Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Hospice Care

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

RIN-0720-AA18

[DoD 6010.8-R]

Civilian Health and Medical Program of the Uniformed Services

(CHAMPUS); Hospice Care

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule revises DoD 6010.8-R which implements the

Civilian Health and Medical Program of the Uniformed Services. The rule

establishes a hospice benefit for the terminally ill that offers an

alternative to traditional therapeutic treatment which may no longer be

appropriate or desirable. Hospice care is palliative rather than

curative, generally emphasizing home care rather than institutional

care, and treating the social, psychological, spiritual, and physical

needs of the entire family.

EFFECTIVE DATE: This final rule is effective June 1, 1995.

ADDRESSES: Office of the Civilian Health and Medical Program of the

Uniformed Service (OCHAMPUS), Program Development Branch, Aurora, CO

80045-6900.

FOR FURTHER INFORMATION CONTACT:

David Bennett, Program Development Branch, OCHAMPUS, Aurora, Colorado

80045-6900, telephone (303) 361-1094.

SUPPLEMENTARY INFORMATION: In FR Doc. 93-21950, appearing in the

Federal Register on September 10, 1993 (58 FR 47692), The Office of the

Secretary of Defense published for public comment a proposed rule

establishing a hospice benefit under CHAMPUS.

Background

The Defense Authorization Act for FY 1992-93, Public Law 102-190,

directed CHAMPUS to provide hospice care in the manner and under the

conditions provided in section 1861(dd) of the Social Security Act (42

U.S.C. 1395x(dd)). This section of the Social Security Act sets forth

coverage/benefit guidelines, along with certification criteria for

participation in a hospice program. Since it is Congress' specific

intent to establish a benefit identical to that of Medicare, CHAMPUS

has adopted the provisions currently set out in Medicare's hospice

coverage/benefit guidelines, reimbursement methodologies (including

national hospice rates and wage indices), and certification criteria

for participation in [[Page 6014]] the hospice program (42 CFR Part

418, Hospice Care).

Under these provisions CHAMPUS will provide palliative care to

individuals with prognoses of less than 6 months to live if the illness

runs its normal course. The benefit is based upon a patient and family-

centered model where the views of the patient and family or friends

figure predominantly in the care decisions. This type of care

emphasizes supportive services, such as pain control and home care,

rather than cure-oriented services provided in institutions that are

otherwise the primary focus under CHAMPUS.

CHAMPUS will use the following national Medicare hospice rates for

services provided on or after October 1, 1994, through September 30,

1995, along with the wage and nonwage components of each:

----------------------------------------------------------------------------------------------------------------

National Wage Nonwage

rate component component

----------------------------------------------------------------------------------------------------------------

Routine Home Care........................................................ $90.51 $62.19 $28.32

Continuous Home Care..................................................... 528.30 362.99 165.31

Inpatient Respite........................................................ 93.63 50.68 42.95

General Inpatient........................................................ 402.67 257.75 144.92

----------------------------------------------------------------------------------------------------------------

The rates are based on a cost-related prospective payment method

subject to a ``cap'' amount and will be adjusted annually by the

Medicare hospital market basket inflation factor for services rendered

on or after October 1 of each fiscal year. These national payment rates

will be adjusted for regional wage differences by using appropriate

Medicare area wage indices. The hospice will be reimbursed for an

amount applicable to the type and intensity of the services furnished

to the beneficiary on a particular day. The Medicare statutory cap

amount for the cap year ending October 31, 1994, is $12,846. Annual

adjustments to the cap amount will be the same as Medicare.

Hospice care is viewed as the most cost-effective form of treatment

for the terminally ill. The benefit lowers costs by reducing or

eliminating inpatient days, unnecessary tests, and expensive curative

therapies. The national rate system is designed to reimburse the

hospice for the costs of all covered services related to the treatment

of the beneficiary's terminal illness, including the administrative and

general supervisory activities performed by physicians who are

employees of, or working under arrangements made with, the hospice.

Review of Comments

As a result of the publication of the proposed rule, the following

comments were received from interested associations and agencies.

Comment 1. One commentor felt that it would be unfair for OCHAMPUS

to apply Medicare aggregate reimbursement limitations to individual

hospices since the CHAMPUS beneficiary population is only a fraction of

the Medicare population. It was their contention that the volume of

Medicare patients is sufficiently large to allow for the development of

average inpatient stay, and average cost per patient, whereas the

volume of CHAMPUS patients in any one hospice would be so small as to

potentially result in a skewed average; e.g., a hospice may have a

small percentage of CHAMPUS patients who either have longer lengths of

stay or require substantial amounts of inpatient care.

As was previously stated, it was Congress' intent for CHAMPUS to

provide hospice care in the manner and under the conditions provided in

section 1861(dd) of the Social Security Act (42 U.S.C. 1395x(dd)).

Paragraph (2)(A)(iii) of this section requires assurance that the

aggregate number of inpatient days does not exceed 20 percent of the

aggregate number of days during the cap period. The only practical way

of assuring this requirement is to incorporate it as part of the

overall reimbursement methodology.

The aggregate limitations also lend themselves to the basic hospice

philosophy of emphasizing home care over institutional care. The cap

and inpatient limitations provide a financial incentive for home care

delivery under the hospice all-inclusive prospective payment system.

Elimination of such incentives might inadvertently result in

overutilization of inpatient care (both respite and general inpatient

care).

There could also be the assumption that since CHAMPUS beneficiaries

constitute a younger population, their hospice care would be more

conducive to a non-institutional setting (home health care setting)

than the traditional Medicare population. Factors such as patient

mobility and availability of family/care-givers would facilitate

treatment in the home setting, thus reducing total expenditures and

inpatient days for CHAMPUS beneficiaries.

