Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Mental Health Services
Federal RegisterJun 29, 1994
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
RIN-0720-AA23
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS); Mental Health Services
AGENCY: Office of the Secretary, DoD.
ACTION: Proposed Rule.
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SUMMARY: This proposed rule is to reform CHAMPUS quality of care
standards and reimbursement methods for inpatient mental health
services. The rule would update existing standards for residential
treatment centers (RTCs) and establish new standards for approval as
CHAMPUS-authorized providers for substance abuse rehabilitation
facilities and partial hospitalization programs; implement
recommendations of the Comptroller General of the United States that
DoD establish cost-based reimbursement methods for psychiatric
hospitals and, residential treatment facilities; adopt another
Comptroller General recommendation that DoD reverse the current
incentive for the use of inpatient mental health care; and eliminate
payments to residential treatment centers for days in which the patient
is on a leave of absence.
DATES: Written comments must be received on or before August 29, 1994.
ADDRESSES: Office of the Civilian Health and Medical Program of the
Uniformed Services (OCHAMPUS), Office of Program Development; Aurora,
Colorado 80045-6900.
FOR FURTHER INFORMATION CONTACT:
CFR Deborah Kamin, NC, USN, Office of the Assistant Secretary of
Defense (Health Affairs), (703) 697-8975.
Questions regarding payment of specific claims should be addressed
to the appropriate CHAMPUS contractor.
SUPPLEMENTARY INFORMATION:
I. Introduction
Quality assurance and cost effectiveness of mental health care
services under CHAMPUS continue to be major reform issues for the
Defense Department and Congress. In recent years, a series of DoD
initiatives, legislative and regulatory actions, and Congressional
hearings has spotlighted both progress made and the need for more
improvement.
Two recent Comptroller General Reports are indicative of the
importance of these issues and the need for reform. The first of these,
``Defense Health Care: Additional Improvements Needed in CHAMPUS's
Mental Health Program,'' GAO/HRD-93-34, May 1993, stated that, although
DoD has taken actions to improve the program, ``several problems
persist.'' The Report (hereafter referred to as ``GAO Report #1'')
elaborated:
For example, reviews of medical records have identified numerous
instances of poor medical record documentation, potentially
inappropriate admissions, excessive hospital stays, and poor-quality
care. Also, inspections of RTCs [Residential Treatment Centers]
continue to reveal significant health and safety problems, and
corrective actions often take many months.
Moreover, DoD * * * pays considerably higher rates for
comparable services than do other public programs.
GAO Report #1, p. 2. The Report referenced the General Accounting
Office's 1991 Congressional testimony regarding CHAMPUS mental health
care and inspections of residential treatment facilities conducted for
DoD since then:
Inspections conducted since our 1991 testimony have identified
some of the same problems we described then: unlicensed and
unqualified staff, inappropriate use of seclusion and medication,
inadequate staff-to-patient ratios, and inadequate documentation of
treatment.
GAO Report #1, p. 5.
The principal conclusions of this Report were: (1) ``standards,
which include termination for noncompliance, should be specified and
termination proceedings, time frames, and reinspection provisions * * *
should be adopted;'' and (2) because ``DoD reimburses psychiatric
hospitals and RTCs at higher rates than do other government payers, it
should modify its payment system to more closely resemble other
programs such as Medicare.'' GAO Report #1, p. 9.
A second recent Comptroller General Report, ``Psychiatric Fraud and
Abuse: Increased Scrutiny of Hospital Stays is Needed to Lessen Federal
Health Program Vulnerability,'' GAO/HRD-93-92, September 1993, also
called for improvements in the CHAMPUS mental health program. The
Report (hereafter referred to as GAO Report #2) said:
Investigations to date have revealed that federal health
programs have been subject to fraudulent and abusive psychiatric
hospital practices, but apparently to a lesser extent than private
insurers. * * *
Some federal control weaknesses do exist which have resulted in
unnecessary hospital admissions, excessive stays, and sometimes
inadequate quality of care. * * *
DoD has also identified numerous instances of quality problems
and unnecessary hospital admissions.
GAO Report #2, pp. 9-10.
These two recent Comptroller General Reports, as well as a
substantial body of other documentation, highlight the need for a very
active quality assurance program. As discussed further below, two
primary issues are presented. First, there is a need for clear,
specific standards for psychiatric facilities on staff qualifications,
clinical practices, and all other aspects directly impacting the
quality of care. These standards are needed for residential treatment
facilities, substance abuse rehabilitation facilities, and partial
hospitalization programs. These standards will help bring those
facilities, a minority in the industry, that are unwilling or unable to
comply with necessary requirements, up to an appropriate standard of
care.
The second key issue is reimbursement rates. As documented by the
Comptroller General, CHAMPUS needs to discontinue payment rates based
on historical billed charges and establish payment rates based on the
actual costs of providing the services. Payment methodologies used by
Medicare provide the appropriate model, with provisions to assure that
rates are based on costs for a broad range of patients, not just the
elderly.
This proposed rule seeks public comment on our plan to adopt
reforms on these two primary issues. The rule would put in place as
part of the CHAMPUS regulation comprehensive quality of care
certification standards for residential treatment facilities, substance
abuse rehabilitation facilities, and partial hospitalization programs.
It would also phase in gradually a cost-based reimbursement system for
psychiatric hospitals and residential treatment facilities. In
addition, the rule includes proposals on several other issues,
addressed below.
II. Provisions of Proposed Rule To Reform Certification Standards For
Mental Health Care Facilities
The Comptroller General's call for stronger management by CHAMPUS
to assure quality of care in the mental health programs was based
partially on a review of serious abuses on the part of some providers.
The GAO presented audit findings identifying program weaknesses. As one
of four states which account for more than half of CHAMPUS mental
health hospital costs, Texas surfaced in recent audits as number one in
CHAMPUS mental health expenditures. Of particular concern are practices
described during 1991 hearings conducted before the Texas state senate
and summarized in GAO report #2. In over 80 hours of testimony, 175
witnesses--some beneficiaries of federal programs--brought forth
allegations which included exorbitant charges for care never rendered;
Kickbacks for patient referrals; restraint of voluntary patients
against their will; discharge of patients upon exhaustion of benefits,
regardless of their condition; and isolation of family from patients
including withholding of visitation and mail/telephone privileges.
While privately insured patients are the most common target of
unethical practices, increasing benefit limits and payment controls by
private third party payers may place federal programs at increased risk
for fraudulent practices. GAO auditors point out that, because CHAMPUS
reimburses mental health at rates higher than other federal programs,
it may be particularly vulnerable to the minority of unethical
providers seeking additional revenue sources.
Other abuses among some mental health providers were also
documented in recent Congressional hearings. The House Select Committee
on Children, Youth and Families, chaired by Representative Patricia
Schroeder, conducted hearings on the U.S. mental health system in April
1992. The hearing was entitled, ``The Profits of Misery: How Inpatient
Psychiatric Treatment Bilks the System and Betrays Our Trust.''
Witnesses testifying before the committee cited numerous abuses in the
mental health industry which included treatment up to the point of
benefit exhaustion regardless of health status, manipulative
advertising campaigns, placement of ``volunteers'' in school counseling
offices for the purpose of recruiting patients, and billing for
physician services actually provided by other health workers.
The GAO, represented by David Baine, Director of Federal Health
Care Delivery issues, testified to disturbing results obtained by a
CHAMPUS contractor, Health Management Strategies International (HMSI),
during focused and quarterly reviews of mental health facilities. In a
substantial number of cases reviewed, medical records failed to
document medical necessity for an admission and two-thirds of cases
reviewed did not meet critical quality-of-care criteria or lacked
evidence to make such a determination. In focused reviews, unnecessary
admissions ranged from 26 to 91 percent of cases sampled.
In his testimony before the committee, Dr. Melvin Sabshin, Medical
Director of the American Psychiatric Association, expressed concern
over inappropriate and abusive psychiatric practices and committed the
APA to ``strengthening laws to protect psychiatric hospital patients.''
Additionally, Dr. Sabshin cited recent adoption of APA guidelines
governing the hospitalization of minors. These guidelines will serve to
``protect children against needless hospitalization and deprivation of
liberty, and to enable medical decisions to be made in response to
clinical needs and in accordance with sound psychiatric judgment.''
