, administrative, and support staff to address patients’ clinical needs and to coordinate
the services provided. RTCs which employ individuals with master’s or doctoral level degrees in a mental health
discipline who do not meet the licensure, certification and experience requirements for a qualified mental
health provider but are actively working toward licensure or certification,
may provide services within the all-inclusive per diem rate, provided the individual works under the clinical supervision of a fully qualified mental
health provider employed by the RTC.
All other program services shall be provided by trained, licensed staff.
(3) Patient rights (i) The RTC shall
provide adequate protection for all patient rights, including rights provided
by law, privacy, personnel rights, safety, confidentiality, informed consent,
grievances, and personal dignity.

(ii) The facility has a written policy
regarding patient abuse and neglect.
(iii) Facility marketing and advertising meets professional standards.
(4) Behavioral management. The RTC
shall adhere to a comprehensive, written plan of behavioral management,
developed by the clinical director and
the medical or professional staff and
approved by the governing body, including strictly limited procedures to
assure that the restraint or seclusion
are used only in extraordinary circumstances, are carefully monitored,
and are fully documented. Only trained
and clinically privileged RNs or qualified mental health professionals may
be responsible for the implementation
of seclusion and restraint procedures in
an emergency situation.
(5) Admission process. The RTC shall
maintain written policies and procedures to ensure that, prior to an admission, a determination is made, and approved
pursuant
to
CHAMPUS
preauthorization requirements, that
the admission is medically and/or psychologically necessary and the program is appropriate to meet the patient’s needs. Medical and/or psychological necessity determinations shall
be rendered by qualified mental health
professionals who meet CHAMPUS requirements for individual professional
providers and who are permitted by law
and by the facility to refer patients for
admission.
(6) Assessments. The professional staff
of the RTC shall complete a current
multidisciplinary assessment which includes, but is not limited to physical,
psychological, developmental, family,
educational, social, spiritual and skills
assessment of each patient admitted.
Unless otherwise specified, all required
clinical assessments are completed
prior to development of the multidisciplinary treatment plan.
(7) Clinical formulation. A qualified
mental health professional of the RTC
will complete a clinical formulation on
all patients. The clinical formulation
will be reviewed and approved by the
responsible individual professional provider and will incorporate significant
findings from each of the multidisciplinary assessments. It will provide the
basis for development of an interdisciplinary treatment plan.

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(8) Treatment planning. A qualified
mental health professional shall be responsible for the development, supervision, implementation, and assessment of a written, individualized,
interdisciplinary plan of treatment,
which shall be completed within 10
days of admission and shall include individual, measurable, and observable
goals for incremental progress and discharge. A preliminary treatment plan
is completed within 24 hours of admission and includes at least an admission
note and orders written by the admitting mental health professional. The
master treatment plan is reviewed and
revised at least every 30 days, or when
major changes occur in treatment.
(9) Discharge and transition planning.
The RTC shall maintain a transition
planning process to address adequately
the anticipated needs of the patient
prior to the time of discharge. The
planning involves determining necessary modifications in the treatment
plan, facilitating the termination of
treatment, and identifying resources to
maintain therapeutic stability following discharge.
(10) Clinical documentation. Clinical
records shall be maintained on each patient to plan care and treatment and
provide ongoing evaluation of the patient’s progress. All care is documented
and each clinical record contains at
least the following: demographic data,
consent forms, pertinent legal documents, all treatment plans and patient
assessments, consultation and laboratory reports, physician orders, progress
notes, and a discharge summary. All
documentation will adhere to applicable provisions of the JCAHO and requirements set forth in § 199.7(b)(3). An
appropriately qualified records administrator or technician will supervise
and maintain the quality of the
records. These requirements are in addition to other records requirements of
this part, and documentation requirements of the Joint Commission on Accreditation of Healthcare Organizations.
(11) Progress notes. RTC’s shall document the course of treatment for patients and families using progress
notes which provide information to review, analyze, and modify the treatment plans. Progress notes are legible,

contemporaneous, sequential, signed
and dated and adhere to applicable provisions of the Manual of Mental
Health, Chemical Dependency, and
Mental Retardation/Development Disabilities Services and requirements set
forth in § 199.7(b)(3).
(12) Therapeutic services. (i) Individual, group, and family psychotherapy are provided to all patients,
consistent with each patient’s treatment plan, by qualified mental health
providers.
(ii) A range of therapeutic activities,
directed and staffed by qualified personnel, are offered to help patients
meet the goals of the treatment plan.
(iii) Therapeutic educational services
are provided or arranged that are appropriate to the patients educational
and therapeutic needs.
(13) Ancillary services. A full range of
ancillary services is provided. Emergency services include policies and procedures for handling emergencies with
qualified personnel and written agreements with each facility providing the
service. Other ancillary services include physical health, pharmacy and
dietary services.
(C) Standards for physical plant and
environment—(1) Physical environment.
The buildings and grounds of the RTC
shall be maintained so as to avoid
health and safety hazards, be supportive of the services provided to patients, and promote patient comfort,
dignity, privacy, personal hygiene, and
personal safety.
(2) Physical plant safety. The RTC
shall be of permanent construction and
maintained in a manner that protects
the lives and ensures the physical safety of patients, staff, and visitors, including conformity with all applicable
building, fire, health, and safety codes.
(3) Disaster planning. The RTC shall
maintain and rehearse written plan for
taking care of casualties and handling
other consequences arising from internal and external disasters.
(D) Standards for evaluation system—
(1) Quality assessment and improvement.
The RTC shall develop and implement
a comprehensive quality assurance and
quality improvement program that
monitors the quality, efficiency, appropriateness, and effectiveness of the

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care, treatments, and services it provides for patients and their families,
primarily utilizing explicit clinical indicators to evaluate all functions of
the RTC and contribute to an ongoing
process of program improvement. The
clinical director is responsible for developing and implementing quality assessment and improvement activities
throughout the facility.
(2) Utilization review. The RTC shall
implement a utilization review process,
pursuant to a written plan approved by
the professional staff, the administration, and the governing body, that assesses the appropriateness of admission, continued stay, and timeliness of
discharge as part of an effort to provide
quality patient care in a cost-effective
manner. Findings of the utilization review process are used as a basis for revising the plan of operation, including
a review of staff qualifications and
staff composition.
(3) Patient records review. The RTC
shall implement a process, including
monthly reviews of a representative
sample of patient records, to determine
the completeness and accuracy of the
patient records and the timeliness and
pertinence of record entries, particularly with regard to regular recording
of progress/non-progress in treatment.
(4) Drug utilization review. The RTC
shall implement a comprehensive process for the monitoring and evaluating
of the prophylactic, therapeutic, and
empiric use of drugs to assure that
medications
are
provided
appropriately, safely, and effectively.
(5) Risk management. The RTC shall
implement a comprehensive risk management program, fully coordinated
with other aspects of the quality assurance and quality improvement program, to prevent and control risks to
patients and staff and costs associated
with clinical aspects of patient care
and safety.
(6) Infection control. The RTC shall
implement a comprehensive system for
the surveillance, prevention, control,
and reporting of infections acquired or
brought into the facility.
(7) Safety. The RTC shall implement
an effective program to assure a safe
environment for patients, staff, and
visitors, including an incident report
system, a continuous safety surveil-

lance system, and an active multidisciplinary safety committee.
(8) Facility evaluation. The RTC annually evaluates accomplishment of the
goals and objectives of each clinical
program and service of the RTC and reports findings and recommendations to
the governing body.
(E) Participation agreement requirements. In addition to other requirements set forth in paragraph (b)(4)(vii),
of this section in order for the services
of an RTC to be authorized, the RTC
shall have entered into a Participation
Agreement with OCHAMPUS. The period of a participation agreement shall
be specified in the agreement, and will
generally be for not more than five
years. Participation agreements entered into prior April 6, 1995 must be
renewed not later than October 1, 1995.
In addition to review of a facility’s application and supporting documentation,
an
on-site
inspection
by
OCHAMPUS authorized personnel may
be required prior to signing a Participation Agreement. Retroactive approval is not given. In addition, the
Participation Agreement shall include
provisions that the RTC shall, at a
minimum:
(1) Render residential treatment center impatient services to eligible
CHAMPUS beneficiaries in need of
such services, in accordance with the
participation
agreement
and
CHAMPUS regulation;
(2) Accept payment for its services
based upon the methodology provided
in § 199.14(f) or such other method as
determined
by
the
Director,
OCHAMPUS;
(3) Accept the CHAMPUS all-inclusive per diem rate as payment in full
and collect from the CHAMPUS beneficiary or the family of the CHAMPUS
beneficiary only those amounts that
represent the beneficiary’s liability, as
defined in § 199.4, and charges for services and supplies that are not a benefit
of CHAMPUS;
(4) Make all reasonable efforts acceptable to the Director, OCHAMPUS,
to collect those amounts, which represents the beneficiary’s liability, as
defined in § 199.4;
(5) Comply with the provisions of
§ 199.8, and submit claims first to all
health insurance coverage to which the

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beneficiary is entitled that is primary
to CHAMPUS;
(6) Submit claims for services provided to CHAMPUS beneficiaries at
least 30 days (except to the extent a
delay is necessitated by efforts to first
collect from other health insurance). If
claims are not submitted at least every
30 days, the RTC agrees not to bill the
beneficiary or the beneficiary’s family
for
any
amounts
disallowed
by
CHAMPUS;
(7) Certify that:
(i) It is and will remain in compliance with the provisions of paragraph
(b)(4)(vii) of this section establishing
standards for Residential Treatment
Centers;
(ii) It has conducted a self assessment
of the facility’s compliance with the
CHAMPUS Standards for Residential
Treatment Centers Serving Children
and Adolescents with Mental Disorders, as issued by the Director,
OCHAMPUS and notified the Director,
OCHAMPUS of any matter regarding
which the facility is not in compliance
with such standards; and
(iii) It will maintain compliance with
the CHAMPUS Standards for Residential Treatment Centers Serving Children and Adolescents with Mental Disorders, as issued by the Director,
OCHAMPUS, except for any such
standards regarding which the facility
notifies the Director, OCHAMPUS that
it is not in compliance.
(8) Designate an individual who will
act as liaison for CHAMPUS inquiries.
The RTC shall inform OCHAMPUS in
writing of the designated individual;
(9) Furnish OCHAMPUS, as requested
by OCHAMPUS, with cost data certified by an independent accounting
firm or other agency as authorized by
the Director, OCHAMPUS;
(10) Comply with all requirements of
this section applicable to institutional
providers
generally
concerning
preauthorization, concurrent care review, claims processing, beneficiary liability, double coverage, utilization
and quality review and other matters;
(11) Grant the Director, OCHAMPUS,
or designee, the right to conduct quality assurance audits or accounting audits with full access to patients and
records (including records relating to
patients who are not CHAMPUS bene-

ficiaries) to determine the quality and
cost-effectiveness of care rendered. The
audits may be conducted on a scheduled or unscheduled (unannounced)
basis. This right to audit/review includes, but is not limited to:
(i) Examination of fiscal and all other
records of the RTC which would confirm compliance with the participation
agreement and designation as an authorized CHAMPUS RTC provider;
(ii) Conducting such audits of RTC
records including clinical, financial,
and census records, as may be necessary to determine the nature of the
services being provided, and the basis
for charges and claims against the
United States for services provided
CHAMPUS beneficiaries;
(iii) Examining reports of evaluations
and inspections conducted by federal,
state and local government, and private agencies and organizations;
(iv) Conducting on-site inspections of
the facilities of the RTC and interviewing employees, members of the
staff, contractors, board members, volunteers, and patients, as required;
(v) Audits conducted by the United
States General Accounting Office.
(F) Other requirements applicable to
RTCs. (1) Even though an RTC may
qualify as a CHAMPUS-authorized provider and may have entered into a participation agreement with CHAMPUS,
payment by CHAMPUS for particular
services provided is contingent upon
the RTC also meeting all conditions set
forth in § 199.4 especially all requirements of paragraph (b)(4) of that section.
(2) The RTC shall provide inpatient
services to CHAMPUS beneficiaries in
the same manner it provides inpatient
services to all other patients. The RTC
may
not
discriminate
against
CHAMPUS beneficiaries in any manner, including admission practices,
placement in special or separate wings
or rooms, or provisions of special or
limited treatment.
(3) The RTC shall assure that all certifications and information provided to
the Director, OCHAMPUS incident to
the process of obtaining and retaining
authorized provider status is accurate
and that it has no material errors or

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omissions. In the case of any misrepresentations, whether by inaccurate information being provided or material
facts withheld, authorized status will
be denied or terminated, and the RTC
will be ineligible for consideration for
authorized provider status for a two
year period.
(viii) Christian Science sanatoriums.
The services obtained in Christian
Science sanatoriums are covered by
CHAMPUS as inpatient care. To qualify for coverage, the sanatorium either
must be operated by, or be listed and
certified by the First Church of Christ,
Scientist.
(ix) Infirmaries. Infirmaries are facilities operated by student health departments of colleges and universities to
provide inpatient or outpatient care to
enrolled students. Charges for care provided by such facilities will not be
cost-shared by CHAMPUS if the student would not be charged in the absence of CHAMPUS, or if student is
covered by a mandatory student health
insurance plan, in which enrollment is
required as a part of the student’s
school registration and the charges by
the college or university include a premium for the student health insurance
coverage. CHAMPUS will cost-share
only if enrollment in the student
health program or health insurance
plan is voluntary.
NOTE: An infirmary in a boarding school
also may qualify under this provision, subject to review and approval by the Director,
OCHAMPUS or a designee.

