83_FR_2407 83 FR 2396 - Civilian Health and Medical Program of the Department of Veterans Affairs

83 FR 2396 - Civilian Health and Medical Program of the Department of Veterans Affairs

DEPARTMENT OF VETERANS AFFAIRS

Federal Register Volume 83, Issue 11 (January 17, 2018)

Page Range2396-2412
FR Document2018-00332

The Department of Veterans Affairs (VA) proposes to amend its regulations governing the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). The proposed revisions would clarify and update these regulations to conform to changes in law and policy that control the administration of CHAMPVA and would include details concerning the administration of CHAMPVA that are not reflected in current regulations. The proposed revisions would also expand covered services and supplies to include certain preventive services and eliminate cost-share amounts and deductibles for certain covered services.

Federal Register, Volume 83 Issue 11 (Wednesday, January 17, 2018)
[Federal Register Volume 83, Number 11 (Wednesday, January 17, 2018)]
[Proposed Rules]
[Pages 2396-2412]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00332]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP02


Civilian Health and Medical Program of the Department of Veterans 
Affairs

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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

SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations governing the Civilian Health and Medical Program of the 
Department of Veterans Affairs (CHAMPVA). The proposed revisions would 
clarify and update these regulations to conform to changes in law and 
policy that control the administration of CHAMPVA and would include 
details concerning the administration of CHAMPVA that are not reflected 
in current regulations. The proposed revisions would also expand 
covered services and supplies to include certain preventive services 
and eliminate cost-share amounts and deductibles for certain covered 
services.

DATES: Written comments must be received on or before March 19, 2018.

ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to the Director, 
Regulation and Policy Management (00REG), Department of Veterans 
Affairs, 810 Vermont Avenue NW, Room 1068, Washington, DC 20420; or by 
fax to (202) 273-9026. Comments should indicate that they are submitted 
in

[[Page 2397]]

response to ``RIN 2900-AP02, Civilian Health and Medical Program of the 
Department of Veterans Affairs.'' Copies of comments received will be 
available for public inspection in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m. 
Monday through Friday (except holidays). Please call (202) 461-4902 for 
an appointment. (This is not a toll-free number.) In addition, during 
the comment period, comments may be viewed online through the Federal 
Docket Management System at http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Joseph Duran, Director, Policy and 
Planning, Office of Community Care (OCC), 3773 Cherry Creek North 
Drive, Denver, Colorado 80209, Joseph.Duran2@va.gov, (303) 370-1637. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: The Civilian Health and Medical Program of 
the Department of Veterans Affairs (CHAMPVA) is a health benefits 
program in which the Department of Veterans Affairs (VA) shares the 
cost of covered medical care services and supplies with spouses, 
children, survivors, and certain caregivers of veterans who meet 
eligibility criteria under 38 U.S.C. 1781. CHAMPVA beneficiaries must 
not be eligible for TRICARE, a health care program administered by the 
Department of Defense (DoD) that is also authorized to provide health 
care to certain family members of veterans. Certain Primary Family 
Caregivers designated under 38 U.S.C. 1720G(a)(7)(A) are eligible under 
section 1781 as long as they are not entitled to services under a 
health-plan contract as that term is defined in 38 U.S.C. 1725(f).
    Under section 1781, VA ``shall provide for medical care in the same 
or similar manner and subject to the same or similar limitations as 
medical care is furnished to certain dependents and survivors of active 
duty and retired members of the Armed Forces under chapter 55 of title 
10 [United States Code] (CHAMPUS).'' 38 U.S.C. 1781(b). CHAMPUS was the 
original program administered by DoD to provide civilian health 
benefits for active duty military personnel, military retirees, and 
their dependents. 32 CFR 199.1. Although the CHAMPUS program is still 
referenced in DoD regulations, DoD effectively replaced the CHAMPUS 
program with what is commonly known as the ``TRICARE Standard'' plan 
(``TRICARE''). See 32 CFR 199.1(r), 199.17(a)(6)(ii)(C) (identifying 
``TRICARE Standard'' as the basic CHAMPUS program). TRICARE's current 
benefit structure offers varying degrees of medical benefits under 
multiple plan options beyond its Standard plan, but we administer 
CHAMPVA in the same or similar manner as TRICARE Standard only, because 
that basic program is the one that is referenced by the CHAMPUS 
authority. Thus, all references in this rulemaking to ``TRICARE'' are 
to the TRICARE Standard plan, which we refer to simply as ``TRICARE'' 
throughout most of this rulemaking for ease of reference.
    VA interprets the mandate in 38 U.S.C. 1781(b) to administer 
CHAMPVA in the ``same or similar manner . . . as medical care is 
furnished . . . under title 10 chapter 55 (CHAMPUS)'' to mean that we 
must generally administer CHAMPVA in a ``same or similar manner'' as 
the TRICARE Standard plan. The phrase ``same or similar manner'' does 
not require the programs to be administered in an identical manner. 
Rather, we broadly interpret this language as affording us needed 
flexibility to administer the program for CHAMPVA beneficiaries. For 
this reason, not every aspect of CHAMPVA will find a corollary in the 
TRICARE Standard Plan.
    TRICARE has undergone changes in legal authority and policy that 
have prompted these proposed revisions to our CHAMPVA regulations. This 
rulemaking is intended to ensure that our regulations continue to be, 
again broadly speaking, the same or similar to the regulations and 
policies governing TRICARE. As noted throughout this proposed rule, 
there are necessary variations from TRICARE, particularly due to 
TRICARE's current benefit structure with varying degrees of medical 
benefits under multiple plan options, but we believe these variations 
satisfy the same or similar requirement in 38 U.S.C. 1781(b).
    This rulemaking also proposes clarifications and revisions that 
will improve our ability to effectively administer CHAMPVA, as well as 
technical revisions to make our regulations more understandable.

17.270 General Provisions and Definitions

    Current Sec.  17.270(a) broadly discusses general administrative 
provisions of CHAMPVA, and current Sec.  17.270(b) establishes certain 
definitions for the CHAMPVA regulations. We would revise the title of 
Sec.  17.270 to clearly indicate that it contains both general 
provisions as well as definitions and would revise and reorganize the 
current definitions as well as add new definitions. Finally, we would 
add a new paragraph (c) to permit VA to waive, under certain 
circumstances, any requirements in the CHAMPVA regulations that are not 
otherwise required by statute, as is allowed under TRICARE. See 32 CFR 
199.1(n). Waiver would be limited to very unusual and limited 
circumstances when waiver was determined to be in the best interests of 
VA; would not set a precedent for future decisions; and would not be 
used to deny any individual any right, benefit, or privilege provided 
to him or her by statute or these regulations.
    Proposed Sec.  17.270(a) would continue to provide an overview of 
CHAMPVA, including a general summary of the manner in which CHAMPVA is 
administered. We would refer to CHAMPUS, as we do in the current 
regulation, but would also reference TRICARE because the reference to 
CHAMPUS is outdated, as explained above, and may be misunderstood by 
CHAMPVA beneficiaries. Current Sec.  17.270(a) states that CHAMPVA is 
administered by the ``Health Administration Center'' (HAC) (referred to 
now as the Office of Community Care (OCC)), which is located in Denver, 
Colorado. We propose to delete this statement because that fact is not 
substantively relevant to the regulations. These revisions are not 
substantively different from current Sec.  17.270(a).
    Proposed Sec.  17.270(a)(1) would state that an authorized non-VA 
provider may provide medical services and supplies that are covered by 
CHAMPVA. This is current practice and would reflect in regulation VA's 
authority to provide CHAMPVA-covered services and supplies under 38 
U.S.C. 1781(b)(2). As explained in greater detail below in connection 
with proposed Sec.  17.272(b)(3), CHAMPVA-covered services and supplies 
are those provided by authorized non-VA providers who agree to provide 
covered services and supplies to CHAMPVA beneficiaries in exchange for 
payment of the CHAMPVA determined allowable amount. Proposed Sec.  
17.270(a)(2) would also reference VA's alternate authority under 
section 1781(b) to provide medical care to CHAMPVA beneficiaries 
through VA medical facilities equipped to provide the care and services 
if such resources are not being used for the care of eligible veterans. 
This initiative is called the CHAMPVA In-house Treatment Initiative 
(CITI) and would be referenced as such in proposed Sec.  17.270(a)(2). 
CITI affords beneficiaries the same medical services available to 
veterans. CITI claims submitted to OCC are processed in the same manner 
as all other CHAMPVA claims. However, a monthly transfer of funds, or 
Transfer