Echoing concern over breaches in professional ethics, Dr. Richard
Cohen, President of the American Academy of Child and Adolescent
Psychiatry, provided a policy statement for the record which identified
as unethical any mental health program offering financial reward in
exchange for admissions, programs allowing admission decisions by other
than qualified psychiatrists, and ``misleading, guilt-provoking, or
unduly alarming advertising to promote self-referrals and admissions.''
Individual providers, professional associations, other members of the
mental health community and beneficiaries testified to an array of
problems in quality of care and utilization management. Numerous calls
were made to strengthen existing legislation, improve professional
standards and provide closer monitoring to ensure appropriate and cost
effective treatment.
Based on information provided to the Committee, Chairwoman
Schroeder stated:
Clearly this business of treating minds--particularly this big
business of treating young minds has not policed itself, and has no
incentive to put a stop to the kinds of fraudulent and unethical
practices that are going on. This leads me to conclude that Federal
and State oversight must be increased.
Hearing, p. 2.
In recent years, the Department has worked to strengthen oversight
and monitoring of mental health programs, particularly with respect to
treatment of children and adolescents. Through the contract with HMSI,
and other efforts, CHAMPUS has paid much more attention to care in
RTCs. In April of 1992, Health Management Strategies International
(HMSI) expressed specific concerns about several of the CHAMPUS-
authorized residential treatment centers. Numerous quality of care
issues surfaced during on-site facility visits to residential treatment
centers where CHAMPUS beneficiaries were receiving care. Here are
several examples:
--Unqualified staff were providing individual, group and family
therapy. For example, group therapy was being conducted by child
care workers with high school diplomas.
--Patient treatment was not being directed by qualified
psychiatrists. At one facility, psychiatry residents were acting as
facility medical directors. In some facilities, one psychiatrist may
be responsible for as many as 90 children and their families,
seriously limiting professional time available for individual
attention.
--Several facilities failed to individualize treatment plans. At one
facility all treatment plans were the same, regardless of history,
needs or problems. Similarly, some facilities were discovered to
focus on one type of treatment to the exclusion of all other
approaches. This was true regardless of whether or not patients
responded to this type of treatment.
--In several facilities, registered nurses were not available on a
full-time basis. For example, at one facility children were ordering
their own medications ``as needed'' and medications were dispensed--
without further evaluation--by untrained child care workers. In one
instance a child who developed tardive dyskinesia (a motion disorder
resulting from medication) was described by a child care worker as
having a ``nervous tic.''
--There was evidence of excessive use of restraints and seclusion as
methods of behavioral management. Examples include placing children
as young as three or four in restraint and seclusion; secluding
neurologically impaired children because of screaming or inability
to follow directions; and locking children who cannot write in
seclusion because they failed to write essays about their behavior.
In one facility, seclusion was used 146 times in one month. The
practice of zipping children into so-called ``body bags'' was
employed by several facilities. Use of a body bag, which leaves an
opening only for the head, carries risk of overheating to the point
of lethal hyperthermia. One facility policy governing this practice
did not require physician evaluation of the patient for 72 to 96
hours after the event.
--Many facilities did not offer the required range of services. For
example, since unskilled child care workers were supervising play,
activity therapy was not being used as treatment. Also, a number of
facilities failed to incorporate basic life skills with other
treatment. Many children facing independent living after discharge
were not able to negotiate activities such as making telephone
calls, making change, planning meals, and riding a bus.
--Certain RTCs employed unnecessary strip searches and other
intrusive acts. Searches involve adult authority figures forcing
children between the ages of four and 18 to remove all clothing and
submit to cavity searches. Cavity searches involve finger probes to
the mouth, vagina, and rectum. Some facilities were requiring such
searches whenever the patient returned from a pass or having a
visitor. In many cases, children subjected to such searches were
victims of abuse and, for some, these methods of search re-enact the
original trauma.
These HMSI case findings pointed out shortcomings in practices in
some RTCs that can be addressed through improved standards. Although
standards for residential treatment centers exist, they have evolved
over time from attempts to address individual issues with incremental
change. Further, existing CHAMPUS standards for residential treatment
centers were written as supplements to standards employed to the Joint
Commission on Accreditation of Hospital Organization (JCAHO). In recent
years, the JCAHO has moved toward a more general set of facility
standards, with less specific reference to unique requirements of
medical specialties. The result has been that CHAMPUS standards--which
were not intended to stand alone--do not address the full spectrum of
requirements and expectations for mental health facilities and
providers.
Orginally drafted in the late 1970s, CHAMPUS standards for RTCs
have undergone multiple revisions to ensure they reflect currently
accepted clinical practice. This rule will incorporate revisions
necessary to update existing standards. With shorter lengths of stay in
acute care facilities, mental health patients are reaching residential
treatment centers at earlier--and less stable--stages of treatment.
Similar to trends in other medical specialties, the growing intensity
of illness among inpatients has dictated a need for higher standards of
care and increasing levels of professional supervision and treatment.
Current CHAMPUS standards for RTCs must be updated to reflect more
clearly professional skill levels and intervention strategies employed
in today's mental health environment. Based on a clear record of
problems among some institutional mental health providers and the
shortcomings of current standards, DoD has developed a comprehensive,
unified set of standards for residential treatment centers, partial
hospitalization programs and substance use disorder rehabilitation
facilities. This rule would update existing standards to reflect
current mental health practices, account for policy shifts in the
JCAHO, and communicate clearly CHAMPUS policy with regard to quality
and scope of care provided to its beneficiaries.
The proposed standards will work to prevent recurrence of abuses
such as those discussed by defining more completely and specifically
quality indicators which will be used to judge care rendered in these
facilities. Among areas addressed by the standards are:
--Qualifications and authority of medical director. Proposed
standards require the medical director of any RTC have completed an
approved residency in psychiatry and have at least five years
experience in treating children and adolescents. In addition to
oversight of all clinical care provided, standards for RTCs,
substance abuse rehabilitation facilities and partial
hospitalization programs outline specific requirements for medical
director participation in program development, peer review, medical
staff supervision, quality monitoring and improvement and
coordination with the governing body.
--Adequate staffing with qualified professionals. Proposed standards
require written staffing plans. Specific information is provided
concerning requirements for staffing levels and professional
qualifications 24 hours per day, seven days per week (or, in the
case of partial hospitalization programs, during all hours of
operation). Standards require that all clinical care provided under
clinical supervision is the responsibility of a licensed or
certified mental health professional. Additionally, there must be
evidence to show that ultimate authority for medical management of
care is vested in a physician.
--Patient rights and limitations on use of seclusion and restraint.
Standards require provisions for protection of all individual
patient rights, including civil rights, provided for under federal
law and the laws of the state where the residential treatment center
is located. Specific requirements address privacy, personal
freedoms, contact with families and environmental safety. Detailed
guidelines for use, supervision and medical monitoring of behavior
management--including use of seclusion and restraint--are also
provided.
--Implementation of individualized treatment plans addressing each
patient's needs. Responsibility for development, supervision,
implementation and assessment of written, individualized and
interdisciplinary treatment plans is assigned to a psychiatrist or
doctoral level clinical psychologist. Treatment goals must be
communicated to the family, must undergo regular review and must
include specific, measurable and observable criteria for discharge.
--Comprehensive evaluation system to guide an ongoing quality
improvement program. Proposed standards provide detailed
expectations with respect to evaluation systems by which quality,
efficiency, appropriateness and effectiveness of care, treatments,
and services are provided. The evaluation system must involve all
disciplines, services, and programs of the facility, including
administrative and support staff activities. Responsibility for
development and implementation of quality assurance and quality
improvement programs rests with the medical director and must
support overall facility philosophical assumptions and values.
Proposed standards are designed to foster interdisciplinary
communication and patient protection through involvement and oversight
of the Governing Body, Chief Executive Officer, Medical Director, and
Professional Staff with respect to administrative, utilization review,
and clinical activities. Based on DoD experience, on-site review of
residential treatment centers, and testimony obtained during
Congressional hearings, DoD has strengthened standards for substance
abuse treatment programs in a manner similar to residential treatment
centers. For partial hospitalization, proposed standards occur as part
of implementation of this new benefit, which became effective September
29, 1993.