(x) Other special institution providers.
(A) General. (1) Care provided by certain special institutional providers (on
either an inpatient or outpatient
basis),
may
be
cost-shared
by
CHAMPUS
under
specified
circumstances and only if the provider is
specifically identified in paragraph
(b)(4)(x) of this section.
(i) The course of treatment is prescribed by a doctor of medicine or osteopathy.
(ii) The patient is under the supervision of a physician during the entire
course of the inpatient admission or
the outpatient treatment.
(iii) The type and level of care and
service rendered by the institution are
otherwise authorized by this part.

(iv) The facility meets all licensing
or other certification requirements
that are extant in the jurisdiction in
which the facility is located geographically.
(v) Is other than a nursing home, intermediate care facility, home for the
aged, halfway house, or other similar
institution.
(vi) Is accredited by the JCAH or
other CHAMPUS-approved accreditation organization, if an appropriate accreditation program for the given type
of facility is available. As future accreditation programs are developed to
cover emerging specialized treatment
programs, such accreditation will be a
prerequisite to coverage by CHAMPUS
for services provided by such facilities.
(2) To ensure that CHAMPUS beneficiaries are provided quality care at a
reasonable cost when treated by a special institutional provider, the Director, OCHAMPUS may:
(i) Require prior approval of all admissions to special institutional providers.
(ii) Set appropriate standards for special institutional providers in addition
to or in the absence of JCAHO accreditation.
(iii) Monitor facility operations and
treatment programs on a continuing
basis and conduct onsite inspections on
a scheduled and unscheduled basis.
(iv) Negotiate agreements of participation.
(v) Terminate approval of a case
when it is ascertained that a departure
from the facts upon which the admission was based originally has occurred.
(vi) Declare a special institutional
provider not eligible for CHAMPUS
payment if that facility has been found
to have engaged in fraudulent or deceptive practices.
(3) In general, the following disclaimers apply to treatment by special
institutional providers:
(i) Just because one period or episode
of treatment by a facility has been covered by CHAMPUS may not be construed to mean that later episodes of
care by the same or similar facility
will be covered automatically.
(ii) The fact that one case has been
authorized for treatment by a specific
facility or similar type of facility may
not be construed to mean that similar

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cases or later periods of treatment will
be extended CHAMPUS benefits automatically.
(B) Types of providers. The following
is a list of facilities that have been designated specifically as special institutional providers.
(1) Free-standing ambulatory surgical
centers. Care provided by freestanding
ambulatory surgical centers may be
cost-shared by CHAMPUS under the
following circumstances:
(i) The treatment is prescribed and
supervised by a physician.
(ii) The type and level of care and
services rendered by the center are otherwise authorized by this part.
(iii) The center meets all licensing or
other certification requirements of the
jurisdiction in which the facility is located.
(iv) The center is accredited by the
JCAH, the Accreditation Association
for Ambulatory Health Care, Inc.
(AAAHC), or such other standards as
authorized
by
the
Director,
OCHAMPUS.
(v) A childbirth procedure provided
by a CHAMPUS-approved free-standing
ambulatory surgical center shall not be
cost-shared by the CHAMPUS unless
the
surgical
center
is
also
a
CHAMPUS-approved birthing center
institutional provider as established by
the birthing center provider certification requirement of this Regulation.
(2) [Reserved]
(xi) Birthing centers. A birthing center
is a freestanding or institution-affiliated outpatient maternity care program which principally provides a
planned course of outpatient prenatal
care and outpatient childbirth service
limited to low-risk pregnancies; excludes care for high-risk pregnancies;
limits childbirth to the use of natural
childbirth procedures; and provides immediate newborn care.
(A) Certification requirements. A birthing center which meets the following
criteria may be designated as an authorized CHAMPUS institutional provider:
(1) The predominant type of service
and level of care rendered by the center
is otherwise authorized by this part.
(2) The center is licensed to operate
as a birthing center where such license
is available, or is specifically licensed

as a type of ambulatory health care facility where birthing center specific license is not available, and meets all
applicable licensing or certification requirements that are extant in the
state, county, municipality, or other
political jurisdiction in which the center is located.
(3) The center is accredited by a nationally recognized accreditation organization whose standards and procedures have been determined to be acceptable by the Director, OCHAMPUS,
or a designee.
(4) The center complies with the
CHAMPUS birthing center standards
set forth in this part.
(5) The center has entered into a participation agreement with OCHAMPUS
in which the center agrees, in part, to:
(i) Participate in CHAMPUS and accept payment for maternity services
based upon the reimbursement methodology for birthing centers;
(ii) Collect from the CHAMPUS beneficiary only those amounts that represent the beneficiary’s liability under
the participation agreement and the
reimbursement methodology for birthing centers, and the amounts for services and supplies that are not a benefit
of the CHAMPUS;
(iii) Permit access by the Director,
OCHAMPUS, or a designee, to the clinical record of any CHAMPUS beneficiary, to the financial and organizational records of the center, and to reports of evaluations and inspections
conducted by state or private agencies
or organizations;
(iv) Submit claims first to all health
benefit and insurance plans primary to
the CHAMPUS to which the beneficiary is entitled and to comply with
the double coverage provisions of this
part;
(v) Notify CHAMPUS in writing within 7 days of the emergency transport of
any CHAMPUS beneficiary from the
center to an acute care hospital or of
the death of any CHAMPUS beneficiary
in the center.
(6) A birthing center shall not be a
CHAMPUS-authorized
institutional
provider and CHAMPUS benefits shall
not be paid for any service provided by
a birthing center before the date the
participation agreement is signed by

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§ 199.6

the Director, OCHAMPUS, or a designee.
(B) CHAMPUS birthing center standards. (1) Environment: The center has a
safe and sanitary environment, properly constructed, equipped, and maintained to protect health and safety and
meets the applicable provisions of the
‘‘Life Safety Code’’ of the National
Fire Protection Association.
(2) Policies and procedures: The center
has written administrative, fiscal, personnel and clinical policies and procedures which collectively promote the
provision of high-quality maternity
care and childbirth services in an orderly, effective, and safe physical and
organizational environment.
(3) Informed consent: Each CHAMPUS
beneficiary admitted to the center will
be informed in writing at the time of
admission of the nature and scope of
the center’s program and of the possible risks associated with maternity
care and childbirth in the center.
(4) Beneficiary care: Each woman admitted will be cared for by or under the
direct supervision of a specific physician or a specific certified nurse-midwife who is otherwise eligible as a
CHAMPUS individual professional provider.
(5) Medical direction: The center has
written memoranda of understanding
(MOU) for routine consultation and
emergency care with an obstetriciangynecologist who is certified or is eligible for certification by the American
Board of Obstetrics and Gynecology or
the American Osteopathic Board of Obstetrics and Gynecology and with a pediatrician who is certified or eligible
for certification by the American
Board of Pediatrics or by the American
Osteopathic Board of Pediatrics, each
of whom have admitting privileges to
at least one backup hospital. In lieu of
a required MOU, the center may employ a physician with the required
qualifications. Each MOU must be renewed annually.
(6) Admission and emergency care criteria and procedures. The center has
written clinical criteria and administrative procedures, which are reviewed
and approved annually by a physician
related to the center as required by
paragraph (b)(4)(xi)(B)(5) above, for the
exclusion of a woman with a high-risk

pregnancy from center care and for
management of maternal and neonatal
emergencies.
(7) Emergency treatment. The center
has a written memorandum of understanding (MOU) with at least one
backup hospital which documents that
the hospital will accept and treat any
woman or newborn transferred from
the center who is in need of emergency
obstetrical or neonatal medical care.
In lieu of this MOU with a hospital, a
birthing center may have an MOU with
a physician, who otherwise meets the
requirements as a CHAMPUS individual professional provider, and who
has admitting privileges to a backup
hospital capable of providing care for
critical maternal and neonatal patients
as demonstrated by a letter from that
hospital certifying the scope and expected duration of the admitting privileges granted by the hospital to the
physician. The MOU must be reviewed
annually.
(8) Emergency medical transportation.
The center has a written memorandum
of understanding (MOU) with at least
one ambulance service which documents that the ambulance service is
routinely staffed by qualified personnel
who are capable of the management of
critical maternal and neonatal patients
during transport and which specifies
the estimated transport time to each
backup hospital with which the center
has arranged for emergency treatment
as required in paragraph (b)(4)(xi)(B)(7)
above. Each MOU must be renewed annually.
(9) Professional staff. The center’s professional staff is legally and professionally qualified for the performance
of their professional responsibilities.
(10) Medical records. The center maintains full and complete written documentation of the services rendered to
each woman admitted and each newborn delivered. A copy of the informed
consent document required by paragraph (b)(4)(xi)(B)(3), above, which contains the original signature of the
CHAMPUS beneficiary, signed and
dated at the time of admission, must
be maintained in the medical record of
each CHAMPUS beneficiary admitted.

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(11) Quality assurance. The center has
an organized program for quality assurance which includes, but is not limited to, written procedures for regularly scheduled evaluation of each type
of service provided, of each mother or
newborn transferred to a hospital, and
of each death within the facility.
(12) Governance and administration.
The center has a governing body legally responsible for overall operation
and maintenance of the center and a
full-time employee who has authority
and responsibility for the day-to-day
operation of the center.
(xii) Psychiatric partial hospitalization
programs. Paragraph (b)(4)(xii) of this
section establishes standards and requirements for psychiatric partial hospitalization programs.
(A) Organization and administration—
(1) Definition. Partial hospitalization is
defined as a time-limited, ambulatory,
active treatment program that offers
therapeutically intensive, coordinated,
and structured clinical services within
a stable therapeutic milieu. Partial
hospitalization programs serve patients who exhibit psychiatric symptoms, disturbances of conduct, and decompensating
conditions
affecting
mental health.
(2) Eligibility. (i) Every psychiatric
partial hospitalization program must
be certified pursuant to CHAMPUS certification standards. Such standards
shall incorporate the basic standards
set forth in paragraphs (b)(4)(xii) (A)
through (D) of this section, and shall
include such additional elaborative criteria and standards as the Director,
OCHAMPUS determines are necessary
to implement the basic standards. Each
psychiatric partial hospitalization program must be either a distinct part of
an otherwise authorized institutional
provider or a freestanding program.
(ii) To be eligible for CHAMPUS certification, the facility is required to be
licensed and fully operational for a period of at least six months (with a minimum patient census of at least 30 percent of bed capacity) and operate in
substantial compliance with state and
federal regulations.
(iii) The facility is currently accredited by the Joint Commission on Accreditation of Healthcare Organizations under the current edition of the

Accreditation Manual for Mental
Health, Chemical Dependency, and
Mental
Retardation/Developmental
Disabilities Services.
(iv) The facility has a written participation agreement with OCHAMPUS.
On October 1, 1995, the PHP is not a
CHAMPUS-authorized provider and
CHAMPUS benefits are not paid for
services provided until the date upon
which a participation agreement is
signed by the Director, OCHAMPUS.
Partial hospitalization is capable of
providing an interdisciplinary program
of medical and therapeutic services a
minimum of three hours per day, five
days per week, and may include full- or
half-day, evening, and weekend treatment programs.
(3) Governing body. (i) The PHP shall
have a governing body which is responsible for the policies, bylaws, and activities of the facilities. If the PHP is
owned by a partnership or single
owner, the partners or single owner are
regarded as the governing body. The facility will provide an up-to-date list of
names, addresses, telephone numbers,
and titles of the members of the governing body.
(ii) The governing body ensures appropriate and adequate services for all
patients and oversees continuing development and improvement of care.
Where business relationships exist between the governing body and facility,
appropriate conflict-of-interest policies
are in place.
(iii) Board members are fully informed about facility services and the
governing body conducts annual review
of its performance in meeting purposes,
responsibilities, goals and objectives.
(4) Chief executive officer. The Chief
Executive Officer, appointed by and
subject to the direction of the governing body, shall assume overall administrative responsibility for the operation of the facility according to
governing body policies. The chief executive officer shall have five years’
administrative experience in the field
of mental health. On October 1, 1997,
the CEO shall possess a degree in business administration, public health,
hospital administration, nursing, social work, or psychology, or meet similar educational requirements as prescribed by the Director, OCHAMPUS.