Although the commenter's assumption that the vast majority of

individual hospices will service only a very small number of CHAMPUS

beneficiaries may be valid, there may be those with significant volumes

due to the concentration of military personnel in select geographic

locations. These programs may provide care for the vast majority of

CHAMPUS beneficiaries electing hospice care.

Comment 2. As part of the previous comment, it was recommended that

the proposed CHAMPUS regulation, section 199.14, paragraph

(g)(5)(D)(ii), be modified to make it clear that inpatient days in

excess of the 80-20 rule be paid as routine home care days when

calculating the amount refunded to CHAMPUS.

Procedural guidelines have been incorporated under section 199.14,

paragraph (g)(4) describing the calculation of amounts in excess of the

inpatient limitation which must be refunded to CHAMPUS. Paragraph

(g)(4)(i)(C) of this section specifies that the actual inpatient days

in excess of the limitation (20 percent of the aggregate inpatient

days) will be paid at the routine home rate when calculating the amount

refunded to CHAMPUS.

Comment 3. One commentor felt that CHAMPUS should not require

hospice programs to collect copayments for outpatient drugs/biologicals

and respite care since their collection was optional under Medicare and

would impose an undue administration burden on those hospice programs

which do not currently have a billing system in place for copayments.

Section 199.14, paragraph (g)(8) has been revised to make the

collection of cost-shares of outpatient drugs/biologicals and respite

care option under CHAMPUS.

Comment 4. Several commentors questioned the accuracy of the

calculations in Table IV of the Supplementary Information section of

the rule.

There was a transposition error in the example. The adjusted wage

component of $58.91 calculated in the first line of the table should

have been added to the [[Page 6015]] nonwage component of $39.50 to

arrive at the adjusted rate of $98.41. The adjusted rate should then

have been divided by .95 to figure the rate for inpatient respite care

including the coinsurance ($103.59) and multiplied by .05 to arrive at

a cost-share of $5.18.

Comment 5. Several commenters felt that the combining of core

service and 24-hour availability requirements caused confusion and led

to the interpretation that drugs and biologicals, as non-core service,

did not have to be routinely available on a 24-hour basis.

The core service and 24-hour availability requirements have been

separated in order to alleviate the apparent confusion over drugs and

biologicals. Refer to section 199.4 paragraphs (e)(19)(ii) through (iv)

for revisions.

Comment 6. One commentor pointed out the draft CHAMPUS regulatory

language does not say exactly what the Medicare regulations do

concerning core services, substantially all of which must be routinely

provided by employees of the hospice, and those services the hospice

must make routinely available on a 24-hour basis. The commentor felt

that these subtle distinctions/differences might cause confusion and

differing interpretations.

Section 199.4, paragraphs (e)(19)(ii) and (iv) have been revised to

reflect current Medicare language regarding core service and 24-hour

availability requirements.

Comment 7. Several commentors indicated that section 199.4,

paragraphs (e)(19)(iv) and (v)(B)(1) of the proposed rule did not say

that the benefit periods may be elected separately at different times

as specified in the Medicare hospice regulations. It was recommended

that language be added to the referenced sections to clarify that

breaks between benefit periods will also be allowed under CHAMPUS.

Section 199.4, paragraph (e)(19)(vi)(B)(1) has been revised to

indicate that periods of care may be elected separately at different

times.

Comment 8. One commentor expressed concern that the preamble

language, as well as the proposed regulatory language, left uncertainty

regarding whether OCHAMPUS will adopt future changes to the Medicare

hospice benefit for its own CHAMPUS benefit so that the two benefits

remain nearly identical. It was felt that a divergence in standards

between the two programs could cause confusion and adversely affect a

hospice's ability to serve CHAMPUS patients.

It is OCHAMPUS' intent to maintain a hospice benefit similar to, if

not identical to, that of Medicare. This includes the adoption of all

future changes in the Medicare hospice conditions of participation.

Comment 9. One commentor felt that it was important that OCHAMPUS

confirm that it intends to use the most current Medicare rates to

reimburse hospices for services provided to CHAMPUS beneficiaries and

to adopt changes in the Medicare reimbursement methodology as they

occur; e.g., Medicare's adoption of an updated, more accurate wage

index. The commentor recommended that regulatory language be added to

section 199.14, paragraph (g) confirming CHAMPUS' intent to adopt

future changes in the Medicare reimbursement methodology.

It is CHAMPUS' intent to use the most current Medicare rates to

reimburse hospices for services to CHAMPUS beneficiaries and to adopt

all changes to the Medicare reimbursement methodology as they occur.

Regulatory language has been added to section 199.14 confirming

CHAMPUS' intention of adopting future changes in the Medicare

reimbursement methodology (refer to section 199.14, paragraph (g)(2)).

Comment 10. Several commentors felt there was an inconsistency

between the preamble and proposed regulatory language regarding the

patient's initial certification. It was pointed out that while section

199.4, paragraph (e)(19)(v)(A) requires the patient's initial

certification to be provided in writing by the patient's attending

physician (if there is one) and the hospice medical director or a

physician member of the hospice interdisciplinary group, the preamble

indicated that written certification must be provided in writing by the

attending physician and/or the hospice medical director or a physician

member of the hospice interdisciplinary group. The commentor felt that

the use of ``and/or'' incorrectly suggested that either the attending

physician or the medical director's certification is sufficient for the

initial certification.

The patient's initial 90-day certification must be provided in

writing by both the patient's attending physician (if there is one) and

the hospice medical director or physician member of the hospice

interdisciplinary group. For subsequent periods the only requirement is

certification by the medical director of the hospice or the physician

member of the hospice interdisciplinary group.