[[Page 2398]]

Dispersing Authority (TDA), from OCC to the providing VA facility is 
used to reimburse CITI claims whereas electronic funds transfer or 
paper checks are used to reimburse beneficiaries and providers for non-
CITI claims.
    With regards to CHAMPVA beneficiaries receiving care in VA medical 
facilities through CITI, we have historically interpreted section 
1781(b) to mean that such care may be provided only if the CHAMPVA 
beneficiary is not also eligible for Medicare benefits. We base this 
interpretation on the fact that CHAMPVA has always been the last payer 
for CHAMPVA-covered medical services and supplies when a CHAMPVA 
beneficiary has Medicare (included in this rulemaking's definition of 
``other health insurance'' (OHI), see 38 U.S.C. 1781(d)(2)). The 
mandated coordination of benefits found in section 1781(d)(2) is 
essentially the same as the requirement in TRICARE codified at 32 CFR 
199.8, which provides that if a TRICARE beneficiary is eligible for 
both Medicare and TRICARE, Medicare is the primary payer and TRICARE is 
the secondary payer. In addition, this policy limitation for CITI is 
reasonable because VA is a publicly funded health care system that 
cannot bill Medicare (see section 1814(c) and section 1835(d) of the 
Social Security Act, codified at 42 U.S.C. 1395f(c) and 1395n(d)). 
Moreover, Medicare is an entitlement program, whereas the provision of 
CHAMPVA medical benefits is subject to the availability of 
appropriations which, for any given time period, might or might not be 
sufficient to cover all CHAMPVA-covered medical services and supplies 
in a VA medical facility. Requiring beneficiaries to use their Medicare 
benefits first accomplishes our goal of protecting all patients' access 
to care. Therefore, we would further clarify in proposed Sec.  
17.270(a)(2) that any CHAMPVA beneficiary who is also eligible for 
Medicare benefits may not receive medical services and supplies through 
CITI.
    Proposed Sec.  17.270(a)(3) would newly indicate in regulation that 
outpatient prescription medications may be provided to certain CHAMPVA 
beneficiaries through Medications by Mail (MbM), administered by VA. 
Proposed paragraph (a)(3)(i) would further provide that VA's MbM 
provides prescription medications through the mail to CHAMPVA 
beneficiaries who do not have any OHI that pays for prescriptions, 
including Medicare Part D. This restriction largely is consistent with 
TRICARE policy on the provision of medications by mail, except that 
TRICARE covers prescribed medications for beneficiaries with OHI in two 
instances: When the prescribed medication is not covered by the OHI or 
when the beneficiary's OHI prescription benefit has been exhausted. See 
TRICARE Pharmacy Program Handbook (October 2015), pages 18-19. CHAMPVA 
is unable to duplicate these two exceptions due to system limitations, 
meaning that CHAMPVA will only provide prescription medications through 
the mail to beneficiaries who do not have any OHI prescription 
coverage. Despite this, CHAMPVA's inclusion of prescription medications 
is, broadly speaking, sufficiently similar to TRICARE that VA remains 
in substantial compliance with the requirements of section 1781(b).
    Proposed paragraph (a)(3)(ii) would provide that smoking cessation 
pharmaceutical supplies are available only through MbM. Section 713 of 
the Duncan Hunter National Defense Authorization Act for Fiscal Year 
2009, Public Law 110-417 (October 14, 2008) (``2009 NDAA'') required 
DoD to establish a smoking cessation program under TRICARE under which 
specified smoking cessation benefits are to be made available to 
beneficiaries who are not also eligible for Medicare. This TRICARE 
benefit is codified at 32 CFR 199.4(e)(30). As to the pharmaceutical 
component of this TRICARE benefit, smoking cessation pharmaceutical 
agents (which VA refers to as pharmaceutical supplies) are available 
only through Military Treatment Facility (MTF) pharmacies or the 
TRICARE Mail Order Program. See 32 CFR 199.4(e)(30)(ii)(A) and 
199.21(h)(2)(iii). Similar to 32 CFR 199.4(e)(30)(i), proposed Sec.  
17.270(a)(3)(ii) would provide that the same smoking cessation supplies 
will be made available to CHAMPVA beneficiaries who are not eligible 
for Medicare. Additionally, smoking cessation pharmaceutical supplies 
would be available only through MbM. For purposes of CITI, we would not 
provide smoking cessation pharmaceutical supplies through VA facility 
pharmacies because it is administratively more efficient for CHAMPVA to 
provide these through MbM, and because, in complying with the 
requirements of section 1781(b), as discussed above, VA facility 
pharmacies would be required to administer any needed smoking cessation 
pharmaceutical supplies first to veterans before providing them to 
CHAMPVA beneficiaries. We would also remove the restriction on smoking 
cessation services and supplies in current Sec.  17.272(a)(57), as 
discussed later in this proposed rule.
    For clarity, we would establish abbreviations for the Civilian 
Health and Medical Program of the Department of Veterans Affairs as 
``CHAMPVA'' and the Department of Veterans Affairs as ``VA.'' The 
current regulations refer to the part of VA that administratively 
handles CHAMPVA claims as the ``Center'' in several places (see current 
Sec. Sec.  17.275-17.277), and to the ``Health Administration Center'' 
in other places (see current Sec. Sec.  17.270, 17.275-17.276), and we 
believe that referring to ``VA'' is more appropriately descriptive and 
would eliminate ambiguity.
    Proposed Sec.  17.270(b) would establish definitions for the 
CHAMPVA regulations. We would define ``accepted assignment'' as the 
action of an authorized non-VA provider who accepts responsibility for 
the care of a CHAMPVA beneficiary and thereby agrees to accept the 
CHAMPVA determined allowable amount as full payment for services and 
supplies rendered to the beneficiary. This extinguishes the 
beneficiary's payment liability to the provider with the exception of 
applicable cost shares and deductibles. This definition is consistent 
with our explanation for proposed Sec.  17.272(b)(3), which further 
outlines the necessity for defining ``accepted assignment.'' Our 
current regulations do not define the term ``authorized provider,'' but 
the term ``authorized provider'' (and variations thereof) is used 
throughout current Sec.  17.272 to refer to an institutional or 
individual provider of CHAMPVA-covered services and supplies. The term 
is used to describe persons or institutions that are considered 
appropriately licensed or credentialed to competently provide medical 
services and supplies to CHAMPVA beneficiaries and that VA will pay to 
provide such services and supplies. In addition, an ``authorized 
provider'' has historically been interpreted in CHAMPVA to be a non-VA 
medical provider. To capture this historical interpretation in full, we 
would define an ``authorized non-VA provider'' to mean an individual or 
institutional non-VA provider of CHAMPVA-covered medical services and 
supplies who is licensed or certified by a State to provide the covered 
medical services and supplies, or is otherwise certified by an 
appropriate national or professional association that sets standards 
for the specific medical provider. This requirement for State licensure 
or other certification would be similar to TRICARE, which requires that 
its providers be either licensed or