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§ 199.6

(5) Clinical Director. The clinical director, appointed by the governing
body, shall be a psychiatrist or doctoral level psychologist who meets applicable CHAMPUS requirements for
individual professional providers and is
licensed to practice in the state where
the PHP is located. The clinical director shall possess requisite education
and experience, credentials applicable
under state practice and licensing laws
appropriate to the professional discipline, and a minimum of five years’
clinical experience in the treatment of
mental disorders specific to the ages
and disabilities of the patients served.
The clinical director shall be responsible for planning, development, implementation, and monitoring of all clinical activities.
(6) Medical director. The medical director, appointed by the governing
body, shall be licensed to practice medicine in the state where the residential
treatment center is located and shall
possess requisite education and experience, including graduation from an accredited school of medicine or osteopathy, an approved residency in psychiatry and a minimum of five years clinical experience in the treatment of
mental disorders specific to the ages
and disabilities of the patients served.
The Medical Director shall be responsible for the planning, development,
implementation, and monitoring of all
activities relating to medical treatment of patients. If qualified, the Medical Director may also serve as Clinical
Director.
(7) Medical or professional staff organization. The governing body shall establish a medical or professional staff organization to assure effective implementation of clinical privileging, professional conduct rules, and other activities directly affecting patient care.
(8) Personnel policies and records. The
PHP shall maintain written personnel
policies, updated job descriptions, personnel records to assure the selection
of qualified personnel and successful
job performance of those personnel.
(9) Staff development. The facility
shall provide appropriate training and
development programs for administrative, professional support, and direct
care staff.

(10) Fiscal accountability. The PHP
shall assure fiscal accountability to applicable government authorities and
patients.
(11) Designated teaching facilities. Students, residents, interns, or fellows
providing direct clinical care are under
the supervision of a qualified staff
member approved by an accredited university. The teaching program is approved by the Director, OCHAMPUS.
(12) Emergency reports and records. The
facility notifies OCHAMPUS of any serious occurrence involving CHAMPUS
beneficiaries.
(B) Treatment services—(1) Staff composition. (i) The PHP shall ensure that
patient care needs will be appropriately addressed during all hours of
operation by a sufficient number of
fully qualified (including license, registration or certification requirements,
educational attainment, and professional experience) health care professionals. Clinicians providing individual, group, and family therapy meet
CHAMPUS requirements as qualified
mental health providers, and operate
within the scope of their licenses. The
ultimate authority for managing care
is vested in a psychiatrist or licensed
doctor level psychologist. The management of medical care is vested in a
physician.
(ii) The PHP shall establish and follow written plans to assure adequate
staff coverage during all hours of operation, including physician availability,
other professional staff coverage, and
support staff in the respective disciplines.
(2) Staff qualifications. The PHP will
have a sufficient number of qualified
mental health providers, administrative, and support staff to address patients’ clinical needs and to coordinate
the services provided. PHPs which employ individuals with master’s or doctoral level degrees in a mental health
discipline who do not meet the licensure, certification and experience requirements for a qualified mental
health provider but are actively working toward licensure or certification,
may provide services within the all-inclusive per diem rate, provided the individual works under the clinical supervision of a fully qualified mental
health provider employed by the PHP.

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All other program services shall be provided by trained, licensed staff.
(3) Patient rights. (i) The PHP shall
provide adequate protection for all patient rights, including rights provided
by law, privacy, personal rights, safety,
confidentiality,
informed
consent,
grievances, and personal dignity.
(ii) The facility has a written policy
regarding patient abuse and neglect.
(iii) Facility marketing and advertising meets professional standards.
(4) Behavioral management. The PHP
shall adhere to a comprehensive, written plan of behavior management, developed by the clinical director and the
medical or professional staff and approved by the governing body, including strictly limited procedures to assure that restraint or seclusion are
used
only
in
extraordinary
circumstances, are carefully monitored,
and are fully documented. Only trained
and clinically privileged RNs or qualified mental health professionals may
be responsible for implementation of
seclusion and restraint procedures in
an emergency situation.
(5) Admission process. The PHP shall
maintain written policies and procedures to ensure that prior to an admission, a determination is made, and approved
pursuant
to
CHAMPUS
preauthorization requirements, that
the admission is medically and/or psychologically necessary and the program is appropriate to meet the patient’s needs. Medical and/or psychological necessity determinations shall
be rendered by qualified mental health
professionals who meet CHAMPUS requirements for individual professional
providers and who are permitted by law
and by the facility to refer patients for
admission.
(6) Assessments. The professional staff
of the PHP shall complete a multidisciplinary assessment which includes, but
is not limited to physical health, psychological health, physiological, developmental, family, educational, spiritual, and skills assessment of each patient admitted. Unless otherwise specified, all required clinical assessment
are completed prior to development of
the interdisciplinary treatment plan.
(7) Clinical formulation. A qualified
mental health provider of the PHP will
complete a clinical formulation on all

patients. The clinical formulation will
be reviewed and approved by the responsible individual professional provider and will incorporate significant
findings from each of the multidisciplinary assessments. It will provide the
basis for development of an interdisciplinary treatment plan.
(8) Treatment planning. A qualified
mental health professional with admitting privileges shall be responsible for
the development, supervision, implementation, and assessment of a written, individualized, interdisciplinary
plan of treatment, which shall be completed by the fifth day following admission to a full-day PHP, or by the seventh day following admission to a halfday PHP, and shall include measurable
and observable goals for incremental
progress and discharge. The treatment
plan shall undergo review at least
every two weeks, or when major
changes occur in treatment.
(9) Discharge and transition planning.
The PHP shall develop an individualized transition plan which addresses
anticipated needs of the patient at discharge. The transition plan involves
determining necessary modifications in
the treatment plan, facilitating the
termination of treatment, and identifying resources for maintaining therapeutic stability following discharge.
(10) Clinical documentation. Clinical
records shall be maintained on each patient to plan care and treatment and
provide ongoing evaluation of the patient’s progress. All care is documented
and each clinical record contains at
least the following: demographic data,
consent forms, pertinent legal documents, all treatment plans and patient
assessments, consultation and laboratory reports, physician orders, progress
notes, and a discharge summary. All
documentation will adhere to applicable provisions of the JCAHO and requirements set forth in § 199.7(b)(3). An
appropriately qualified records administrator or technician will supervise
and maintain the quality of the
records. These requirements are in addition to other records requirements of
this part, and documentation requirements of the Joint Commission on Accreditation of Health Care Organization.

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§ 199.6

(11) Progress notes. PHPs shall document the course of treatment for patients and families using progress
notes which provide information to review, analyze, and modify the treatment plans. Progress notes are legible,
contemporaneous, sequential, signed
and dated and adhere to applicable provisions of the Manual for Mental
Health, Chemical Dependency, and
Mental
Retardation/Developmental
Disabilities Services and requirements
set forth in section 199.7(b)(3).
(12) Therapeutic services.
(i) Individual, group, and family therapy are provided to all patients, consistent with each patient’s treatment
plan by qualified mental health providers.
(ii) A range of therapeutic activities,
directed and staffed by qualified personnel, are offered to help patients
meet the goals of the treatment plan.
(iii) Educational services are provided
or arranged that are appropriate to the
patient’s needs.
(13) Ancillary services. A full range of
ancillary services are provided. Emergency services include policies and procedures for handling emergencies with
qualified personnel and written agreements with each facility providing
these services. Other ancillary services
include physical health, pharmacy and
dietary services.
(C) Standards for physical plant and
environment—(1) Physical environment.
The buildings and grounds of the PHP
shall be maintained so as to avoid
health and safety hazards, be supportive of the services provided to patients, and promote patient comfort,
dignity, privacy, personal hygiene, and
personal safety.
(2) Physical plant safety. The PHP
shall be of permanent construction and
maintained in a manner that protects
the lives and ensures the physical safety of patients, staff, and visitors, including conformity with all applicable
building, fire, health, and safety codes.
(3) Disaster planning. The PHP shall
maintain and rehearse written plans
for taking care of casualties and handling other consequences arising from
internal and external disasters.
(D) Standards for evaluation system—
(1) Quality assessment and improvement.
The PHP shall develop and implement

a comprehensive quality assurance and
quality improvement program that
monitors the quality, efficiency, appropriateness, and effectiveness of care,
treatments, and services the PHP provides for patients and their families.
Explicit clinical indicators shall be
used to be used to evaluate all functions of the PHP and contribute to an
ongoing process of program improvement. The clinical director is responsible for developing and implementing
quality assessment and improvement
activities throughout the facility.
(2) Utilization review. The PHP shall
implement a utilization review process,
pursuant to a written plan approved by
the professional staff, the administration and the governing body, that assesses distribution of services, clinical
necessity of treatment, appropriateness of admission, continued stay, and
timeliness of discharge, as part of an
overall effort to provide quality patient care in a cost-effective manner.
Findings of the utilization review process are used as a basis for revising the
plan of operation, including a review of
staff qualifications and staff composition.
(3) Patient records. The PHP shall implement a process, including regular
monthly reviews of a representative
sample of patient records, to determine
completeness, accuracy, timeliness of
entries, appropriate signatures, and
pertinence of clinical entries. Conclusions, recommendations, actions taken,
and the results of actions are monitored and reported.
(4) Drug utilization review. The PHP
shall implement a comprehensive process for the monitoring and evaluating
of the prophylactic, therapeutic, and
empiric use of drugs to assure that
medications
are
provided
appropriately, safely, and effectively.
(5) Risk management. The PHP shall
implement a comprehensive risk management program, fully coordinated
with other aspects of the quality assurance and quality improvement program, to prevent and control risks to
patients and staff, and to minimize
costs associated with clinical aspects
of patient care and safety.
(6) Infection control. The PHP shall
implement a comprehensive system for
the surveillance, prevention, control,

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and reporting of infections acquired or
brought into the facility.
(7) Safety. The PHP shall implement
an effective program to assure a safe
environment for patients, staff, and
visitors, including an incident reporting system, disaster training and safety education, a continuous safety surveillance system, and an active multidisciplinary safety committee.
(8) Facility evaluation. The PHP annually evaluates accomplishment of the
goals and objectives of each clinical
program component or facility service
of the PHP and reports findings and
recommendations to the governing
body.
(E) Participation agreement requirements. In addition to other requirements set forth in paragraph (b)(4)(xii)
of this section, in order for the services
of a PHP to be authorized, the PHP
shall have entered into a Participation
Agreement with OCHAMPUS. The period of a Participation Agreement shall
be specified in the agreement, and will
generally be for not more than five
years. On October 1, 1995, the PHP shall
not be considered to be a CHAMPUS
authorized provider and CHAMPUS
payments shall not be made for services provided by the PHP until the date
the participation agreement is signed
by the Director, OCHAMPUS. In addition to review of a facility’s application and supporting documentation, an
on-site inspection by OCHAMPUS authorized personnel may be required
prior to signing a participation agreement. The Participation Agreement
shall include at least the following requirements:
(1) Render partial hospitalization
program services to eligible CHAMPUS
beneficiaries in need of such services,
in accordance with the participation
agreement and CHAMPUS regulation.
(2) Accept payment for its services
based upon the methodology provided
in § 199.14, or such other method as determined by the Director, OCHAMPUS;
(3) Accept the CHAMPUS all-inclusive per diem rate as payment in full
and collect from the CHAMPUS beneficiary or the family of the CHAMPUS
beneficiary only those amounts that
represent the beneficiary’s liability, as
defined in § 199.4, and charges for serv-

ices and supplies that are not a benefit
of CHAMPUS;
(4) Make all reasonable efforts acceptable to the Director, OCHAMPUS,
to collect those amounts, which represent the beneficiary’s liability, as defined in § 199.4;
(5) Comply with the provisions of
§ 199.8, and submit claims first to all
health insurance coverage to which the
beneficiary is entitled that is primary
to CHAMPUS;
(6) Submit claims for services provided to CHAMPUS beneficiaries at
least every 30 days (except to the extent a delay is necessitated by efforts
to first collect from other health insurance). If claims are not submitted at
least every 30 days, the PHP agrees not
to bill the beneficiary or the beneficiary’s family for any amounts disallowed by CHAMPUS;
(7) Certify that:
(i) It is and will remain in compliance with the provisions of paragraph
(b)(4)(xii) of this section establishing
standards for psychiatric partial hospitalization programs;
(ii) It has conducted a self assessment
of the facility’s compliance with the
CHAMPUS Standards for Psychiatric
Partial Hospitalization Programs, as
issued by the Director, OCHAMPUS,
and notified the Director, OCHAMPUS
of any matter regarding which the facility is not in compliance with such
standards; and
(iii) It will maintain compliance with
the CHAMPUS Standards for Psychiatric Partial Hospitalization Programs, as issued by the Director,
OCHAMPUS, except for any such
standards regarding which the facility
notifies the Director, OCHAMPUS that
it is not in compliance.
(8) Designate an individual who will
act as liaison for CHAMPUS inquiries.
The PHP shall inform OCHAMPUS in
writing of the designated individual;
(9) Furnish OCHAMPUS with cost
data, as requested by OCHAMPUS, certified by an independent accounting
firm or other agency as authorized by
the Director, OCHAMPUS;
(10) Comply with all requirements of
this section applicable to institutional
providers
generally
concerning

