Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Establishment of an Appeals Process for TRICARE Claimcheck Denials

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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

Civilian Health and Medical Program of the Uniformed Services

(CHAMPUS); Establishment of an Appeals Process for TRICARE Claimcheck

Denials

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule implements section 714 of the National

Defense Authorization Act for Fiscal Year 1999 which requires the

establishment of an appeals process for denials by TRICARE Claimcheck

(TCC) or any similar software system. This proposed rule enhances the

current appeals process by adding an additional level of appeal

conducted at the TRICARE Management Activity (TMA) and by codifying the

entire process in this part.

DATES: Public comments must be received by March 13, 2000.

ADDRESSES: Forward comments to: TRICARE Management Activity (TMA),

Medical Benefits and Reimbursement Systems, 16401 East Centretech

Parkway, Aurora, CO 80011-9043.

FOR FURTHER INFORMATION CONTACT: Donald F. Wagner, Office of Appeals

and Hearings, TMA, (303) 676-3411.

SUPPLEMENTARY INFORMATION: On December 30, 1998 (63 FR 71915), the

Department of Defense published a notice in the Federal Register. That

notice provides additional detailed information regarding TMA's use of

TCC.

TMA, first used TCC, the TMA version of a commercial claims

auditing software, in May 1996. Use of the TCC software has been

subsequently linked to the start of the TRICARE regional at-risk

managed care support contracts. TMA has customized TCC to conform to

specific statutory and regulatory requirements for the TRICARE program.

TRICARE Claimcheck is a fully automated program that contains

specific auditing logic designed to ensure appropriate coding on

professional claims and eliminate overpayments on those claims

subsequently linked to the start of the TRICARE regional at-risk

managed care support contracts. TMA has customized TCC to conform to

specific statutory and regulatory requirements for the TRICARE program.

TRICARE Claimcheck is a fully automated program that contains

specific auditing logic designed to ensure appropriate coding on

professional claims and eliminate overpayments on those claims. TRICARE

Claimcheck audits for: unbundling of services (fragmented billing of

services when one code is appropriate), incidental procedures, mutually

exclusive procedures, assistant surgeon codes, duplicate claims

submission, unlisted procedures, age/gender conflicts, medical visits

associated with pre- and post-operative care, and cosmetic procedures.

The auditing logic resulting in a TCC denial on a TRICARE claim

currently can be administratively reviewed by the TRICARE Managed Care

Support Contractor (MCSC), but the specific dollar amount of an

allowance (e.g., the CHAMPUS Maximum Allowable Charge) is not formally

appealable under TRICARE Claimcheck appeals or the appeals procedures

established in 32 CFR 199.10. A determination by the MCSC that allows

additional payment amounts results in an adjustment of the claim by the

contractor with no further action required by the beneficiary or

provider. No other appeal is currently allowed.

Section 714 of the National Defense Authorization Act for Fiscal

Year 1999 (P.L. 105-261) required the establishment of an appeals

process for denials by TCC or any similar software system. This

proposed rule establishes a two-level appeals process for TCC denials

and codifies it under the formal appeals procedures established in 32

eficiary or

provider. No other appeal is currently allowed.

Section 714 of the National Defense Authorization Act for Fiscal

Year 1999 (P.L. 105-261) required the establishment of an appeals

process for denials by TCC or any similar software system. This

proposed rule establishes a two-level appeals process for TCC denials

and codifies it under the formal appeals procedures established in 32

CFR 199.10. TRICARE Managed Care Support Contractor conducts the first-

level appeal. The second-level appeal is performed within the TMA.

We have also reinserted paragraphs (c)(1) through (c)(5) in section

199.10 which were inadvertently omitted in a previous publication of 32

CFR 199.10 and included other minor corrections to sections 199.10 and

199.15.

Regulatory Procedures

Executive Order 12866 requires that a comprehensive regulatory

impact analysis be performed on any economically significant regulatory

action, defined as one which would result in an annual effect of $100

million or more on the national economy 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 is not a significant regulatory action under EO 12866 and has

been reviewed by the Office of Management and Budget. In addition, we

certify that this proposed rule will not significantly affect a

substantial number of small entities.

Paperwork Reduction Act

This rule, as written, imposes no burden as defined by the

Paperwork Reduction Act of 1995. If however, any program implemented

under this rule causes such a burden to be imposed, approval thereof

will be sought from the Office of Management and Budget in accordance

with the Act, prior to implementation.

List of Subjects in 32 CFR Part 199

Claims, Handicapped, Health insurance, and Military personnel.

as written, imposes no burden as defined by the

Paperwork Reduction Act of 1995. If however, any program implemented

under this rule causes such a burden to be imposed, approval thereof

will be sought from the Office of Management and Budget in accordance

with the Act, prior to implementation.

List of Subjects in 32 CFR Part 199

Claims, Handicapped, Health insurance, and Military personnel.

Accordingly, 32 CFR part 199 is proposed to be amended as follows:

PART 199--[AMENDED]

1. The authority citation for part 199 continues to read as

follows:

Authority: 5 U.S.C. 301; 10 U.S.C. Chapter 55.

2. Section 199.2(b) is proposed to be amended by revising the

definition of Party to the initial determination and by adding a new

definition of TRICARE Claimcheck and placing both definitions in

alphabetical order as follows:

Sec. 199.2 Definitions.

* * * * *

Party to the initial determination. Includes CHAMPUS and also

refers to a CHAMPUS beneficiary and a participating provider of

services whose interests have been adjudicated by the initial

determination. (Under TRICARE Claimcheck or other similar software, a

party to the initial determination also includes a non-participating

provider.) In addition, a provider who has been denied approval as an

authorized CHAMPUS provider is a party to that initial determination,

as is a provider who is disqualified or excluded as an authorized

provider under CHAMPUS, unless the provider is excluded based on a

determination of abuse or fraudulent practices or procedures under

another federal or federally funded program. See Sec. 199.10 for

additional information concerning parties not entitled to

administrative review under the CHAMPUS appeals and hearing procedures.

TRICARE Claimcheck. TRICARE Claimcheck is the TRICARE Management

Activity version of a commercial claims auditing software designed to

ensure appropriate coding on professional claims and eliminate

overpayments on those claims.

* * * * *

am. See Sec. 199.10 for

additional information concerning parties not entitled to

administrative review under the CHAMPUS appeals and hearing procedures.

TRICARE Claimcheck. TRICARE Claimcheck is the TRICARE Management

Activity version of a commercial claims auditing software designed to

ensure appropriate coding on professional claims and eliminate

overpayments on those claims.

* * * * *

3. Section 199.10 is proposed to be revised to read as follows:

Sec. 199.10 Appeal and hearing procedures.

(a) General. An appeal under CHAMPUS is an administrative review of

program determinations made under the provisions of law and regulation.

An appeal cannot challenge the propriety, equity, or legality of any

provision of law or regulation. Paragraphs (a) through (e) of this

section set forth the policies and procedures for appealing decisions

made by OCHAMPUS and CHAMPUS contractors adversely affecting the rights

and liabilities of CHAMPUS beneficiaries, CHAMPUS participating

providers, and providers denied the status of authorized provider under

CHAMPUS. Paragraph (f) of this section describes the appeal process for

TRICARE Claimscheck or other similar software denials. Supplemental

appeal procedures relating to determinations made under the quality and

utilization review peer review organization program are contained in

Sec. 199.15.

(1) Initial determination. (i) Notice of initial determination and

right to appeal. (A) OCHAMPUS and CHAMPUS contractors shall mail

notices of initial determinations to the affected provider or CHAMPUS

beneficiary (or representative) at the last known address. For

beneficiaries who are under 18 years of age or who are incompetent, a

notice issued to the parent, guardian, or other representative, under

established CHAMPUS procedures, constitutes notice to the beneficiary

eal. (A) OCHAMPUS and CHAMPUS contractors shall mail

notices of initial determinations to the affected provider or CHAMPUS

beneficiary (or representative) at the last known address. For

beneficiaries who are under 18 years of age or who are incompetent, a

notice issued to the parent, guardian, or other representative, under

established CHAMPUS procedures, constitutes notice to the beneficiary.