Comment 11. One commentor recommended that the definition of

hospice care at Sec. 199.2, paragraph (b) and at Sec. 199.4, paragraph

(e)(19) be amended to add ``palliative care'' to the sentence: ``This

type of care emphasizes [palliative care] and supportive service * *

*.''

The recommendation has been adopted and incorporated into the final

rule.

Comment 12. Several commentors recommended that the term ``nursing

home'' be changed to Medicaid-certified nursing facility in Sec. 199.4,

paragraph (e)(19)(i)(H).

The commentors' recommendation was adopted and incorporated into

the final rule.

Comment 13. One commentor felt that a cross-reference to the

Medicare home health agency conditions of participation, 42 CFR 484.36,

would be helpful in defining the term ``qualified'' aides in

Sec. 199.4, paragraph (e)(19)(i)(E).

A cross-reference has been provided in a note following Sec. 199.4,

paragraph (e)(19)(i)(E) which will help in defining the term

``qualified'' home health aide.

Comment 14. One commentor felt that the last sentence in proposed

Sec. 199.4, paragraph (e)(19)(i)(F) was not necessary and would only

cause confusion since each of the covered services enumerated in

Sec. 199.4, paragraphs (e)(19)(i) (A)-(H) are covered only if the

service or item is included in the patient's plan of care.

The last sentence has been deleted from the final rule.

Comment 15. One commentor pointed out that Medicare policy defines

``terminal'' as six months or less if the disease runs its normal

course.

The definition of ``terminal'' has been expanded wherever cited in

the final regulation.

Comment 16. One commentor recommended that the requirement that the

hospice must maintain professional management of the patient at all

times be expanded to include ``and in all settings.''

The recommendation was adopted and incorporated into the final

rule.

Comment 17. One commentor wanted clarification regarding the word

``participating'' in Sec. 199.4, paragraph (e)(19)(i)(H).

A hospice program must be Medicare approved (i.e., a state agency

must certify to the Department of Health and Human Services that a

hospice meets the conditions of participation established in 42 CFR

Part 418--Hospice Care) in order to participate in the CHAMPUS program.

The hospice will only be allowed to participate (enter into a

participation agreement with CHAMPUS) if there is proof that it is a

Medicare approved facility. Respite care is the only type of inpatient

care that may be provided in a nursing [[Page 6016]] facility (formally

known as an intermediate care facility--ICF). A nursing facility must

be certified by a state Medicaid agency as well as meet the conditions

for participation under 42 CFR 418.100 in order to participate in

CHAMPUS.

Comment 18. One commentor pointed out that CHAMPUS' requirement

that short-term inpatient care be provided in Medicare participating

facilities precludes/prohibits the coverage of inpatient care in VA

hospitals.

Hospice care will not be allowed in VA hospitals under the

provisions of this rule.

Comment 19. One commenter wanted to know if CHAMPUS intended to use

the Health Care Financing Administration's (HCFA) wage index

adjustments for hospice reimbursement.

Yes, CHAMPUS intends to use HCFA's wage index adjustments for

hospice reimbursement. These wage indices have been in use since the

inception of the Medicare hospice benefit in 1983, and are different

than those used in calculation of CHAMPUS DRGs and mental health per

diems.

Comment 20. Several editorial comments were received from one of

CHAMPUS' administrative agencies.

All of these comments were adopted and incorporated into the final

rule.

Summary of Regulatory Modifications

The following modifications were made as a result of suggestions

received during the public comment period:

(1) The core services and 24-hour availability requirements were

separated out as distinct provisions;

(2) the collection of cost-shares by individual hospices for

outpatient drugs/biologicals and respite care was made optional under

CHAMPUS; (3) regulatory language was added confirming CHAMPUS's

intention of adopting future changes in Medicare reimbursement

methodology; (4) procedures were added for changes in designation of

hospice programs; (5) exceptions were provided for waiver of payment of

other basic program services related to treatment of terminal illness;

(6) a note was added regarding the information required on the

treatment plan; and (7) payment provisions were modified to allow 100

percent payment of CHAMPUS allowed charges for hospice physicians

providing direct patient care.

Provider Notification

The CHAMPUS contractors will be sending out letters along with

CHAMPUS participation agreements, on a one time basis, to all hospice

programs certified to participate in Medicare within their

jurisdictional areas. The letters will provide information regarding

the new hospice benefit and encourage participation under CHAMPUS. A

hospice program will be certified based solely on its appearance on a

current Medicare listing. No additional information will be required

except for the signed CHAMPUS participation agreement which accompanied

the notification letter. Thereafter, hospice programs will have to

contact the CHAMPUS contractor responsible for claims processing within

their geographical area for certification under CHAMPUS. The hospice

will have to provide documentation that it is certified to participate

in Medicare (i.e., it meets all Medicare conditions of participation

(42 CFR Part 418) relative to CHAMPUS beneficiaries) and that it and

its employees are licensed in accordance with applicable Federal, State

and local laws and regulations. The hospice will be provided with a

participation agreement for signature if the above requirements are

met. An agreement with a hospice is not time-limited and has no fixed

expiration date. The agreement remains in effect until such time as

there is a voluntary or involuntary termination.

Regulatory Procedures

Executive Order 12866 requires that a regulatory impact analysis be

performed on any significant action. A ``significant action'' is

defined as one which would result in an annual effect on the national

economy of $100 million or more, or which would have other substantial

impacts.

The Regulatory Flexibility Act (RFA) 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 final rule is not a major rule under Executive Order 12866.

The changes set forth in this final rule are minor revisions to

existing regulation. The changes made in this final rule involve an

expansion of CHAMPUS benefits. In addition, this final rule will have

minor impact and will not significantly affect a substantial number of

small entities. In light of the above, no regulatory impact analysis is

required.