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§ 199.6

preauthorization, concurrent care review, claims processing, beneficiary liability, double coverage, utilization
and quality review and other matters;
(11) Grant the Director, OCHAMPUS,
or designee, the right to conduct quality assurance audits or accounting audits with full access to patients and
records (including records relating to
patients who are not CHAMPUS beneficiaries) to determine the quality and
cost-effectiveness of care rendered. The
audits may be conducted on a scheduled or unscheduled (unannounced)
basis. This right to audit/review includes, but is not limited to:
(i) Examination of fiscal and all other
records of the PHP which would confirm compliance with the participation
agreement and designation as an authorized CHAMPUS PHP provider;
(ii) Conducting such audits of PHP
records including clinical, financial,
and census records, as may be necessary to determine the nature of the
services being provided, and the basis
for charges and claims against the
United States for services provided
CHAMPUS beneficiaries;
(iii) Examining reports of evaluations
and inspections conducted by federal,
state and local government, and private agencies and organizations;
(iv) Conducting on-site inspections of
the facilities of the PHP and interviewing employees, members of the
staff, contractors, board members, volunteers, and patients, as required;
(v) Audits conducted by the United
States General Account Office.
(F) Other requirements applicable to
PHPs.
(1) Even though a PHP may qualify
as a CHAMPUS-authorized provider
and may have entered into a participation agreement with CHAMPUS, payment by CHAMPUS for particular services provided is contingent upon the
PHP also meeting all conditions set
forth in section 199.4 of this part.
(2) The PHP shall provide patient
services to CHAMPUS beneficiaries in
the same manner it provides inpatient
services to all other patients. The PHP
may
not
discriminate
against
CHAMPUS beneficiaries in any manner, including admission practices,
placement in special or separate wings

or rooms, or provisions of special or
limited treatment.
(3) The PHP shall assure that all certifications and information provided to
the Director, OCHAMPUS incident to
the process of obtaining and retaining
authorized provider status is accurate
and that is has no material errors or
omissions. In the case of any misrepresentations, whether by inaccurate information being provided or material
facts withheld, authorized provider status will be denied or terminated, and
the PHP will be ineligible for consideration for authorized provider status for
a two year period.
(xiii) Hospice programs. Hospice programs must be Medicare approved and
meet all Medicare conditions of participation (42 CFR part 418) in relation
to CHAMPUS patients in order to receive payment under the CHAMPUS
program. A hospice program may be
found to be out of compliance with a
particular Medicare condition of participation and still participate in the
CHAMPUS as long as the hospice is allowed continued participation in Medicare while the condition of noncompliance is being corrected. The hospice
program can be either a public agency
or private organization (or a subdivision thereof) which:
(A) Is primarily engaged in providing
the care and services described under
§ 199.4(e)(19) and makes such services
available on a 24-hour basis.
(B) Provides bereavement counseling
for the immediate family or terminally
ill individuals.
(C) Provides for such care and services in individuals’ homes, on an outpatient basis, and on a short-term inpatient basis, directly or under arrangements made by the hospice program, except that the agency or organization must:
(1) Ensure that substantially all the
core services are routinely provided directly by hospice employees.
(2) Maintain professional management responsibility for all services
which are not directly furnished to the
patient, regardless of the location or
facility in which the services are rendered.
(3) Provide assurances that the aggregate number of days of inpatient
care provided in any 12-month period

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does not exceed 20 percent of the aggregate number of days of hospice care
during the same period.
(4) Have an interdisciplinary group
composed of the following personnel
who provide the care and services described under § 199.4(e)(19) and who establish the policies governing the provision of such care/services:
(i) A physician;
(ii) A registered professional nurse;
(iii) A social worker; and
(iv) A pastoral or other counselor.
(5) Maintain central clinical records
on all patients.
(6) Utilize volunteers.
(7) The hospice and all hospice employees must be licensed in accordance
with applicable Federal, State and
local laws and regulations.
(8) The hospice must enter into an
agreement with CHAMPUS in order to
be qualified to participate and to be eligible for payment under the program.
In this agreement the hospice and
CHAMPUS agree that the hospice will:
(i) Not charge the beneficiary or any
other person for items or services for
which the beneficiary is entitled to
have
payment
made
under
the
CHAMPUS hospice benefit.
(ii) Be allowed to charge the beneficiary for items or services requested
by the beneficiary in addition to those
that are covered under the CHAMPUS
hospice benefit.
(9) Meet such other requirements as
the Secretary of Defense may find necessary in the interest of the health and
safety of the individuals who are provided care and services by such agency
or organization.
(xiv) Substance use disorder rehabilitation facilities. Paragraph (b)(4)(xiv) of
this section establishes standards and
requirements for substance use order
rehabilitation facilities (SUDRF). This
includes both inpatient rehabilitation
centers for the treatment of substance
use disorders and partial hospitalization centers for the treatment of substance use disorders.
(A) Organization and administration—
(1) Definition of inpatient rehabilitation
center. An inpatient rehabilitation center is a facility, or distinct part of a facility, that provides medically monitored, interdisciplinary addiction-focused treatment to beneficiaries who

have psychoactive substance use disorders. Qualified health care professionals provide 24-hour, seven-day-perweek, medically monitored assessment,
treatment, and evaluation. An inpatient rehabilitation center is appropriate for patients whose addiction-related symptoms, or concomitant physical and emotional/behavioral problems
reflect persistent dysfunction in several major life areas. Inpatient rehabilitation is differentiated from:
(i) Acute psychoactive substance use
treatment and from treatment of acute
biomedical/emotional/behavioral problems; which problems are either lifethreatening and/or severely incapacitating and often occur within the context of a discrete episode of addictionrelated biomedical or psychiatric dysfunction;
(ii) A partial hospitalization center,
which serves patients who exhibit emotional/behavioral dysfunction but who
can function in the community for defined periods of time with support in
one or more of the major life areas;
(iii) A group home, sober-living environment, halfway house, or three-quarter way house;
(iv) Therapeutic schools, which are
educational programs supplemented by
addiction-focused services;
(v) Facilities that treat patients with
primary psychiatric diagnoses other
than psychoactive substance use or dependence; and
(vi) Facilities that care for patients
with the primary diagnosis of mental
retardation or developmental disability.
(2) Definition of partial hospitalization
center for the treatment of substance use
disorders. A partial hospitalization center for the treatment of substance use
disorders is an addiction-focused service that provides active treatment to
adolescents between the ages of 13 and
18 or adults aged 18 and over. Partial
hospitalization is a generic term for
day, evening, or weekend programs
that treat patients with psychoactive
substance use disorders according to a
comprehensive, individualized, integrated schedule of care. A partial hospitalization center is organized, interdisciplinary, and medically monitored.
Partial hospitalization is appropriate
for those whose addiction-related

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symptoms or concomitant physical and
emotional/behavioral problems can be
managed outside the hospital environment for defined periods of time with
support in one or more of the major life
areas.
(3) Eligibility. (i) Every inpatient rehabilitation center and partial hospitalization center for the treatment of
substance use disorders must be certified pursuant to CHAMPUS certification standards. Such standards shall
incorporate the basic standards set
forth in paragraphs (b)(4)(xiv) (A)
through (D) of this section, and shall
include such additional elaborative criteria and standards as the Director,
OCHAMPUS determines are necessary
to implement the basic standards.
(ii) To be eligible for CHAMPUS certification, the SUDRF is required to be
licensed and fully operational (with a
minimum patient census of the lesser
of: six patients or 30 percent of bed capacity) for a period of at least six
months and operate in substantial
compliance with state and federal regulations.
(iii) The SUDRF is currently accredited by the Joint Commission on Accreditation of Healthcare Organizations under the Accreditation Manual
for Mental Health, Chemical Dependency, and Mental Retardation/Developmental Disabilities Services, or by the
Commission on Accreditation of Rehabilitation Facilities as an alcoholism
and other drug dependency rehabilitation program under the Standards
Manual for Organizations Serving People with Disabilities, or other designated standards approved by the Director, OCHAMPUS.
(iv) The SUDRF has a written participation
agreement
with
OCHAMPUS. On October 1, 1995, the
SUDRF is not considered a CHAMPUSauthorized provider, and CHAMPUS
benefits are not paid for services provided until the date upon which a participation agreement is signed by the
Director, OCHAMPUS.
(4) Governing body. (i) The SUDRF
shall have a governing body which is
responsible for the policies, bylaws,
and activities of the facility. If the
SUDRF is owned by a partnership or
single owner, the partners or single
owner are regarded as the governing

body. The facility will provide an upto-date list of names, addresses, telephone numbers and titles of the members of the governing body.
(ii) The governing body ensures appropriate and adequate services for all
patients and oversees continuing development and improvement of care.
Where business relationships exist between the governing body and facility,
appropriate conflict-of-interest policies
are in place.
(iii) Board members are fully informed about facility services and the
governing body conducts annual reviews of its performance in meeting
purposes, responsibilities, goals and objectives.
(5) Chief executive officer. The chief
executive officer, appointed by and
subject to the direction of the governing body, shall assume overall administrative responsibility for the operation of the facility according to
governing body policies. The chief executive officer shall have five years’
administrative experience in the field
of mental health or addictions. On October 1, 1997 the CEO shall possess a degree in business administration, public
health, hospital administration, nursing, social work, or psychology, or
meet similar educational requirements
as
prescribed
by
the
Director,
OCHAMPUS.
(6) Clinical Director. The clinical director, appointed by the governing
body, shall be a qualified psychiatrist
or doctoral level psychologist who
meets applicable CHAMPUS requirements for individual professional providers and is licensed to practice in the
state where the SUDRF is located. The
clinical director shall possess requisite
education and experience, including
credentials applicable under state practice and licensing laws appropriate to
the professional discipline. The clinical
director shall satisfy at least one of the
following requirements: certification
by the American Society of Addiction
Medicine; one year or 1,000 hours of experience
in
the
treatment
of
psychoactive substance use disorders;
or is a psychiatrist or doctoral level
psychologist with experience in the
treatment of substance use disorders.