[[Page 2399]]

certified by a State, or, where States do not offer licensure or 
certification, be otherwise certified by an appropriate national or 
professional association that sets standards for the specific medical 
provider. See TRICARE Policy Manual 6010.60-M, Chapter 11 
(``Providers''), section 3.2 (``State Licensure And Certification''). 
(For general operational-type information, one can also refer to 
TRICARE Operations Manual 6010.59-M, Chapter 4, (``Provider 
Certification And Credentialing'') (April 1, 2015).)
    We would define ``calendar year'' as the period of time between and 
including January 1 through December 31. This is plain language and is 
consistent with the generally understood meaning of the phrase 
``calendar year.''
    The term ``CHAMPVA beneficiary'' would be defined as a person 
enrolled for CHAMPVA under Sec.  17.271. This would be a program-
specific definition, but it is in plain language and is consistent with 
the generally understood meaning of the word ``beneficiary.'' To 
clarify, an individual is enrolled in CHAMPVA only after the individual 
has successfully completed the application process (i.e., where the 
individual submits a completed VA Form 10-10d to VA, and VA has 
confirmed the individual's eligibility).
    We would define ``CHAMPVA-covered services and supplies'' to mean 
those medical services and supplies that are medically necessary and 
appropriate for the treatment of a condition and that are not 
specifically excluded from coverage under proposed Sec.  17.272(a)(1) 
through (84) (current Sec.  17.272(a)(1) through (86)).
    We would define ``CHAMPVA determined allowable amount'' by 
referencing the proposed paragraph that would relate to this term, 
proposed Sec.  17.272(b)(1).
    We would define ``CHAMPVA In-house Treatment Initiative (CITI)'' to 
mean the initiative under section 1781(b) under which participating VA 
medical facilities provide medical services and supplies to CHAMPVA 
beneficiaries who are not also eligible for Medicare, subject to 
availability of space and resources.
    We would define the term ``child'' consistent with 38 U.S.C. 101, 
as we do in the current regulation at Sec.  17.270(b).
    We would define the term ``claim'' consistent with the current use 
and understanding of the term in the context of CHAMPVA, as a request 
by an authorized non-VA provider or CHAMPVA beneficiary for payment or 
reimbursement for medical services and supplies provided to a CHAMPVA 
beneficiary.
    We would define ``fiscal year'' as the period of time starting on 
October 1 and ending on September 30. This is plain language and is 
consistent with the generally understood meaning of the phrase ``fiscal 
year'' as used within the Federal Government.
    We would define ``Medications by Mail (MbM)'' to mean the 
initiative under which VA provides outpatient prescription medications 
through the mail to CHAMPVA beneficiaries.
    We would define ``other health insurance'' (OHI) as a health 
insurance plan or program (to include Medicare) or third-party coverage 
that provides coverage to a CHAMPVA beneficiary for expenses incurred 
for medical services and supplies. The inclusion of Medicare is 
consistent with the TRICARE regulation related to double coverage. See 
32 CFR 199.8(d)(1).
    We would define the term ``payer'' to mean OHI, as defined in this 
rulemaking, that is obligated to pay for CHAMPVA-covered medical 
services and supplies. In a situation in which more than one insurer is 
responsible to pay for such services and supplies (e.g., a ``double 
coverage'' situation), there would be a primary payer (i.e., the payer 
obligated to pay first), a secondary payer (i.e., the payer obligated 
to pay after the primary payer), etc. In double coverage situations, 
CHAMPVA would be the last payer, after payment by the primary payer and 
all other secondary payers.
    Defining a ``payer'' and designating different payer types would 
not affect the administration of CHAMPVA because these concepts of 
relative payment responsibility are all accepted and understood by the 
insurance industry and current CHAMPVA beneficiaries and are an 
essential part of current CHAMPVA billing practices. For instance, 
Medicare would be the primary payer in situations governed by current 
Sec.  17.271(b) (which remains unchanged by this proposed rulemaking). 
See 38 U.S.C. 1781(d)(2).
    The definition of ``service-connected'' in current Sec.  17.270(b) 
would be unchanged and given the same meaning as that term in 38 U.S.C. 
101. However, the terms ``spouse'' and ``surviving spouse'' would no 
longer have the definitions of these same terms in 38 U.S.C. 101(31) 
and (3), respectively, as those definitions are outdated; instead, 
these terms would both be determined by operation of 38 U.S.C. 103(c).
    Consistent with the waiver provisions of TRICARE, see 32 CFR 
199.1(n), new proposed paragraph (c) would establish the discretionary 
authority of VA to waive, when it is deemed to be in the best interest 
of VA, any regulatory requirement of this part that is not required by 
38 U.S.C. 1781 or otherwise imposed by statute. This discretionary 
waiver authority would be limited to very unusual and limited 
circumstances and would not set a precedent for future decisions. In 
addition, it would not be used to deny any individual any right, 
benefit, or privilege provided by statute or these regulations. This 
new provision would enable VA to allow payment under CHAMPVA in cases, 
for example, where, by operation of CHAMPVA rules, the claim is subject 
to complex administrative or accounting procedures that ultimately 
result in determination of the claim's technical noncompliance when the 
underlying claim is otherwise appropriate. Where a claimant's non-
compliance with a purely policy or administrative-based technical 
requirement is both unintentional and harmless, we believe it would be 
in VA's best interest to have the authority to waive the regulatory 
requirement and allow payment.

17.271 Eligibility

    Current Sec.  17.271 identifies persons who may be eligible for 
CHAMPVA benefits. We would revise Sec.  17.271(a) to recognize as 
CHAMPVA beneficiaries those individuals designated as Primary Family 
Caregivers under 38 CFR 71.25(f). This substantive addition to the 
eligibility criterion would be made pursuant to the Caregivers and 
Veterans Omnibus Health Services Act of 2010, Public Law 111-163, 
section 102, which amended 38 U.S.C. 1781(a) by adding a new subsection 
(a)(4) authorizing VA to provide CHAMPVA benefits to ``an individual 
designated as a primary provider of personal care services under [38 
U.S.C. 1720G(a)(7)(A)] who is not entitled to care or services under a 
health-plan contract (as defined in [38 U.S.C. 1725(f)]).'' We amend 
CHAMPVA eligibility criteria to recognize these Primary Family 
Caregivers as CHAMPVA beneficiaries but not to establish substantive 
eligibility rules in the CHAMPVA regulations to determine whether an 
individual is a Primary Family Caregiver. (VA's regulations governing 
the Caregivers Benefits Program established by 38 U.S.C. 1720G are 
codified at 38 CFR part 71, and the specific rules governing the 
identification of such individuals are found at 38 CFR 71.15 through 
71.25.) We would redesignate current Sec.  17.271(a)(4) as Sec.  
17.271(a)(5) and add a new proposed Sec.  17.271(a)(4) to state that a 
Primary Family Caregiver is eligible for CHAMPVA benefits if they are 
not entitled to care or services under a health-plan contract (as 
defined in 38 U.S.C. 1725(f)(2)). We note that VA is already providing 
CHAMPVA services

[[Page 2400]]

and supplies to these individuals pursuant to the statutory mandate in 
section 1720G(a)(3)(A)(ii)(IV) and under the Caregivers Benefits 
Program regulations. This revision would simply update the CHAMPVA 
regulations to conform to these laws.

17.272 Benefits Limitations/Exclusions

    Current Sec.  17.272 provides general information about what 
medical services and supplies are covered by CHAMPVA and lists coverage 
limitations along with the exclusions. The general information 
concerning coverage in current Sec.  17.272(a) continues to be 
accurate, and we do not propose any changes to paragraph (a). Some of 
the coverage limitations and exclusions listed in the numbered 
paragraphs under Sec.  17.272(a) require revision due to either changed 
standards in clinical practice or changes in TRICARE coverage.
    Current Sec.  17.272(a)(2) excludes the provision of services and 
supplies required as a result of an occupational disease or injury for 
which benefits are payable under workers' compensation or a similar 
protection plan. We propose to update the verbiage to clarify the 
exclusion for the reader.
    Current Sec.  17.272(a)(3) excludes the provision of services and 
supplies that are paid directly or indirectly by local, State, or 
Federal government agencies, with certain exceptions listed in Sec.  
17.272(a)(3)(i) and (ii) where CHAMPVA assumes primary payer status. We 
propose to add Indian Health Service and CHAMPVA supplemental policies 
as exceptions where CHAMPVA assumes primary payer status. This would be 
consistent with current CHAMPVA practice as well as the TRICARE 
regulation related to double coverage. See 32 CFR 199.8(b)(4)(ii) and 
(iv). We also propose to remove the ``(Medicaid excluded)'' 
parenthetical language in current Sec.  17.272(a)(3), because Sec.  
17.272(a)(3)(i) already expressly excepts ``Medicaid'' from the general 
exclusion in Sec.  17.272(a)(3).
    Current Sec.  17.272(a)(21) excludes dental care generally, with 
exceptions to such exclusion listed in paragraphs (a)(21)(i) through 
(xii). We would amend paragraph (a)(21)(ix) to clarify that the 
provision of initial imaging services for the treatment of 
temporomandibular joint disorder (TMD) could specifically include 
Computed Tomography (CT) and Magnetic Resonance Imaging (MRI) services. 
We believe the sole reference to ``initial radiographs'' in current 
Sec.  17.272(a)(21)(ix) is outdated and that modern industry standards 
include the use of CT scans as well as MRIs for diagnosing TMD. A CT 
scan provides a more detailed image of the bones in the joint, and an 
MRI provides a more detailed image of the soft tissue to determine 
proper positioning as the jaw moves. We would also update Sec.  
17.272(a)(21)(ix) to refer to the more updated and clinically 
appropriate terminology ``temporomandibular joint disorder (TMD).'' 
These revisions would update CHAMPVA regulations with current standards 
of clinical practice for the benefit of CHAMPVA beneficiaries.
    A majority of the remaining proposed changes to CHAMPVA coverage 
exclusions in proposed Sec.  17.272(a)(1) through (82) are based on 
changes to TRICARE coverage and policy. Virtually all coverage 
limitations and exclusions in current Sec.  17.272(a)(1)-(86), as shown 
in the chart below, are substantially identical to services and 
supplies excluded from, or limited under, TRICARE coverage under 32 CFR 
199.4(g), or as otherwise noted in the chart.