(B) CHAMPUS contractors shall notify a provider of an initial

determination on a claim only if the provider participated in the claim

or the initial determination resulted from the application of TRICARE

Claimcheck or other similar software. (See Sec. 199.7)

CHAMPUS contractors of a denial determination on a claim.

(D) Notice of an initial determination on a claim processed by a

CHAMPUS contractor normally will be made on a CHAMPUS Explanation of

Benefits (CEOB) form.

(E) Each notice of an initial determination on a request for

benefit authorization, a request by a provider for approval as an

authorized CHAMPUS provider, or a decision to disqualify or exclude a

provider as an authorized provider under CHAMPUS shall state the

reason(s) for the determination and the underlying facts supporting the

determination.

(F) In any case when the initial determination is adverse to the

beneficiary or participating provider, or to the provider seeking

approval as an authorized CHAMPUS provider, the notice shall include a

statement of the beneficiary's or provider's right to appeal the

determination. The procedure for filing the appeal also shall be

explained.

(ii) Effect of initial determination. The initial determination is

final unless appealed in accordance with this section, or unless the

initial determination is reopened by OCHAMPUS, the CHAMPUS contractor,

or the CHAMPUS peer review organization.

de a

statement of the beneficiary's or provider's right to appeal the

determination. The procedure for filing the appeal also shall be

explained.

(ii) Effect of initial determination. The initial determination is

final unless appealed in accordance with this section, or unless the

initial determination is reopened by OCHAMPUS, the CHAMPUS contractor,

or the CHAMPUS peer review organization.

(2) Participation in an appeal. Participation in an appeal is

limited to any party to the initial determination, including OCHAMPUS,

and authorized representatives of the parties. Any party to the initial

determination, except OCHAMPUS, may appeal an adverse determination.

The appealing party is the party to the initial determination who

actually files the appeal, whether personally or by representative.

(i) Parties to the initial determination. For purposes of the

CHAMPUS appeals and hearing procedures, the following are not parties

to an initial determination and are not entitled to administrative

review under this section.

(A) A provider disqualified or excluded as an authorized provider

under CHAMPUS based on a

determination of abuse or fraudulent practices or procedures under

another Federal or federally funded program is not a party to the

CHAMPUS action and may not appeal under this section.

(B) A beneficiary who has an interest in receiving care or has

received care from a particular provider cannot be an appealing party

regarding the exclusion, suspension, or termination of the provider

under Sec. 199.9.

guardian of an incompetent beneficiary is not a party to the initial

determination and may not serve as the appealing party.

(D) A third party, such as an insurance company, is not a party to

the initial determination and is not entitled to appeal even though it

may have an indirect interest in the initial determination.

(E) A nonparticipating provider is not a party to the initial

determination and may not appeal

ent beneficiary is not a party to the initial

determination and may not serve as the appealing party.

(D) A third party, such as an insurance company, is not a party to

the initial determination and is not entitled to appeal even though it

may have an indirect interest in the initial determination.

(E) A nonparticipating provider is not a party to the initial

determination and may not appeal.

(ii) Representative. Any party to the initial determination may

appoint a representative to act on behalf of the party in connection

with an appeal. Generally, the custodial parent of a minor beneficiary

and the legally appointed guardian of an incompetent beneficiary shall

be presumed to have been appointed representative without specific

designation by the beneficiary. The custodial parent or legal guardian

(appointed by a cognizant court) of a minor beneficiary may initiate an

appeal based on the above presumption. However, should a minor

beneficiary turn 18 years of age during the course of an appeal, then

any further requests to appeal on behalf of the beneficiary must be

from the beneficiary or pursuant to the written authorization of the

beneficiary appointing a representative. For example, if the

beneficiary is 17 years of age and the sponsor ( who is a custodial

parent) requests a formal review, absent written objection by the minor

beneficiary, the sponsor is presumed to be acting on behalf of the

minor beneficiary. Following the issuance of the formal review

determination, the sponsor requests a hearing; however, if at the time

of the request for a hearing, the beneficiary is 18 years of age or

older, the request must either be by the beneficiary or the

beneficiary's appointed representative. The sponsor, in this example,

could not pursue the request for hearing without being appointed by the

beneficiary as the beneficiary's representative

eview

determination, the sponsor requests a hearing; however, if at the time

of the request for a hearing, the beneficiary is 18 years of age or

older, the request must either be by the beneficiary or the

beneficiary's appointed representative. The sponsor, in this example,

could not pursue the request for hearing without being appointed by the

beneficiary as the beneficiary's representative.

(A) The representative shall have the same authority as the

appealing party and notice given to the representative shall constitute

notice to the appealing party.

(B) To avoid possible conflicts of interest, an officer or employee

of the United States, such as an employee or member of a Uniformed

Service, including an employee or staff member of a Uniformed Service

legal office, or a CHAMPUS advisor, subject to the exceptions in 18

U.S.C. 205, is not eligible to serve as a representative. An exception

usually is made for an employee or member of a Uniformed Service who

represents an immediate family member. In addition, the Director,

OCHAMPUS, or designee, may appoint an officer or employee of the United

States as the CHAMPUS representative at a hearing.

(3) Burden of proof. The burden of proof is on the appealing party

to establish affirmatively by substantial evidence the appealing

party's entitlement under law and this part to the authorization of

CHAMPUS benefits, approval of authorized CHAMPUS provider status, or

removal of sanctions imposed under Sec. 199.9. If a presumption exists

under the provisions of this part or information constitutes prima

facie evidence under the provisions of this part, the appealing party

must produce evidence reasonably sufficient to rebut the presumption or

prima facie evidence as part of the appealing party's burden of proof.

CHAMPUS shall not pay any part of the cost or fee, including attorney

fees, associated with producing or submitting evidence in support of an

appeal.

r information constitutes prima

facie evidence under the provisions of this part, the appealing party

must produce evidence reasonably sufficient to rebut the presumption or

prima facie evidence as part of the appealing party's burden of proof.

CHAMPUS shall not pay any part of the cost or fee, including attorney

fees, associated with producing or submitting evidence in support of an

appeal.

(4) Evidence in appeal and hearing cases. Any relevant evidence may

be used in the administrative appeal and hearing process if it is the

type of evidence on which reasonable persons are accustomed to rely in

the conduct of serious affairs, regardless of the existence of any

common law or statutory rule that might make improper the admission of

such evidence over objection in civil or criminal courts.

(5) Late filing. If a request for reconsideration, formal review,

or hearing is filed after the time permitted in this section, written

notice shall be issued denying the request. Late filing may be

permitted only if the appealing party reasonably can demonstrate to the

satisfaction of the Director, OCHAMPUS, or a designee, that the timely

filing of the request was not feasible due to extraordinary

circumstances over which the appealing party had no practical control.

Each request for an exception to the filing requirement will be

considered on its own merits. The decision of the Director, OCHAMPUS,

or a designee, on the request for an exception to the filing

requirement shall be final.

(6) Appealable issue. An appealable issue is required in order for

an adverse determination to be appealed under the provisions of this

section. Examples of issues that are not appealable under this section

include:

equirement will be

considered on its own merits. The decision of the Director, OCHAMPUS,

or a designee, on the request for an exception to the filing

requirement shall be final.

(6) Appealable issue. An appealable issue is required in order for

an adverse determination to be appealed under the provisions of this

section. Examples of issues that are not appealable under this section

include:

(i) A dispute regarding a requirement of the law or regulation.

