Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AE64

Civilian Health and Medical Program of the Department of Veterans

Affairs (CHAMPVA)

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the medical regulations concerning

medical care for survivors and dependents of certain veterans. These

regulations establish basic policies and procedures governing the

administration of the Civilian Health and Medical Program of the

Department of Veterans Affairs (CHAMPVA), including CHAMPVA claims

processing procedures, benefits and services.

DATES: Effective Date: October 9, 1998.

FOR FURTHER INFORMATION CONTACT: Susan Schmetzer, Health Administration

Center (formerly CHAMPVA Center), P.O. Box 65023, Denver, CO 80206-

9023, telephone (303) 331-7552.

[[Page 48101]]

SUPPLEMENTARY INFORMATION: In a document published in the Federal

Register (61 FR 56486) on November 1, 1996, we proposed to amend the

medical regulations (38 CFR part 17) by including CHAMPVA claims

processing procedures and a description of benefits and services.

The provisions of 38 U.S.C. 1713 authorize VA to provide medical

care to the dependents and survivors of certain veterans ``in the same

or similar manner and subject to the same or similar limitations'' as

medical care is furnished by the Department of Defense (DoD) to certain

dependents and survivors of active duty and retired members of the

Armed Forces under 10 United States Code, Chapter 55, Civilian Health

and Medical Program of the Uniformed Services (CHAMPUS/TRICARE).

Previously, VA had an agreement with DoD to contract with commercial

claims processors (fiscal intermediaries) for the processing of VA

claims. However, in an effort to both contain costs and to improve

services to the beneficiaries, VA now conducts its own claims

processing services and has consolidated the operations in Denver,

Colorado.

Interested parties were invited to submit written comments on or

before December 31, 1996. We received comments from two organizations,

the American Academy of Dermatology and the American Podiatric Medical

Association, Inc. All comments submitted by these two organizations

were in reference to excluded benefits under Sec. 17.272.

It was recommended that we clarify the exclusion for cosmetic

surgery found at Sec. 17.272(19) to distinguish it from reconstructive

surgery. We agree and have added clarifying language to assist in

distinguishing between covered and noncovered benefits.

A recommendation was made to change the term ``podiatry services''

in Sec. 17.272(25) to ``foot care services.'' We concur with this

recommendation as it clarifies that the exclusion is applicable to all

medical providers who may treat certain foot conditions, not just

podiatrists.

A commenter recommended that Sec. 17.272(35) be modified to allow

for wigs and hairpieces for conditions other than alopecia. No changes

were made based on this comment. 38 U.S.C. 1713 requires that CHAMPVA

benefits be subject to the same or similar limitations as medical care

furnished to Department of Defense dependents through the CHAMPUS/

TRICARE program. In accordance with section 744 of Public Law 96-527,

CHAMPUS/TRICARE wig and hairpiece benefits are specifically limited to

alopecia resulting from treatment of malignant disease.

The exclusion at Sec. 17.272(46) of service or advice rendered by

telephone or telephonic device with the exception of cardiac pacemaker

monitoring was suggested as presenting a roadblock to cost-saving

technology. For the same reason, the commenter also objected to the

exclusion at Sec. 17.272(75) of services performed when a patient is

not physically present. These exclusions promote a quality of care

standard that is established for diagnosis and treatment through face-

to-face contact between a provider and patient. For this reason, no

changes are made to Sec. 17.272(75). However, we do recognize that

remote monitoring can be an efficient alternative to certain outpatient

hospital or physician office visits. Additionally, CHAMPUS/TRICARE has

recently revised their regulations on this issue to allow for remote

monitoring under specific circumstances. As CHAMPVA is to be

administered in a similar manner, the final rule was modified to

include the applicable criteria to consider an exception to the

exclusion cited under Sec. 17.272(46) for services rendered by

telephone.

It was recommended that the exclusion of benefits for autopsy and

post-mortem examinations found at Sec. 17.272(53) be eliminated. The

commenter stated that accrediting bodies look at autopsy rates as a

quality assurance measure. Although quality assurance is important, the

CHAMPVA program was established to provide healthcare benefits.

Autopsies and post-mortem examinations do not come within the scope of

a healthcare benefit. For this reason, no change was made to the

regulation.

One comment asserted that limiting immunotherapy for malignant

diseases to Stage A and Stage O of the bladder under Sec. 17.272(73)

was too restrictive as there are some promising treatments being

researched. No change was made based on this comment. CHAMPVA benefits

do not include coverage for treatments that are experimental or

investigational and the stated exclusion is consistent with CHAMPUS/

TRICARE policy.