We certify that this final rule has been reviewed under the

provisions of the October 23, 1991, Executive Order on Civil Justice

Reform. This final rule meets all applicable standards provided in that

executive order.

This rule does impose minimal information collection requirements

to include the following: (1) Total number of CHAMPUS inpatient hospice

days; (2) total number of CHAMPUS hospice days (both inpatient and home

care); (3) total number of CHAMPUS beneficiaries electing hospice care;

(4) total reimbursement for CHAMPUS inpatient care; and (5) total

reimbursement for all CHAMPUS hospice care (both inpatient and home

care).

The fact that all CHAMPUS-approved hospice programs are subject to

Medicare reporting requirements (i.e., they must be Medicare certified

in order to receive CHAMPUS reimbursement), will tend to minimize the

administrative burden imposed by this rule. The hospice will already

have an established data collection system in place for developing

these annual reports. Overall, resource allocation (administrative

time) will be minimal since the number of CHAMPUS hospice beneficiaries

would be disproportionately low compared to the number of Medicare

patients. In other words, since the facility already has to collect,

arrange, and submit the data on a majority of its patients, the

administrative costs and/or burden of reporting CHAMPUS hospice

patients would be minimal. The hospice would have to expand only the

data collection parameters (data on CHAMPUS beneficiaries) in order to

meet the requirements under this rule.

The rule represents an expansion of benefits under the CHAMPUS

program, resulting in certification of a new provider category

(hospice). Although hospice programs are accustomed to the proposed

reporting requirements and would not view this as an administrative

intrusion, the final rule has been prepared for review by the Executive

Office of Management and Budget under authority of the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501-3520.

List of Subjects in 32 CFR Part 199

Claims, handicapped, health insurance, and military personnel.

Accordingly, 32 CFR part 199, is amended as follows:

PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED

SERVICES (CHAMPUS)

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 199.2(b) is amended by adding a definition for ``hospice

care'' [[Page 6017]] and ``respite care'' in alphabetical order to read

as follows:

Sec. 199.2 Definitions.

* * * * *

(b) * * *

Hospice care. Hospice care is a program which provides an

integrated set of services and supplies designed to care for the

terminally ill. This type of care emphasizes palliative care and

supportive services, such as pain control and home care, rather than

cure-oriented services provided in institutions that are otherwise the

primary focus under CHAMPUS. The benefit provides coverage for a humane

and sensible approach to care during the last days of life for some

terminally ill patients.

* * * * *

Respite care. Respite care is short-term care for a patient in

order to provide rest and change for those who have been caring for the

patient at home, usually the patient's family.

* * * * *

3. Section 199.4 is amended by adding new paragraph (e)(19) to read

as follows:

Sec. 199.4 Basic program benefits.

* * * * *

(e) * * *

(19) Hospice care. Hospice care is a program which provides an

integrated set of services and supplies designed to care for the

terminally ill. This type of care emphasizes palliative care and

supportive services, such as pain control and home care, rather than

cure-oriented services provided in institutions that are otherwise the

primary focus under CHAMPUS. The benefit provides coverage for a humane

and sensible approach to care during the last days of life for some

terminally ill patients.

(i) Benefit coverage. CHAMPUS beneficiaries who are terminally ill

(that is, a life expectancy of six months or less if the disease runs

its normal course) will be eligible for the following services and

supplies in lieu of most other CHAMPUS benefits:

(A) Physician services.

(B) Nursing care provided by or under the supervision of a

registered professional nurse.

(C) Medical social services provided by a social worker who has at

least a bachelor's degree from a school accredited or approved by the

Council on Social Work Education, and who is working under the

direction of a physician. Medical social services include, but are not

limited to the following:

(1) Assessment of social and emotional factors related to the

beneficiary's illness, need for care, response to treatment, and

adjustment to care.

(2) Assessment of the relationship of the beneficiary's medical and

nursing requirements to the individual's home situation, financial

resources, and availability of community resources.

(3) Appropriate action to obtain available community resources to

assist in resolving the beneficiary's problem.

(4) Counseling services that are required by the beneficiary.

(D) Counseling services provided to the terminally ill individual

and the family member or other persons caring for the individual at

home. Counseling, including dietary counseling, may be provided both

for the purpose of training the individual's family or other care-giver

to provide care, and for the purpose of helping the individual and

those caring for him or her to adjust to the individual's approaching

death. Bereavement counseling, which consists of counseling services

provided to the individual's family after the individual's death, is a

required hospice service but it is not reimbursable.

(E) Home health aide services furnished by qualified aides and

homemaker services. Home health aides may provide personal care

services. Aides also may perform household services to maintain a safe

and sanitary environment in areas of the home used by the patient.

Examples of such services are changing the bed or light cleaning and

laundering essential to the comfort and cleanliness of the patient.

Aide services must be provided under the general supervision of a

registered nurse. Homemaker services may include assistance in personal

care, maintenance of a safe and healthy environment, and services to

enable the individual to carry out the plan of care. Qualifications for

home health aides can be found in 42 CFR 484.36.

(F) Medical appliances and supplies, including drugs and

biologicals. Only drugs that are used primarily for the relief of pain

and symptom control related to the individual's terminal illness are

covered. Appliances may include covered durable medical equipment, as

well as other self-help and personal comfort items related to the

palliation or management of the patient's condition while he or she is

under hospice care. Equipment is provided by the hospice for use in the

beneficiary's home while he or she is under hospice care. Medical

supplies include those that are part of the written plan of care.

Medical appliances and supplies are included within the hospice all-

inclusive rates.

(G) Physical therapy, occupational therapy and speech-language

pathology services provided for purposes of symptom control or to

enable the individual to maintain activities of daily living and basic

functional skills.