            List of Comparable CHAMPVA and TRICARE Exclusions
------------------------------------------------------------------------
                                          TRICARE provision (identified
     CHAMPVA provision (identified         paragraphs are from 32 CFR
 paragraphs are from 38 CFR 17.272(a))  199.4(g), or as otherwise noted)
------------------------------------------------------------------------
(1)...................................  (11).
(2)...................................  (23).
(3)...................................  (13).
(4)...................................  (1).
(5)...................................  (2).
(6)...................................  (3).
(7)...................................  (4).
(8)...................................  (5).
(9)...................................  (6).
(10)..................................  (7).
(11)..................................  (8).
(12)..................................  (9).
(13)..................................  (14).
(14), (81)............................  (15).
(15)..................................  (16).
(16)..................................  (17).
(17)..................................  (19).
(18)..................................  (21).
(19), (82)............................  (24).
(20)..................................  (26).
(21)..................................  (27).
(22)..................................  (28).
(23)..................................  (29).
(24)..................................  (30).
(25)..................................  (31).
(27)..................................  (33).
(28)..................................  (34).
(29)..................................  (35).
(30)..................................  (36).
(31)..................................  (37).
(32)..................................  (38).
(33)..................................  (39).
(34)..................................  (40).
(35)..................................  (41).
(36)..................................  (20), (42).
(37)..................................  (43).
(38)..................................  (44).
(40)..................................  (46).
(41)..................................  (47).
(42)..................................  (50).
(43)..................................  (51).
(44)..................................  (48).
(45)..................................  (49).
(46)..................................  (52).
(47)..................................  (53).
(48)..................................  (54).
(49)..................................  (55).
(50)..................................  (56).
(51)..................................  (57).
(52)..................................  (58).
(53)..................................  (60).
(54)..................................  (61).
(55), (57)............................  (62).
(56)..................................  (64).
(57)..................................  (65).
(58)..................................  (66).
(59)..................................  (67).
(60)..................................  (72).
(62)..................................  32 CFR 199.4(a)(12) and
                                         (b)(10)(iv).
(63) through (65).....................  32 CFR 199.4(e)(4) and (h).
(66)..................................  (73).
(67), (68)............................  32 CFR 199.2(b) and 199.4(e)(2).
(69)..................................  32 CFR 199.4(c)(3)(ix) and
                                         199.4(e)(4).
(70), (71)............................  32 CFR 199.4(e)(17).
(73)..................................  32 CFR 199.4(g)(15)(iv).
(74)..................................  (69).
(75)..................................  32 CFR 199.4(a)(1).
(76)..................................  32 CFR 199.4(g)(74).
(77)..................................  (39), (42).
(78)..................................  (25).
(79)..................................  32 CFR 199.4(g)(15).
(80)..................................  32 CFR 199.2(b) and
                                         199.4(b)(2)(v), (b)(3)(iii),
                                         (b)(5)(v), (d)(3)(vi),
                                         (e)(11)(i).
(83)..................................  32 CFR 199.4(c)(2), (c)(3),
                                         (e)(8)(i)(E).
(84)..................................  32 CFR 199.4(e)(8).
(85), (86)............................  32 CFR 199.2(b), 199.4(e)(8),
                                         (g)(24).
------------------------------------------------------------------------

    We note that even where our current provisions are not identical to 
a TRICARE provision, our intent has consistently been to apply CHAMPVA 
comparable exclusions or limitations in the same or similar manner to 
their TRICARE counterpart in accordance with 38 U.S.C. 1781(b). The 
same is true for our proposed revisions below, which are consistent 
with changes in DoD's administration of TRICARE.
    The first change we would make to our limitations and exclusions 
based on TRICARE regulatory and policy changes concerns current Sec.  
17.272(a)(26), which is not addressed in the chart above because it 
correlates with a provision that has been removed from TRICARE 
regulations. See 60 FR 12419 (March 7, 1995). Therefore, we propose to 
remove this exclusion from our regulations as well. Paragraph (a)(26) 
in current Sec.  17.272 excludes coverage for services and supplies, 
including psychological testing, provided in connection with a specific 
developmental disorder. By removing this exclusion, CHAMPVA would now 
cover this service, and we would redesignate current

[[Page 2401]]