A commenter suggested that the exclusion of medical photography at

Sec. 17.272(76) is inappropriate as it is a procedure utilized by

dermatologists to document skin disease progression. Medical

photography, however, is not considered medically essential for the

treatment of skin diseases and, therefore, no change was made based on

this comment.

A recommendation was made to modify the exclusion of dermabrasion

at Sec. 17.272(84) to allow for treatment related to premalignant

changes or for patients who are allergic to 5-fluorouracil. Although

dermabrasion is not a covered benefit in the cases cited by the

commenter, it is a benefit under limited circumstances. Coverage may be

extended following authorized reconstructive or plastic surgery if it

is required to restore body form or revise disfiguring and extensive

scars resulting from neoplastic surgery. As a result, the language

relating to this exclusion has been modified.

Subsequent to the publication of the proposed regulations for the

Civilian Health and Medical Program of the Department of Veterans

Affairs (CHAMPVA), the name of the administrating organization for the

Program was changed from CHAMPVA Center to the Health Administration

Center. As a result, a modification to 38 CFR 17.270, General

Provisions, has been made to reflect this change.

Additional changes were made to the final rule for purposes of

clarification as well as standardization with other VA programs for

dependents. These changes, which expand benefits available under

CHAMPVA, are described below.

A note was added to 38 CFR 17.271 clarifying that eligibility

criteria specific to dependency and indemnity are not applicable to

CHAMPVA eligibility determinations.

Consistent with CHAMPUS/TRICARE policy, wheelchair lifts were

removed as an excluded benefit from Sec. 17.272(a).

Consistent with CHAMPUS/TRICARE policy, the exception to excluded

coverage of shoes and inserts in Sec. 17.272(a)(45) was modified to

include medically necessary therapeutic shoes and inserts for diabetics

as a covered benefit.

Preauthorization for durable medical equipment detailed in

Sec. 17.273(a)(5) was clarified to note that the requirement is

applicable to rentals and purchases.

For clarification, Sec. 17.274, Cost Sharing, was modified from

``With the exception of services obtained directly from VA medical

facilities * * *'' to ``With the exception of services obtained

directly through VA medical facilities* * *'' This modification was

made to clarify that cost-sharing is not required for services that are

provided by VA, whether directly, through sharing agreements or through

services provided by the VA's Consolidated Mail Outpatient Pharmacy. In

these cases the services are an extension of VA services although a

physical examination within the VA may not occur.

The proposed regulations provided that if there were disagreement

with a

[[Page 48102]]

determination concerning covered services or calculation of benefits, a

request for reconsideration may be submitted within one year of the

initial determination. If there continues to be disagreement with the

reconsideration decision, a request for written review may be made to

the Center Director within 30 days. The final rule has been changed

from allowing 30 days to submit the request for review to the Center

Director to 90 days. This action provides consistency in the

reconsideration procedures between CHAMPVA and other VA health benefit

programs for dependents.

In addition to the above modifications, three Public Laws were

enacted which impact the proposed regulations. As noted earlier, under

the provisions of 38 U.S.C. 1713, the CHAMPVA program is to provide the

same/similar benefits as those provided under CHAMPUS. The Public Laws

expand available benefits under CHAMPUS/TRICARE. Accordingly, we are

making these same changes to the CHAMPVA regulations.

Public Law 103-322, section 230202, effective September 13, 1994,

states that, notwithstanding any other law, if a Federal program or

Federally financed State or local program would otherwise pay benefits

which are also available under an eligible crime victim compensation

plan, (1) such crime compensation program must not pay that

compensation; and (2) the other program must make its payments without

regard to the existence of the crime victim compensation program. This

provision, therefore, mandates that CHAMPVA assume primary payer status

to State Victims of Crime Compensation Programs. As a result, the final

rule at Sec. 17.272(a)(3) has been modified to indicate that CHAMPVA is

the primary payer when benefits are also available through the State

Victims of Crime Compensation Program.

Public Law 103-337, section 705, enacted October 5, 1994, added

voice prostheses to the benefits available under CHAMPUS/TRICARE. 38

U.S.C. 1713 requires that CHAMPVA benefits be subject to the same or

similar limitations as medical care furnished to Department of Defense

dependents through the CHAMPUS/TRICARE program. As a result, the

regulations at Sec. 17.272(a)(44) were modified to include voice

prostheses as a covered benefit.