(H) Short-term inpatient care provided in a Medicare participating

hospice inpatient unit, or a Medicare participating hospital, skilled

nursing facility (SNF) or, in the case of respite care, a Medicaid-

certified nursing facility that additionally meets the special hospice

standards regarding staffing and patient areas. Services provided in an

inpatient setting must conform to the written plan of care. Inpatient

care may be required for procedures necessary for pain control or acute

or chronic symptom management. Inpatient care may also be furnished to

provide respite for the individual's family or other persons caring for

the individual at home. Respite care is the only type of inpatient care

that may be provided in a Medicaid-certified nursing facility. The

limitations on custodial care and personal comfort items applicable to

other CHAMPUS services are not applicable to hospice care.

(ii) Core services. The hospice must ensure that substantially all

core services are routinely provided directly by hospice employees;

i.e., physician services, nursing care, medical social services, and

counseling for individuals and care givers. Refer to paragraphs

(e)(19)(i)(A), (e)(19)(i)(B), (e)(19)(i)(C), and (e)(19)(i)(D) of this

section.

(iii) Non-core services. While non-core services (i.e., home health

aide services, medical appliances and supplies, drugs and biologicals,

physical therapy, occupational therapy, speech-language pathology and

short-term inpatient care) may be provided under arrangements with

other agencies or organizations, the hospice must maintain professional

management of the patient at all times and in all settings. Refer to

paragraphs (e)(19)(i)(E), (e)(19)(i)(F), (e)(19)(i)(G), and

(e)(19)(i)(H) of this section.

(iv) Availability of services. The hospice must make nursing

services, physician services, and drugs and biologicals routinely

available on a 24-hour basis. All other covered services must be made

available on a 24-hour basis to the extent necessary to meet the needs

of individuals for care that is reasonable and necessary for the

palliation and management of the terminal illness and related

condition. These services must be provided in a [[Page 6018]] manner

consistent with accepted standards of practice.

(v) Periods of care. Hospice care is divided into distinct periods/

episodes of care. The terminally ill beneficiary may elect to receive

hospice benefits for an initial period of 90 days, a subsequent period

of 90 days, a second subsequent period of 30 days, and a final period

of unlimited duration.

(vi) Conditions for coverage. The CHAMPUS beneficiary must meet the

following conditions/criteria in order to be eligible for the hospice

benefits and services referenced in paragraph (e)(19)(i) of this

section.

(A) There must be written certification in the medical record that

the CHAMPUS beneficiary is terminally ill with a life expectancy of six

months or less if the terminal illness runs its normal course.

(1) Timing of certification. The hospice must obtain written

certification of terminal illness for each of the election periods

described in paragraph (e)(19(vi)(B) of this section, even if a single

election continues in effect for two, three or four periods.

(i) Basic requirement. Except as provided in paragraph

(e)(19(vi)(A)(1)(ii) of this section the hospice must obtain the

written certification no later than two calendar days after the period

begins.

(ii) Exception. For the initial 90-day period, if the hospice

cannot obtain the written certifications within two calendar days, it

must obtain oral certifications within two calendar days, and written

certifications no later than eight calendar days after the period

begins.

(2) Sources of certification. Physician certification is required

for both initial and subsequent election periods.

(i) For the initial 90-day period, the hospice must obtain written

certification statements (and oral certification statements if required

under paragraph (e)(19(vi)(A)(i)(ii) of this section) from:

(A) The individual's attending physician if the individual has an

attending physician; and

(B) The medical director of the hospice or the physician member of

the hospice interdisciplinary group.

(ii) For subsequent periods, the only requirement is certification

by one of the physicians listed in paragraph (e)(19)(vi)(A)(2)(i)(B) of

this section.

(B) The terminally ill beneficiary must elect to receive hospice

care for each specified period of time; i.e., the two 90-day periods, a

subsequent 30-day period, and a final period of unlimited duration. If

the individual is found to be mentally incompetent, his or her

representative may file the election statement. Representative means an

individual who has been authorized under State law to terminate medical

care or to elect or revoke the election of hospice care on behalf of a

terminally ill individual who is found to be mentally incompetent.

(1) The episodes of care must be used consecutively; i.e., the two

90-day periods first, then the 30-day period, followed by the final

period. The periods of care may be elected separately at different

times.

(2) The initial election will continue through subsequent election

periods without a break in care as long as the individual remains in

the care of the hospice and does not revoke the election.

(3) The effective date of the election may begin on the first day

of hospice care or any subsequent day of care, but the effective date

cannot be made prior to the date that the election was made.

(4) The beneficiary or representative may revoke a hospice election

at any time, but in doing so, the remaining days of that particular

election period are forfeited and standard CHAMPUS coverage resumes. To

revoke the hospice benefit, the beneficiary or representative must file

a signed statement of revocation with the hospice. The statement must

provide the date that the revocation is to be effective. An individual

or representative may not designate an effective date earlier than the

date that the revocation is made.

(5) If an election of hospice benefits has been revoked, the

individual, or his or her representative may at any time file a hospice

election for any period of time still available to the individual, in

accordance with Sec. 199.4(e)(19)(vi)(B).

(6) A CHAMPUS beneficiary may change, once in each election period,

the designation of the particular hospice from which he or she elects

to receive hospice care. To change the designation of hospice programs

the individual or representative must file, with the hospice from which

care has been received and with the newly designated hospice, a

statement that includes the following information:

(i) The name of the hospice from which the individual has received

care and the name of the hospice from which he or she plans to receive

care.

(ii) The date the change is to be effective.

(7) Each hospice will design and print its own election statement

to include the following information:

(i) Identification of the particular hospice that will provide care

to the individual.