This proposed rule incorporates basic requirements governing
CHAMPUS approval of facilities providing mental health services as
residential treatment centers, as partial hospitalization providers,
and substance use disorder rehabilitation facilities. More detailed
definition of these basis standards will be issued under the authority
of this regulation. It should be noted that only the requirements
included in the final regulation will, by themselves, have the force
and effect of law. Additional detail in the more lengthy standards are
extensions of the regulation. They do not independently have the force
and effect of law. Rather, they establish the agency's interpretations
of regulation and will serve as guidelines for compliance with the
regulatory requirements. The complete proposed standards are available
to the public from the office of CHAMPUS. These more lengthy standards
will be finalized coincident with the issuance of the final regulation.
CHAMPUS must have some means of differentiating among RTCs,
Substance Use Disorder Rehabilitation Facilities, and Partial
Hospitalization Programs in order to select and certify only those
facilities capable of fully meeting the needs of its beneficiaries.
III. Provisions of Proposed Rule To Reform Payment Methods For Mental
Health Care Facilities
The proposed rule closely follows the Comptroller General's
recommendations regarding payment reform for mental health care
facilities. The Comptroller General's findings regarding current
CHAMPUS payment rates are especially noteworthy. According to the
Report: ``Our work indicates that DoD pays psychiatric facilities
considerably more than other government programs do for comparable
services.'' GAO Report #1, p. 6. The Comptroller General very
accurately summarized the background of the current CHAMPUS payment
methods for psychiatric hospitals and RTCs:
Although the current CHAMPUS system of per diem reimbursements
has helped limit program cost increases for inpatient mental health,
the per diem rates were based on providers' billed charges, not
their costs. The rates were based on billing data from a period when
providers' charges were not subject to controls and had just
increased significantly. Before 1989 when no upper limit on rates
existed, hospitals and RTCs essentially set their own CHAMPUS
payment rates. Before the per diem calculations, hospitals and RTC
rates increased significantly. For example, average daily charges
per CHAMPUS inpatient day rose by 17 percent from fiscal years 1987
to 1988. One RTC boosted its daily charges from an average of $331
in fiscal year 1987 to $531 in June 1988--a 60% increase.
GAO Report #1, pp 6-7.
Because CHAMPUS payments are based on historical billed charges,
they substantially exceed the facilities' actual costs and Medicare
reimbursement rates. Based on an analysis of payments to a number of
high CHAMPUS volume psychiatric hospitals, the Comptroller General
concluded: ``The hospitals made large profits, on average, on CHAMPUS
patients.'' GAO Report #1, p. 7. More specifically, based on fiscal
year 1990 payments.:
Subtracting their average daily costs from the CHAMPUS per diem
rates revealed an average daily profit on CHAMPUS patients of about
$99, or about 22% above the average cost per inpatient day. In
contrast, the average profit margin per day for other patients and
payers was about $66 or 14% above the average daily costs.
Id. The degree to which CHAMPUS currently overpays facilities is even
more dramatically shown in comparison with Medicare rates. According to
the Comptroller General: On average, the hospitals were paid 39 percent
more per day for CHAMPUS patients than for Medicare patients.'' Id. In
the aggregate CHAMPUS paid an average of $170 per day more than the
Medicare-allowed daily costs, ``and this was more than 15 times larger
than the average Medicare-allowed profit.'' Id.
A similar pattern emerges on payment rates for RTCs. Using fiscal
year 1991 data, the Comptroller General compared CHAMPUS payments to
state-authorized daily rates for a number of RTCs in Florida and
Virginia, and found that the average daily CHAMPUS rate was 36 percent
more than the average state rate. RTC cost data were available for
three RTCs in Texas, the state with the highest total CHAMPUS RTC
costs. These data showed ``an average profit margin of 27 percent.''
Id., p. 8. The Comptroller General also stated that the index factor
used to annually update CHAMPUS RTC per diems, the consumer price index
for urban medical services (CPI-U), results in excessive increases. The
GAO Report says the hospital market basket index factor that CHAMPUS
and Medicare use for hospital payments ``would be more appropriate than
the CPI-U because it reflects increases in the amounts hospitals pay
for goods and services'' rather than ``increases in charges by health
practitioners and facilities.'' Id.
The problem of excessive payments also involves drug and alcohol
abuse rehabilitation facilities, which continue to be paid by CHAMPUS
billed charges. According to the Comptroller General:
These facilities set their own fees and can increase them
freely--without controls over their charges. Some of these
facilities are paid more on a daily basis than are psychiatric
hospitals. Id.
Based on these findings, the Comptroller General recommended that
the Secretary of Defense:
Establish a system of reimbursing psychiatric facilities, RTCs,
and specialized treatment facilities based on a cost-based system
similar to Medicare, adjusted appropriately for differences in
beneficiary demographics, rather than the present per diem or billed
charges system.
Id., p. 10.
This proposed rule would do that. It is based on the legal
authority of 10 U.S.C. section 1079(j)(2), which calls on CHAMPUS
generally to adopt reimbursement rules similar to Medicare's for health
care facilities. For facilities except from the Medicare Prospective
Payment System Medicare pays on the basis of the facility's allowable
costs, as reflected on a Medicare cost report.
Under the proposed rule, CHAMPUS payments to specialty psychiatric
hospitals and units and residential treatment facilities would
gradually transition from the present system of per diem rates based on
historical billed charges to a new system of per diem rates based on
facility costs. Where possible, Medicare cost reports for the most
current period will be used to calculate base year costs.
For inpatient mental health hospital care in specialty psychiatric
hospitals and units, two sets of per diem rates will be established.
One set of per diems applies to hospitals and units that have a
relatively higher number of CHAMPUS discharges (at least 50). For these
hospitals and units, the system uses hospital-specific per diem rates
based on the hospital's average Medicare inpatient operating cost,
including pass through cost, per day. Hospital-specific per diem rates
would be subject to a cap, set at two standard deviations above the
mean per diem for all higher volume hospitals.
The other set of per diems applies to hospitals and units with a
relatively lower number of CHAMPUS discharges. For these hospitals and
units, the system uses a national per diem, based on the average
Medicare inpatient operating cost per day, including pass through
costs, for all patients in all CHAMPUS lower volume hospitals and units
which file Medicare cost reports, adjusted for local area wage
differences and facility/type teaching status. Costs will be determined
from the Medicare cost reports filed by those hospitals for a recent
base year, updated to the year for which the payment rate will be used.
With respect to RTC's, the proposed rule would establish a similar
payment structure. For RTCs that have a relatively higher number of
CHAMPUS discharges (again, 50 or more per year), RTC-specific per diem
rates would be established based on the RTC's average allowable cost
per day, subject to a cap comparable to that set for psychiatric
hospitals. For RTCs with a relatively lower number of CHAMPUS
discharges, the system uses a national per diem adjusted for area
wages. Costs will be based on the cost per day for all patients in all
CHAMPUS lower volume RTCs in the nation which file cost reports (or an
appropriate sample of such facilities). If data from cost reports are
insufficient to establish a national rate, an alternative method will
be available, based on RTC charges, adjusted by the cost-to-charge
applicable to free-standing, non-teaching psychiatric hospitals.
Beginning in fiscal year 1995, per diem rates for both psychiatric
hospitals and RTCs would undergo transition from charge-based to cost-
based rates. For psychiatric hospitals, the transition will occur over
three years. For RTCs, to provide time for collection of cost reports,
the transition will occur over four years. For psychiatric hospitals,
during the transition years, in the cost-based per diem is less than
the fiscal year 1994 per diem, OCHAMPUS will pay a blended rate
calculated to phase in the cost-based rate by fiscal year 1997. For
fiscal year 1995, the blended rate will be two-thirds of the 1994 per
diem plus one-third of the cost-based rate. For fiscal year 1996, the
blended rate will be one-third of the 1994 per diem plus two-thirds of
the cost-based rate. Beginning in fiscal year 1995, if the cost-based
per diem exceeds the 1994 per diem rate, the cost based per diem will
be used.