Public Law 104-106, section 701, enacted February 10, 1996, expands

pediatric coverage under the CHAMPUS/TRICARE program. Previously,

coverage for well-baby visits and immunizations was provided to

children up to age two. With the enactment of the Public Law, this

coverage was extended for children up to age six. As 38 U.S.C. 1713

requires that CHAMPVA benefits be subject to the same or similar

limitations as medical benefits furnished to Department of Defense

dependents through the CHAMPUS/TRICARE program, the regulations at

Sec. 17.272(a)(31)(i) were modified to provide for well child care up

to age six.

This final rule has been reviewed by OMB under Executive Order

12866.

The Secretary hereby certifies that this final rule will not have a

significant economic impact on a substantial number of small entities

as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-

612. These amendments would not cause significant economic impact on

healthcare providers, suppliers, or entities since only a small portion

of their business concerns CHAMPVA beneficiaries. The final rule would

mostly impact individuals who are VA beneficiaries. Pursuant to 5

U.S.C. 605(b), these amendments are exempt from the initial and final

regulatory flexibility analyses requirements of Secs. 603 and 604.

The Catalog of Federal Domestic Assistance Program numbers are

64.009, 64.010, 64.011.

List of Subjects in 38 CFR Part 17

Administrative practice and procedure, Alcohol abuse, Alcoholism,

Claims, Day care, Dental health, Drug abuse, Foreign relations,

Government contracts, Grant programs--health, Grants programs--

veterans, Health care, Health facilities, Health professions, Health

records, Homeless, Medical and dental schools, Medical devices, Medical

research, Mental health programs, Nursing home care, Philippines,

Reporting and record-keeping requirements, Scholarships and

fellowships, Travel and transportation expenses, Veterans.

Approved: May 8, 1998.

Togo D. West, Jr.,

Secretary.

For the reasons set out in the preamble, 38 CFR part 17 is amended

as follows:

PART 17--MEDICAL

1. The authority citation for part 17 continues to read as follows:

Authority: 38 U.S.C. 501, 1721, unless otherwise noted.

Sec. 17.84 [Removed]

2. Section 17.84 is removed.

3. A new center heading and Secs. 17.270 through 17.278 are added

to read as follows:

Civilian Health and Medical Program of the Department of Veterans

Affairs (CHAMPVA)--Medical Care for Survivors and Dependents of

Certain Veterans

Sec.

17.270 General provisions.

17.271 Eligibility.

17.272 Benefit limitations/exclusions.

17.273 Preauthorization.

17.274 Cost sharing.

17.275 Claim filing deadline.

17.276 Appeal/review process.

17.277 Third party liability/medical care cost recovery.

17.278 Confidentiality of records.

Sec. 17.270 General provisions.

(a) CHAMPVA is the Civilian Health and Medical Program of the

Department of Veterans Affairs and is administered by the Health

Administration Center, Denver, Colorado. Pursuant to 38 U.S.C. 1713, VA

is authorized to provide medical care in the same or similar manner and

subject to the same or similar limitations as medical care furnished to

certain dependents and survivors of active duty and retired members of

the Armed Forces. The CHAMPVA program is designed to accomplish this

purpose. Under CHAMPVA, VA shares the cost of medically necessary

services and supplies for eligible beneficiaries as set forth in

Secs. 17.271 through 17.278.

(b) For purposes of this section, the definitions of ``child,''

``service-connected condition/disability,'' ``spouse,'' and ``surviving

spouse'' must be those set forth further in 38 U.S.C. 101. The term

``fiscal'' year refers to October 1, through September 30.

(Authority: 38 U.S.C. 1713)

Sec. 17.271 Eligibility.

(a) The following persons are eligible for CHAMPVA benefits

provided that they are not eligible for CHAMPUS/TRICARE or Medicare

Part A (except as noted in Sec. 17.271).

(1) The spouse or child of a veteran who has been adjudicated by VA

as having a permanent and total service-connected disability;

(2) The surviving spouse or child of a veteran who died as a result

of an adjudicated service-connected condition(s); or who at the time of

death was adjudicated permanently and totally disabled from a service-

connected condition(s);

(3) The surviving spouse or child of a person who died on active

military service and in the line of duty and not

[[Page 48103]]

due to such person's own misconduct; and

(4) An eligible child who is pursuing a full-time course of

instruction approved under 38 U.S.C. Chapter 36, and who incurs a

disabling illness or injury while pursuing such course (between terms,

semesters or quarters; or during a vacation or holiday period) that is

not the result of his or her own willful misconduct and that results in

the inability to continue or resume the chosen program of education

must remain eligible for medical care until:

(i) The end of the six-month period beginning on the date the

disability is removed; or

(ii) The end of the two-year period beginning on the date of the

onset of the disability; or

(iii) The twenty-third birthday of the child, whichever occurs

first.