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The clinical director shall be responsible for planning, development, implementation, and monitoring of all clinical activities.
(7) Medical director. The medical director, appointed by the governing
body, shall be licensed to practice medicine in the state where the center is
located and shall possess requisite education including graduation from an
accredited school of medicine or osteopathy. The medical director shall satisfy at least one of the following requirements: certification by the American Society of Addiction Medicine;
one year or 1,000 hours of experience in
the treatment of psychoactive substance use disorders; or is a psychiatrist with experience in the treatment
of substance use disorders. The medical
director shall be responsible for the
planning, development, implementation, and monitoring of all activities
relating to medical treatment of patients. If qualified, the Medical Director may also serve as Clinical Director.
(8) Medical or professional staff organization. The governing body shall establish a medical or professional staff organization to assure effective implementation of clinical privileging, professional conduct rules, and other activities directly affecting patient care.
(9) Personnel policies and records. The
SUDRF shall maintain written personnel policies, updated job descriptions, personnel records to assure the
selection of qualified personnel and
successful job performance of those
personnel.
(10) Staff development. The SUDRF
shall provide appropriate training and
development programs for administrative, support, and direct care staff.
(11) Fiscal accountability. The SUDRF
shall assure fiscal accountability to applicable government authorities and
patients.
(12) Designated teaching facilities. Students, residents, interns, or fellows
providing direct clinical care are under
the supervision of a qualified staff
member approved by an accredited university or approved training program.
The teaching program is approved by
the Director, OCHAMPUS.
(13) Emergency reports and records. The
facility notifies OCHAMPUS of any se-

rious occurrence involving CHAMPUS
beneficiaries.
(B) Treatment services—(1) Staff composition. (i) The SUDRF shall follow
written plans which assure that medical and clinical patient needs will be
appropriately addressed during all
hours of operation by a sufficient number of fully qualified (including license,
registration or certification requirements, educational attainment, and
professional experience) health care
professionals and support staff in the
respective disciplines. Clinicians providing individual, group and family
therapy meet CHAMPUS requirements
as qualified mental health providers
and operate within the scope of their
licenses. The ultimate authority for
planning, development, implementation, and monitoring of all clinical activities is vested in a psychiatrist or
doctoral level clinical psychologist.
The management of medical care is
vested in a physician.
(ii) The SUDRF shall establish and
follow written plans to assure adequate
staff coverage during all hours of operation of the center, including physician
availability and other professional
staff coverage 24 hours per day, seven
days per week for an inpatient rehabilitation center and during all hours of
operation for a partial hospitalization
center.
(2) Staff qualifications. Within the
scope of its programs and services, the
SUDRF has a sufficient number of professional, administrative, and support
staff to address the medical and clinical needs of patients and to coordinate
the services provided. SUDRFs that
employ individuals with master’s or
doctoral level degrees in a mental
health discipline who do not meet the
licensure, certification and experience
requirements for a qualified mental
health provider but are actively working toward licensure or certification,
may provide services within the DRG,
provided the individual works under
the clinical supervision of a fully qualified mental health provider employed
by the SUDRF.
(3) Patient rights. (i) The SUDRF shall
provide adequate protection for all patient rights, safety, confidentiality, informed consent, grievances, and personal dignity.

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(ii) The SUDRF has a written policy
regarding patient abuse and neglect.
(iii) SUDRF marketing and advertising meets professional standards.
(4) Behavioral management. When a
SUDRF uses a behavioral management
program, the center shall adhere to a
comprehensive, written plan of behavioral management, developed by the
clinical director and the medical or
professional staff and approved by the
governing body. It shall be based on
positive reinforcement methods and,
except for infrequent use of temporary
physical holds or time outs, does not
include the use of restraint or seclusion. Only trained and clinically privileged RNs or qualified mental health
professionals may be responsible for
the implementation of seclusion and
restraint in an emergency situation.
(5) Admission process. The SUDRF
shall maintain written policies and
procedures to ensure that, prior to an
admission, a determination is made,
and approved pursuant to CHAMPUS
preauthorization requirements, that
the admission is medically and/or psychologically necessary and the program is appropriate to meet the patient’s needs. Medical and/or psychological necessity determinations shall
be rendered by qualified mental health
professionals who meet CHAMPUS requirements for individual professional
providers and who are permitted by law
and by the facility to refer patients for
admission.
(6) Assessment. The professional staff
of the SUDRF shall provide a complete,
multidisciplinary assessment of each
patient which includes, but is not limited to, medical history, physical
health, nursing needs, alcohol and drug
history, emotional and behavioral factors,
age-appropriate
social
circumstances, psychological condition,
education status, and skills. Unless
otherwise specified, all required clinical assessments are completed prior to
development of the multidisciplinary
treatment plan.
(7) Clinical formulation. A qualified
mental health care professional of the
SUDRF will complete a clinical formulation on all patients. The clinical formulation will be reviewed and approved by the responsible individual
professional provider and will incor-

porate significant findings from each of
the multidisciplinary assessments. It
will provide the basis for development
of an interdisciplinary treatment plan.
(8) Treatment planning. A qualified
health care professional with admitting privileges shall be responsible for
the development, supervision, implementation, and assessment of a written, individualized, and interdisciplinary plan of treatment, which shall be
completed within 10 days of admission
to an inpatient rehabilitation center or
by the fifth day following admission to
full day partial hospitalization center,
and by the seventh day of treatment
for half day partial hospitalization.
The treatment plan shall include individual, measurable, and observable
goals for incremental progress towards
the treatment plan objectives and
goals and discharge. A preliminary
treatment plan is completed within 24
hours of admission and includes at
least a physician’s admission note and
orders. The master treatment plan is
regularly reviewed for effectiveness
and revised when major changes occur
in treatment.
(9) Discharge and transition planning.
The SUDRF shall maintain a transition planning process to address adequately the anticipated needs of the
patient prior to the time of discharge.
(10) Clinical documentation. Clinical
records shall be maintained on each patient to plan care and treatment and
provide ongoing evaluation of the patient’s progress. All care is documented
and each clinical record contains at
least the following: demographic data,
consent forms, pertinent legal documents, all treatment plans and patient
assessments, consultation and laboratory reports, physician orders, progress
notes, and a discharge summary. All
documentation will adhere to applicable provisions of the JCAHO and requirements set forth in § 199.7(b)(3). An
appropriately qualified records administrator or technician will supervise
and maintain the quality of the
records. These requirements are in addition to other records requirements of
this part, and provisions of the JCAHO
Manual for Mental Health, Chemical
Dependency, and Mental Retardation/
Developmental Disabilities Services.

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(11) Progress notes. Timely and complete progress notes shall be maintained to document the course of treatment for the patient and family.
(12) Therapeutic services. (i) Individual, group, and family psychotherapy and addiction counseling services are provided to all patients, consistent with each patient’s treatment
plan by qualified mental health providers.
(ii) A range of therapeutic activities,
directed and staffed by qualified personnel, are offered to help patients
meet the goals of the treatment plan.
(iii) Therapeutic educational services
are provided or arranged that are appropriate to the patient’s educational
and therapeutic needs.
(13) Ancillary services. A full range of
ancillary services is provided. Emergency services include policies and procedures for handling emergencies with
qualified personnel and written agreements with each facility providing the
service. Other ancillary services include physical health, pharmacy and
dietary services.
(C) Standards for physical plant and
environment. (1) Physical environment.
The buildings and grounds of the
SUDRF shall be maintained so as to
avoid health and safety hazards, be
supportive of the services provided to
patients, and promote patient comfort,
dignity, privacy, personal hygiene, and
personal safety.
(2) Physical plant safety. The SUDRF
shall be maintained in a manner that
protects the lives and ensures the physical safety of patients, staff, and visitors, including conformity with all applicable building, fire, health, and safety codes.
(3) Disaster planning. The SUDRF
shall maintain and rehearse written
plans for taking care of casualties and
handling other consequences arising
from internal or external disasters.
(D) Standards for evaluation system. (1)
Quality assessment and improvement. The
SUDRF develop and implement a comprehensive quality assurance and quality improvement program that monitors the quality, efficiency, appropriateness, and effectiveness of the
care, treatments, and services it provides for patients and their families,
utilizing clinical indicators of effec-

tiveness to contribute to an ongoing
process of program improvement. The
clinical director is responsible for developing and implementing quality assessment and improvement activities
throughout the facility.
(2) Utilization review. The SUDRF
shall implement a utilization review
process, pursuant to a written plan approved by the professional staff, the administration, and the governing body,
that assesses the appropriateness of admissions, continued stay, and timeliness of discharge as part of an effort to
provide quality patient care in a costeffective manner. Findings of the utilization review process are used as a
basis for revising the plan of operation,
including a review of staff qualifications and staff composition.
(3) Patient records review. The center
shall implement a process, including
monthly reviews of a representative
sample of patient records, to determine
the completeness and accuracy of the
patient records and the timeliness and
pertinence of record entries, particularly with regard to regular recording
of progress/non-progress in treatment
plan.
(4) Drug utilization review. An inpatient rehabilitation center and, when
applicable, a partial hospitalization
center, shall implement a comprehensive process for the monitoring and
evaluating of the prophylactic, therapeutic, and empiric use of drugs to assure that medications are provided appropriately, safely, and effectively.
(5) Risk management. The SUDRF
shall implement a comprehensive risk
management program, fully coordinated with other aspects of the quality
assurance and quality improvement
program, to prevent and control risks
to patients and staff and costs associated with clinical aspects of patient
care and safety.
(6) Infection control. The SUDRF shall
implement a comprehensive system for
the surveillance, prevention, control,
and reporting of infections acquired or
brought into the facility.
(7) Safety. The SUDRF shall implement an effective program to assure a
safe environment for patients, staff,
and visitors.
(8) Facility evaluation. The SUDRF
annually evaluates accomplishment of

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the goals and objectives of each clinical program and service of the SUDRF
and reports findings and recommendations to the governing body.
(E) Participation agreement requirements. In addition to other requirements set forth in paragraph (b)(4)(xiv)
of this section, in order for the services
of an inpatient rehabilitation center or
partial hospitalization center for the
treatment of substance abuse disorders
to be authorized, the center shall have
entered into a Participation Agreement with OCHAMPUS. The period of a
Participation Agreement shall be specified in the agreement, and will generally be for not more than five years.
On October 1, 1995, the SUDRF shall
not be considered to be a CHAMPUS
authorized provider and CHAMPUS
payments shall not be made for services provided by the SUDRF until the
date the participation agreement is
signed by the Director, OCHAMPUS. In
addition to review of the SUDRFS application and supporting documentation, an on-site visit by OCHAMPUS
representatives may be part of the authorization process. In addition, such a
Participation Agreement may not be
signed until an SUDRF has been licensed and operational for at least six
months. The Participation Agreement
shall include at least the following requirements:
(1) Render applicable services to eligible CHAMPUS beneficiaries in need
of such services, in accordance with the
participation
agreement
and
CHAMPUS regulation;
(2) Accept payment for its services
based upon the methodology provided
in § 199.14, or such other method as determined by the Director, OCHAMPUS;
(3) Accept the CHAMPUS-determined
rate as payment in full and collect
from the CHAMPUS beneficiary or the
family of the CHAMPUS beneficiary
only those amounts that represent the
beneficiary’s liability, as defined in
§ 199.4, and charges for services and supplies that are not a benefit of
CHAMPUS;
(4) Make all reasonable efforts acceptable to the Director, OCHAMPUS,
to collect those amounts which represent the beneficiary’s liability, as defined in § 199.4;

(5) Comply with the provisions of
§ 199.8, and submit claims first to all
health insurance coverage to which the
beneficiary is entitled that is primary
to CHAMPUS;
(6) Furnish OCHAMPUS with cost
data, as requested by OCHAMPUS, certified to by an independent accounting
firm or other agency as authorized by
the Director, OCHAMPUS;
(7) Certify that:
(i) It is and will remain in compliance with the provisions of paragraph
(b)(4)(xiv) of the section establishing
standards for substance use disorder rehabilitation facilities;
(ii) It has conducted a self assessment
of the SUDRF’S compliance with the
CHAMPUS Standards for Substance
Use Disorder Rehabilitation Facilities,
as issued by the Director, OCHAMPUS,
and notified the Director, OCHAMPUS
of any matter regarding which the facility is not in compliance with such
standards; and
(iii) It will maintain compliance with
the CHAMPUS Standards for Substance Use Disorder Rehabilitation Facilities, as issued by the Director,
OCHAMPUS, except for any such
standards regarding which the facility
notifies the Director, OCHAMPUS that
it is not in compliance.
(8) Grant the Director, OCHAMPUS,
or designee, the right to conduct quality assurance audits or accounting audits with full access to patients and
records (including records relating to
patients who are not CHAMPUS beneficiaries) to determine the quality and
cost effectiveness of care rendered. The
audits may be conducted on a scheduled or unscheduled (unannounced)
basis. This right to audit/review included, but is not limited to:
(i) Examination of fiscal and all other
records of the center which would confirm compliance with the participation
agreement and designation as an authorized CHAMPUS provider;
(ii) Conducting such audits of center
records including clinical, financial,
and census records, as may be necessary to determine the nature of the
services being provided, and the basis
for charges and claims against the
United States for services provided
CHAMPUS beneficiaries;