(ii) The individual's or representative's acknowledgment that he or

she has been given a full understanding of the palliative rather than

curative nature of hospice care, as it relates to the individual's

terminal illness.

(iii) The individual's or representative's acknowledgment that he

or she understands that certain other CHAMPUS services are waived by

the election.

(iv) The effective date of the election.

(v) The signature of the individual or representative, and the date

signed.

(8) The hospice must notify the CHAMPUS contractor of the

initiation, change or revocation of any election.

(c) The beneficiary must waive all rights to other CHAMPUS payments

for the duration of the election period for:

(1) Care provided by any hospice program other than the elected

hospice unless provided under arrangements made by the elected hospice;

and

(2) Other CHAMPUS basic program services/benefits related to the

treatment of the terminal illness for which hospice care was elected,

or to a related condition, or that are equivalent to hospice care,

except for services provided by:

(i) the designated hospice;

(ii) another hospice under arrangement made by the designated

hospice; or

(iii) an attending physician who is not employed by or under

contract with the hospice program.

(3) Basic CHAMPUS coverage will be reinstated upon revocation of

the hospice election.

(D) A written plan of care must be established by a member of the

basic interdisciplinary group assessing the patient's needs. This group

must have at least one physician, one registered professional nurse,

one social worker, and one pastoral or other counselor.

(1) In establishing the initial plan of care the member of the

basic interdisciplinary group who assesses the patient's needs must

meet or call at least one other group member before writing the initial

plan of care.

(2) At least one of the persons involved in developing the initial

plan must be a nurse or physician.

(3) The plan must be established on the same day as the assessment

if the day of assessment is to be a covered day of hospice care.

(4) The other two members of the basic interdisciplinary group--the

attending physician and the medical director or physician designee--

must review the initial plan of care and provide their input to the

process of establishing the plan of care within two

[[Page 6019]] calendar days following the day of assessment. A meeting

of group members is not required within this 2-day period. Input may be

provided by telephone.

(5) Hospice services must be consistent with the plan of care for

coverage to be extended.

(6) The plan must be reviewed and updated, at intervals specified

in the plan, by the attending physician, medical director or physician

designee and interdisciplinary group. These reviews must be documented

in the medical records.

(7) The hospice must designate a registered nurse to coordinate the

implementation of the plan of care for each patient.

(8) The plan must include an assessment of the individual's needs

and identification of the services, including the management of

discomfort and symptom relief. It must state in detail the scope and

frequency of services needed to meet the patient's and family's needs.

(E) Complete medical records and all supporting documentation must

be submitted to the CHAMPUS contractor within 30 days of the date of

its request. If records are not received within the designated time

frame, authorization of the hospice benefit will be denied and any

prior payments made will be recouped. A denial issued for this reason

is not an initial determination under section 199.10, and is not

appealable.

(vii) Appeal rights under hospice benefit. A beneficiary or

provider is entitled to appeal rights for cases involving a denial of

benefits in accordance with the provisions of this part and part

199.10.

* * * * *

4. Section 199.6 is amended by adding new paragraph (b)(4)(xiii) to

read as follows:

Sec. 199.6 Authorized providers.

* * * * *

(b) * * *

(4) * * *

(xiii) Hospice programs. Hospice programs must be Medicare approved

and meet all Medicare conditions of participation (42 CFR Part 418) in

relation to CHAMPUS patients in order to receive payment under the

CHAMPUS program. A hospice program may be found to be out of compliance

with a particular Medicare condition of participation and still

participate in the CHAMPUS as long as the hospice is allowed continued

participation in Medicare while the condition of noncompliance is being

corrected. The hospice program can be either a public agency or private

organization (or a subdivision thereof) which:

(A) Is primarily engaged in providing the care and services

described under Sec. 199.4(e)(19) and makes such services available on

a 24-hour basis.

(B) Provides bereavement counseling for the immediate family or

terminally ill individuals.

(C) Provides for such care and services in individuals' homes, on

an outpatient basis, and on a short-term inpatient basis, directly or

under arrangements made by the hospice program, except that the agency

or organization must:

(1) Ensure that substantially all the core services are routinely

provided directly by hospice employees.

(2) Maintain professional management responsibility for all

services which are not directly furnished to the patient, regardless of

the location or facility in which the services are rendered.

(3) Provide assurances that the aggregate number of days of

inpatient care provided in any 12-month period does not exceed 20

percent of the aggregate number of days of hospice care during the same

period.

(4) Have an interdisciplinary group composed of the following

personnel who provide the care and services described under

Sec. 199.4(e)(19) and who establish the policies governing the

provision of such care/services:

(i) A physician;

(ii) A registered professional nurse;

(iii) A social worker; and

(iv) A pastoral or other counselor.

(5) Maintain central clinical records on all patients.

(6) Utilize volunteers.

(7) The hospice and all hospice employees must be licensed in

accordance with applicable Federal, State and local laws and

regulations.

(8) The hospice must enter into an agreement with CHAMPUS in order

to be qualified to participate and to be eligible for payment under the

program. In this agreement the hospice and CHAMPUS agree that the

hospice will:

(i) Not charge the beneficiary or any other person for items or

services for which the beneficiary is entitled to have payment made

under the CHAMPUS hospice benefit.

(ii) Be allowed to charge the beneficiary for items or services

requested by the beneficiary in addition to those that are covered

under the CHAMPUS hospice benefit.

(9) Meet such other requirements as the Secretary of Defense may

find necessary in the interest of the health and safety of the

individuals who are provided care and services by such agency or

organization.

* * * * *

5. Section 199.14 is amended by redesignating paragraphs (g), (h),

(i), (j), and (k) as (h), (i), (j), (k), and (l), adding new paragraph

(g).