Sec.  17.272(a)(27) through (38) as Sec.  17.272(a)(26) through (37), 
respectively.
    Under section 711 of the 2009 NDAA, TRICARE must waive all 
beneficiary costs associated with certain preventive services, unless 
the beneficiary is also Medicare-eligible. TRICARE regulations were 
revised to delete from 32 CFR 199.4(g)(37) the list of preventive 
services not excluded from coverage, and these services were moved to 
new Sec.  199.4(e)(28) so that they instead would be reflected as 
preventive services under TRICARE for which out-of-pocket costs are 
eliminated. See 76 FR 81368 (December 28, 2011). We would revise our 
current exclusion of preventive care in Sec.  17.272(a)(31) (proposed 
to be redesignated as Sec.  17.272(a)(30)) to except the same 
preventive services identified in paragraphs (d)(1)(A) through (F) of 
section 711 of the 2009 NDAA and, further, do so in a manner that, on 
the whole, reflects the manner in which these services are provided 
under TRICARE. Section 711 of the 2009 NDAA sets forth the following 
preventive services for which beneficiaries shall pay no associated 
costs: Colorectal cancer screening; breast cancer screening; cervical 
cancer screening; prostate cancer screening; annual physical exam; 
vaccinations. Current Sec.  17.272(a)(31)(i) through (x) set forth 
exceptions to the general exclusion of certain specific preventive 
care. Respectively, the terms of current paragraphs (a)(31)(v) and (vi) 
already except ``[p]ap smears'' and ``[m]ammography tests'' and so 
effectively capture ``cervical cancer screening'' and ``breast cancer 
screening'' as referred to in the 2009 NDAA. However, because the 
singular terms ``mammography test'' and ``pap smear'' are outdated, we 
are updating to ``breast cancer screening'' and ``cervical cancer 
screening.'' Therefore, proposed Sec.  17.272(a)(30) would revise the 
exceptions to the general exclusion of preventive care to include the 
four remaining preventive services specified in the 2009 NDAA, namely 
colorectal cancer screening; prostate cancer screening; annual physical 
examination; and vaccinations/immunizations.
    We note that the TRICARE final rule that implemented the amendments 
made by section 711 of the 2009 NDAA does not include an annual 
physical exam benefit for all TRICARE beneficiaries; instead, such 
benefit is limited to certain dependents of Active Duty military 
personnel who are traveling outside the United States and for 
beneficiaries ages 5 through 11 who require such exams for school 
enrollment. This benefit is also not exempt from cost sharing 
requirements. See 76 FR 81368, and 32 CFR 199.4(e)(29). Broadly 
interpreting our mandate in section 1781(b), VA proposes to modify the 
current exclusion of preventive care in current Sec.  17.272(a)(31) 
insofar as it defines that term to include annual physical examinations 
and create an exception permitting such exams. Despite the limited 
availability of such examinations under TRICARE, it is noteworthy that 
TRICARE nonetheless covers some preventive services that are typically 
provided as part of an annual physical examination such as blood 
pressure screening, cholesterol testing, and body measurements. See 
TRICARE Policy Manual 6010.60-M (``Medicine''), Chapter 7, section 2.1 
(``Clinical Preventive Services-TRICARE Standard'') (April 1, 2015). To 
be paid for by TRICARE, however, these types of health promotion and 
disease prevention services must be billed in connection with another 
preventive service delineated in TRICARE's policy manual. Id. We do not 
believe limiting the provision of annual physical examinations to only 
a few select groups is appropriate from a clinical perspective. 
Further, in the exercise of our discretion, when broadly interpreting 
the mandate of section 1781(b), we conclude it lies within our 
discretion to determine that this benefit should be made available to 
all CHAMPVA beneficiaries. This is particularly the case given that 
some individual health promotion and disease prevention services that 
are typically provided as part of an annual physical examination would 
eventually be approved by TRICARE as long as they are coupled or 
associated with billing submitted for a covered service. (The nature 
and delivery of those services remains the same whether delivered as 
part of an annual examination or under the umbrella of another service 
for which TRICARE billing is permitted.) Furthermore, VA finds that 
annual physical examinations are beneficial for both CHAMPVA 
beneficiaries and VA, by serving to identify serious medical issues 
before they progress and their clinical management becomes more 
difficult and resource-intensive. Even though our proposed approach 
would include elements of an annual physical examination not otherwise 
included as an adjunct service provided under a covered benefit as 
described above, we believe our approach is sufficiently ``similar'' to 
TRICARE. Therefore, we propose to create an exception to the exclusion 
of preventive care, permitting an annual physical examination to be 
among the benefits available to all CHAMPVA beneficiaries.
    We also note that we would except ``[v]accinations/immunizations'' 
from the general exclusion of preventive services. Although subsection 
(d)(1)(F) of section 711 of the 2009 NDAA exempts ``vaccination'' only, 
TRICARE's guidance on this issue additionally exempts immunizations. 
See TRICARE Reimbursement Manual 6010.61-M Chapter 2 (``Beneficiary 
Liability''), section 1 (``Cost-Shares And Deductibles'') (April 1, 
2015). We believe these terms have identical meanings and would use 
both terms just to be clear that this preventive service is covered 
regardless of whether it is called an ``immunization'' or a 
``vaccination.''
    Current Sec.  17.272(a)(39) excludes coverage for audiological 
services or speech therapy, except when prescribed by a physician and 
rendered as part of a treatment addressing a physical defect, which 
correlates with a provision not addressed in the chart above because it 
has been removed from TRICARE regulations. See 75 FR 50880 (August 18, 
2010). Therefore, we propose to remove this exclusion from our 
regulations as well. By removing this exclusion, CHAMPVA would now 
cover this service, and we would redesignate current Sec.  
17.272(a)(40) through (56) as Sec.  17.272(a)(38) through (54), 
respectively.
    As stated earlier in this rulemaking, pursuant to section 713 of 
the 2009 NDAA, TRICARE must make available smoking cessation benefits, 
as specified in the law, to beneficiaries who are not also eligible for 
Medicare. The four categories of smoking cessation benefits available 
to these beneficiaries are set forth in TRICARE's regulations under 32 
CFR 199.4(e)(30)(ii)(A)-(D). Hence, we would revise our regulations by 
removing our correlate restriction on smoking cessation services and 
supplies in current Sec.  17.272(a)(57). In removing current Sec.  
17.272(a)(57), current paragraphs (a)(58) through (71) would be 
redesignated as paragraphs (a)(55) through (68), respectively.
    Redesignated paragraphs (a)(57) through (59) would be revised to 
reference coverage of mental health benefits in a ``calendar year'' 
versus the current reference to ``fiscal year.'' We propose to change 
the yearly basis of this coverage because our beneficiaries and 
providers are more familiar with calendar year events, and the impact 
of the change from fiscal to calendar on the functioning of CHAMPVA 
would be minimal.

[[Page 2402]]

    With the proposed removal of Sec.  17.272(a)(57) and subsequent 
redesignations of paragraphs noted above, current paragraph (a)(67) 
would be redesignated as paragraph (a)(64). CHAMPVA would continue to 
exclude the performance of abortions, except when a physician certifies 
that the life of the mother would be endangered if the fetus were 
carried to term. This is the same restriction in current TRICARE 
regulations (see 32 CFR 199.4(e)(2)), although statute and TRICARE 
policy statements recently established an additional exception to the 
general ban on abortions. Specifically, section 704 of the National 
Defense Authorization Act for Fiscal Year 2013, Public Law 112-239 
(2013 NDAA), amended 10 U.S.C. 1093(a) and (b) to expand the 
circumstances under which funds available to DoD and MTFs may be used 
to provide and perform abortions in cases of pregnancy resulting from 
an act of rape or incest. Despite the recent amendments to section 1093 
of title 10 and TRICARE policy, we do not propose same or similar 
changes to CHAMPVA's current exclusion at this time because TRICARE 
regulations do not provide for it. Additionally, such changes would 
create an even greater disparity between the women's health care 
benefits afforded veterans and CHAMPVA beneficiaries.
    Current Sec.  17.272(a)(72) excludes from coverage drug maintenance 
programs where one addictive drug is substituted for another such as 
methadone substituted for heroin. A TRICARE final rule published on 
October 22, 2013, and effective November 21, 2013, removes a correlate 
restriction from TRICARE regulations, and so we propose to similarly 
remove Sec.  17.272(a)(72). See 78 FR 62427 (October 22, 2013); 32 CFR 
199.4(e)(4)(ii). We agree with the stated rationale in the related 
TRICARE proposed rule that the current restriction fails to recognize 
the accumulated medical evidence supporting certain maintenance 
programs as one component of the continuum of care necessary for the 
effective treatment of substance use disorders. See 76 FR 81899 
(December 29, 2011). In removing current Sec.  17.272(a)(72), current 
paragraphs (a)(73) through (86) would be redesignated as paragraphs 
(a)(69) through (82), respectively.
    Current Sec.  17.272(a)(80), as proposed to be redesignated as 
paragraph (a)(76), excludes from CHAMPVA benefits medications not 
requiring a prescription, except for insulin and related diabetic 
testing supplies and syringes. We would revise redesignated paragraph 
(a)(76) to instead exclude ``over-the-counter products'' and would 
additionally expand the exception to this exclusion to cover over-the-
counter smoking cessation pharmaceutical supplies that are approved by 
the U.S. Food and Drug Administration (FDA), prescribed, and provided 
through MbM. These changes would be consistent with TRICARE 
regulations, which require a prescription from an authorized provider 
for smoking cessation pharmaceutical agents (even for FDA-approved 
over-the-counter smoking cessation agents). See 32 CFR 
199.4(e)(30)(ii)(A).
    Section 702 of the 2013 NDAA grants the Secretary of Defense the 
authority to add certain over-the-counter medications to the TRICARE 
formulary so that such medications may be administered as if they were 
prescription medications. CHAMPVA does not have a same or similar 
uniform formulary as DoD that could be altered to include certain over-
the-counter medications, and we do not interpret section 702 as 
granting authority to alter VA's uniform formulary. Therefore, we would 
not amend our regulations in response to section 702 of the 2013 NDAA. 
Our regulation as revised and redesignated Sec.  17.272(a)(76) would 
permit CHAMPVA to provide the same over-the-counter smoking cessation 
supplies as permitted in TRICARE policy.
    Lastly, we would add two new exclusions to Sec.  17.272. Proposed 
paragraph (a)(83) would exclude medications that are not approved by 
the FDA, excluding FDA exceptions to the approval requirement. Current 
CHAMPVA regulations are silent regarding the need for medications to 
meet FDA approval requirements; however, this has not been a problem as 
a matter of practice because applicable standards of care generally 
require prescribed medications to be FDA-approved or excluded as an 
exception from the approval requirement. Still, we wish to formally and 
expressly exclude medications that do not meet these requirements. In 
addition, to provide benefits in the same or similar manner and subject 
to the same or similar limitations as TRICARE, paragraph (a)(84) would 
establish exclusions for services and supplies related to the treatment 
of dyslexia. See 38 CFR 199.4(g)(32). This change merely reflects in 
regulation current CHAMPVA practice and policy.
    Due to the multiple proposed deletions and additions in Sec.  
17.272(a)(1)-(86), we reiterate that we would redesignate most of the 
current paragraphs under Sec.  17.272(a). With the proposed removal of 
current paragraph (a)(26), current paragraphs (a)(27) through (38) 
would be redesignated as (a)(26) through (37), respectively, with the 
substantive changes to redesignated (a)(30) as noted above. With the 
proposed removal of current paragraph (a)(39), current paragraphs 
(a)(40) through (56) would be redesignated as (a)(38) through (54), 
respectively, with no substantive changes. With the deletion of the 
current paragraphs (a)(57) and (72), current paragraphs (a)(58) through 
(86) would be redesignated as (a)(55) through (82), respectively, with 
the minor substantive changes as noted above to redesignated paragraphs 
(a)(57) through (59) and (a)(76). Lastly, we would add new paragraphs 
(a)(83) and (84).
    Current Sec.  17.272(b) establishes the ``CHAMPVA determined 
allowable amount,'' and paragraph (b)(1) states that the term 
``allowable amount'' is the maximum amount that CHAMPVA will pay an 
authorized provider for a covered benefit, which is determined prior to 
cost sharing and the application of deductibles or OHI. (This means, 
for instance, that the cost-share would be a percentage of the entire 
CHAMPVA determined allowable amount.) However, this is merely a 
definition and not a statement of coverage limitation or exclusions. We 
would revise paragraph (b) to clearly indicate that amounts above the 
CHAMPVA determined allowable amount are excluded from CHAMPVA coverage. 
The actual payment methodology--the amount to which cost sharing and 
deductibles will be applied--is addressed in proposed Sec.  17.274(e) 
and is discussed below.
    Proposed Sec.  17.272(b)(1) would explain that the CHAMPVA 
determined allowable amount is the maximum level of payment to an 
authorized non-VA provider for CHAMPVA-covered services and supplies 
and that this allowable amount is determined before cost sharing and 
the application of deductibles or OHI is considered. This is a 
restatement of current Sec.  17.272(b)(1), except that we would use the 
term ``authorized non-VA provider'' to encompass all those providers 
listed in current Sec.  17.272(b)(1) and include the term ``supplies'' 
after ``covered services'' to underscore they too can be covered. See 
current 38 CFR 17.272(b)(1) (referencing ``a hospital or other 
authorized institutional provider, a physician or other authorized 
individual professional provider, or other authorized provider for 
covered services''). We believe use of the one term ``authorized non-VA 
provider'' as defined in proposed Sec.  17.270(b) properly captures all 
provider types now listed in Sec.  17.272(b)(1) and