(ii) The amount of the CHAMPUS-determined allowable cost or charge,

since the methodology for determining allowable costs or charges is

established by this part.

(iii) The establishment of diagnosis-related groups (DRGs), or the

methodology for the classification of inpatient discharges within the

DRGs, or the weighting factors that reflect the relative hospital

resources used with respect of discharges within each DRG, since each

of these is established by this part.

(iv) Certain other issues on the basis that the authority for the

initial determination is not vested in CHAMPUS. Such issues include but

are not limited to the following examples:

(A) Determination of a person's eligibility as a CHAMPUS

beneficiary is the responsibility of the appropriate Uniformed Service.

Although OCHAMPUS and CHAMPUS contractors must make determinations

concerning a beneficiary's eligibility in order to ensure proper

disbursement of appropriated funds on each CHAMPUS claim processed,

ultimate responsibility for resolving a beneficiary's eligibility rests

with the Uniformed Services. Accordingly, disputed question of fact

concerning a beneficiary's eligibility will not be considered an

appealable issue under the provisions of this section, but shall be

resolved in accordance with Sec. 199.3.

(B) Similarly, decisions relating to the issuance of a

Nonavailability Statement (DD Form 1251) in each case are made by the

Uniformed Services

ty rests

with the Uniformed Services. Accordingly, disputed question of fact

concerning a beneficiary's eligibility will not be considered an

appealable issue under the provisions of this section, but shall be

resolved in accordance with Sec. 199.3.

(B) Similarly, decisions relating to the issuance of a

Nonavailability Statement (DD Form 1251) in each case are made by the

Uniformed Services. Disputes over the need for a Nonavailability

Statement or a refusal to issue a Nonavailability Statement are not

appealable under this section. The one exception is when a dispute

arises over whether the facts of the case demonstrate a medical

emergency for which a Nonavailability Statement is not required. Denial

of payment in this one situation is an appealable issue.

under Sec. 199.9 which is based solely on a provider's exclusion or

suspension by another agency of the Federal Government, a state, or a

local licensing authority is not appealable under this section. The

provider must exhaust

administrative appeal rights offered by the other agency that made the

initial determination to exclude or suspend the provider. Similarly,

any sanction imposed under Sec. 199.9 which is based solely on a

criminal conviction of civil judgment against the provider is not

appealable under this section. If the sanction imposed under Sec. 199.9

is not based solely on the provider's criminal conviction or civil

judgment or on the provider's exclusion or suspension by another agency

of the Federal government, a state, or a local licensing authority,

that portion of the CHAMPUS administrative determination which is in

addition to the criminal conviction/civil judgment or exclusion/

suspension by the other agency may be appealed under this section.

d solely on the provider's criminal conviction or civil

judgment or on the provider's exclusion or suspension by another agency

of the Federal government, a state, or a local licensing authority,

that portion of the CHAMPUS administrative determination which is in

addition to the criminal conviction/civil judgment or exclusion/

suspension by the other agency may be appealed under this section.

(v) A decision by the Director, OCHAMPUS, or a designee, as a

suspending official when the decision is final under

Sec. 199.9(h)(1)(iv)(A).

(7) Amount in Dispute. An amount in dispute is required for an

adverse determination to be appealed under the provisions of this

section, except as set forth in the following:

(i) The amount in dispute is calculated as the amount of money

CHAMPUS would pay if the services and supplies involved in dispute were

determined to be authorized CHAMPUS benefits. Examples of amounts of

money that are excluded by the Regulation from CHAMPUS payments for

authorized benefits include, but are not limited to:

(A) Amounts in excess of the CHAMPUS-determined allowable charge of

cost.

(B) The beneficiary's CHAMPUS deductible and cost-share amounts.

(C)Amounts that the CHAMPUS beneficiary, or parent, guardian, or

other responsible person has no legal obligation to pay.

(D) Amounts excluded under Sec. 199.8.

(ii) The amount in dispute for appeals involving a denial of a

request for authorization in advance of obtaining care shall be the

estimated allowable charge or cost for the services(s) requested.

(iii) There is no requirement for an amount in dispute when the

appealable issue involves a denial of a provider's request for approval

as an authorized CHAMPUS provider or the determination to exclude,

suspend, or terminate a provider's authorized CHAMPUS provider status.

authorization in advance of obtaining care shall be the

estimated allowable charge or cost for the services(s) requested.

(iii) There is no requirement for an amount in dispute when the

appealable issue involves a denial of a provider's request for approval

as an authorized CHAMPUS provider or the determination to exclude,

suspend, or terminate a provider's authorized CHAMPUS provider status.

(iv) Individual claims may be combined to meet the required amount

in dispute if all of the following exist:

(A) The claims involve the same beneficiary.

(B) The claims involve the same issue.

decision issued by a CHAMPUS contractor or a CHAMPUS peer review

organization.

Note to paragraph (a)(7): A request for administrative review

under this appeal process which involves a dispute regarding a

requirement of law or regulation (paragraph (a)(6)(i) of this

section) or does not involve a sufficient amount in dispute

(paragraph (a)(7) of this section) may not be rejected at the

reconsideration level of appeal. However, an appeal shall involve an

appealable issue and sufficient amount in dispute under these

paragraphs to be granted a formal review or hearing.

(8) Levels of appeal. The sequence and procedures of a CHAMPUS

appeal vary, depending on whether the initial determination was made by

OCHAMPUS, a CHAMPUS contractor, or a CHAMPUS peer review organization.

the

reconsideration level of appeal. However, an appeal shall involve an

appealable issue and sufficient amount in dispute under these

paragraphs to be granted a formal review or hearing.

(8) Levels of appeal. The sequence and procedures of a CHAMPUS

appeal vary, depending on whether the initial determination was made by

OCHAMPUS, a CHAMPUS contractor, or a CHAMPUS peer review organization.

(i) Appeal levels for initial determination made by CHAMPUS

contractor or CHAMPUS peer review organization.

(A) Reconsideration by CHAMPUS contractor or CHAMPUS peer review

organization.

(B) Formal review by OCHAMPUS (except for CHAMPUS peer review

organization reconsiderations and reconsideration determinations issued

by CHAMPUS contractors that are subject to Sec. 199.15).

(ii) Appeal levels for initial determination made by OCHAMPUS.

(A) Formal review by OCHAMPUS except initial determinations

involving the suspension of claims processing where the Director,

OCHAMPUS, or a designee, determines that additional proceedings are

necessary as to disputed material facts and the suspending official's

decision is not final under Sec. 199.9(h)(1)(iv)(A) or Sec. 199.9(h)(2)

initial determinations involving the sanctioning (exclusion,

suspension, or termination) of CHAMPUS providers. Initial

determinations involving these matters shall be appealed directly to

the hearing level.

(B) Hearing.

(9) Appeal decision. An appeal decision at any level may address

all pertinent issues which arise under the appeal or are otherwise

presented by the information in the case record (for example, the

entire episode of care in the appeal), and shall not be limited to

addressing the specific issue appealed by a party. In the case of

sanctions imposed under Sec. 199.9, the final decision may affirm,

increase or reduce the sanction period imposed by CHAMPUS, or otherwise

modify or reverse the imposition of the sanction.

erwise

presented by the information in the case record (for example, the

entire episode of care in the appeal), and shall not be limited to

addressing the specific issue appealed by a party. In the case of

sanctions imposed under Sec. 199.9, the final decision may affirm,

increase or reduce the sanction period imposed by CHAMPUS, or otherwise

modify or reverse the imposition of the sanction.