Sec. 199.14 Provider reimbursement methods.

* * * * *

(g) Reimbursement of hospice programs. Hospice care will be

reimbursed at one of four predetermined national CHAMPUS rates based on

the type and intensity of services furnished to the beneficiary. A

single rate is applicable for each day of care except for continuous

home care where payment is based on the number of hours of care

furnished during a 24-hour period. These rates will be adjusted for

regional differences in wages using wage indices for hospice care.

(1) National hospice rates. CHAMPUS will use the national hospice

rates for reimbursement of each of the following levels of care

provided by or under arrangement with a CHAMPUS approved hospice

program:

(i) Routine home care. The hospice will be paid the routine home

care rate for each day the patient is at home, under the care of the

hospice, and not receiving continuous home care. This rate is paid

without regard to the volume or intensity of routine home care services

provided on any given day.

(ii) Continuous home care. The hospice will be paid the continuous

home care rate when continuous home care is provided. The continuous

home care rate is divided by 24 hours in order to arrive at an hourly

rate.

(A) A minimum of 8 hours of care must be provided within a 24-hour

day starting and ending at midnight.

(B) More than half of the total actual hours being billed for each

24-hour period must be provided by either a registered or licensed

practical nurse.

(C) Homemaker and home health aide services may be provided to

supplement the nursing care to enable the beneficiary to remain at

home.

(D) For every hour or part of an hour of continuous care furnished,

the hourly rate will be reimbursed to the hospice up to 24 hours a day.

(iii) Inpatient respite care. The hospice will be paid at the

inpatient respite care rate for each day on which the beneficiary is in

an approved inpatient facility and is receiving respite care.

(A) Payment for respite care may be made for a maximum of 5 days at

a time, including the date of admission but not counting the date of

discharge. The [[Page 6020]] necessity and frequency of respite care

will be determined by the hospice interdisciplinary group with input

from the patient's attending physician and the hospice's medical

director.

(B) Payment for the sixth and any subsequent days is to be made at

the routine home care rate.

(iv) General inpatient care. Payment at the inpatient rate will be

made when general inpatient care is provided for pain control or acute

or chronic symptom management which cannot be managed in other

settings. None of the other fixed payment rates (i.e., routine home

care) will be applicable for a day on which the patient receives

general inpatient care except on the date of discharge.

(v) Date of discharge. For the day of discharge from an inpatient

unit, the appropriate home care rate is to be paid unless the patient

dies as an inpatient. When the patient is discharged deceased, the

inpatient rate (general or respite) is to be paid for the discharge

date.

(2) Use of Medicare rates. CHAMPUS will use the most current

Medicare rates to reimburse hospice programs for services provided to

CHAMPUS beneficiaries. It is CHAMPUS' intent to adopt changes in the

Medicare reimbursement methodology as they occur; e.g., Medicare's

adoption of an updated, more accurate wage index.

(3) Physician reimbursement. Payment is dependent on the

physician's relationship with both the beneficiary and the hospice

program.

(i) Physicians employed by, or contracted with, the hospice.

(A) Administrative and supervisory activities (i.e., establishment,

review and updating of plans of care, supervising care and services,

and establishing governing policies) are included in the adjusted

national payment rate.

(B) Direct patient care services are paid in addition to the

adjusted national payment rate.

(1) Physician services will be reimbursed an amount equivalent to

100 percent of the CHAMPUS' allowable charge; i.e., there will be no

cost-sharing and/or deductibles for hospice physician services.

(2) Physician payments will be counted toward the hospice cap

limitation.

(ii) Independent attending physician. Patient care services

rendered by an independent attending physician (a physician who is not

considered employed by or under contract with the hospice) are not part

of the hospice benefit.

(A) Attending physician may bill in his/her own right.

(B) Services will be subject to the appropriate allowable charge

methodology.

(C) Reimbursement is not counted toward the hospice cap limitation.

(D) Services provided by an independent attending physician must be

coordinated with any direct care services provided by hospice

physicians.

(E) The hospice must notify the CHAMPUS contractor of the name of

the physician whenever the attending physician is not a hospice

employee.

(iii) Voluntary physician services. No payment will be allowed for

physician services furnished voluntarily (both physicians employed by,

and under contract with, the hospice and independent attending

physicians). Physicians may not discriminate against CHAMPUS

beneficiaries; e.g., designate all services rendered to non-CHAMPUS

patients as volunteer and at the same time bill for CHAMPUS patients.

(4) Unrelated medical treatment. Any covered CHAMPUS services not

related to the treatment of the terminal condition for which hospice

care was elected will be paid in accordance with standard reimbursement

methodologies; i.e., payment for these services will be subject to

standard deductible and cost-sharing provisions under the CHAMPUS. A

determination must be made whether or not services provided are related

to the individual's terminal illness. Many illnesses may occur when an

individual is terminally ill which are brought on by the underlying

condition of the ill patient. For example, it is not unusual for a

terminally ill patient to develop pneumonia or some other illness as a

result of his or her weakened condition. Similarly, the setting of

bones after fractures occur in a bone cancer patient would be treatment

of a related condition. Thus, if the treatment or control of an upper

respiratory tract infection is due to the weakened state of the

terminal patient, it will be considered a related condition, and as

such, will be included in the hospice daily rates.

(5) Cap amount. Each CHAMPUS-approved hospice program will be

subject to a cap on aggregate CHAMPUS payments from November 1 through

October 31 of each year, hereafter known as ``the cap period.''

(i) The cap amount will be adjusted annually by the percent of

increase or decrease in the medical expenditure category of the

Consumer Price Index for all urban consumers (CPI-U).