(Authority: 38 U.S.C. 1713)

(b) Persons who lose eligibility for CHAMPVA by becoming

potentially eligible for Medicare Part A as a result of reaching age 65

or who qualify for Medicare Part A benefits on the basis of a

disability, including end stage renal disease, may re-establish CHAMPVA

eligibility by submitting documentation from the Social Security

Administration (SSA) certifying their non-entitlement to or exhaustion

of Medicare Part A benefits. Persons under age 65 who are enrolled in

both Medicare Part A and B may become potentially eligible for CHAMPVA

as a secondary payer to Medicare. In cases where CHAMPVA eligibility is

restored upon exhaustion of Medicare benefits, CHAMPVA coverage will

extend even during subsequent periods of Medicare eligibility. When

both CHAMPVA and Medicare eligibility exist, CHAMPVA must be the

secondary payer.

(Authority: 38 U.S.C. 1713(d))

Note to Sec. 17.271: Eligibility criteria specific to Dependency

and Indemnity Compensation (DIC) benefits are not applicable to

CHAMPVA eligibility determinations.

Sec. 17.272 Benefits limitations/exclusions.

(a) Benefits cover allowable expenses for medical services and

supplies that are medically necessary and appropriate for the treatment

of a condition and that are not specifically excluded from program

coverage. Covered benefits may have limitations. The fact that a

physician may prescribe, order, recommend, or approve a service or

supply does not, of itself, make it medically necessary or make the

charge an allowable expense, even though it is not listed specifically

as an exclusion. The following are specifically excluded from program

coverage:

(1) Services, procedures or supplies for which the beneficiary has

no legal obligation to pay, or for which no charge would be made in the

absence of coverage under a health benefits plan.

(2) Services and supplies required as a result of an occupational

disease or injury for which benefits are payable under workers'

compensation or similar protection plan (whether or not such benefits

have been applied for or paid) except when such benefits are exhausted

and are otherwise not excluded from CHAMPVA coverage.

(3) Services and supplies that are paid directly or indirectly by a

local, State or Federal government agency (Medicaid excluded),

including court-ordered treatment. In the case of the following

exceptions, CHAMPVA assumes primary payer status:

(i) Medicaid.

(ii) State Victims of Crime Compensation Programs.

(4) Services and supplies that are not medically or psychologically

necessary for the diagnosis or treatment of a covered condition

(including mental disorder) or injury.

(5) Radiology, laboratory, and pathological services and machine

diagnostic testing not related to a specific illness or injury or a

definitive set of symptoms.

(6) Services and supplies above the appropriate level required to

provide necessary medical care.

(7) Services and supplies related to an inpatient admission

primarily to perform diagnostic tests, examinations, and procedures

that could have been and are performed routinely on an outpatient

basis.

(8) Postpartum inpatient stay of a mother for purposes of staying

with the newborn infant (primarily for the purpose of breast feeding

the infant) when the infant (but not the mother) requires the extended

stay; or continued inpatient stay of a newborn infant primarily for

purposes of remaining with the mother when the mother (but not the

newborn infant) requires extended postpartum inpatient stay.

(9) Therapeutic absences from an inpatient facility or residential

treatment center (RTC).

(10) Custodial care.

(11) Inpatient stays primarily for domiciliary care purposes.

(12) Inpatient stays primarily for rest or rest cures.

(13) Services and supplies provided as a part of, or under, a

scientific or medical study, grant, or research program.

(14) Services and supplies not provided in accordance with accepted

professional medical standards or related to experimental or

investigational procedures or treatment regimens.

(15) Services or supplies prescribed or provided by a member of the

beneficiary's immediate family, or a person living in the beneficiary's

or sponsor's household.

(16) Services and supplies that are (or are eligible to be) payable

under another medical insurance or program, either private or

governmental, such as coverage through employment or Medicare.

(17) Services or supplies subject to preauthorization (see

Sec. 17.273) that were obtained without the required preauthorization;

and services and supplies that were not provided according to the terms

of the preauthorization.

(18) Inpatient stays primarily to control or detain a runaway

child, whether or not admission is to an authorized institution.

(19) Services and supplies (to include prescription medications) in

connection with cosmetic surgery which is performed to primarily

improve physical appearance or for psychological purposes or to restore

form without correcting or materially improving a bodily function.

(20) Electrolysis.