(10) Dismissal of request for reconsideration, formal review, or

hearing. (i) By application of the appealing party. A request for

reconsideration, formal review, or hearing may be dismissed by the

Director, OCHAMPUS, or a designee, at any time before the mailing of

the final decision, upon the application of the appealing party. A

request for dismissal must be in writing and filed with the Chief,

Office of Appeals and Hearings, OCHAMPUS or designee, or the hearing

officer in hearing cases. When dismissal is requested, the previous

determination in the case shall be deemed final, unless the dismissal

is vacated in accordance with paragraph (a)(10)(v) of this section.

(ii) By stipulation of the parties. A request for a

reconsideration, formal review, or hearing may be dismissed by the

Director, OCHAMPUS, or a designee, at any time before the mailing of

notice of the reconsideration determination, formal review

determination, or hearing final decision under a stipulation agreement

between the appealing party and the Director, OCHAMPUS, or designee.

When a dismissal is entered under a stipulation, the previous

determination shall be deemed final, unless the dismissal is vacated in

accordance with paragraph (a)(10)(v) of this section.

ling of

notice of the reconsideration determination, formal review

determination, or hearing final decision under a stipulation agreement

between the appealing party and the Director, OCHAMPUS, or designee.

When a dismissal is entered under a stipulation, the previous

determination shall be deemed final, unless the dismissal is vacated in

accordance with paragraph (a)(10)(v) of this section.

(iii) By abandonment. The Director, OCHAMPUS, or a designee, may

dismiss a request for reconsideration, formal review, or hearing upon

abandonment by the appealing party.

(A) An appealing party shall be deemed to have abandoned a request

for hearing, other than when personal appearance is waived in

accordance with Sec. 199.10(d)(10)(xii), if neither the appealing party

nor an appointed representative appears at the time and placed fixed

for the hearing and if, within 10 days after the mailing of a notice by

certified mail to the appealing party by the hearing officer to show

cause, such party does not show good and sufficient cause for such

failure to appear and failure to notify the hearing officer before the

time fixed for the hearing that an appearance could not be made.

(B) An appealing party shall be deemed to have abandoned a request

for reconsideration, formal review, or hearing if, before mailing of

the notice of the reconsideration determination or formal review

determination or before assignment of the case to the hearing officer,

the Director, OCHAMPUS, or a designee, is unable to locate either the

appealing party or an appointed representative.

for

for reconsideration, formal review, or hearing if, before mailing of

the notice of the reconsideration determination or formal review

determination or before assignment of the case to the hearing officer,

the Director, OCHAMPUS, or a designee, is unable to locate either the

appealing party or an appointed representative.

for

reconsideration, formal review, or hearing if the appealing party fails

to prosecute the appeal. Failure to prosecute the appeal includes, but

is not limited to, an appealing party's failure to provide information

reasonably requested by the Director, OCHAMPUS, or a designee, or the

hearing officer for consideration in the appeal.

(D) If the Director, OCHAMPUS, or a designee, dismisses the request

for reconsideration, formal review, or hearing because of abandonment,

the previous determination in the case shall be deemed to be final,

unless the dismissal is vacated in accordance with paragraph (a)(10)(v)

of this section.

(iv) For cause. If the Director, OCHAMPUS, or a designee, may

dismiss for cause a request for reconsideration, formal review, or

hearing either entirely or as to any stated issue. If the Director,

OCHAMPUS, or a designee, dismisses a reconsideration, formal review, or

hearing request for cause, the previous determination in the case shall

be deemed to be final, unless the dismissal is vacated in accordance

with paragraph (a)(10)(v) of this section. A dismissal for cause may be

issued under any of the following circumstances:

(A) When the appealing party requesting the reconsideration, formal

review, or hearing is not a proper party under paragraph (a)(2)(i) of

this section, or does not otherwise have a right to participate in a

reconsideration, formal review, or hearing

s vacated in accordance

with paragraph (a)(10)(v) of this section. A dismissal for cause may be

issued under any of the following circumstances:

(A) When the appealing party requesting the reconsideration, formal

review, or hearing is not a proper party under paragraph (a)(2)(i) of

this section, or does not otherwise have a right to participate in a

reconsideration, formal review, or hearing.

(B) When the appealing party who filed the reconsideration, formal

review, or hearing request dies, and there is no information before the

Director, OCHAMPUS, or a designee, showing that a party to the initial

determination who is not an appealing party may be prejudiced by the

previous determination.

(D) When the amount in dispute is less than $50 in a formal review

or less than $300 in a hearing.

(E) When all appealable issues have been resolved in favor of the

appealing party.

(v) Vacation of dismissal. Dismissial of a request for

reconsideration, formal review, or hearing may be vacated by the

Director, OCHAMPUS, or a designee, upon written request of the

appealing party, if the request is received within 6 months of the date

of the notice of dismissal mailed to the last known address of the

party requesting the reconsideration, formal review, or hearing.

(b) Reconsideration. Any party to the initial determination made by

the CHAMPUS contractor or a CHAMPUS peer review organization may

request a reconsideration.

e, upon written request of the

appealing party, if the request is received within 6 months of the date

of the notice of dismissal mailed to the last known address of the

party requesting the reconsideration, formal review, or hearing.

(b) Reconsideration. Any party to the initial determination made by

the CHAMPUS contractor or a CHAMPUS peer review organization may

request a reconsideration.

(1) Requesting a reconsideration. (i) Written request required. The

request must be in writing, shall state the specific matter in dispute,

and shall include a copy of the notice of initial determination (such

as the CEOB form) made by the CHAMPUS contractor or the CHAMPUS peer

review organization.

(ii) Where to file. The request shall be submitted to the office

that made the initial determination (i.e., the CHAMPUS contractor or

the CHAMPUS peer review organization) or any other CHAMPUS contractor

designated in the notice of initial determination.

(iii) Allowed time to file. The request must be mailed within 90

days after the date of the notice of initial determination.

(iv) Official filing date. A request for a reconsideration shall be

deemed filed on the date it is mailed and postmarked. For the purposes

of CHAMPUS, a postmark is a cancellation mark issued by the United

States Postal Service. If the request does not have a postmark, it

shall be deemed filed on the date received by the CHAMPUS contractor or

the CHAMPUS peer review organization.

ermination.

(iv) Official filing date. A request for a reconsideration shall be

deemed filed on the date it is mailed and postmarked. For the purposes

of CHAMPUS, a postmark is a cancellation mark issued by the United

States Postal Service. If the request does not have a postmark, it

shall be deemed filed on the date received by the CHAMPUS contractor or

the CHAMPUS peer review organization.

(2) The reconsideration process. The purpose of the reconsideration

is to determine whether the initial determination was made in

accordance with law, regulation, policies, and guidelines in effect at

the time the care was provided or requested, or at the time of the

initial determination and/or reconsideration decision involving a

provider request for approval as an authorized provider under CHAMPUS.

The reconsideration is performed by a member of the CHAMPUS contractor

or the CHAMPUS peer review organization staff who was not involved in

making the initial determination and is a thorough and independent

review of the case. The reconsideration is based on the information

submitted that led to the initial determination, plus any additional

information that the appealing party may submit or the CHAMPUS

contractor or the CHAMPUS peer review organization may obtain.

(3) Timeliness of reconsideration determination. The CHAMPUS

contractor or the CHAMPUS peer review organization normally shall issue

its reconsideration determination no later than 60 days from the date

of receipt of the request for reconsideration by the CHAMPUS contractor

or the CHAMPUS peer review organization.

(4) Notice of reconsideration determination. The CHAMPUS contractor

or the CHAMPUS peer review organization shall issue a written notice of

the reconsideration to the appealing party at his or her last known

address. The notice of the reconsideration must contain the following

elements:

eipt of the request for reconsideration by the CHAMPUS contractor

or the CHAMPUS peer review organization.

(4) Notice of reconsideration determination. The CHAMPUS contractor

or the CHAMPUS peer review organization shall issue a written notice of

the reconsideration to the appealing party at his or her last known

address. The notice of the reconsideration must contain the following

elements:

(i) A statement of the issues or issue under appeal.