We are aware that most RTCs do not currently file Medicare cost
reports. For this reason, the Director, OCHAMPUS will establish an
alternative method for obtaining the facility cost information
necessary to calculate the per diem payment rates. State Medicaid cost
reports are a probable source of the information, as may be other
independently audited cost data. As a fall back, RTCs that have no
administratively easy way to provide cost information may be excused
from any such requirement and receive the national per diem rate. To
allow time for the collection of cost data, cost-based rates will not
be fully implemented until fiscal year 1998. Blended rates will be used
in fiscal years 1996 and 1997. Fiscal year 1994 rates will be continued
in fiscal year 1995.
For both hospitals and RTCs, per day costs for individual
facilities and regions will be calculated every three years. In the
interim years, the per diem rates will be updated by the Medicare
update factor for hospitals exempt from the Medicare Prospective
Payment System.
Importantly, the mechanism for calculation of actual costs for the
facility will assure each hospital and RTC with substantial CHAMPUS
business that all allowable costs will be recognized. This includes all
increased costs the facility might incur in order to comply with the
revised quality of care certification standards. If the facility must
invest more resources in its clinical program in order to assure that
it has qualified personnel, adequate staffing, an intensive therapeutic
program, appropriate clinical interventions, and consistently good
quality of care, those costs will be acknowledged in the CHAMPUS
payment rate. Thus, although our proposed reforms may both push up
facility costs and bring down reimbursement rates, our effort to tie
payments to actual facility costs assures that we keep faith with the
justifications for both actions.
With respect to substance use disorder rehabilitation facilities,
the proposed rule would include services provided by these facilities
under the CHAMPUS DRG-based payment system. Currently, most substance
use disorder rehabilitation services reimbursed by CHAMPUS are provided
by facilities covered by the CHAMPUS DRG system or mental health per
diem system. Only a small portion are provided by facilities that
continue to be paid on the basis of billed charges. Under Medicare,
these facilities are covered by the Medicare Prospective Payment
System. Based on these factors, we believe inclusion of services
provided by substance use disorder rehabilitation facilities should be
included with the similar services already covered by the CHAMPUS DRG-
based payment system. Partial hospitalization for substance use
disorder rehabilitation will be reimbursed in the same manner as
psychiatric partial hospitalization programs.
The proposed payment system changes appear at the proposed
revisions to section 1994.14.
IV. Other Provisions of Proposed Rule
A. Therapeutic leave of absence days.
Currently, DoD pays RTCs for days a patient is away from the
facility on an approved therapeutic leave of absence. The payment
amount is 100% of the normal per diem for the first three days and 75%
for additional days. It is our view that current rates are not
justified by any costs to the facility. In addition, we are aware of no
other public payer that pays for leave days. Therefore, the proposed
rule would eliminate payment for days in which patients are on leave
from the residential treatment center. Because the proposed rates are
cost-based, facility costs associated with therapeutic leave should be
captured in cost reports and reflected in the CHAMPUS reimbursement
rates. We believe the proposed rates are adequate to cover the
facility's overhead costs associated with reserving space for the
patient's return. This change applies only to RTCs; in psychiatric
hospitals, substance use disorder rehabilitation facilities and partial
hospitalization programs, leave days are not reimbursed by CHAMPUS.
B. Reversing incentive for inpatient care.
Another of the recommendations of the Comptroller General was to
``reverse the financial incentives to use inpatient care by introducing
larger copayments for CHAMPUS inpatient care.'' GAO Report #1, p. 10.
This recommendation was based on the Comptroller General's conclusion
that there is a ``bias toward patients receiving inpatient rather than
outpatient care'' because inpatient care is less expensive for
dependents of active duty members than outpatient care. Id., p. 8-9.
These beneficiaries currently pay $9.30 per day or $25 per admission,
whichever is greater, for inpatient care. For outpatient care,
dependents of active duty members pay a $150 deductible (subject to a
$300 family limit) and 20 percent of the allowable payment for
individual professional services. Consequently, as a general matter,
there is a financial incentive for beneficiaries to seek services on an
inpatient, rather than an outpatient, basis. Under 10 U.S.C. section
1079(i)(2), DoD has authority to establish mental health copayment
requirements different from those for other CHAMPUS services.
The proposed rule would establish a per day copayment of $20 for
dependents of active duty beneficiaries. This is based on the fact that
an outpatient mental health visit is generally approximately $100,
meaning that the copayment would be $20. Thus, an inpatient day would
have a roughly equal beneficiary copayment as an outpatient visit
(excluding the deductible). We believe this proposal addresses the
Comptroller General's recommendation, without impairing access to care
or imposing hardship on beneficiaries. (With respect to avoidance of
hardship, we note that the catastrophic cap for active duty dependents
is $1000 per family per year.)
C. Equalization of alcoholism and drug abuse benefit provisions.
The frequent coexistence of alcohol and other chemical dependency
or abuse suggests existing differences in benefit structures for
treatment of alcohol and drug abuse should be eliminated. This rule
proposes to include treatment for both alcohol and drug dependency/
abuse under a broad benefit package designed to include treatment of
all substance use disorders.
V. Rulemaking Procedures
We are soliciting public comments on this proposed rule. We will
address these comments in connection with the final rule, which will be
issued in fiscal year 1994.
Regarding other regulatory procedures, Executive Order 12866
requires certain regulatory assessments for any significant regulatory
action, defined as one which would result in an annual effect on the
nation's economy of $100 million or more or have other substantial
impacts. Section 605(b) of the Regulatory Flexibility Act requires that
each federal agency prepare, and make available for public comment, a
regulatory flexibility analysis when the agency issues a regulation
which would have a significant impact on a substantial number of small
entities.
This proposed rule is a significant regulatory action as determined
by the Office of Management and Budget. Also, we certify that this
proposed rule will not significantly affect a large number of small
entities within the meaning of the Regulatory Flexibility Act. For the
most part, this proposed rule would implement revised quality assurance
standards and cost based reimbursement methods for mental health care
facilities.
This proposed rule does not impose new information collection
requirements. The authority to require facility cost information
currently exists in CFR 199.6(b)(4)(x)(B)(3)(v)(bb).
List of Subjects in 32 CFR Part 199
Claims, Handicapped, Health insurance, and Military personnel.
Accordingly, 32 CFR Part 199 is proposed to be amended as follows:
PART 199--[AMENDED]
1. The authority citation for Part 199 continues to read as
follows:
Authority: 5 U.S.C. 301; 10 U.S.C. 1079, 1086.
2. Section 199.4 is proposed to be amended by revising the heading
of paragraph (e)(4), paragraph (e)(4) introductory text, (e)(4)(i),
(e)(4)(ii), and the introductory text of paragraph (f)(2)(ii), by
adding new paragraphs (e)(4) (v) and (vi), and (f)(2)(ii)(D), as
follows:
Sec. 199.4 Basic program benefits.
* * * * *
(e) * * *
(4) Treatment of substance use disorders. Emergency and inpatient
hospital care for complications of alcohol and drug abuse or dependency
and detoxification are covered as for any other medical condition.
Specific coverage for the treatment of substance use disorders includes
detoxification, rehabilitation, and outpatient care provided in
authorized substance use disorder rehabilitation facilities.
(i) Emergency and inpatient hospital services. Emergency and
inpatient hospital services are covered when medically necessary for
the active medical treatment of the acute phases of substance abuse
withdrawal (detoxification), for stabilization, and for treatment of
medical complications of substance use disorders. Emergency and
inpatient hospital services are considered medically necessary only
when the patient's condition is such that the personnel and facilities
of a hospital are required. Stays provided for substance use disorder
rehabilitation in a hospital-based rehabilitation facility are covered,
subject to the provisions of paragraph (e)(4)(ii) of this section.
Inpatient hospital services also are subject to the provisions
regarding the limit on inpatient mental health services.