[[Page 2403]]

simplifies the regulatory reference to providers for the benefit of 
CHAMPVA beneficiaries. Proposed Sec.  17.272(b)(1) would also clearly 
state that the CHAMPVA determined allowable amount is payment made by 
VA to an authorized non-VA provider for the provision of CHAMPVA-
covered services and supplies to a CHAMPVA beneficiary.
    Current Sec.  17.272(b)(2) states that a Medicare-participating 
hospital must accept the CHAMPVA determined allowable amount for 
inpatient services as payment in full and references 42 CFR parts 489 
and 1003. While this is a true statement of law under 42 CFR 489.25, 
the references to 42 CFR parts 489 and 1003 are vague, and part 1003 is 
not relevant to the issue of what amounts Medicare-participating 
hospitals must accept as payment in full from CHAMPVA. See 42 CFR part 
1003 (describing civil money penalties, assessments, and exclusions 
generally for individuals who violate provisions of or agreements with 
Federal health care programs). Proposed Sec.  17.272(b)(2) would state 
that inpatient services are ``provided to a CHAMPVA beneficiary'' and 
use a single, clarifying reference to 42 CFR 489.25.
    Section 503 of The Caregivers and Veterans Omnibus Health Services 
Act of 2010, Public Law 111-163, revised 38 U.S.C. 1781 by adding new 
subsection (e), which states: ``Payment by the Secretary under this 
section on behalf of a covered beneficiary for medical care shall 
constitute payment in full and extinguish any liability on the part of 
the beneficiary for that care.'' Current Sec.  17.272(b)(3) states 
that: ``An authorized provider of covered medical services or supplies 
must accept the CHAMPVA determined allowable amount as payment in 
full.'' Proposed Sec.  17.272(b)(3) would state more clearly that 
``accepted assignment'' refers to the action of an authorized non-VA 
provider who accepts responsibility for the care of a CHAMPVA 
beneficiary and thereby agrees to accept the CHAMPVA determined 
allowable amount as full payment for services and supplies rendered to 
the beneficiary. The provider's acceptance of the CHAMPVA determined 
allowable amount extinguishes the beneficiary's payment liability to 
the provider with the exception of applicable cost shares and 
deductibles. Proposed Sec.  17.272(b)(3) would not be substantively 
different than current paragraph (b)(3) but would clarify that the 
action of accepting payment is the equivalent of accepting assignment. 
The term ``accepted assignment'' is used currently in the 
administration of CHAMPVA payments, and we believe using it in this 
regulation as described would increase clarity in payment practices for 
both CHAMPVA beneficiaries and authorized non-VA providers.
    Current Sec.  17.272(b)(4) provides that a provider who has 
collected and not made an 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. The underlying authority for this rule is 42 CFR 1003.105, 
which establishes the terms for a health care provider's permissive or 
mandatory exclusion from participation in the Medicare program and 
other Federal health care programs. Exclusion may result, for instance, 
if a provider files false claims under these programs. We would move 
this information to proposed Sec.  17.272(b)(3) for increased clarity 
and would remove mention of providers not making an appropriate refund 
of amounts collected from beneficiaries, as the purpose of 38 U.S.C. 
1781(e) and proposed Sec.  17.272(b)(3) is for these amounts to never 
be collected by the provider. By moving this information to proposed 
paragraph (b)(3), we would also remove current paragraph (b)(4).

17.273 Preauthorization

    CHAMPVA preauthorization requirements for certain medical care and 
services are based on CHAMPVA needs and are substantially the same or 
similar as those required by TRICARE. See 32 CFR 199.4 passim. We 
propose to revise the preauthorization requirements by adding language 
to indicate when a beneficiary has ``other health insurance'' that 
provides primary coverage for the benefit, preauthorization 
requirements will not apply. TRICARE waives preauthorization 
requirements in all instances when OHI, to include Medicare, is the 
primary payer. See TRICARE Policy Manual 6010.60-M, Chapter 1 
(``Administration''), section 6.1 (``Special Authorization 
Requirements'') (April 1, 2015). To provide benefits in a similar 
fashion, we would waive any requirement for preauthorization where OHI 
(as defined by this rulemaking) covers the benefit. We would also 
revise current Sec.  17.273(d) to refer to dental coverage limitations 
in Sec.  17.272(a)(21)(i)-(xii) to avoid a potential misconception that 
preauthorization is generally required for dental services. CHAMPVA 
clearly excludes all dental services, except for those listed in 
current Sec.  17.272(a)(21)(i)-(xii). We would remove current Sec.  
17.273(e) and not require preauthorization for durable medical 
equipment as a covered service or supply. Removal of Sec.  17.273(e) 
would be consistent with TRICARE policy. See TRICARE Policy Manual 
6010.60-M, Chapter 8 (``Other Services''), section 2.1 (``Durable 
Medical Equipment: Basic Program'') (April 1, 2015). Based on this 
removal, we would redesignate current Sec.  17.273(f) as Sec.  
17.273(e).
    Finally, we would add new proposed Sec.  17.273(f) to detail the 
reviews of medical necessity. Since CHAMPVA is a secondary payer, VA 
would be required to perform reviews of medical necessity on a 
retrospective basis. If during the coordination of benefits process it 
is determined that CHAMPVA would be the responsible payer for the 
services and supplies but CHAMPVA preauthorization was not obtained 
prior to delivery of the services or supplies, we would obtain the 
necessary information and perform a retrospective medical necessity 
review. We would also propose that any claims, where a retrospective 
review occurs, are filed within the appropriate one-year period.