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32 CFR Ch. I (7–1–06 Edition)

(iii) Examining reports of evaluations
and inspection conducted by federal,
state and local government, and private agencies and organizations;
(iv) Conducting on-site inspections of
the facilities of the SUDRF and interviewing employees, members of the
staff, contractors, board members, volunteers, and patients, as required.
(v) Audits conducted by the United
States General Accounting Office.
(F) Other requirements applicable to
substance use disorder rehabilitation facilities. (1) Even though a SUDRF may
qualify as a CHAMPUS-authorized provider and may have entered into a participation agreement with CHAMPUS,
payment by CHAMPUS for particular
services provided is contingent upon
the SUDRF also meeting all conditions
set forth in § 199.4.
(2) The center shall provide inpatient
services to CHAMPUS beneficiaries in
the same manner it provides services
to all other patients. The center may
not discriminate against CHAMPUS
beneficiaries in any manner, including
admission practices, placement in special or separate wings or rooms, or provisions of special or limited treatment.
(3) The substance use disorder facility shall assure that all certifications
and information provided to the Director, OCHAMPUS incident to the process of obtaining and retaining authorized provider status is accurate and
that it has no material errors or omissions. In the case of any misrepresentations, whether by inaccurate information being provided or material facts
withheld, authorized provider status
will be denied or terminated, and the
facility will be ineligible for consideration for authorized provider status for
a two year period.
(xv) Home health agencies (HHAs).
HHAs must be Medicare approved and
meet all Medicare conditions of participation under sections 1861(o) and
1891 of the Social Security Act (42
U.S.C. 1395x(o) and 1395bbb) and 42 CFR
part 484 in relation to TRICARE beneficiaries in order to receive payment
under the TRICARE program. An HHA
may be found to be out of compliance
with a particular Medicare condition of
participation and still participate in
the TRICARE program as long as the
HHA is allowed continued participation

in Medicare while the condition of noncompliance is being corrected. An HHA
is a public or private organization, or a
subdivision of such an agency or organization, that meets the following requirements:
(A) Engaged in providing skilled
nursing services and other therapeutic
services, such as physical therapy,
speech-language pathology services, or
occupational therapy, medical services,
and home health aide services.
(1) Makes available part-time or
intermittent skilled nursing services
and at least one other therapeutic service on a visiting basis in place of residence used as a patient’s home.
(2) Furnishes at least one of the
qualifying services directly through
agency employees, but may furnish the
second qualifying service and additional services under arrangement with
another HHA or organization.
(B) Policies established by a professional group associated with the agency or organization (including at least
one physician and one registered nurse)
to govern the services and provides for
supervision of such services by a physician or a registered nurse.
(C) Maintains clinical records for all
patients.
(D) Licensed in accordance with
State and local law or is approved by
the State or local licensing agency as
meeting the licensing standards, where
applicable.
(E) Enters into an agreement with
TRICARE in order to participate and
to be eligible for payment under the
program. In this agreement the HHA
and TRICARE agree that the HHA will:
(1) Not charge the beneficiary or any
other person for items or services for
which the beneficiary is entitled to
have payment under the TRICARE
HHA prospective payment system.
(2) Be allowed to charge the beneficiary for items or services requested
by the beneficiary in addition to those
that are covered under the TRICARE
HHA prospective payment system.
(F) Abide by the following consolidated billing requirements:
(1) The HHA must submit all
TRICARE claims for all home health
services, excluding durable medical
equipment (DME), while the beneficiary is under the home health plan

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without regard to whether or not the
item or service was furnished by the
HHA, by others under arrangement
with the HHA, or under any other contracting or consulting arrangement.
(2) Separate payment will be made
for DME items and services provided
under the home health benefit which
are under the DME fee schedule. DME
is excluded from the consolidated billing requirements.
(3) Home health services included in
consolidated billing are:
(i) Part-time or intermittent skilled
nursing;
(ii) Part-time or intermittent home
health aide services;
(iii) Physical therapy, occupational
therapy and speech-language pathology;
(iv) Medical social services;
(v) Routine and non-routine medical
supplies;
(vi) A covered osteoporosis drug (not
paid under PPS rate) but excluding
other drugs and biologicals;
(vii) Medical services provided by an
intern or resident-in-training of a hospital, under an approved teaching program of the hospital in the case of an
HHA that is affiliated or under common control of a hospital;
(viii) Services at hospitals, SNFs or
rehabilitation centers when they involve equipment too cumbersome to
bring home.
(G) Meet such other requirements as
the Secretary of Health and Human
Services and/or Secretary of Defense
may find necessary in the interest of
the health and safety of the individuals
who are provided care and services by
such agency or organization.
(c) Individual professional providers of
care—(1) General—(i) Purpose. This individual professional provider class is established to accommodate individuals
who are recognized by 10 U.S.C. 1079(a)
as authorized to assess or diagnose illness, injury, or bodily malfunction as a
prerequisite for CHAMPUS cost-share
of otherwise allowable related preventive or treatment services or supplies,
and to accommodate such other qualified individuals who the Director,
OCHAMPUS, or designee, may authorize to render otherwise allowable services essential to the efficient implementation of a plan-of-care established

and managed by a 10 U.S.C. 1079(a) authorized professional.
(ii) Professional corporation affiliation
or association membership permitted.
Paragraph (c) of this section applies to
those individual health care professionals who have formed a professional
corporation or association pursuant to
applicable state laws. Such a professional corporation or association may
file claims on behalf of a CHAMPUSauthorized individual professional provider and be the payee for any payment
resulting from such claims when the
CHAMPUS-authorized individual certifies to the Director, OCHAMPUS, or
designee, in writing that the professional corporation or association is
acting on the authorized individual’s
behalf.
(iii) Scope of practice limitation. For
CHAMPUS cost-sharing to be authorized, otherwise allowable services provided by a CHAMPUS-authorized individual professional provider shall be
within the scope of the individual’s license as regulated by the applicable
state practice act of the state where
the individual rendered the service to
the CHAMPUS beneficiary or shall be
within the scope of the test which was
the basis for the individual’s qualifying
certification.
(iv) Employee status exclusion. An individual employed directly, or indirectly
by contract, by an individual or entity
to render professional services otherwise allowable by this part is excluded
from provider status as established by
this paragraph (c) for the duration of
each employment.
(v) Training status exclusion. Individual health care professionals who
are allowed to render health care services only under direct and ongoing supervision as training to be credited towards earning a clinical academic degree or other clinical credential required for the individual to practice
independently are excluded from provider status as established by this
paragraph (c) for the duration of such
training.
(2) Conditions of authorization—(i) Professional license requirement. The individual must be currently licensed to
render professional health care services
in each state in which the individual

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renders services to CHAMPUS beneficiaries. Such license is required when
a specific state provides, but does not
require, license for a specific category
of individual professional provider. The
license must be at full clinical practice
level to meet this requirement. A temporary license at the full clinical practice level is acceptable.
(ii) Professional certification requirement. When a state does not license a
specific category of individual professional, certification by a Qualified Accreditation Organization, as defined in
§ 199.2, is required. Certification must
be at full clinical practice level. A temporary certification at the full clinical
practice level is acceptable.
(iii) Education, training and experience
requirement. The Director, OCHAMPUS,
or designee, may establish for each category or type of provider allowed by
this paragraph (c) specific education,
training, and experience requirements
as necessary to promote the delivery of
services by fully qualified individuals.
(iv) Physician referral and supervision.
When physician referral and supervision is a prerequisite for CHAMPUS
cost-sharing of the services of a provider authorized under this paragraph
(c), such referral and supervision
means that the physicians must actually see the patient to evaluate and diagnose the condition to be treated
prior to referring the beneficiary to another provider and that the referring
physician provides ongoing oversight of
the course of referral related treatment
throughout the period during which
the beneficiary is being treated in response to the referral. Written contemporaneous documentation of the referring physician’s basis for referral and
ongoing communication between the
referring and treating provider regarding the oversight of the treatment rendered as a result of the referral must
meet all requirements for medical
records established by this part. Referring physician supervision does not require physical location on the premises
of the treating provider or at the site
of treatment.
(v) Subject to section 1079(a) of title
10, U.S.C., chapter 55, a physician or
other health care practitioner who is
eligible to receive reimbursement for
services provided under Medicare (as

defined in section 1086(d)(3)(C) of title
10 U.S.C., chapter 55) shall be considered approved to provide medical care
authorized under section 1079 and section 1086 of title 10, U.S.C., chapter 55
unless the administering Secretaries
have information indicating Medicare,
TRICARE, or other Federal health care
program integrity violations by the
physician or other health care practitioner. Approval is limited to those
classes of provider currently considered
TRICARE authorized providers as outlined in 32 CFR 199.6. Services and supplies rendered by those providers who
are not currently considered authorized providers shall be denied.
(3) Types of providers. Subject to the
standards of participation provisions of
this part, the following individual professional providers of medical care are
authorized to provide services to
CHAMPUS beneficiaries:
(i) Physicians. (A) Doctors of Medicine (M.D.).
(B) Doctors of Osteopathy (D.O.).
(ii) Dentists. Except for covered oral
surgery as specified in § 199.4(e) of this
part, all otherwise covered services
rendered
by
dentists
require
preauthorization.
(A) Doctors of Dental Medicine
(D.M.D.).
(B) Doctors of Dental Surgery
(D.D.S.).
(iii) Other allied health professionals.
The services of the following individual
professional providers of care are
coverable on a fee-for-service basis provided such services are otherwise authorized in this or other sections of
this part.
(A) Clinical psychologist. For purposes
of CHAMPUS, a clinical psychologist is
an individual who is licensed or certified by the state for the independent
practice of psychology and:
(1) Possesses a doctoral degree in psychology from a regionally accredited
university; and
(2) Has had 2 years of supervised clinical experience in psychological health
services of which at least 1 year is
post-doctoral and 1 year (may be the
post-doctoral year) is in an organized
psychological health service training
program; or
(3) As an alternative to paragraphs
(c)(3)(iii)(A)(1) and (2) of this section is

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listed in the National Register of
Health Service Providers in Psychology.
(B) Doctors of Optometry.
(C) Doctors of Podiatry or Surgical Chiropody.
(D) Certified nurse midwives.
(1) A certified nurse midwife may
provide covered care independent of
physician referral and supervision, provided the nurse midwife is:
(i) Licensed, when required, by the
local licensing agency for the jurisdiction in which the care is provided; and
(ii) Certified by the American College
of Nurse Midwives. To receive certification, a candidate must be a registered nurse who has completed successfully an educational program approved by the American College of
Nurse Midwives, and passed the American College of Nurse Midwives National Certification Examination.
(2) The services of a registered nurse
who is not a certified nurse midwife
may be authorized only when the patient has been referred for care by a licensed physician and a licensed physician provides continuing supervision of
the course of care. A lay midwife who
is neither a certified nurse midwife nor
a registered nurse is not a CHAMPUSauthorized provider, regardless of
whether the services rendered may otherwise be covered.
(E) Certified nurse practitioner. Within
the scope of applicable licensure or certification requirements, a certified
nurse practitioner may provide covered
care independent of physician referral
and supervision, provided the nurse
practitioner is:
(1) A licensed, registered nurse; and
(2) Specifically licensed or certified
as a nurse practitioner by the state in
which the care was provided, if the
state offers such specific licensure or
certification; or
(3) Certified as a nurse practitioner
(certified nurse) by a professional organization offering certification in the
specialty of practice, if the state does
not offer specific licensure or certification for nurse practitioners.
(F) Certified Clinical Social Worker. A
clinical social worker may provide covered services independent of physician
referral and supervision, provided the
clinical social worker:

(1) Is licensed or certified as a clinical social worker by the jurisdiction
where practicing; or, if the jurisdiction
does not provide for licensure or certification of clinical social workers, is
certified by a national professional organization offering certification of
clinical social workers; and
(2) Has at least a master’s degree in
social work from a graduate school of
social work accredited by the Council
on Social Work Education; and
(3) Has had a minimum of 2 years or
3,000 hours of post-master’s degree supervised clinical social work practice
under the supervision of a master’s
level social worker in an appropriate
clinical setting, as determined by the
Director, OCHAMPUS, or a designee.
NOTE: Patients’ organic medical problems
must receive appropriate concurrent management by a physician.