(21) Dental care with the following exceptions:

(i) Dental care that is medically necessary in the treatment of an

otherwise covered medical condition, is an integral part of the

treatment of such medical condition, and is essential to the control of

the primary medical condition.

(ii) Dental care required in preparation for, or as a result of,

radiation therapy for oral or facial cancer.

(iii) Gingival Hyperplasia.

(iv) Loss of jaw substance due to direct trauma to the jaw or due

to treatment of neoplasm.

(v) Intraoral abscess when it extends beyond the dental alveolus.

(vi) Extraoral abscess.

(vii) Cellulitis and osteitis which is clearly exacerbating and

directly affecting a medical condition currently under treatment.

(viii) Repair of fracture, dislocation, and other injuries of the

jaw, to include removal of teeth and tooth fragments only when such

removal is incidental to the repair of the jaw.

(ix) Treatment for stabilization of myofascial pain dysfunction

syndrome, also referred to as temporomandibular joint (TMJ) syndrome.

Authorization is limited to initial radiographs, up to four office

visits, and the construction of an occlusal splint.

[[Page 48104]]

(x) Total or complete ankyloglossia.

(xi) Adjunctive dental and orthodontic support for cleft palate.

(xii) Prosthetic replacement of jaw due to trauma or cancer.

(22) Nonsurgical treatment of obesity or morbid obesity for dietary

control or weight reduction (with the exception of gastric bypass,

gastric stapling, or gastroplasty procedures in connection with morbid

obesity when determined to be medically necessary) including

prescription medications.

(23) Services and supplies related to transsexualism or other

similar conditions such as gender dysphoria (including, but not limited

to, intersex surgery and psychotherapy, except for ambiguous genitalia

which was documented to be present at birth).

(24) Sex therapy, sexual advice, sexual counseling, sex behavior

modification, psychotherapy for mental disorders involving sexual

deviations (e.g., transvestic fetish), or other similar services, and

any supplies provided in connection with therapy for sexual

dysfunctions or inadequacies.

(25) Removal of corns or calluses or trimming of toenails and other

routine foot care services, except those required as a result of a

diagnosed systemic medical disease affecting the lower limbs, such as

severe diabetes.

(26) Services and supplies, to include psychological testing,

provided in connection with a specific developmental disorder. The

following exception applies: Diagnostic and evaluative services

required to arrive at a differential diagnosis for an otherwise

eligible child unless the state is required to provide those services

under Public Law 94-142, Education for All Handicapped Children Act of

1975 as amended, see 20 U.S.C. chapter 33.

(27) Surgery to reverse voluntary surgical sterilization

procedures.

(28) Services and supplies related to artificial insemination

(including semen donors and semen banks), in vitro fertilization,

gamete intrafallopian transfer and all other noncoital reproductive

technologies.

(29) Nonprescription contraceptives.

(30) Diagnostic tests to establish paternity of a child; or tests

to determine sex of an unborn child.

(31) Preventive care (such as routine, annual, or employment-

requested physical examinations; routine screening procedures; and

immunizations). The following exceptions apply:

(i) Well-child care from birth to age six. Periodic health

examinations designed for prevention, early detection, and treatment of

disease are covered to include screening procedures, immunizations, and

risk counseling. The following services are payable when required as

part of a well-child care program and when rendered by the attending

pediatrician, family physician, or a pediatric nurse practitioner.

(A) Newborn examination, heredity and metabolic screening, and

newborn circumcision.

(B) Periodic health supervision visits intended to promote optimal

health for infants and children to include the following services:

(1) History and physical examination.

(2) Vision, hearing, and dental screening.

(3) Developmental appraisal to include body measurement.

(4) Immunizations as recommended by the Centers for Disease Control

(CDC) and Prevention Advisory Committee on Immunization Practices.

(5) Pediatric blood lead level test.

(6) Tuberculosis screening.

(7) Blood pressure screening.

(8) Measurement of hemoglobin and hematocrit for anemia.

(9) Urinalysis.

(C) Additional services or visits required because of specific

findings or because the particular circumstances of the individual case

are covered if medically necessary and otherwise authorized for

benefits under CHAMPVA.

(ii) Rabies vaccine following an animal bite.

(iii) Tetanus vaccine following an accidental injury.

(iv) Rh immune globulin.

(v) Pap smears.

(vi) Mammography tests.

(vii) Genetic testing and counseling determined to be medically

necessary.

(viii) Chromosome analysis in cases of habitual abortion or

infertility.

(ix) Gamma globulin.

(32) Chiropractic and naturopathic services.

(33) Counseling services that are not medically necessary in the

treatment of a diagnosed medical condition (such as educational

counseling; vocational counseling; and counseling for socioeconomic

purposes, stress management, life style modification, etc.).