17.274 Cost Sharing

    Current Sec.  17.274(a) provides in general that CHAMPVA is a cost 
sharing program in which the cost of CHAMPVA-covered services and 
supplies is shared with the beneficiary, with the exception of services 
obtained through VA medical facilities. This provision would remain 
substantively the same, but we would add new paragraphs (a)(1)(i) and 
(ii) to explicate, respectively, that the former language ``services 
obtained through VA facilities'' refers to services and supplies 
provided both through MbM and through CITI. That is, the exception to 
this cost-share requirement would extend specifically to each of these 
initiatives (as these initiatives would be defined by this proposed 
rulemaking).
    Subsections (d)(1)(A) through (d)(1)(F) of section 711 of the 2009 
NDAA, as discussed earlier, set forth certain preventive services for 
which TRICARE waives all out-of-pocket costs, even if the beneficiary 
has not paid the amount necessary to cover the beneficiary's deductible 
requirement for the year. We propose to revise Sec.  17.274(a) to make 
clear that there will be no associated cost share for CHAMPVA 
beneficiaries for such services. (We address waiving the associated 
deductible requirement later in the discussion of proposed Sec.  
17.274(b)). We would add new paragraphs (a)(1)(iii)(A)-(G) to Sec.  
17.274 to waive CHAMPVA beneficiary cost-share requirements for the 
same preventive services identified in paragraphs (d)(1)(A) through (F) 
of

[[Page 2404]]

section 711 of the 2009 NDAA. Section 711 also authorizes, but does not 
require, the Secretary of Defense to extend the waiver of beneficiary 
costs to other preventive services. As such, we state in regulation 
that the list of services is not all-inclusive, enabling us to add 
supplemental items to the list in the future if needed, while enabling 
us to be sufficiently similar to TRICARE. See Public Law 110-417, 
section 711(d)(1)(G). TRICARE regulations and policy guidance extend 
this waiver to well-child visits for children under 6 years of age. See 
32 CFR 199.4(e)(28)(iv), (f); TRICARE Reimbursement Manual 6010.61-M, 
Chapter 2 (``Beneficiary Liability''), section 1 (``Cost-Shares and 
Deductibles), 1.3.3.10.1.6 (Preventive Services''). We would include 
this same waiver in proposed paragraph (a)(1)(iii)(G) of Sec.  17.274. 
We would waive any cost-share requirement for hospice services in 
proposed Sec.  17.274(a)(1)(iv). This waiver is similar to the cost-
share waiver for hospice services in TRICARE regulation. See 32 CFR 
199.14(g)(9). Lastly, to remain similar to TRICARE, in Sec.  
17.274(a)(1)(v), we would add a waiver for other services as determined 
by the Secretary of Veterans Affairs.
    For TRICARE, the waiver of beneficiary costs associated with 
preventive services in proposed Sec.  17.274(a)(1)(iii)(A) through (G) 
do not apply to any TRICARE beneficiary who is also Medicare-eligible. 
See Public Law 110-417, section 711(b). We would not exclude Medicare-
eligible beneficiaries from cost sharing waivers for preventive 
services as this would unfairly disadvantage them as compared to other 
CHAMPVA beneficiaries with OHI. By not including this waiver, CHAMPVA 
will treat all beneficiaries with OHI the same. Additionally, we 
believe most preventive services provided to Medicare-eligible 
beneficiaries will be paid in full by Medicare, and, therefore, CHAMPVA 
will not assume any payment responsibility. In the event a cost share 
or deductible is applied for preventive services, CHAMPVA will treat 
those claims as it would the claims for any other beneficiary with OHI.
    The general provisions in current Sec.  17.274(b) related to 
establishing an annual deductible requirement (in addition to 
beneficiary cost share) would remain substantively the same. We would 
move the exception to this general requirement in current Sec.  
17.274(b) (last sentence) for services obtained through VA facilities 
to a new Sec.  17.274(b)(1) and also explain that it refers to services 
and supplies provided through MbM or CITI under the same rationale as 
expressed above for proposed new Sec.  17.274(a)(1)(i) and (ii), 
respectively. We would also move the exception to the deductible 
requirement in current Sec.  17.274(b) (last sentence) for any 
inpatient services to a new Sec.  17.274(b)(2). Proposed Sec.  
17.274(b)(3) would except the listed preventive services in proposed 
Sec.  17.274(a)(1)(iii)(A)-(G) from the general deductible requirement 
in current and proposed Sec.  17.274(b), in accordance with the mandate 
in section 711 of the 2009 NDAA. See Public Law 110-417, section 
711(a)(2) (mandating that a beneficiary not be charged for preventive 
services during a year even if the beneficiary has not paid the amount 
necessary to cover the beneficiary's deductible for the year. See 32 
CFR 199.4(f)(12)). Proposed Sec.  17.274(b)(4) would waive the CHAMPVA 
beneficiary deductible requirement for hospice services, as is done 
similarly under TRICARE regulations. See 32 CFR 199.14(g)(9). Lastly, 
to remain similar to TRICARE, in Sec.  17.274(b)(5), we would add a 
waiver for other services as determined by the Secretary of Veterans 
Affairs.
    Current Sec.  17.274(c) establishes a calendar year limit on the 
``cost-share amount'' incurred by a CHAMPVA beneficiary through the 
payment of both cost-shares and deductible amounts (See current 38 CFR 
17.274(c), indicating that the cap is ``limited to the applied annual 
deductible(s) and the beneficiary cost-share amount.''). Proposed Sec.  
17.274(c) would retain this basic information but would refer instead 
to a cap on ``out-of-pocket costs'' instead of ``cost-share amounts'' 
so that it is clear that both cost share and deductible amounts apply 
to this cap. Current Sec.  17.274(c)(i) establishes an annual cap of 
cost sharing of $7,500 per CHAMPVA eligible family ``through December 
31, 2001'', which is an outdated provision. Current Sec.  17.274(c)(ii) 
further establishes a current cap of $3000 per CHAMPVA eligible family, 
which was ``[e]ffective January 1, 2002.'' Under proposed Sec.  
17.274(c), we would establish an annual (calendar year) cap on out-of-
pocket costs of $3,000 per CHAMPVA eligible family. The annual cap 
amount would be unchanged from what currently exists but would use the 
new terminology proposed above for the sake of clarity. We would also 
remove current Sec.  17.274(c)(i) and (ii).
    We do not propose any substantive changes to current Sec.  
17.274(d) as this provision is legally adequate, and we are not 
proposing to revise policies related to it. However, we are adding a 
subject heading in an effort to mirror the cost share calculation in 
proposed paragraph (e) to Sec.  17.274.
    We propose to add a new paragraph (e) to Sec.  17.274 which would 
set forth the principles found in current policy manuals that VA uses 
to establish CHAMPVA beneficiary cost-share amounts. The calculation 
methodologies that would be described in proposed Sec.  17.274(e) 
represent current CHAMPVA practice and therefore would not increase or 
decrease the out-of-pocket costs for CHAMPVA beneficiaries. The 
methodologies described in proposed Sec.  17.274(e) are also consistent 
with TRICARE cost-share calculation methodologies for the same or 
similar types of care, except as indicated below.
    In accordance with current practice, and as proposed in Sec.  
17.274(e), the CHAMPVA beneficiary's cost-share amount, if applicable, 
is 25 percent of the CHAMPVA determined allowable amount in excess of 
the annual calendar year deductible for most CHAMPVA-covered services 
and supplies. This calculation is similar to that used in TRICARE to 
determine cost-share amounts for a majority of TRICARE covered 
services. See 32 CFR 199.4(f)(3)(ii)(C) and (f)(3)(iii). Proposed Sec.  
17.274(e)(1) and (2) would establish the services for which the general 
rule of a 25 percent cost share does not always apply. Proposed 
paragraph (e)(1) would establish in regulation the current calculation 
VA uses to determine CHAMPVA beneficiary cost share for inpatient 
facility services and supplies that are subject to the CHAMPVA 
Diagnosis Related Group (DRG) payment system. The CHAMPVA DRG system, 
like that used by TRICARE under 32 CFR 199.14, is based on the Centers 
for Medicare and Medicaid Services (CMS) prospective payment system for 
hospital services, as set forth in 42 CFR part 412. For services based 
on the CHAMPVA DRG system, the CHAMPVA beneficiary cost share would be 
the lesser of the per diem rate multiplied by the number of inpatient 
days; or, 25 percent of the hospital's billed amount; or, the base 
CHAMPVA DRG rate. This calculation is similar to that used in TRICARE 
regulation. See 32 CFR 199.4(f)(3)(ii)(A) and (f)(8)(ii).
    Proposed Sec.  17.274(e)(2) would establish the CHAMPVA beneficiary 
cost share for covered inpatient facility services and supplies that 
are subject to the CHAMPVA mental health low volume per diem 
reimbursement methodology. This methodology covers mental health 
inpatient services for lower volume hospitals and units (less than 25 
mental health discharges per federal fiscal year). For these services, 
the CHAMPVA beneficiary cost share