(G) Certified psychiatric nurse specialist. A certified psychiatric nurse
specialist may provide covered care
independent of physician referral and
supervision.
For
purposes
of
CHAMPUS, a certified psychiatric
nurse specialist is an individual who:
(1) Is a licensed, registered nurse; and
(2) Has at least a master’s degree in
nursing from a regionally accredited
institution with a specialization in
psychiatric and mental health nursing;
and
(3) Has had at least 2 years of postmaster’s degree practice in the field of
psychiatric and mental health nursing,
including an average of 8 hours of direct patient contact per week; or
(4) Is listed in a CHAMPUS-recognized, professionally sanctioned listing
of clinical specialists in psychiatric
and mental health nursing.
(H) Certified physician assistant. A
physician assistant may provide care
under general supervision of a physician (see § 199.14(g)(1)(iii) of this part
for limitations on reimbursement). For
purposes of CHAMPUS, a physician assistant must meet the applicable state
requirements governing the qualifications of physician assistants and at
least one of the following conditions:
(1) Is currently certified by the National Commission on Certification of
Physician Assistants to assist primary
care physicians, or

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32 CFR Ch. I (7–1–06 Edition)

(2) Has satisfactorily completed a
program for preparing physician assistants that:
(i) Was at least 1 academic year in
length;
(ii) Consisted of supervised clinical
practice and at least 4 months (in the
aggregate) of classroom instruction directed toward preparing students to deliver health care; and
(iii) Was accredited by the American
Medical Association’s Committee on
Allied Health Education and Accreditation; or
(3) Has satisfactorily completed a
formal educational program for preparing program physician assistants
that does not meet the requirement of
paragraph (c)(3)(iii)(H)(2) of this section and had been assisting primary
care physicians for a minimum of 12
months during the 18-month period immediately preceding January 1, 1987.
(I) Anesthesiologist Assistant. An anesthesiologist assistant may provide covered anesthesia services, if the anesthesiologist assistant:
(1) Works under the direct supervision of an anesthesiologist who bills
for the services and for each patient;
(i) The anesthesiologist performs a
pre-anesthetic examination and evaluation;
(ii) The anesthesiologist prescribes
the anesthesia plan;
(iii) The anesthesiologist personally
participates in the most demanding aspects of the anesthesia plan including,
if applicable, induction and emergence;
(iv) The anesthesiologist ensures that
any procedures in the anesthesia plan
that he or she does not perform are
performed by a qualified anesthesiologist assistant;
(v) The anesthesiologist monitors the
course of anesthesia administration at
frequent intervals;
(vi) The anesthesiologist remains
physically present and available for
immediate personal diagnosis and
treatment of emergencies;
(vii) The anesthesiologist provides indicated post-anesthesia care; and
(viii) The anesthesiologist performs
no other services while he or she supervises no more than four anesthesiologist assistants concurrently or a lesser number if so limited by the state in
which the procedure is performed.

(2) Is in compliance with all applicable requirements of state law, including any licensure requirements the
state imposes on nonphysician anesthetists; and
(3) Is a graduate of a Master’s level
anesthesiologist assistant educational
program that is established under the
auspices of an accredited medical
school and that:
(i) Is accredited by the Committee on
Allied Health Education and Accreditation, or its successor organization; and
(ii) Includes approximately two years
of specialized basic science and clinical
education in anesthesia at a level that
builds on a premedical undergraduate
science background.
(4) The Director, TMA, or a designee,
shall issue TRICARE policies, instructions, procedures, guidelines, standards, and criteria as may be necessary
to implement the intent of this section.
(J) Certified Registered Nurse Anesthetist (CRNA). A certified registered
nurse anesthetist may provide covered
care independent of physician referral
and supervision as specified by state licensure. For purposes of CHAMPUS, a
certified registered nurse anesthetist is
an individual who:
(1) Is a licensed, registered nurse; and
(2) Is certified by the Council on Certification of Nurse Anesthetists, or its
successor organization.
(K) Other individual paramedical providers. The services of the following individual professional providers of care
to be considered for benefits on a feefor-service basis may be provided only
if the beneficiary is referred by a physician for the treatment of a medicallydiagnosed condition and a physician
must also provide continuing and ongoing oversight and supervision of the
program or episode of treatment provided by these individual para-medical
providers.
(1) Licensed registered nurses.
(2) Licensed registered physical
therapists and occupational therapists.
(3) Licensed registered physical
therapists.
(4) Audiologists.
(5) Speech therapists (speech pathologists).
(iv) Extramedical individual providers.
Extramedical individual providers are

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those who do counseling or nonmedical
therapy and whose training and therapeutic concepts are outside the medical
field. The services of extramedical individual professionals are coverable following the CHAMPUS determined allowable charge methodology provided
such services are otherwise authorized
in this or other sections of the regulation.
(A) Certified marriage and family therapists. For the purposes of CHAMPUS, a
certified marriage and family therapist
is an individual who meets the following requirements:
(1) Recognized graduate professional
education with the minimum of an
earned master’s degree from a regionally accredited educational institution
in an appropriate behavioral science
field, mental health discipline; and
(2) The following experience:
(i) Either 200 hours of approved supervision in the practice of marriage and
family counseling, ordinarily to be
completed in a 2- to 3-year period, of
which at least 100 hours must be in individual supervision. This supervision
will occur preferably with more than
one supervisor and should include a
continuous process of supervision with
at least three cases; and
(ii) 1,000 hours of clinical experience
in the practice of marriage and family
counseling under approved supervision,
involving at least 50 different cases; or
(iii) 150 hours of approved supervision
in the practice of psychotherapy, ordinarily to be completed in a 2- to 3-year
period, of which at least 50 hours must
be individual supervision; plus at least
50 hours of approved individual supervision in the practice of marriage and
family counseling, ordinarily to be
completed within a period of not less
than 1 nor more than 2 years; and
(iv) 750 hours of clinical experience in
the practice of psychotherapy under
approved supervision involving at least
30 cases; plus at least 250 hours of clinical practice in marriage and family
counseling under approved supervision,
involving at least 20 cases; and
(3) Is licensed or certified to practice
as a marriage and family therapist by
the jurisdiction where practicing (see
paragraph (c)(3)(iv)(D) of this section
for more specific information regarding
licensure); and

(4) Agrees that a patients’ organic
medical problems must receive appropriate concurrent management by a
physician.
(5) Agrees to accept the CHAMPUS
determined allowable charge as payment in full, except for applicable
deductibles and cost-shares, and hold
CHAMPUS beneficiaries harmless for
noncovered care (i.e., may not bill a
beneficiary for noncovered care, and
may not balance bill a beneficiary for
amounts above the allowable charge).
The certified marriage and family therapist must enter into a participation
agreement
with
the
Office
of
CHAMPUS within which the certified
marriage and family therapist agrees
to all provisions specified above.
(6) As of the effective date of termination, the certified marriage and family therapist will no longer be recognized as an authorized provider under
CHAMPUS. Subsequent to termination, the certified marriage and family therapist may only be reinstated as
an authorized CHAMPUS extramedical
provider by entering into a new participation agreement as a certified marriage and family therapist.
(B) Pastoral counselors. For the purposes of CHAMPUS, a pastoral counselor is an individual who meets the
following requirements:
(1) Recognized graduate professional
education with the minimum of an
earned master’s degree from a regionally accredited educational institution
in an appropriate behavioral science
field, mental health discipline; and
(2) The following experience:
(i) Either 200 hours of approved supervision in the practice of pastoral counseling, ordinarily to be completed in a
2- to 3-year period, of which at least 100
hours must be in individual supervision. This supervision will occur preferably with more than one supervisor
and should include a continuous process of supervision with at least three
cases; and
(ii) 1,000 hours of clinical experience
in the practice of pastoral counseling
under approved supervision, involving
at least 50 different cases; or
(iii) 150 hours of approved supervision
in the practice of psychotherapy, ordinarily to be completed in a 2- to 3-year
period, of which at least 50 hours must

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32 CFR Ch. I (7–1–06 Edition)

be individual supervision; plus at least
50 hours of approved individual supervision in the practice of pastoral counseling, ordinarily to be completed
within a period of not less than 1 nor
more than 2 years; and
(iv) 750 hours of clinical experience in
the practice of psychotherapy under
approved supervision involving at least
30 cases; plus at least 250 hours of clinical practice in pastoral counseling
under approved supervision, involving
at least 20 cases; and
(3) Is licensed or certified to practice
as a pastoral counselor by the jurisdiction where practicing (see paragraph
(c)(3)(iv)(D) of this section for more
specific information regarding licensure); and
(4) The services of a pastoral counselor meeting the above requirements
are coverable following the CHAMPUS
determined allowable charge methodology, under the following specified
conditions:
(i) The CHAMPUS beneficiary must
be referred for therapy by a physician;
and
(ii) A physician is providing ongoing
oversight and supervision of the therapy being provided; and
(iii) The pastoral counselor must certify on each claim for reimbursement
that a written communication has been
made or will be made to the referring
physician of the results of the treatment. Such communication will be
made at the end of the treatment, or
more frequently, as required by the referring physician (refer to § 199.7).
(5) Because of the similarity of the
requirements for licensure, certification, experience, and education, a
pastoral counselor may elect to be authorized under CHAMPUS as a certified
marriage and family therapist, and as
such, be subject to all previously defined criteria for the certified marriage
and family therapist category, to include acceptance of the CHAMPUS determined allowable charge as payment
in
full,
except
for
applicable
deductibles and cost-shares (i.e., balance billing of a beneficiary above the
allowable charge is prohibited; may not
bill beneficiary for noncovered care).
The pastoral counselor must also agree
to enter into the same participation
agreement as a certified marriage and

family therapist with the Office of
CHAMPUS within which the pastoral
counselor agrees to all provisions including licensure, national association
membership and conditions upon termination, outlined above for certified
marriage and family therapist.
NOTE: No dual status will be recognized by
the Office of CHAMPUS. Pastoral counselors
must elect to become one of the categories of
extramedical CHAMPUS provides specified
above. Once authorized as either a pastoral
counselor, or a certified marriage and family
therapist, claims review and reimbursement
will be in accordance with the criteria established for the elected provider category.

(C) Mental health counselor. For the
purposes of CHAMPUS, a mental
health counselor is an individual who
meets the following requirements:
(1) Minimum of a master’s degree in
mental health counseling or allied
mental health field from a regionally
accredited institution; and
(2) Two years of post-masters experience which includes 3000 hours of clinical work and 100 hours of face-to-face
supervision; and
(3) Is licensed or certified to practice
as a mental health counselor by the jurisdiction where practicing (see paragraph (c)(3)(iv)(D) of this section for
more specific information); and
(4) May only be reimbursed when:
(i) The CHAMPUS beneficiary is referred for therapy by a physician; and
(ii) A physician is providing ongoing
oversight and supervision of the therapy being provided; and
(iii) The mental health counselor certifies on each claim for reimbursement
that a written communication has been
made or will be made to the referring
physician of the results of the treatment. Such communication will be
made at the end of the treatment, or
more frequently, as required by the referring physician (refer to § 199.7).
(D) The following additional information applies to each of the above categories of extramedical individual providers:
(1) These providers must also be licensed or certified to practice as a certified marriage and family therapist,
pastoral counselor or mental health
counselor by the jurisdiction where
practicing. In jurisdictions that do not
provide for licensure or certification,