(ii) The provisions of law, regulation, policies, and guidelines

that apply to the issue or issues under appeal.

(iii) A discussion of the original and additional information that

is relevant to the issue or issues under appeal.

(iv) Payment and liability under Sec. 199.4(h), if applicable.

(v) Whether the reconsideration determination upholds the initial

determination or reverses it, in whole or in part, and the rationale

for the action.

(vi) A statement of the right to appeal further in any case when

the reconsideration determination is less than fully favorable to the

appealing party and the amount in dispute in $50 or more.

(5) Effect of reconsideration determination. The reconsideration

determination is final if the following exits:

(i) The amount in dispute is less than $50.

(ii) Appeal rights have been offered, but a request for formal

review (or hearing in a case subject to Sec. 199.15) is not postmarked

or received by OCHAMPUS within 60 days of the date of the notice of the

reconsideration determination.

(5) Effect of reconsideration determination. The reconsideration

determination is final if the following exits:

(i) The amount in dispute is less than $50.

(ii) Appeal rights have been offered, but a request for formal

review (or hearing in a case subject to Sec. 199.15) is not postmarked

or received by OCHAMPUS within 60 days of the date of the notice of the

reconsideration determination.

to an initial determination made by OCHAMPUS, or a reconsideration

determination made by the CHAMPUS contractor may request a formal

review by OCHAMPUS if the party is dissatisfied with the initial or

reconsideration determination unless the initial or reconsideration

determination:

(1) Is final under paragraph (b)(5) of this section.

(2) Involves the sanctioning of a provider by the exclusion,

suspension or termination of authorized provider status;

(3) Involves a written decision issued pursuant to

Sec. 199.9(h)(l)(iv)(A) regarding the temporary suspension of claims

processing; or

(4) Involves a reconsideration determination by a CHAMPUS peer

review organization. A hearing, but not a formal review level of

appeal, may be available to a party to an initial determination

involving the sanctioning of a provider or to a party to a written

decision involving a temporary

suspension of claims processing. A beneficiary (or an authorized

representative of a beneficiary), but not a provider (except as

provided in Sec. 199.15), may request a hearing, but not a formal

review, of a reconsideration determination made by a CHAMPUS peer

review organization.

determination

involving the sanctioning of a provider or to a party to a written

decision involving a temporary

suspension of claims processing. A beneficiary (or an authorized

representative of a beneficiary), but not a provider (except as

provided in Sec. 199.15), may request a hearing, but not a formal

review, of a reconsideration determination made by a CHAMPUS peer

review organization.

(5) Requesting a formal review. (i) Written request required. The

request must be in writing, shall state the specific matter in dispute,

shall include copies of the written determination (notice of

reconsideration determination or OCHAMPUS initial determination) being

appealed, and shall include any additional information or documents not

submitted previously.

(ii) Where to file. The request shall be submitted to the Chief,

Office of Appeals and Hearings, TRICARE Management Activity, 16401 East

Centretech Parkway, Aurora, Colorado 80011-9043.

(iii) Allowed time to file. The request shall be mailed within 60

days after the date of the notice of the reconsideration determination

or OCHAMPUS initial determination being appealed.

(iv) Official filing date. A request for a formal review shall be

deemed filed on the date it is mailed and postmarked. For the purposes

of CHAMPUS, a postmark is a cancellation mark issued by the United

States Postal Service. If the request does not have a postmark, it

shall be deemed filed on the date received by OCHAMPUS.

ion determination

or OCHAMPUS initial determination being appealed.

(iv) Official filing date. A request for a formal review shall be

deemed filed on the date it is mailed and postmarked. For the purposes

of CHAMPUS, a postmark is a cancellation mark issued by the United

States Postal Service. If the request does not have a postmark, it

shall be deemed filed on the date received by OCHAMPUS.

(6) The formal review process. The purpose of the formal review is

to determine whether the initial determination or reconsideration

determination was made in accordance with law, regulation, policies,

and guidelines in effect at the time the care was provided or requested

or at the time of the initial determination, reconsideration, or formal

review decision involving a provider request for approval as an

authorized CHAMPUS provider. The formal review is performed by the

Chief, Office of Appeals and Hearings, OCHAMPUS, or a designee, and is

a thorough review of the case. The formal review determination shall be

based on the information upon which the initial determination and/or

reconsideration determination was based, and any additional information

the appealing party may submit or OCHAMPUS may obtain.

(7) Timeliness of formal review determination. The Chief, Office of

Appeals and Hearings, OCHAMPUS, or a designee, normally shall issue the

formal review determination no later than 90 days from the date of

receipt of the request for formal review by the OCHAMPUS.

(8) Notice of formal review determination. The Chief, Office of

Appeals and Hearings, OCHAMPUS, or a designee, shall issue a written

notice of the formal review determination to the appealing party at his

or her last known address. The notice of the formal review

determination must contain the following elements:

days from the date of

receipt of the request for formal review by the OCHAMPUS.

(8) Notice of formal review determination. The Chief, Office of

Appeals and Hearings, OCHAMPUS, or a designee, shall issue a written

notice of the formal review determination to the appealing party at his

or her last known address. The notice of the formal review

determination must contain the following elements:

(i) A statement of the issue or issues under appeal.

(ii) The provisions of law, regulation, policies, and guidelines,

that apply to the issue or issues under appeal.

(iii) A discussion of the original and additional information that

is relevant to the issue or issues under appeal.

(iv) Whether the formal review upholds the prior determination or

determinations or reverses the prior determination or determinations in

whole or in part and the rationale for the action.

(v) A statement of the right to request a hearing in any case when

the formal review determination is less than fully favorable, the issue

is appealable,and the amount in dispute is $300 or more.

(9) Effect of formal review determinations. The formal review

determination is final if one or more of the following exist:

(i) The issue is not appealable. (See paragraph (a)(6) of this

section.)

(ii) The amount in dispute is less than $300. (See paragraph (a)(7)

of this section.)

(iii) Appeal rights have been offered but a request for hearing is

not postmarked or received by OCHAMPUS within 60 days of the date of

the notice of the formal review determination.

ion is final if one or more of the following exist:

(i) The issue is not appealable. (See paragraph (a)(6) of this

section.)

(ii) The amount in dispute is less than $300. (See paragraph (a)(7)

of this section.)

(iii) Appeal rights have been offered but a request for hearing is

not postmarked or received by OCHAMPUS within 60 days of the date of

the notice of the formal review determination.

(d) Hearing. Any party to the initial determination may request a

hearing if the party is dissatisfied with the formal review

determination and the formal review determination is not final under

the provisions of paragraph (c)(9), of this section; or the initial

determination involves the sanctioning of a provider under Sec. 199.9

and involves an appealable issue; or the reconsideration determination

is issued by a CHAMPUS peer review organization under Sec. 199.15 and

is not final under paragraph (b)(5) of this section.

(1) Requesting a hearing. (i) Written request required. The request

shall be in writing, state the specific matter in dispute, include a

copy of the initial determination, reconsideration determination, or

formal review determination being appealed, and include any additional

information or documents not submitted previously.

(ii) Where to file. The request shall be submitted to the Chief,

Office of Appeals and Hearings, TRICARE Management Activity, 16401 East

Centretech Parkway, Aurora, Colorado 80011-9043.

(iii) Allowed time to file. The request shall be mailed within 60

days after the date of the notice of the initial determination or

formal review determination being appealed.

(iv) Official filing date. A request for hearing shall be deemed

filed on the date it is mailed and postmarked. For the purposes of

CHAMPUS, a postmark is a cancellation mark issued by the United States

Postal Service. If a request for hearing does not have a postmark, it

shall be deemed filed on the day received by OCHAMPUS.

itial determination or

formal review determination being appealed.