(34) Acupuncture, whether used as a therapeutic agent or as an

anesthetic.

(35) Hair transplants, wigs, or hairpieces, except that benefits

may be extended for one wig or hairpiece per beneficiary (lifetime

maximum) when the attending physician certifies that alopecia has

resulted from treatment of malignant disease and the beneficiary

certifies that a wig or hairpiece has not been obtained previously

through the U.S. Government (including the Department of Veterans

Affairs). The wig or hairpiece benefit does not include coverage for

the following:

(i) Maintenance, wig or hairpiece supplies, or replacement of the

wig or hairpiece.

(ii) Hair transplant or any other surgical procedure involving the

attachment of hair or a wig or hairpiece to the scalp.

(iii) Any diagnostic or therapeutic method or supply intended to

encourage hair growth.

(36) Self-help, academic education or vocational training services

and supplies.

(37) Exercise equipment, spas, whirlpools, hot tubs, swimming

pools, health club membership or other such charges or items.

(38) General exercise programs, even if recommended by a physician.

(39) Services of an audiologist or speech therapist, except when

prescribed by a physician and rendered as a part of treatment addressed

to the physical defect itself and not to any educational or

occupational deficit.

(40) Eye exercises or visual training (orthoptics).

(41) Eye and hearing examinations except when rendered in

connection with medical or surgical treatment of a covered illness or

injury or in connection with well-child care.

(42) Eyeglasses, spectacles, contact lenses, or other optical

devices with the following exceptions:

(i) When necessary to perform the function of the human lens, lost

as a result of intraocular surgery, ocular injury or congenital

absence.

(ii) Pinhole glasses prescribed for use after surgery for detached

retina.

(iii) Lenses prescribed as ``treatment'' instead of surgery for the

following conditions:

(A) Contact lenses used for treatment of infantile glaucoma.

(B) Corneal or scleral lenses prescribed in connection with

treatment of keratoconus.

(C) Scleral lenses prescribed to retain moisture when normal

tearing is not present or is inadequate.

(D) Corneal or scleral lenses prescribed to reduce a corneal

irregularity other than astigmatism.

(iv) The specified benefits are limited to one set of lenses

related to one qualifying eye condition as set forth in paragraphs

(a)(42)(iii)(A) through (D) of this section. If there is a prescription

change requiring a new set of lenses, but still related to the

qualifying eye condition, benefits may be extended for a second set of

lenses, subject to medical review.

[[Page 48105]]

(43) Hearing aids or other auditory sensory enhancing devices.

(44) Prostheses with the following exceptions:

(i) Artificial limbs.

(ii) Voice prostheses.

(iii) Eyes.

(iv) Items surgically inserted in the body as an integral part of a

surgical procedure.

(v) Dental prostheses specifically required in connection with

otherwise covered orthodontia directly related to the surgical

correction of a cleft palate anomaly.

(45) Orthopedic shoes, arch supports, shoe inserts, and other

supportive devices for the feet, including special ordered, custom-made

built-up shoes, or regular shoes later built up with the following

exceptions:

(i) Shoes that are an integral part of an orthopedic brace, and

which cannot be used separately from the brace.

(ii) Extra-depth shoes with inserts or custom molded shoes with

inserts for individuals with diabetes.

(46) Services or advice rendered by telephone are excluded except

that a diagnostic or monitoring procedure which incorporates electronic

transmission of data or remote detection and measurement of a

condition, activity, or function (biotelemetry) is covered when:

(i) The procedure, without electronic data transmission, is a

covered benefit; and

(ii) The addition of electronic data transmission or biotelemetry

improves the management of a clinical condition in defined

circumstances; and

(iii) The electronic data or biotelemetry device has been

classified by the U.S. Food and Drug Administration, either separately

or as part of a system, for use consistent with the medical condition

and clinical management of such condition.

(47) Air conditioners, humidifiers, dehumidifiers, and purifiers.

(48) Elevators.

(49) Alterations to living spaces or permanent features attached

thereto, even when necessary to accommodate installation of covered

durable medical equipment or to facilitate entrance or exit.

(50) Items of clothing, even if required by virtue of an allergy

(such as cotton fabric versus synthetic fabric and vegetable-dyed

shoes).

(51) Food, food substitutes, vitamins or other nutritional

supplements, including those related to prenatal care for a home

patient whose condition permits oral feeding.

(52) Enuretic (bed-wetting) devices; enuretic conditioning

programs.