(ii) Authorized substance use disorder treatment. Only those
services provided by CHAMPUS-authorized institutional providers are
covered. Such a provider must be either an authorized hospital, or an
organized substance use disorder treatment program in an authorized
free-standing or hospital-based substance use disorder rehabilitation
facility. Covered services consist of any or all of the services listed
below. A qualified mental health provider (physicians, clinical
psychologists, clinical social workers, psychiatric nurse specialists)
(see paragraph (c)(3)(ix) of this section) shall prescribe the
particular level of treatment. Each CHAMPUS beneficiary is entitled to
three substance use disorder treatment benefit periods in his or her
lifetime, unless this limit is waived pursuant to paragraph (e)(4)(v)
of this section. (A benefit period begins with the first date of
covered treatment and ends 365 days later, regardless of the total
services actually used within the benefit period. Unused benefits
cannot be carried over to subsequent benefit periods. Emergency and
inpatient hospital services (as described in paragraph (e)(4)(i) of
this section) do not constitute substance abuse treatment for purposes
of establishing the beginning of a benefit period.)
(A) Rehabilitative care. Rehabilitative care in an authorized
hospital or substance use disorder rehabilitative facility, whether
free-standing or hospital-based, is covered on either a residential or
partial care (day or night program) basis. Coverage during a single
benefit period is limited to no more than one inpatient stay (exclusive
of stays classified in DRG 433) in hospitals subject to CHAMPUS DRG-
based payment system or 21 days in a DRG-exempt facility for
rehabilitation care, unless the limit is waived pursuant to paragraph
(e)(4)(v) of this section. If the patient is medically in need of
chemical detoxification, but does not require the personnel or
facilities of a general hospital setting, detoxification services are
covered in addition to the rehabilitative care, but in a DRG-exempt
facility detoxification services are limited to 7 days, unless the
limit is waived pursuant to paragraph (e)(4)(v) of this section. The
medical necessity for the detoxification must be documented. Any
detoxification services provided by the substance use disorder
rehabilitation facility must be under general medical supervision.
(B) Outpatient care. Outpatient treatment provided by an approved
substance use disorder rehabilitation facility, whether free-standing
or hospital-based, is covered for up to 60 visits in a benefit period,
unless the limit is waived pursuant to paragraph (e)(4)(v) of this
section.
(C) Family therapy. Family therapy provided by an approved
substance use disorder rehabilitation facility, whether free-standing
or hospital-based, is covered for up to 15 visits in a benefit period,
unless the limit is waived pursuant to paragraph (e)(4)(v) of this
section.
* * * * *
(v) Confidentiality. Release of any patient identifying
information, including that required to adjudicate a claim, must comply
with the provisions of section 544 of the Public Health Service Act, as
amended, (42 U.S.C. 290dd-3), which governs the release of medical and
other information from the records of patients undergoing treatment of
substance abuse. If the patient refuses to authorize the release of
medical records which are, in the opinion of the Director, OCHAMPUS, or
a designee, necessary to determine benefits on a claim for treatment of
substance abuse the claim will be denied.
(vi) Waiver of benefit limits. The specific benefit limits set
forth in paragraph (e)(4)(ii) of this section may be waived by the
Director, OCHAMPUS in special cases based on a determination that all
of the following criteria are met:
(A) Active treatment has taken place during the period of the
benefit limit and substantial progress has been made according to the
plan of treatment.
(B) Further progress has been delayed due to the complexity of the
illness.
(C) Specific evidence has been presented to explain the factors
that interfered with further treatment progress during the period of
the benefit limit.
(D) The waiver request includes specific time frames and a specific
plan of treatment which will complete the course of treatment.
* * * * *
(f) * * *
(2) * * *
(ii) Inpatient cost-sharing. Except in the case of mental health
services (see paragraph (f)(2)(ii)(D) of this section), dependents of
active duty members of the Uniformed Services or their sponsors are
responsible for the payment of the first $25 of the allowable
institutional costs incurred with each covered inpatient admission to a
hospital or other authorized institutional provider (refer to section
199.6), or the amount the beneficiary or sponsor would have been
charged had the inpatient care been provided in a Uniformed Service
hospital, whichever is greater.
* * * * *
(D) Inpatient cost-sharing for mental health services. The
inpatient cost-sharing for mental health services is $20 per day for
each day of the inpatient admission. This $20 per day cost sharing
amount applies to admissions to any hospital for mental health
services, any residential treatment facility, any substance abuse
rehabilitation facility, and any partial hospitalization program
providing mental health services.
3. Section 199.6 is proposed to be amended by revising paragraphs
(b)(4)(vii) and (b)(4)(xii), by removing paragraph (b)(4)(x)(B)(3), and
by adding a new paragraph (b)(4)(xiii) to read as follows:
Sec. 199.6 Authorized providers.
* * * * *
(b) * * *
(4) * * *
(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 diagnostic and therapeutic
services to establish and implement an effective plan of care which
will reverse life-threatening and/or severely incapacitating symptoms;
(ii) Partial hospitalization, which provides a less than 24-hour-
per-day, seven-day-per-week 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.
(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 overseas 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 possess a
master's degree in business administration, public health, hospital
administration, nursing, social work, or psychology, or meet similar
educational requirements as prescribed by the Director, OCHAMPUS or a
designee. The CEO shall have five years' administrative experience in
the field of mental health and shall assume overall administrative
responsibility for the operation of the facility according to governing
body policies.
(5) 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 clinical activities.
(6) 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.
(7) 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.
(8) Staff development. The facility shall provide appropriate
training and development programs for administrative, professional
support, and direct care staff.
(9) Fiscal accountability. The RTC shall assure fiscal
accountability to applicable government authorities and patients.
(10) 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.
(11) 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 for
independent practice, 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 medical management of care is vested in a physician.
(ii) The center 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 for independent practice, educational
attainment, and professional experience) health care professionals and
support staff in the respective disciplines. The ultimate authority for
medical management of care is vested in a physician.
(2) Staff qualifications. Within the scope of its programs and
services, the facility has a sufficient number of professional,
administrative and support staff to address the medical and clinical
needs of patients and to coordinate services provided. RTCs that employ
master's or doctoral level staff who are not qualified mental health
providers have a supervision program to oversee and monitor their
activities related to the provision of clinical care.
(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 medical
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, as determined by a psychiatrist, are carefully
monitored, and are fully documented. Only trained and clinically
privileged RNs or qualified mental health professionals may implement
seclusion and restraint procedures in an emergency situation.
(5) Admission process. The RTC shall maintain written policies and
procedures to assure that prior to an admission, a determination is
made by a psychiatrist or doctoral level clinical psychologist, and
approved pursuant to CHAMPUS pre-authorization requirements, that the
admission is medically and/or psychologically necessary and the program
is appropriate to meet the patient's needs.
(6) Assessment. The professional staff of the RTC shall provide 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
within 14 days of admission.
(7) Clinical formulation. The psychiatrist or doctoral level
psychologist shall be responsible for the clinical formulation which
incorporates significant findings from each of the multidisciplinary
assessments and provides the basis for development of an
interdisciplinary treatment planning.
(8) Treatment planning. The psychiatrist or doctoral level clinical
psychologist 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 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 a physician's admission note and
orders. 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. Clinical records are
maintained and controlled by an appropriately qualified records
administrator. 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 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 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
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 RTC shall 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, primarily utilizing explicit clinical
indicators to evaluate all functions of the RTC and contribute to an
ongoing process of program improvement. The medical 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 admissions, 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 plan.
(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 surveillance 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 agreement
entered into prior to October 1, 1994, must be renewed not later than
April 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) Reader residential treatment center inpatient 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
provides in section 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 section 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 section 199.4;
(5) Comply with the provisions of section 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 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 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 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 section 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 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 eligible for consideration for authorized provider status for a
two year period.
* * * * *
(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 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) (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 Accreditation
Manual for Mental Health, Chemical Dependency, and Mental Retardation/
Developmental Disabilities Services.
(iv) The facility has a written participations agreement with
OCHAMPUS. 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 possess a
master's degree in business administration, public health, hospital
administration, nursing, social work, or psychology, or meet similar
educational requirements as prescribed by the Director, OCHAMPUS or a
designee. The CEO shall have five years' administrative experience in
the field of mental health and shall assume overall administrative
responsiblity for the operation of the facility according to governing
body policies.