(iv) Official filing date. A request for hearing shall be deemed

filed on the date it is mailed and postmarked. For the purposes of

CHAMPUS, a postmark is a cancellation mark issued by the United States

Postal Service. If a request for hearing does not have a postmark, it

shall be deemed filed on the day received by OCHAMPUS.

(2) Hearing process. A hearing is an administrative proceeding in

which facts relevant to the appealable issue(s) in the case are

presented and evaluated in relation to applicable law, regulation,

policies, and guidelines in effect at the time the care in dispute was

provided or requested; at the time of the initial determination, formal

review determination, or hearing decision involving a provider request

for approval under CHAMPUS as an authorized provider; or at the time of

the act or event which is the basis for the imposition of sanctions

under this part. A hearing, except for an appeal involving a provider

sanction, generally shall be conducted as a nonadversial,

administrative proceeding. However, an authorized party to any hearing,

including CHAMPUS, may submit additional evidence or testimony relevant

to the appealable issue(s) and may appoint a representative, including

legal counsel, to participate in the hearing process.

(3) Timeliness of hearing. (i) Except as otherwise provided in this

section, within 60 days following receipt of a request for hearing, the

Director, OCHAMPUS, or a designee, normally will appoint a hearing

officer to hear the appeal. Copies of all records in the possession of

OCHAMPUS that are pertinent to the matter to be heard or that formed

the basis of the formal review determination shall be provided to the

hearing officer and, upon request, to the appealing party.

hin 60 days following receipt of a request for hearing, the

Director, OCHAMPUS, or a designee, normally will appoint a hearing

officer to hear the appeal. Copies of all records in the possession of

OCHAMPUS that are pertinent to the matter to be heard or that formed

the basis of the formal review determination shall be provided to the

hearing officer and, upon request, to the appealing party.

(ii) The hearing officer, except as otherwise provided in this

section, normally shall have 60 days from the date of written notice of

assignment to review the file, schedule and hold the hearing, and issue

a recommended decision to the Director, OCHAMPUS, or designee.

(iii) The Director, OCHAMPUS, or designee, may delay the case

assignment to the hearing officer if additional information is needed

that cannot be

obtained and included in the record within the time period specified

above. The appealing party will be notified in writing of the delay

resulting from the request for additional information. The Director,

OCHAMPUS, or a designee, in such circumstances, will assign the case to

a hearing officer within 30 days of receipt of all such additional

information, or within 60 days of receipt of the request for hearing,

whichever shall occur last.

(iv) The hearing officer may delay submitting the recommended

decision if, at the close of the hearing, any party to the hearing

requests that the record remain open for submission of additional

information. In such circumstances, the hearing officer will have 30

days following receipt of all such additional information including

comments from the other parties to the hearing concerning the

additional information to submit the recommended decision to the

Director, OCHAMPUS, or a designee.

ing, any party to the hearing

requests that the record remain open for submission of additional

information. In such circumstances, the hearing officer will have 30

days following receipt of all such additional information including

comments from the other parties to the hearing concerning the

additional information to submit the recommended decision to the

Director, OCHAMPUS, or a designee.

(4) Representation at a hearing. Any party to the hearing may

appoint a representative to act on behalf of the party at the hearing,

unless such person currently is disqualified or suspended from acting

in another Federal administrative proceeding, or unless otherwise

prohibited by law, this part, or any other DoD regulation (see

paragraph (a)(2)(ii) of this section). A hearing officer may refuse to

allow any person to represent a party at the hearing when such person

engages in unethical, disruptive, or contemptuous conduct, or

intentionally fails to comply with proper instructions or requests of

the hearing officer, or the provisions of this part. The representative

shall have the same authority as the appealing party and notice given

to the representative shall constitute notice required to be given to

the appealing party.

(5) Consolidation of proceedings. The Director, OCHAMPUS, or a

designee, may consolidate any number of proceedings for hearing when

the facts and circumstances are similar and no substantial right of an

appealing party will be prejudiced.

have the same authority as the appealing party and notice given

to the representative shall constitute notice required to be given to

the appealing party.

(5) Consolidation of proceedings. The Director, OCHAMPUS, or a

designee, may consolidate any number of proceedings for hearing when

the facts and circumstances are similar and no substantial right of an

appealing party will be prejudiced.

(6) Authority of the hearing officer. The hearing officer in

exercising the authority to conduct a hearing under this part will be

bound by 10 U.S.C. Chapter 55 and this part. The hearing officer in

addressing substantive, appealable issues shall be bound by policy

manuals, instructions, procedures, and other guidelines issued by the

ASD(HA), or a designee, or by the Director, OCHAMPUS, or a designee, in

effect for the period in which the matter in dispute arose. A hearing

officer may not establish or amend policy, procedures, instructions, or

guidelines. However, the hearing officer may recommend reconsideration

of the policy, procedures, instructions or guidelines by the ASD(HA),

or a designee, when the final decision is issued in the case.

(7) Disqualification of hearing officer. A hearing officer shall

voluntarily disqualify himself or herself and withdraw from any

proceeding in which the hearing officer cannot given fair or impartial

hearing, or in which there is a conflict of interest. A party to the

hearing may request the disqualification of a hearing officer by filing

a statement detailing the reasons the party believes that a fair and

impartial hearing cannot be given or that a conflict of interest

exists. Such request shall be immediately sent by the appealing party

or the hearing officer to the Director, OCHAMPUS, or a designee, who

shall investigate the allegations and advise the complaining party of

the decision in writing. A copy of such decision also shall be mailed

to all other parties of the decision in writing

impartial hearing cannot be given or that a conflict of interest

exists. Such request shall be immediately sent by the appealing party

or the hearing officer to the Director, OCHAMPUS, or a designee, who

shall investigate the allegations and advise the complaining party of

the decision in writing. A copy of such decision also shall be mailed

to all other parties of the decision in writing. A copy of such

decision also shall be mailed to all other parties to the hearing. If

the Director, OCHAMPUS, or a designee, reassigns the case to another

hearing officer, no investigation shall be required.

(8) Notice and scheduling of hearing. The hearing officer shall

issued by certified mail, when practicable, a written notice to the

parties to the hearing of the time and place for the hearing. Such

notice shall be mailed at least 15 days before the scheduled date of

the hearing. The notice shall contain sufficient information about the

hearing procedure, including the party's right to representation, to

allow for effective preparation. The notice also shall advise the

appealing party of the right to request a copy of the record before the

hearing. Additionally, the notice shall advise the appealing party of

his or her responsibility to furnish the hearing officer, no later than

7 days before the scheduled date of the hearing, a list of all

witnesses who will testify and a copy of all additional information to

be presented at the hearing. The time and place of the hearing shall be

determined by the hearing officer, who shall select a reasonable time

and location mutually convenient to the appealing party and OCHAMPUS.

ity to furnish the hearing officer, no later than

7 days before the scheduled date of the hearing, a list of all

witnesses who will testify and a copy of all additional information to

be presented at the hearing. The time and place of the hearing shall be

determined by the hearing officer, who shall select a reasonable time

and location mutually convenient to the appealing party and OCHAMPUS.

(9) Preparation for hearing. (i) Prehearing statement of

contentions. The hearing officer may on reasonable notice require a

party to the hearing to submit a written statement of contentions and

reasons. The written statement shall be provided to all parties to the

hearing before the hearing takes place.

(ii) Discovery. Upon the written request of a party to the initial

determination (including OCHAMPUS) and for good cause shown, the

hearing officer will allow that party to inspect and copy all document,

unless privileged, relevant to issues in the proceeding that are in the

possession or control of the other party participating in the appeal.

The written request shall state clearly what information and documents

are required for inspection and the relevance of the documents to the

issues in the proceeding. Depositions, interrogatories, requests for

admissions, and other forms of prehearing discovery are generally not

authorized and the Department of Defense does not have subpoena

authority for purposes of administrative hearings under this section.