(53) Autopsy and post-mortem examinations.

(54) All camping, even when organized for a specific therapeutic

purpose (such as diabetic camp or a camp for emotionally disturbed

children), or when offered as a part of an otherwise covered treatment

plan.

(55) Housekeeping, homemaker, or attendant services, including a

sitter or companion.

(56) Personal comfort or convenience items, such as beauty and

barber services, radio, television, and telephone.

(57) Smoking cessation services and supplies.

(58) Megavitamin psychiatric therapy; orthomolecular psychiatric

therapy.

(59) All transportation except for specialized transportation with

life sustaining equipment, when medically required for the treatment of

a covered condition.

(60) Inpatient mental health services in excess of 30 days in any

fiscal year (or in an admission), in the case of a patient nineteen

years of age or older; 45 days in any fiscal year (or in an admission),

in the case of a patient under 19 years of age; or 150 days of

residential treatment care in any fiscal year (or in an admission)

unless a waiver for extended coverage is granted in advance.

(61) Outpatient mental health services in excess of 23 visits in a

fiscal year unless a waiver for extended coverage is granted in

advance.

(62) Institutional services for partial hospitalization in excess

of 60 treatment days in any fiscal year (or in an admission) unless a

waiver for extended coverage is granted in advance.

(63) Detoxification in a hospital setting or rehabilitation

facility in excess of seven days.

(64) Outpatient substance abuse services in excess of 60 visits

during a benefit period. A benefit period begins with the first date of

covered service and ends 365 days later.

(65) Family therapy for substance abuse in excess of 15 visits

during a benefit period. A benefit period begins with the first date of

covered service and ends 365 days later.

(66) Services that are provided to a beneficiary who is referred to

a provider of such services by a provider who has an economic interest

in the facility to which the patient is referred, unless a waiver is

granted.

(67) Abortion except when a physician certifies that the life of

the mother would be endangered if the fetus were carried to term.

(68) Abortion counseling.

(69) Aversion therapy.

(70) Rental or purchase of biofeedback equipment.

(71) Biofeedback therapy for treatment of ordinary muscle tension

states (including tension headaches) or for psychosomatic conditions.

(72) Drug maintenance programs where one addictive drug is

substituted for another, such as methadone substituted for heroin.

(73) Immunotherapy for malignant diseases except for treatment of

Stage O and Stage A carcinoma of the bladder.

(74) Services and supplies provided by other than a hospital, such

as nonskilled nursing homes, intermediate care facilities, halfway

houses, homes for the aged, or other institutions of similar purpose.

(75) Services performed when the patient is not physically present.

(76) Medical photography.

(77) Special tutoring.

(78) Surgery for psychological reasons.

(79) Treatment of premenstrual syndrome (PMS).

(80) Medications not requiring a prescription, except for insulin

and related diabetic testing supplies and syringes.

(81) Thermography.

(82) Removal of tattoos.

(83) Penile implant/testicular prosthesis procedures and related

supplies for psychological impotence.

(84) Dermabrasion of the face except in those cases where coverage

has been authorized for reconstructive or plastic surgery required to

restore body form following an accidental injury or to revise

disfiguring and extensive scars resulting from neoplastic surgery.

(85) Chemical peeling for facial wrinkles.

(86) Panniculectomy, body sculpting procedures.

(b) CHAMPVA-determined allowable amount.

(1) The term allowable amount is the maximum CHAMPVA-determined

level of payment to a hospital or other authorized institutional

provider, a physician or other authorized individual professional

provider, or other authorized provider for covered services. The

CHAMPVA-allowable amount is determined prior to cost sharing and the

application of deductibles and/or other health insurance.

(2) A Medicare-participating hospital must accept the CHAMPVA-

determined allowable amount for inpatient services as payment-in-full.

(Reference 42 CFR parts 489 and 1003).

(3) An authorized provider of covered medical services or supplies

must accept the CHAMPVA-determined allowable amount as payment-in-full.

[[Page 48106]]

(4) A provider who has collected and not made appropriate refund,

or attempts to collect from the beneficiary, any amount in excess of

the CHAMPVA-determined allowable amount may be subject to exclusion

from Federal benefit programs.

(Authority: 38 U.S.C. 1713)

Sec. 17.273 Preauthorization.

Preauthorization or advance approval is required for any of the

following:

(a) Non-emergent inpatient mental health and substance abuse care

including admission of emotionally disturbed children and adolescents

to residential treatment centers.

(b) All admissions to a partial hospitalization program (including

alcohol rehabilitation).