(5) Medical director. The Medical Director, appointed by the
governing body, shall be licensed to practice medicine in the state
where the PHP 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 treating 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 clinical activities.
(6) 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.
(7) 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.
(8) Staff development. The facility shall provide appropriate
training and development programs for administrative, professional
support, and direct care staff.
(9) Fiscal accountability. The PHP shall assure fiscal
accountability to applicable government authorities and patients.
(10) 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.
(11) 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 qualified 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 with admitting
privileges.
(ii) The center shall establish and follow written plans to assure
adequate staff coverage during all hours of operation, including on-
call physician availability 24 hours per day, seven days per week to
respond to medical and psychiatric problems, and other professional
staff coverage during all service hours.
(2) Staff qualifications. The PHP will have a sufficient number of
qualified (including license, registration or certification
requirements for independent practice, educational attainment, and
professional experience) mental health providers, administrative, and
support staff to address patients' clinical needs and to coordinate the
services provided. All mental health services must be provided by a
CHAMPUS-authorized mental health provider. [Exception: 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 that the
individual must work under the clinical supervision of a fully
qualified mental health provider employed by the PHP.] 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 medical 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, as determined
by a psychiatrist, are carefully monitored, and are fully documented.
Only trained and clinically privileged RNs or qualified mental health
professionals may implement 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 by a psychiatrist, and approved pursuant to CHAMPUS pre-
authorization requirements, that the admission is medically and/or
psychologically necessary and the program is appropriate to meet the
patient's needs.
(6) Assessments. The professional staff of the PHP shall provide
complete, current and timely assessments of all patients in the PHP.
Assessments include, but are not limited to, physical health,
psychological health, physiological, biological, and cognitive
processes, development, family history, social history, educational or
vocational history, environmental factors, and skills.
(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 physician
or doctoral level licensed clinical psychologist and will incorporate
significant findings from each of the multidisciplinary assessments. It
will provide the basis for development of a multidisciplinary treatment
plan.
(8) Treatment planning. A PHP psychiatrist or doctoral level
psychologist 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 half-day 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 section 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 Organizations.
(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 and 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 evaluate all functions of the PHP and contribute to an ongoing
process of program improvement. The medical 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, 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. 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 section 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 section 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 section 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 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 Accounting
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 inpatient 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) Substance are disorder rehabilitation facilities. Paragraph
(b)(4)(xiii) of this section establishes standards and requirements for
substance use disorder rehabilitation facilities. 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.
(i) 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-per-week, medically monitored
assessment, treatment, and evaluation. An inpatient rehabilitation
center is appropriate for patients whose addition-related symptoms, or
concomitant physical and emotional/behavioral problems reflect
persistent dysfunction in several major life areas. Inpatient
rehabilitation is differentiated from:
(A) Acute psychoactive substance use treatment and from treatment
of acute biomedical/emotional/behavioral problems; which problems are
either life-threatening and/or severely incapacitating and often occur
within the context of a discrete episode of addition-related biomedical
or psychiatric dysfunction;
(B) 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;
(C) A group home, sober-living environment, halfway house, or
three-quarter way house;
(D) Therapeutic schools, which are educational programs
supplemented by addiction-focused services;
(E) Facilities that treat patients with primary psychiatric
diagnoses other than psychoactive substance use or dependence; and
(F) 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 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)(xiii)(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 (with a minimum patient
census of the less 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 facility 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 facility has a written participation agreement with
OCHAMPUS. The facility is not considered 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.
(4) Governing body.
(i) The center shall have a governing body which is responsible for
the policies, bylaws, and activities of the facility. If the center 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 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 possess a
master's degree in business administration, public health, hospital
administration, nursing, social work, or psychology, or meet similar
educational requirements as prescribed by the Director, OCHAMPUS or a
designee. The CEO shall have five years administrative experience
requisite education and experience and shall assume overall
administrative responsibility for the operation of the facility
according to governing body policies.
(6) 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 clinical activities.
(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 center 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, support, and
direct care staff.
(10) Fiscal accountability. The center 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 center 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 for independent practice, educational
attainment, and professional experience) health care professionals and
support staff in the respective disciplines. Clinicians providing
individual, group and private therapy meet CHAMPUS requirements as
qualified mental health providers and operate within the scope of their
licenses. The ultimate authority for medical management of care is
vested in a physician.
(ii) The center 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 service hours for a partial hospitalization
center.
(2) Staff qualification. Within the scope of its programs and
services, the facility 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. Facilities
that employ master's or doctoral level staff who are not qualified
health care providers have a supervision program to oversee and monitor
their activities related to the provision of clinical care.
(3) Patient rights.
(i) The center shall provide adequate protection for all patient
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. When a center uses a behavioral
management program, the center shall adhere to a comprehensive, written
plan of behavioral management, developed by the medical director and
the medical or professional staff and approved by the governing body,
which shall be based on positive reinforcement methods and may not
permit the use of restraint or seclusion.
(5) Admission process. The center shall maintain written policies
and procedures to assure that each admission is approved pursuant to
CHAMPUS pre-authorization requirements, medically necessary, and based
on a determination that the center's program is appropriate to the
patient's needs.
(6) Assessment. The professional staff of the center shall provide
a complete, multidisciplinary assessment of each patient's medical
history, physical health, nursing needs, alcohol and drug history,
emotional and behavioral factors, age-appropriate social circumstances,
psychological condition, education status, and skills.
(7) Clinical formulation. A qualified health care professional
shall be responsible for a clinical formulation, providing the basis
for an interdisciplinary treatment plan.
(8) Treatment planning. The qualified health care professional
shall be responsible for the development, supervision, implementation,
and assessment of a written, individualized, and interdisciplinary plan
of treatment, which shall be completed within ten 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 and 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 center shall maintain a
transition planning process to address adequately the anticipated needs
of the patient prior to the time of discharge.
(10) Clinical records. Complete individual patient clinical records
shall be maintained, documenting all treatment plans, patient care, and
patient assessments, and adhering to applicable provisions of the JCAHO
Manual for Mental Health, Chemical Dependency, and Mental Retardation/
Development Disabilities Services, and the requirements set forth in
section 199.7(b)(3). Clinical records are maintained and controlled by
an appropriately qualified records administrator or technician.
(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 center
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 center 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 center 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 center shall 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
effectiveness to contribute to an ongoing process of program
improvement. The medical director is responsible for developing and
implementing quality assessment and improvement activities throughout
the facility.
(2) Utilization review. The center 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
cost-effective manner. Findings of the utilization review process are
used as a basis for reviewing 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 entities,
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 center 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 center shall implement a comprehensive
system for the surveillance, prevention, control, and reporting of
infections acquired or brought into the facility.
(7) Safety. The center shall implement an effective program to
assure a safe environment for patients, staff, and visitors.
(8) Facility evaluation. The center 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)(xiii) 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. The center shall not be considered to be a CHAMPUS
authorized provider and CHAMPUS payments shall not be made for services
provided by the center until the date the participation agreement is
signed by the Director, OCHAMPUS. In addition to review of facility's
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 section 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 section 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 section 199.4;
(5) Comply with the provisions of section 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)(xiii) of the section establishing standards for
substance use disorder rehabilitation facilities;
(ii) It has conducted a self assessment of the facility'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 include, 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;
(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 center
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 disorders
rehabilitation facilities.
(1) Even though a center 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 center also meeting all conditions set forth in
section 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.
* * * * *
4. Section 199.14 is proposed to be amended by revising the
introductory text of paragraph (a)(2), paragraphs (a)(2)(ii),
(a)(2)(iii), (a)(2)(iv), (a)(2)(v), the heading of (a)(2)(ix),
paragraphs (a)(2)(ix)(A), (a)(2)(ix)(C), the introductory text of
paragraph (f), paragraphs (f)(1), (f)(2), (f)(3), and (f)(5), by
redesignating paragraph (f)(4) as (f)(7), and by adding a heading for
the newly designated paragraph (f)(7), and by adding new paragraphs
(a)(1)(ii)(F), (f)(4), and (f)(6), as follows:
Sec. 199.14 Provider reimbursement methods.