If the hearing officer finds that good cause exists for taking a

deposition or interrogatory, the expense shall be assessed to the

requesting party, with copies furnished to the hearing officer and the

other parties to the hearing.

discovery are generally not

authorized and the Department of Defense does not have subpoena

authority for purposes of administrative hearings under this section.

If the hearing officer finds that good cause exists for taking a

deposition or interrogatory, the expense shall be assessed to the

requesting party, with copies furnished to the hearing officer and the

other parties to the hearing.

(iii) Witnesses and evidence. All parties to a hearing are

responsible for producing, at each party's expense, meaning without

reimbursement of payment by CHAMPUS, witnesses and other evidence in

their own behalf, and for furnishing copies of any such documentary

evidence to the hearing officer and other party or parties to the

hearing. The Department of Defense is not authorized to subpoena

witnesses or records. The hearing officer may issue invitations and

requests to individuals to appear and testify without cost to the

Government, so that the full facts in the case may be presented.

(10) Conduct of hearing. (i) Right to open hearing. Because of the

personal nature of the matters to be considered, hearings normally

shall be closed to the public. However, the appealing party may request

an open hearing. If this occurs, the hearing shall be open except when

protection of other legitimate Government purposes dictates closing

certain portions of the hearing.

(ii) Right to examine parties to the hearing and their witnesses.

Each party to the hearing shall have the right to produce and examine

witnesses, to introduce exhibits, to question opposing witnesses on any

matter relevant to the issue even though the matter was not covered in

the direct examination, to impeach any witness regardless of which

party to the hearing first called the witness to testify, and to rebut

any evidence presented. Except as to those witnesses employed by

OCHAMPUS at the time of the hearing, and records in

tnesses, to introduce exhibits, to question opposing witnesses on any

matter relevant to the issue even though the matter was not covered in

the direct examination, to impeach any witness regardless of which

party to the hearing first called the witness to testify, and to rebut

any evidence presented. Except as to those witnesses employed by

OCHAMPUS at the time of the hearing, and records in

the possession of OCHAMPUS, a party to a hearing shall be responsible

for the cost of fee associated with producing witnesses and other

evidence in the party's own behalf, and for furnishing copies of

documentary evidence to the hearing officer and other party or parties

to the hearing.

(iii) Taking of evidence. The hearing officer shall control the

taking of evidence in a manner best suited to ascertain the facts and

safeguard the rights of the parties to the hearing. Before taking

evidence, the hearing officer shall identify and state the issues in

dispute on the record and the order in which evidence will be received.

(iv) Questioning and admission of evidence. A hearing officer may

question any witness and shall admit any relevant evidence. Evidence

that is irrelevant or unduly repetitions shall be excluded.

(v) Relevant evidence. Any relevant evidence shall be admitted,

unless unduly repetitious, if it is the type of evidence on which

reasonable persons are accustomed to rely in the conduct of serious

affairs, regardless of the existence of any common law or statutory

rule that might make improper the admission of such evidence over

objection in civil or criminal actions.

(vi) CHAMPUS determination first. The basis of the CHAMPUS

determinations shall be presented to the hearing officer first. The

appealing party shall then be given the opportunity to establish

affirmatively why this determination is held to be in error.

(vii) Testimony. Testimony shall be taken only on oath or

affirmation on penalty of perjury.

ce over

objection in civil or criminal actions.

(vi) CHAMPUS determination first. The basis of the CHAMPUS

determinations shall be presented to the hearing officer first. The

appealing party shall then be given the opportunity to establish

affirmatively why this determination is held to be in error.

(vii) Testimony. Testimony shall be taken only on oath or

affirmation on penalty of perjury.

(viii) Oral argument and briefs. At the request of any party to the

hearing made before the close of the hearing, the hearing officer shall

grant oral argument. If written argument is requested, it shall be

granted, and the parties to the hearing shall be advised as to the time

and manner within which such argument is to be filed. The hearing

officer may require any party to the hearing to submit written

memoranda pertaining to any or all issues raised in the hearing.

(ix) Continuance of hearing. A hearing officer may continue a

hearing to another time or place on his or her own motion or, upon

showing of good cause, at the request of any party. Written notice of

the time and place of the continued hearing, except as otherwise

provided here, shall be in accordance with this part. When a

continuance is ordered during a hearing, oral notice of the time and

place of the continued hearing may be given to each party to the

hearing who is present at the hearing.

(x) Continuance for additional evidence. If the hearing officer

determines, after a hearing has begun, that additional evidence is

necessary for the proper determination of the case, the following

procedure may be invoked:

(A) Continue hearing. The hearing may be continued to a later date

in accordance with Sec. paragraph (d)(10)(ix) of this section.

(B) Closed hearing. The hearing may be closed, but the record held

open in order to permit the introduction of additional evidence

ng has begun, that additional evidence is

necessary for the proper determination of the case, the following

procedure may be invoked:

(A) Continue hearing. The hearing may be continued to a later date

in accordance with Sec. paragraph (d)(10)(ix) of this section.

(B) Closed hearing. The hearing may be closed, but the record held

open in order to permit the introduction of additional evidence. Any

evidence submitted after the close of the hearing shall be made

available to all parties to the hearing, and all parties to the hearing

shall have the opportunity for comment prior to the issuance of the

recommended decision by the hearing officer. The hearing officer may

reopen the hearing if any portion of the additional evidence makes

further hearing desirable. Notice thereof shall be given in accordance

with paragraph (d)(8) of this section.

(xi) Transcript of hearing. A verbatim taped record of the hearing

shall be made and shall become a permanent part of the record. Upon

request, the appealing party shall be furnished a duplicate copy of the

tape. A typed transcript of the testimony will be made only when

determined to be necessary by OCHAMPUS. If a typed transcript is made,

upon request, the appealing party shall be furnished a copy without

charge. Corrections shall be allowed in the typed transcript by the

hearing officer solely for the purpose of conforming the transcript to

the actual testimony.

ished a duplicate copy of the

tape. A typed transcript of the testimony will be made only when

determined to be necessary by OCHAMPUS. If a typed transcript is made,

upon request, the appealing party shall be furnished a copy without

charge. Corrections shall be allowed in the typed transcript by the

hearing officer solely for the purpose of conforming the transcript to

the actual testimony.

(xii) Waiver of right to appear and present evidence. A party may

waive his or her right to appear at a hearing and present evidence. If

all parties waive their right to appear before the hearing officer for

presenting evidence and contentions personally or by representation, it

will not be necessary for the hearing officer to give notice of, or to

conduct a formal hearing. A waiver of the right to appear must be in

writing and filed with the hearing officer or the Chief, Office of

Appeals and Hearings, OCHAMPUS. Such waiver may be withdrawn by the

party by written notice received by the hearing officer or Chief,

Office of Appeals and Hearings, no later than 7 days before the

scheduled hearing or the mailing of notice of the final decision,

whichever occurs first. For purposes of this section, failure of a

party to appear personally or by representation after filing written

notice of waiver, will not be cause for finding of abandonment and the

hearing officer shall make the recommended decision on the basis of all

evidence of record.

(11) Recommended decision. At the conclusion of the hearing and

after the record has been closed, the matter shall be taken under

consideration by the hearing officer. Within the time frames previously

set forth in this section, the hearing officer shall submit to the

Director, OCHAMPUS, or a designee, a written recommended decision

containing a statement of findings and a statement of reasons based on

the evidence adduced at the hearing and otherwise included in the

hearing record.

sed, the matter shall be taken under

consideration by the hearing officer. Within the time frames previously

set forth in this section, the hearing officer shall submit to the

Director, OCHAMPUS, or a designee, a written recommended decision

containing a statement of findings and a statement of reasons based on

the evidence adduced at the hearing and otherwise included in the

hearing record.