(c) Outpatient mental health visits in excess of 23 per calendar

year and/or more than two (2) sessions per week.

(d) Dental care.

(e) Durable medical equipment with a purchase or total rental price

in excess of $300.00.

(f) Organ transplants.

(Authority: 38 U.S.C. 1713)

Sec. 17.274 Cost sharing.

(a) With the exception of services obtained through VA medical

facilities, CHAMPVA is a cost-sharing program in which the cost of

covered services is shared with the beneficiary. In addition to the

beneficiary cost share, an annual (calendar year) outpatient deductible

requirement ($50 per beneficiary or $100 per family) must be satisfied

prior to the payment of outpatient benefits. There is no deductible for

inpatient services. CHAMPVA pays the CHAMPVA-determined allowable

amount less the deductible, if applicable, and less the beneficiary

cost share. To provide financial protection against the impact of a

long-term illness or injury, an annual cost limit or ``catastrophic

cap'' has been placed on the beneficiary cost-share amount for covered

services and supplies. This annual cap on cost sharing is $7,500 per

CHAMPVA-eligible family. Credits to the annual catastrophic cap are

limited to the applied annual deductible(s) and the beneficiary cost-

share amount. Costs above the CHAMPVA-allowable amount, as well as

costs associated with noncovered services are not credited to the

catastrophic cap computation.

(b) If the CHAMPVA benefit payment is under $1.00, payment will not

be issued. Catastrophic cap and deductible will, however, be credited.

(Authority: 38 U.S.C. 1713)

Sec. 17.275 Claim filing deadline.

(a) Unless an exception is granted under paragraph (b) of this

section, claims for medical services and supplies must be filed with

the Center no later than:

(1) One year after the date of service; or

(2) In the case of inpatient care, one year after the date of

discharge; or

(3) In the case of retroactive approval for medical services/

supplies, 180 days following beneficiary notification of authorization;

or

(4) In the case of retroactive approval of CHAMPVA eligibility, 180

days following notification to the beneficiary of authorization for

services occurring on or after the date of first eligibility.

(b) Requests for an exception to the claim filing deadline must be

submitted, in writing, to the Center and include a complete explanation

of the circumstances resulting in late filing along with all available

supporting documentation. Each request for an exception to the claim

filing deadline will be reviewed individually and considered on its own

merit. The Center Director may grant exceptions to the requirements in

paragraph (a) if he or she determines that there was good cause for

missing the filing deadline. For example, when dual coverage exists

CHAMPVA payment, if any, cannot be determined until after the primary

insurance carrier has adjudicated the claim. In such circumstances an

exception may be granted provided that the delay on the part of the

primary insurance carrier is not attributable to the beneficiary.

Delays due to provider billing procedures do not constitute a valid

basis for an exception.

Sec. 17.276 Appeal/review process.

Notice of the initial determination regarding payment of CHAMPVA

benefits will be provided to the beneficiary on a CHAMPVA Explanation

of Benefits (EOB) form. The EOB form is generated by the CHAMPVA

automated payment processing system. If a beneficiary disagrees with

the determination concerning covered services or calculation of

benefits, he or she may request reconsideration. Such requests must be

submitted to the Center in writing within one year of the date of the

initial determination. The request must state why the beneficiary

believes the decision is in error and must include any new and relevant

information not previously considered. Any request for reconsideration

that does not identify the reason for dispute will be returned to the

claimant without further consideration. After reviewing the claim and

any relevant supporting documentation, a CHAMPVA benefits advisor will

issue a written determination to the beneficiary that affirms, reverses

or modifies the previous decision. If the beneficiary is still

dissatisfied, within 90 days of the date of the decision he or she may

make a written request for review by the Center Director. The Director

will review the claim, and any relevant supporting documentation, and

issue a decision in writing that affirms, reverses or modifies the

previous decision. The decision of the Director with respect to benefit

coverage and computation of benefits is final.

(Authority: 38 U.S.C. 1713)

Note to Sec. 17.276: Denial of CHAMPVA benefits based on legal

eligibility requirements may be appealed to the Board of Veterans'

Appeals in accordance with 38 CFR part 20. Medical determinations

are not appealable to the Board. 20 CFR 20.101.

Sec. 17.277 Third-party liability/Medicare cost recovery.

The Center will actively pursue third-party liability/medical care

cost recovery in accordance with applicable law.

Sec. 17.278 Confidentiality of records.

Confidentiality of records will be maintained in accordance with 38

CFR 1.460 through 1.582.

[FR Doc. 98-22857 Filed 9-8-98; 8:45 am]

BILLING CODE 8320-01-P