* * * * *
(a) * * *
(1) * * *
(ii) * * *
(F) Substance Use Disorder Rehabilitation facilities. Substance use
disorder rehabilitation facilities, authorized under section
199.6(b)(4)(xiii), are subject to the DRG-based payment system.
* * * * *
(2) CHAMPUS mental health per diem payment system. The CHAMPUS
mental health per diem payment system shall be used to reimburse for
inpatient mental health hospital care in specialty psychiatric
hospitals and units. Payment is made on the basis of prospectively
determined rates and paid on a per diem basis. The system uses two sets
of per diems. One set of per diems applies to hospitals and units that
have a relatively higher number of CHAMPUS discharges. For these
hospitals and units, the system uses hospital-specific per diem rates,
calculated pursuant to paragraph (a)(2)(ii) of this section. The other
set of per diems applies to hospitals and units with a relatively lower
number of CHAMPUS discharges. For these hospitals and units, the system
uses a national per diem rate, calculated pursuant to paragraph
(a)(2)(iii) of this section, and adjusted for area wage rates.
Beginning in fiscal year 1995, these two sets of rates will undergo
transitions from charge-based to cost-based. This transition process,
which will occur over a three-year period, is set forth in paragraph
(a)(2)(iv) of this section. Costs will be determined by reference to
average per day Medicare inpatient operating costs, including pass
through costs, as reported on Medicare cost reports. For high volume
hospitals and units, a hospital-specific per day cost will be
determined. For low volume hospitals, a national average per day cost
will be determined based on available Medicare cost reports for four
separate types of facilities: distinct part unit teaching facilities;
distinct part unit non-teaching facilities; free-standing teaching
hospitals; and free-standing non-teaching hospitals. During the
transition years, if the cost based per diem is less than the fiscal
year 1994 per diem, OCHAMPUS will pay a blended rate, calculated to
phase in the cost-based rate by fiscal year 1997. Beginning in fiscal
year 1995, if the cost based per diem exceeds the 1994 per diem rate,
the cost based per diem will be used.
* * * * *
(ii) Hospital-specific cost-based per diems for higher volume
hospitals and units. The per diem amount for each higher volume
hospital and unit will be the average Medicare inpatient operating
cost, including pass through costs per day, in that hospital or
specialty unit, as reported in the hospital's Medicare cost report for
a recent base year, updated to the year for which the payment rate will
be used. However, the per diem shall not be higher than two standard
deviations above the mean per diem for all high volume facilities.
(iii) National cost-based per diem for lower volume hospitals and
units. This paragraph (a)(2)(iii) describes the per diem payment amount
for hospitals with lower volume of CHAMPUS discharges.
(A) Per diem amount. Hospitals and units with a lower volume of
CHAMPUS patients are paid on the basis of a national per diem amount.
The national per diem amount is calculated based on the average
Medicare inpatient operating cost, including pass through costs, per
day for all patients in all CHAMPUS lower volume hospitals and units
which file Medicare cost reports, as determined from the Medicare cost
reports filed by those hospitals for a recent base year, updated to the
year for which the payment rate will be used.
(B) Adjustments to national per diem. Two adjustments shall be made
to the per diem rate.
(1) Area wage index. The same area wages indexes used for the
CHAMPUS DRG-based payment system (see paragraph (a)(1)(iii)(E)(2) of
this section) shall be applied to the wage portion of the national per
diem rate for each day of the admission. The wage portion shall be the
same as that used for the CHAMPUS DRG-based payment system.
(2) Facility type/teaching status. An adjustment to the per diem
rate will be made to reflect the type of facility and the presence or
absence of a teaching program. Separate per diem rates will be
calculated for each of the following four types of facilities: distinct
part unit teaching facilities; distinct part unite non-teaching
facilities; free-standing teaching hospitals; and free-standing non-
teaching hospitals.
(iv) Transition from charge-based rates to cost-based rates.
Beginning in fiscal year 1995, there is a transition from charge-based
per diem rates to cost-based per diem rates under the CHAMPUS mental
health per diem payment system.
(A) Fiscal year 1997 rate. In fiscal year 1997, each facility's per
diem rate (whether hospital-specific or based on the national rate)
shall be the cost-based rate calculated pursuant to paragraph (a)(2)
(ii) or (iii) of this section, whichever is applicable.
(B) Transition rule. For fiscal years 1995 and 1996, each
facility's per diem rate (whether hospital-specific or based on the
national rate) shall be the cost-based rate calculated pursuant to
paragraphs (a)(2) (ii) or (iii) of this section, whichever is
applicable, if it exceeds the fiscal year 1994 rate, or the blended
rate calculated pursuant to paragraph (a)(2)(iv)(c) of this section if
it does not.
(C) Blended rate. For fiscal years 1995 and 1996, each facility's
per diem rate (whether hospital-specific or based on the national rate)
shall, if the cost-based rate calculated pursuant to paragraphs (a)(2)
(ii) or (iii) of this section, whichever is applicable, is less than
the facility's 1994 rate, be a blended rate calculated as follows:
(1) For fiscal year 1995, the sum of two-thirds of the facility's
fiscal year 1994 rate plus one third of the facility's cost-based rate;
and
(2) For fiscal year 1996, the sum of one third of the facility's
1994 rate plus two-thirds of the facility's cost-based rate.
(D) Special rule for new hospitals. For any hospital or unit that
was not in operation as a CHAMPUS-authorized provider in fiscal year
1994, the cost-based per diem rate shall be that calculated pursuant to
paragraph (a)(2)(iii) of this section until rebasing.
(v) Administration of per diem payment system. This paragraph
contains several provisions pertinent to the administration of the
CHAMPUS mental health per diem payment system.
(A) Identification of higher volume hospitals. A hospital or unit
is considered a higher volume hospital for purposes of a hospital-
specific per diem rate if it had 50 or more annual discharges of
CHAMPUS patients during fiscal year 1994 or a subsequent period that
serves as a base year for purposes of rebasing under paragraph
(a)(2)(v)(D) of this section. All other hospitals and units are
considered lower volume hospitals for purposes of establishing a per
diem rate.
(B) Cost reports. Information from cost reports needed for
determinations required by paragraph (a)(2) of this section will, as a
general rule, be obtained by the Director, OCHAMPUS from the Health
Care Financing Administration. For hospitals that do not file a
Medicare cost report, the Director, OCHAMPUS may provide an alternative
method for reporting independently audited costs. In the case of any
hospital or unit for which the Director, OCHAMPUS is unable to
determine hospital-specific costs because the hospital has not filed a
Medicare cost report or provided appropriate alternative cost
information, the cost-based per diem rate for this hospital will be
based on the national rate (as provided in paragraph (a)(2)(iii) of
this section).
(C) Based year and update factor. The base year used for
calculating hospital-specific and national per day costs will be
established by the Director, OCHAMPUS based on the most current
available Medicare cost reports. The update factor used to calculate
cost based payment rates from base year per day costs will be the
applicable Medicare update factor for hospitals and units exempt from
the Medicare prospective payment system.
(D) Rebasing. Under the cost-based per diem system, the Director,
OCHAMPUS will recalculate base year cost-based per diem rates every
third year after initially calculated.
* * * * *
(ix) Per diem payment for psychiatric and substance use disorder
rehabilitation partial hospitalization services.
(A) In general. Psychiatric and substance use disorder
rehabilitation partial hospitalization services authorized by
Sec. 199.4(b)(10) and (e)(4) and provided by institutional providers
authorized under Sec. 199.6(b)(4)(xii) and (b)(4)(xiii), are reimbursed
on the basis of prospectively determined, all-inclusive per diem rates.
The per diem payment amount must be accepted as payment in full for all
institutional services provided, including board, routine nursing
services, ancillary services (includes art, music, dance, occupational
and other such therapies), psychological testing and assessments,
overhead and any other services for which the customary practice among
similar providers is included as part of the institutional charges.
* * * * *
(C) Per diem rate. For any full day partial hospitalization program
(minimum of 6 hours), the maximum per diem payment amount is 40 percent
of the average inpatient per diem amount per case established under the
CHAMPUS mental health per diem reimbursement system for both high and
low volume psychiatric hospitals and units (as defined in section
199.14(a)(2)) for the fiscal year. A partial hospitalization program of
less than 6 hours (with a minimum of three hours) will be paid a per
diem rate of 75 percent of the rate for a full-day program.