(i) Statement of findings. A statement of findings is a clear and

concise statement of fact evidenced in the record or conclusions that

readily can be deduced from the evidence of record. Each finding must

be supported by substantial evidence that is defined as such evidence

as a reasonable mind can accept as adequate to support a conclusion.

(ii) Statement of reasons. A reason is a clear and concise

statement of law, regulation, policies, or guidelines relating to the

statement of findings that provides the basis for the recommended

decision.

(e) Final decision. (1) Director, OCHAMPUS. The recommended

decision shall be reviewed by the Director, OCHAMPUS, or a designee,

who shall adopt or reject the recommended decision or refer the

recommended decision for review by the Assistant Secretary of Defense

(Health Affairs). The Director, OCHAMPUS, or a designee, normally will

take action with regard to the recommended decision within 90 days of

receipt of the recommended decision or receipt of the revised

recommended decision following a remand order to the Hearing Officer.

dopt or reject the recommended decision or refer the

recommended decision for review by the Assistant Secretary of Defense

(Health Affairs). The Director, OCHAMPUS, or a designee, normally will

take action with regard to the recommended decision within 90 days of

receipt of the recommended decision or receipt of the revised

recommended decision following a remand order to the Hearing Officer.

(i) Final action. If the Director, OCHAMPUS, or a designee, concurs

in the recommended decision, no further agency action is required and

the recommended decision, as adopted by the Director, OCHAMPUS, is the

final agency decision in the appeal. In the case of rejection, the

Director, OCHAMPUS, or a designee, shall state the reason for

disagreement with the recommended decision and the underlying facts

supporting such disagreement. In these circumstances, the Director,

OCHAMPUS, or a designee, may have a final decision prepared based on

the record, or may remand the matter to the Hearing Officer for

appropriate action. In the latter instance, the Hearing Officer shall

take appropriate action and submit a new

recommended decision within 60 days of receipt of the remand order. The

decision by the Director, OCHAMPUS, or a designee, concerning a case

arising under the procedures of this section, shall be the final agency

decision and the final decision, together with a copy of the

recommended decision, shall be sent by certified mail to the appealing

party or parties. A final agency decision under paragraph (e)(1)(i) of

this section will not be relied on, used, or cited as precedent by the

Department of Defense in the administration of CHAMPUS.

g under the procedures of this section, shall be the final agency

decision and the final decision, together with a copy of the

recommended decision, shall be sent by certified mail to the appealing

party or parties. A final agency decision under paragraph (e)(1)(i) of

this section will not be relied on, used, or cited as precedent by the

Department of Defense in the administration of CHAMPUS.

(ii) Referral for review by ASD(HA). The Director, OCHAMPUS, or a

designee, may refer a hearing case to the Assistant Secretary of

Defense (Health Affairs) when the hearing involves the resolution of

CHAMPUS policy and issuance of a final decision which may be relied on,

used, or cited as precedent in the administration of CHAMPUS. In such a

circumstance, the Director, OCHAMPUS, or a designee, shall forward the

recommended decision, together with the recommendation of the Director,

OCHAMPUS, or a designee, regarding disposition of the hearing case.

(2) ASD(HA). The ASD(HA), or a designee, after reviewing a case

arising under the procedures of this section may issue a final decision

based on the record in the hearing case or remand the case to the

Director, OCHAMPUS, or a designee, for appropriate action. A decision

issued by the ASD(HA), or a designee, shall be the final agency

decision in the appeal and the final decision, together with a copy of

the recommended decision, shall be sent by certified mail to the

appealing party or parties. A final decision of the ASD(HA), or a

designee, issued under this paragraph (e)(2) may be relied on, used, or

cited as precedent in the administration of CHAMPUS.

ion

issued by the ASD(HA), or a designee, shall be the final agency

decision in the appeal and the final decision, together with a copy of

the recommended decision, shall be sent by certified mail to the

appealing party or parties. A final decision of the ASD(HA), or a

designee, issued under this paragraph (e)(2) may be relied on, used, or

cited as precedent in the administration of CHAMPUS.

(f) TRICARE Claimcheck or other similar software. (1) General. This

sets forth the policies and procedures for appealing adverse

determinations issued as a result of the application of TRICARE

Claimcheck or other similar software. The TRICARE Claimcheck or other

similar software appeal procedures apply to denial or reduction in

payment based on approved reimbursement methods; whereas, denials

arising from TRICARE Claimcheck or other similar software relating to

benefit determinations are subject to the appeal process in paragraphs

(a) through (e) of this section. Non-participating providers may appeal

only through the TRICARE Claimcheck or other similar software appeal

procedures described in this paragraph (f). The levels of appeal under

the TRICARE Claimcheck or other similar software appeal procedures are:

First-level appeal, issued by the CHAMPUS contractor; and second-level

appeal, issued by OCHAMPUS. Provisions in paragraph (a)(10) of this

section that apply to the dismissal of reconsideration and formal

review determinations also apply to dismissal of first and second level

appeals.

raph (f). The levels of appeal under

the TRICARE Claimcheck or other similar software appeal procedures are:

First-level appeal, issued by the CHAMPUS contractor; and second-level

appeal, issued by OCHAMPUS. Provisions in paragraph (a)(10) of this

section that apply to the dismissal of reconsideration and formal

review determinations also apply to dismissal of first and second level

appeals.

(i) Initial determination. (A) Notice of initial determination and

right to appeal. (1) CHAMPUS contractors shall mail notices of initial

determinations to the affected provider or CHAMPUS beneficiary (or

representative) at the last known address. For beneficiaries who are

under 18 years of age or who are incompetent, a notice issued to the

other parent, guardian, or other representative, under established

CHAMPUS procedures, constitutes notice to the beneficiary.

(2) Notice of an initial determination on a claim processed by a

CHAMPUS contractor will be made on a CHAMPUS Explanation of Benefits

(CEOB) form.

(3) Each CEOB shall state the reason for the determination.

(4) In any case when the initial determination is adverse to the

beneficiary or provider, the CEOB shall include a statement of the

beneficiary's or provider's right to appeal the determination. The

procedure for filing a first-level appeal shall also be explained.

(B) Effect of initial determination. The initial determination is

final unless appealed in accordance with this paragraph (f) or unless

the initial determination is reopened by OCHAMPUS or the CHAMPUS

contractor.

ider, the CEOB shall include a statement of the

beneficiary's or provider's right to appeal the determination. The

procedure for filing a first-level appeal shall also be explained.

(B) Effect of initial determination. The initial determination is

final unless appealed in accordance with this paragraph (f) or unless

the initial determination is reopened by OCHAMPUS or the CHAMPUS

contractor.

(ii) Participation in an appeal. Participation in an appeal is

limited to any party to the initial determination, including OCHAMPUS,

and authorized representatives of the parties. Any party to the initial

determination, except OCHAMPUS, may appeal an adverse determination.

(A) Parties to the initial determination. For purposes of this

appeal procedure, the following are not parties to an initial

determination and are not entitled to administrative review under this

paragraph (f).

(1) A sponsor or parent of a beneficiary under 18 years of age or

guardian of an incompetent beneficiary is not a party to the initial

determination and may not serve as the appealing party.

(2) A third party, such as an insurance company, is not a party to

the initial determination and is not entitled to appeal even though it

may have an indirect interest in the initial determination.

(B) Representative. Any party to the initial determination may

appoint a representative to act on behalf of the party in connection

with an appeal. Generally, the custodial parent of a minor beneficiary

and the legally appointed guardian of an incompetent beneficiary shall

be presumed to have been appointed representative without specific

designation by the beneficiary. The custodial parent or legal guardian

(appointed by a cognizant court) of a minor beneficiary may initiate an

appeal based on the above presumption

tion