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the provider must be certified by or eligible for full clinical membership in
the appropriate national professional
association that sets standards for the
specific profession.
(2) Grace period for therapists or
counselors in states where licensure/
certification is optional. CHAMPUS is
providing a grace period for those
therapists or counselors who did not
obtain optional licensure/certification
in their jurisdiction, not realizing it
was a CHAMPUS requirement for authorization. The exemption by state
law for pastoral counselors may have
misled this group into thinking licensure was not required. The same situation may have occurred with the other
therapist or counselor categories where
licensure was either not mandated by
the state or was provided under a more
general category such as ‘‘professional
counselors.’’ This grace period pertains
only to the licensure/certification requirement, applies only to therapists
or counselors who are already approved
as of October 29, 1990, and only in those
areas where the licensure/certification
is optional. Any therapist or counselor
who is not licensed/certified in the
state in which he/she is practicing by
August 1, 1991, will be terminated
under the provisions of § 199.9. This
grace period does not change any of the
other existing requirements which remain in effect. During this grace period, membership or proof of eligibility
for full clinical membership in a recognized professional association is required for those therapists or counselors who are not licensed or certified
by the state. The following organizations are recognized for therapists or
counselors at the level indicated: Full
clinical member of the American Association of Marriage and Family Therapy; membership at the fellow or diplomate level of the American Association of Pastoral Counselors; and membership in the National Academy of
Certified Clinical Mental Health Counselors. Acceptable proof of eligibility
for membership is a letter from the appropriate certifying organization. This
opportunity for delayed certification/
licensure is limited to the counselor or
therapist category only as the language in all of the other provider categories has been consistent and un-

modified from the time each of the
other provider categories were added.
The grace period does not apply in
those states where licensure is mandatory.
(E) Christian Science practitioners and
Christian Science nurses. CHAMPUS
cost-shares the services of Christian
Science practitioners and nurses. In
order to bill as such, practitioners or
nurses must be listed or be eligible for
listing in the Christian Science Journal 1 at the time the service is provided.
(d) Other providers. Certain medical
supplies and services of an ancillary or
supplemental nature are coverable by
CHAMPUS, subject to certain controls.
This category of provider includes the
following:
(1) Independent laboratory. Laboratory
services of independent laboratories
may be cost-shared if the laboratory is
approved for participation under Medicare and certified by the Medicare Bureau, Health Care Financing Administration.
(2) Suppliers of portable x-ray services.
Such suppliers must meet the conditions of coverage of the Medicare program, set forth in the Medicare regulations, or the Medicaid program in that
state in which the covered service is
provided.
(3) Pharmacies. Pharmacies must
meet the applicable requirements of
state law in the state in which the
pharmacy is located.
(4) Ambulance companies. Such companies must meet the requirements of
state and local laws in the jurisdiction
in which the ambulance firm is licensed.
(5) Medical equipment firms, medical
supply firms, and Durable Medical Equipment, Prosthetic, Orthotic, Supplies providers/suppliers. Any firm, supplier, or
provider that is an authorized provider
under Medicare or is otherwise designated an authorized provider by the
Director, TRICARE Management Activity.
1 Copies of this journal can be obtained
through the Christian Science Publishing
Company, 1 Norway Street, Boston, MA
02115–3122 or the Christian Science Publishing Society, P.O. Box 11369, Des Moines,
IA 50340.

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32 CFR Ch. I (7–1–06 Edition)

(6) Mammography suppliers. Mammography services may be cost-shared only
if the supplier is certified by Medicare
for participation as a mammography
supplier, or is certified by the American College of Radiology as having
met its mammography supplier standards.
(e) Extended Care Health Option Providers—(1) General. (i) Services and
items cost-shared through § 199.5 must
be rendered by a CHAMPUS-authorized
provider.
(ii) A Program for Persons with Disabilities
(PFPWD)
provider
with
TRICARE-authorized status on the effective date for the Extended Care
Health Option (ECHO) Program shall
be deemed to be a TRICARE-authorized
provider until the expiration of all outstanding PFPWD benefit authorizations for services or items being rendered by the provider.
(2) ECHO provider categories—(i) ECHO
inpatient care provider. A provider of
residential institutional care, which is
otherwise an ECHO benefit, shall be:
(A) A not-for-profit entity or a public
facility; and
(B) Located within a state; and
(C) Be certified as eligible for Medicaid payment in accordance with a
state plan for medical assistance under
Title XIX of the Social Security Act
(Medicaid) as a Medicaid Nursing Facility, or Intermediate Care Facility
for the Mentally Retarded, or be a
TRICARE-authorized institutional provider as defined in paragraph (b) of this
section, or be approved by a state educational agency as a training institution.
(ii) ECHO outpatient care provider. A
provider of ECHO outpatient, ambulatory, or in-home services shall be:
(A) A TRICARE-authorized provider
of services as defined in this section; or
(B) An individual, corporation, foundation, or public entity that predominantly renders services of a type
uniquely allowable as an ECHO benefit
and not otherwise allowable as a benefit of § 199.4, that meets all applicable
licensing or other regulatory requirements of the state, county, municipality, or other political jurisdiction in
which the ECHO service is rendered, or
in the absence of such licensing or regulatory requirements, as determined

by the Director, TRICARE Management Activity or designee.
(iii) ECHO vendor. A provider of an
allowable ECHO item, such as supplies
or equipment, shall be deemed to be a
TRICARE-authorized vendor for the
provision of the specific item, supply
or equipment when the vendor supplies
such information as the Director,
TRICARE Management Activity or
designee determines necessary to adjudicate a specific claim.
(3) ECHO provider exclusion or suspension. A provider of ECHO services or
items may be excluded or suspended for
a pattern of discrimination on the
basis of disability. Such exclusion or
suspension shall be accomplished according to the provisions of § 199.9.
(f) Corporate services providers—(1)
General. (i) This corporate services provider class is established to accommodate individuals who would meet the
criteria for status as a CHAMPUS authorized individual professional provider as established by paragraph (c) of
this section but for the fact that they
are employed directly or contractually
by a corporation or foundation that
provides principally professional services which are within the scope of the
CHAMPUS benefit.
(ii) Payment for otherwise allowable
services may be made to a CHAMPUSauthorized corporate services provider
subject to the applicable requirements,
exclusions and limitations of this part.
(iii) The Director, OCHAMPUS, or
designee, may create discrete types
within any allowable category of provider established by this paragraph (f)
to improve the efficiency of CHAMPUS
management.
(iv) The Director, OCHAMPUS, or
designee, may require, as a condition of
authorization, that a specific category
or type of provider established by this
paragraph (f):
(A) Maintain certain accreditation in
addition to or in lieu of the requirement of paragraph (f)(2)(v) of this section;
(B) Cooperate fully with a designated
utilization and clinical quality management organization which has a contract with the Department of Defense
for the geographic area in which the
provider does business;

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(C) Render services for which direct
or indirect payment is expected to be
made by CHAMPUS only after obtaining CHAMPUS written authorization;
and
(D) Maintain Medicare approval for
payment
when
the
Director,
OCHAMPUS, or designee, determines
that a category, or type, of provider established by this paragraph (f) is substantially comparable to a provider or
supplier for which Medicare has regulatory conditions of participation or
conditions of coverage.
(v) Otherwise allowable services may
be rendered at the authorized corporate
services provider’s place of business, or
in the beneficiary’s home under such
circumstances
as
the
Director,
OCHAMPUS, or designee, determines
to be necessary for the efficient delivery of such in-home services.
(vi) The Director, OCHAMPUS, or
designee, may limit the term of a participation agreement for any category
or type of provider established by this
paragraph (f).
(vii) Corporate services providers
shall be assigned to only one of the following allowable categories based upon
the predominate type of procedure rendered by the organization;
(A) Medical treatment procedures;
(B) Surgical treatment procedures;
(C) Maternity management procedures;
(D) Rehabilitation and/or habilitation procedures; or
(E) Diagnostic technical procedures.
(viii) The Director, OCHAMPUS, or
designee, shall determine the appropriate procedural category of a qualified organization and may change the
category based upon the provider’s
CHAMPUS claim characteristics. The
category determination of the Director, OCHAMPUS, designee, is conclusive and may not be appealed.
(2) Conditions of authorization. An applicant must meet the following conditions to be eligible for authorization as
a CHAMPUS corporate services provider:
(i) Be a corporation or a foundation,
but not a professional corporation or
professional association; and
(ii) Be institution-affiliated or freestanding as defined in § 199.2; and
(iii) Provide:

(A) Services and related supplies of a
type rendered by CHAMPUS individual
professional providers or diagnostic
technical services and related supplies
of a type which requires direct patient
contact and a technologist who is licensed by the state in which the procedure is rendered or who is certified by
a Qualified Accreditation Organization
as defined in § 199.2; and
(B) A level of care which does not necessitate that the beneficiary be provided with on-site sleeping accommodations and food in conjunction
with the delivery of services; and
(iv) Complies with all applicable organizational and individual licensing
or certification requirements that are
extant in the state, county, municipality, or other political jurisdiction in
which the provider renders services;
and
(v) Be approved for Medicare payment when determined to be substantially comparable under the provisions
of paragraph (f)(1)(iv)(D) of this section
or, when Medicare approved status is
not required, be accredited by a qualified accreditation organization, as defined in § 199.2; and
(vi) Has entered into a participation
agreement approved by the Director,
OCHAMPUS, or designee, which at
least complies with the minimum participation agreement requirements of
this section.
(3) Transfer of participation agreement.
In order to provide continuity of care
for beneficiaries when there is a change
of provider ownership, the provider
agreement is automatically assigned to
the new owner, subject to all the terms
and conditions under which the original agreement was made.
(i) The merger of the provider corporation or foundation into another
corporation or foundation, or the consolidation of two or more corporations
or foundations resulting in the creation of a new corporation or foundation, constitutes a change of ownership.
(ii) Transfer of corporate stock or the
merger of another corporation or foundation into the provider corporation or
foundation does not constitute change
of ownership.
(iii) The surviving corporation or
foundation shall notify the Director,

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§ 199.7

32 CFR Ch. I (7–1–06 Edition)

OCHAMPUS, or designee, in writing of
the change of ownership promptly after
the effective date of the transfer or
change in ownership.
(4) Pricing and payment methodology:
The pricing and payment of procedures
rendered by a provider authorized
under this paragraph (f) shall be limited to those methods for pricing and
payment allowed by this part which
the Director, OCHAMPUS, or designee,
determines contribute to the efficient
management of CHAMPUS.
(5) Termination of participation agreement. A provider may terminate a participation agreement upon 45 days
written
notice
to
the
Director,
OCHAMPUS, or designee, and to the
public.
[51 FR 24008, July 1, 1986]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting § 199.6, see the List of Sections Affected, which appears in the Finding
Aids section of the printed volume and on
GPO Access.

§ 199.7 Claims submission, review, and
payment.
(a)
General.
The
Director,
OCHAMPUS, or a designee, is responsible for ensuring that benefits under
CHAMPUS are paid only to the extent
described in this part. Before benefits
can be paid, an appropriate claim must
be submitted that includes sufficient
information as to beneficiary identification, the medical services and supplies provided, and double coverage information, to permit proper, accurate,
and timely adjudication of the claim
by the CHAMPUS contractor or
OCHAMPUS. Providers must be able to
document that the care or service
shown on the claim was rendered. This
section sets forth minimum medical
record requirements for verification of
services. Subject to such definitions,
conditions, limitations, exclusions, and
requirements as may be set forth in
this part, the following are the
CHAMPUS claim filing requirements:
(1) CHAMPUS identification card required. A patient shall present his or
her applicable CHAMPUS identification card (that is, Uniformed Services
identification card) to the authorized
provider of care that identifies the patient as an eligible CHAMPUS beneficiary (refer to § 199.3 of this part).

(2) Claim required. No benefit may be
extended under the Basic Program or
Extended Care Health Option (ECHO)
without submission of an appropriate,
complete and properly executed claim
form.
(3) Responsibility for perfecting claim.
It is the responsibility of the
CHAMPUS beneficiary or sponsor or
the authorized provider acting on behalf of the CHAMPUS beneficiary to
perfect a claim for submission to the
appropriate CHAMPUS fiscal intermediary. Neither a CHAMPUS fiscal
intermediary nor OCHAMPUS is authorized to prepare a claim on behalf of
a CHAMPUS beneficiary.
(4) Obtaining appropriate claim form.
CHAMPUS provides specific CHAMPUS
forms appropriate for making a claim
for benefits for various types of medical services and supplies (such as hospital, physician, or prescription drugs).
Claim forms may be obtained from the
appropriate CHAMPUS fiscal intermediary who processes claims for the
beneficiary’s state of residence, from
the Director, OCHAMPUS, or a designee, or from CHAMPUS health benefits advisors (HBAs) located at all Uniformed Services medical facilities.
(5) Prepayment not required. A
CHAMPUS beneficiary or sponsor is
not required to pay for the medical
services or supplies before submitting a
claim for benefits.
(6) Deductible certificate. If the fiscal
year outpatient deductible, as defined
in § 199.4(f)(2) has been met by a beneficiary or a family through the submission of a claim or claims to a
CHAMPUS fiscal intermediary in a geographic location different from the location where a current claim is being
submitted, the beneficiary or sponsor
must obtain a deductible certificate
from the CHAMPUS fiscal intermediary where the applicable individual or family fiscal year deductible
was met. Such deductible certificate
must be attached to the current claim
being submitted for benefits. Failure to
obtain a deductible certificate under
such circumstances will result in a second individual or family fiscal year deductible being applied. However, this
second deductible may be reimbursed
once appropriate documentation, as described in this paragraph is supplied to

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