* * * * *
(f) Reimbursement of Residential Treatment Centers. The CHAMPUS
rate is the per diem rate that CHAMPUS will authorize for all mental
health services rendered to a patient and the patient's family as part
of the total treatment plan submitted by a CHAMPUS-approved RTC, and
approved by the Director, OCHAMPUS, or designee. The per diem rates for
RTCs are all-inclusive rates for all institutional and professional
services incident to the provision of inpatient services. No separate
billings or payments for ancillary or professional services are
allowed.
(1) In general. Payment to RTCs is made on the basis of
prospectively determined rates and paid on a per diem basis. The system
uses two sets of per diems. One set of per diems applies to RTCs that
have a relatively higher number of CHAMPUS discharges. For these RTCs,
the system uses RTC-specific per diem rates, calculated pursuant to
paragraph (f)(2) of this section. The other set of per diems applies to
RTCs with a relatively lower number of CHAMPUS discharges. For these
RTCs, the system uses a national per diem rate, calculated pursuant to
paragraph (f)(3) of this section, adjusted for area wages. Beginning in
fiscal year 1995, per diem rates will undergo transitions from charge-
based to cost-based. This transition process, which will occur over a
four-year period, is set forth in paragraph (f)(4) of this section.
Costs will be determined by reference to average allowable costs per
day as reported on cost reports filed with OCHAMPUS. For high volume
RTCs, an RTC-specific per day cost will be determined. For low volume
RTCs, a national average per day cost will be determined. During the
first year of the transition--fiscal year 1995--fiscal year 1994
payment rates will be continued. For the subsequent three years, if the
cost based per diem is less than the fiscal year 1995 per diem,
OCHAMPUS will pay a blended rate, calculated to 'phase in the cost-
based rate by fiscal year 1998. Beginning in fiscal year 1996, if the
cost-based per diem exceeds the 1995 per diem rate, the cost-based per
diem will be used.
(2) RTC-specific cost-based per diems for higher volume RTCs. The
per diem amount for each higher volume RTC will be the allowable cost
per day for all inpatients in that RTC, as reported in the RTC's cost
report for a recent base year, updated to the year for which the
payment rate will be used. However, the per diem shall not be higher
than two standard deviations above the mean per diem for all high
volume RTCs.
(3) National cost-based per diems for lower volume RTCs. This
paragraph describes the per diem payment amounts for RTCs with a lower
volume of CHAMPUS discharges.
(i) Per diem amount. RTCs with a lower volume of CHAMPUS patients
are paid on the basis of a national per diem amount. The national per
diem amount is calculated based on the cost per day for all patients in
all CHAMPUS lower volume RTCs in the nation which file cost reports (or
an appropriate sample of such facilities).
(A) Determination of RTC costs. The national average cost per day
for lower volume RTCs is determined from the cost reports filed by
those RTCs for a recent base year, updated to the year for which the
payment rates will be used.
(B) Alternative method for determining RTC costs. In the event that
the Director, OCHAMPUS determines that there are insufficient data from
RTC cost reports on which to base a reliable calculation of the cost
per day for all patients in all CHAMPUS lower volume RTCs in the nation
(or an appropriate sample of such patients), the Director may use an
alternative method for calculating a national per diem amount. The
alternative method will be the average charge per day for all CHAMPUS
patients in all RTCs, other than higher volume RTCs for which adequate
RTC-specific cost data are available to the Director, OCHAMPUS,
adjusted by the cost-to-charge ratio of all free-standing, non-teaching
psychiatric hospitals covered by paragraph (a)(2) of this section,
updated to the year for which the payment rates will be used. A
national rate calculated based on this alternative method may not be
the basis for the determination of a national rate for the next
subsequent year unless the Director, OCHAMPUS determines that
sufficient data from RTC cost reports continue to be unavailable.
(ii) Area wage index adjustment to national per diem. The same area
wage indexes used for the CHAMPUS DRG-based payment system (see
paragraph (a)(1)(iii)(E)(2) of this section) shall be applied to the
wage portion of the national per diem rate for each day of the
admission. The wage portion shall be the same as that used for the
CHAMPUS DRG-based payment system.
(4) Transition from charge-based rates to cost-based rates.
Beginning in fiscal year 1995, there is a transition from charge-based
per diem rates to cost-based per diem rates under the RTC per diem
payment system.
(i) Fiscal year 1998 rate. In fiscal year 1998, each RTC's per diem
rate (whether hospital-specific or based on the national rate) shall be
the cost-based rate calculated pursuant to paragraph (f) (2) or (3) of
this section, whichever is applicable.
(ii) Transition rule for fiscal year 1995. Each RTC's per diem
payment rate for fiscal year 1994 shall be continued for fiscal year
1995.
(iii) Transition rule for fiscal years 1996 and 1997. For fiscal
years 1996 and 1997, each RTC's per diem rate (whether hospital
specific or based on the national rate) shall be the cost-based rate
calculated pursuant to paragraphs (f) (2) or (3) of this section,
whichever is applicable, if it exceeds the fiscal year 1994 rate, or
the blended rate calculated pursuant to paragraph (f)(4)(iv) of this
section if it does not.
(iv) Blended rate. For fiscal years 1996 and 1997, each RTC's per
diem rate (whether hospital specific or based on the national rate)
shall, if the cost-based rate calculated pursuant to paragraphs (f) (2)
or (3) of this section, whichever is applicable, is less than the
facility's 1995 rate, be a blended rate calculated as follows:
(A) For fiscal year 1996, the sum of two-thirds of the RTC's fiscal
year 1995 rate plus one-third of the RTC's cost-based rate; and
(B) For fiscal year 1997, the sum of one third of the RTC's 1995
rate plus two-thirds of the RTC's cost-based rate.
(v) Special rule for new RTCs. For any RTC that was not in
operation as a CHAMPUS-authorized provider in fiscal year 1994, the
cost-based per diem rate shall be that calculated pursuant to paragraph
(f)(3) of this section until rebasing.
(5) Administration of RTC per diem payment system. This paragraph
contains several provisions pertinent to the administration of the
CHAMPUS RTC per diem payment system.
(i) Higher volume RTCs. An RTC is considered a higher volume RTC
for purposes of a RTC-specific per diem rate if it had 50 or more
annual discharges of CHAMPUS patients during the base period used for
calculation of the per diem rates. All other RTCs are considered lower
volume RTCs for purposes of establishing a per diem rate.
(ii) Cost reports. Cost reports needed for determinations required
by paragraphs (f)(2) and (f)(3) of this section will be provided by
each RTC to the Director, OCHAMPUS, who will provide a method for
reporting costs. The method established by the Director, OCHAMPUS will
require submission by the RTC of a copy of the RTC's state Medicaid
cost report, if the RTC filed one, or of alternative, independently
audited cost information. In any case in which the Director, OCHAMPUS
is unable to determine RTC-specific costs because the RTC has not
provided appropriate cost information, the cost-based per diem rate for
that RTC will be based on the national rate (as provided in paragraph
(f)(3) of this section).
(iii) Base year and update factor. The base year used for
calculating RTC-specific and national per day costs will be established
by the Director, OCHAMPUS based on the most current available cost
report data. The update factor used to calculate cost based payment
rates from base year per day costs will be the applicable Medicare
update factor for hospitals and units exempt from the Medicare
prospective payment system.
(iv) Rebasing. Under the cost-based per diem system, the Director,
OCHAMPUS will recalculate base year cost-based per diem rates every
third year after initially calculated.
(6) Therapeutic absences. CHAMPUS will not pay for days in which
the patient is absent on leave from the RTC. The RTC must identify
these days when claiming reimbursement. CHAMPUS will not count a
patient's leave of absence as a discharge in determining whether the
facility is a higher volume RTC for purposes of paragraph (f)(5) of
this section.
(7) Education costs. * * *
* * * * *
June 23, 1994.
L. M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 94-15700 Filed 6-28-94; 8:45 am]
BILLING CODE 5000-04-M
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