(ii) The aggregate cap amount (i.e., the statutory cap amount times

the number of CHAMPUS beneficiaries electing hospice care during the

cap period) will be compared with total actual CHAMPUS payments made

during the same cap period.

(iii) Payments in excess of the cap amount must be refunded by the

hospice program. The adjusted cap amount will be obtained from the

Health Care Financing Administration (HCFA) prior to the end of each

cap period.

(iv) Calculation of the cap amount for a hospice which has not

participated in the program for an entire cap year (November 1 through

October 31) will be based on a period of at least 12 months but no more

than 23 months. For example, the first cap period for a hospice

entering the program on October 1, 1994, would run from October 1, 1994

through October 31, 1995. Similarly, the first cap period for hospice

providers entering the program after November 1, 1993 but before

November 1, 1994 would end October 31, 1995.

(6) Inpatient limitation. During the 12-month period beginning

November 1 of each year and ending October 31, the aggregate number of

inpatient days, both for general inpatient care and respite care, may

not exceed 20 percent of the aggregate total number of days of hospice

care provided to all CHAMPUS beneficiaries during the same period.

(i) If the number of days of inpatient care furnished to CHAMPUS

beneficiaries exceeds 20 percent of the total days of hospice care to

CHAMPUS beneficiaries, the total payment for inpatient care is

determined follows:

(A) Calculate the ratio of the maximum number of allowable

inpatient days of the actual number of inpatient care days furnished by

the hospice to Medicare patients.

(B) Multiply this ratio by the total reimbursement for inpatient

care made by the CHAMPUS contractor.

(C) Multiply the number of actual inpatient days in excess of the

limitation by the routine home care rate.

(D) Add the amounts calculated in paragraphs (g)(6)(i) (B) and (C)

of this section.

(ii) Compare the total payment for inpatient care calculated in

paragraph (g)(6)(i)(D) of this section to actual payments made to the

hospice for inpatient care during the cap period.

(iii) Payments in excess of the inpatient limitation must be

refunded by the hospice program.

(7) Hospice reporting responsibilities. The hospice is responsible

for reporting the following data within 30 days after the end of the

cap period: [[Page 6021]]

(i) Total reimbursement received and receivable for services

furnished CHAMPUS beneficiaries during the cap period, including

physician's services not of an administrative or general supervisory

nature.

(ii) Total reimbursement received and receivable for general

inpatient care and inpatient respite care furnished to CHAMPUS

beneficiaries during the cap period.

(iii) Total number of inpatient days furnished to CHAMPUS hospice

patients (both general inpatient and inpatient respite days) during the

cap period.

(iv) Total number of CHAMPUS hospice days (both inpatient and home

care) during the cap period.

(v) Total number of beneficiaries electing hospice care. The

following rules must be adhered to by the hospice in determining the

number of CHAMPUS beneficiaries who have elected hospice care during

the period:

(A) The beneficiary must not have been counted previously in either

another hospice's cap or another reporting year.

(B) The beneficiary must file an initial election statement during

the period beginning September 28 of the previous cap year through

September 27 of the current cap year in order to be counted as an

electing CHAMPUS beneficiary during the current cap year.

(C) Once a beneficiary has been included in the calculation of a

hospice cap amount, he or she may not be included in the cap for that

hospice again, even if the number of covered days in a subsequent

reporting period exceeds that of the period where the beneficiary was

included.

(D) There will be proportional application of the cap amount when a

beneficiary elects to receive hospice benefits from two or more

different CHAMPUS-certified hospices. A calculation must be made to

determine the percentage of the patient's length of stay in each

hospice relative to the total length of hospice stay.

(8) Reconsideration of cap amount and inpatient limit. A hospice

dissatisfied with the contractor's calculation and application of its

cap amount and/or inpatient limitation may request and obtain a

contractor review if the amount of program reimbursement in

controversy--with respect to matters which the hospice has a right to

review--is at least $1000. The administrative review by the contractor

of the calculation and application of the cap amount and inpatient

limitation is the only administrative review available. These

calculations are not subject to the appeal procedures set forth in

Sec. 199.10. The methods and standards for calculation of the hospice

payment rates established by CHAMPUS, as well as questions as to the

validity of the applicable law, regulations or CHAMPUS decisions, are

not subject to administrative review, including the appeal procedures

of Sec. 199.10.

(9) Beneficiary cost-sharing. There are no deductibles under the

CHAMPUS hospice benefit. CHAMPUS pays the full cost of all covered

services for the terminal illness, except for small cost-share amounts

which may be collected by the individual hospice for outpatient drugs

and biologicals and inpatient respite care.

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

outpatient drugs or $5 toward each prescription, whichever is less.

Additionally, the cost of prescription drugs (drugs or biologicals) may

not exceed that which a prudent buyer would pay in similar

circumstances; that is, a buyer who refuses to pay more than the going

price for an item or service and also seeks to economize by minimizing

costs.

(ii) For inpatient respite care, the cost-share for each respite

care day is equal to 5 percent of the amount CHAMPUS has estimated to

be the cost of respite care, after adjusting the national rate for

local wage differences.

(iii) The amount of the individual cost-share liability for respite

care during a hospice cost-share period may not exceed the Medicare

inpatient hospital deductible applicable for the year in which the

hospice cost-share period began. The individual hospice cost-share

period begins on the first day an election is in effect for the

beneficiary and ends with the close of the first period of 14

consecutive days on each of which an election is not in effect for the

beneficiary.

* * * * *

Dated: January 25, 1995.

Patricia L. Toppings,

Alternate OSD Federal Register Liaison Officer, Department of Defense.

[FR Doc. 95-2194 Filed 1-31-95; 8:45 am]

BILLING CODE 5000-04-M