[[Page 2405]]

would be the lesser of a fixed per diem amount multiplied by the number 
of inpatient days or 25 percent of the hospital's billed charges. This 
calculation is similar to that used in TRICARE regulations. See 32 CFR 
199.4(f)(3)(ii)(B) and (f)(8)(ii).
    Although, as noted above, a majority of the CHAMPVA cost-share 
methodologies are the same or similar as TRICARE's, we would not adopt 
a recent TRICARE exception to its general 25 percent cost-share rule 
for prescription medications. Section 712 of the 2013 NDAA requires the 
Secretary of DoD, through regulations, to establish specified fixed 
dollar amounts for cost shares for pharmacy benefits (e.g., generic, 
formulary, and non-formulary agents or medications). We would not 
establish similar fixed cost-share amounts because CHAMPVA does not 
have an established uniform formulary and, therefore, is unable to 
identify all medications which may be prescribed or approximate their 
standard retail pricing to determine, with certainty, that a fixed 
dollar amount would satisfy beneficiaries' cost-share liability. 
Generally, CHAMPVA coverage of medications depends upon whether 
medications are approved by the FDA for the indications for which they 
are prescribed (as explained above in connection with new proposed 
Sec.  17.272(a)(83)). Additionally, the fixed cost-share amounts 
required by section 712 of the 2013 NDAA would apply even to 
medications administered through TRICARE's mail order service; whereas, 
under proposed Sec.  17.274(a)(1), as revised for clarity, cost-sharing 
requirements would not apply to services and supplies provided through 
VA's MbM. As a matter of policy, VA does not wish to apply a cost share 
for mail order pharmacy supplies provided to CHAMPVA beneficiaries. We 
believe that this departure from TRICARE is necessary to ensure the 
most appropriate care for CHAMPVA beneficiaries. Although we would not 
establish fixed cost-share amounts for medications similar to those set 
forth in section 712 of the 2013 NDAA, we would revise our regulations 
to clarify the methodology CHAMPVA uses to determine allowable amounts 
paid for outpatient medications obtained in the community (explained 
later in the discussion of proposed Sec.  17.275(f)), upon which the 25 
percent CHAMPVA beneficiary cost share is based. We believe these 
clarifications would provide more transparency related to pharmacy 
costs and subsequent CHAMPVA beneficiary cost-share amounts for 
pharmaceutical supplies obtained in the community, which we believe is 
a reasonable interpretation of the goals of section 712 of the 2013 
NDAA in establishing fixed cost-share amounts.

17.275 CHAMPVA Determined Allowable Amount Calculation

    We propose to add a new Sec.  17.275 to describe the various 
payment methodologies used by CHAMPVA to calculate the CHAMPVA 
determined allowable amount for covered services and supplies. CHAMPVA 
uses the same or similar payment methodologies to establish allowable 
reimbursement amounts for providers as TRICARE. See 32 CFR 199.14. As 
with the cost-share methodologies that would be described in Sec.  
17.274(e), proposed Sec.  17.275 represents current practice except as 
noted below and would not cause changes for CHAMPVA beneficiaries. The 
reason that Sec.  17.274(e) (regarding cost share) and Sec.  17.275 
(regarding CHAMPVA determined allowable amount) would be separated is 
to clarify for CHAMPVA beneficiaries how much of the CHAMPVA determined 
allowable amount they are responsible for as a cost share (e.g., 25 
percent) and additionally to provide beneficiaries and providers with 
an idea of how such allowable amounts are calculated.
    Proposed Sec.  17.275(a) would establish in regulation the CHAMPVA 
determined allowable amount for reimbursement of inpatient hospital 
services based on the CHAMPVA DRG-based payment system. Proposed 
paragraph (a) would explain that, unless exempt or subject to a 
methodology in proposed paragraph (b) or (c), hospital services 
provided in the 50 States, the District of Columbia, and Puerto Rico 
are subject to the CHAMPVA DRG-based payment system. The CHAMPVA DRG 
system, similar to that used by TRICARE under 32 CFR 199.14, is also 
based on the CMS prospective payment system as set forth in 42 CFR part 
412. Certain services provided in a DRG reimbursed facility will be 
reimbursed under the CHAMPVA Cost-to-Charge (CTC) payment method. See, 
e.g., 32 CFR 199.14(c). However, we will not list these specifically in 
regulations as the list of services may change more often than 
regulations can be updated.
    Proposed Sec.  17.275(b) would establish in regulation the current 
CHAMPVA inpatient mental health per diem payment system used to 
calculate reimbursement for inpatient mental health hospital care in 
specialty psychiatric hospitals and psychiatric units of general acute 
hospitals that are exempt from the CHAMPVA DRG-based payment system. 
The per diem rate would be calculated based on the daily rate times the 
number of days (length of stay). CHAMPVA's mental health per diem rates 
are updated each fiscal year for both high volume hospitals (25 or more 
discharges per fiscal year) and low volume hospitals (less than 25 
discharges per fiscal year). The per diem rates used by CHAMPVA are 
determined by TRICARE per diem rates. See 32 CFR 199.14(a).
    Proposed Sec.  17.275(c) would establish in regulation the CHAMPVA 
CTC payment system that is used to calculate the CHAMPVA determined 
allowable amount for inpatient services furnished by hospitals or 
facilities that are exempt from the CHAMPVA DRG-based payment system or 
the CHAMPVA inpatient mental health per diem payment system. TRICARE 
establishes an alternate methodology to calculate payments for 
inpatient services that are exempt from its DRG and inpatient mental 
health per diem payment systems. See 32 CFR 199.14(a)(4). Proposed 
Sec.  17.275(c)(1) would establish the CHAMPVA CTC methodology used to 
calculate costs for hospitals or facilities by multiplying a CTC ratio 
by billed charges. We would further propose that the billed charges 
from the applicable hospitals and facilities must be customary and not 
in excess of rates or fees the hospital or facility charges the general 
public for similar services in a community. This requirement that the 
applicable billed charges not be in excess of what is charged of the 
general public is similar to TRICARE's requirements. See 32 CFR 
199.14(a)(4)(i). Proposed Sec.  17.275(c)(2)(i) through (x) would 
establish the types of hospitals and services subject to the CHAMPVA 
CTC methodology, similar to TRICARE at 32 CFR 199.14(a)(1)(ii)(D)(1) 
through (10) and (a)(1)(ii)(E). We would also add in proposed Sec.  
17.275(c)(2)(xi) that hospitals and services as determined by the 
Secretary of Veterans Affairs may be subject to the CHAMPVA CTC 
methodology.
    Proposed Sec.  17.275(d) would establish in regulation the CHAMPVA 
outpatient prospective payment system (OPPS) used to calculate the 
allowable amount for outpatient services provided in a hospital subject 
to Medicare OPPS. This will include the utilization of TRICARE's 
reimbursement methodology to include specific coding requirements, 
ambulatory payment classifications (APCs), nationally established APC 
amounts, and associated adjustments (e.g., discounting for multiple 
surgery procedures, wage adjustments for variations in labor-related 
costs across geographical regions, and outlier

[[Page 2406]]

calculations). The CHAMPVA OPPS is the same as that utilized by TRICARE 
under 32 CFR 199.14, which is similar to Medicare's basic OPPS 
methodology. There are differences between TRICARE's OPPS methodology 
and Medicare's basic OPPS methodology due to variations in benefit 
structure and beneficiary population. CHAMPVA is adopting TRICARE's 
OPPS because the CHAMPVA beneficiary population is more similar to the 
TRICARE beneficiary population than to the Medicare beneficiary 
population. See 32 CFR 199.14(a)(6)(ii).
    Proposed Sec.  17.275(e) would establish in regulation the 
reimbursement methodology for services and supplies provided by 
authorized non-VA providers on an outpatient or inpatient basis where 
the services are distinct from facility-type charges in proposed Sec.  
17.275(a) through (d). Proposed Sec.  17.275(e) would explain that the 
CHAMPVA determined allowable amount paid to authorized non-VA providers 
(not hospitals) for services and supplies provided on an outpatient or 
inpatient basis is the lesser of: The CHAMPVA maximum allowable charge 
(equivalent to the maximum allowable charge for similar services 
provided by other than hospitals and skilled nursing facilities under 
TRICARE, see 32 CFR 199.14(c)); the prevailing amount, which is the 
amount equal to the maximum reasonable amount allowed providers for a 
specific procedure in a specific locality; or the billed amount. 
Certain services that typically may be provided within a hospital 
setting, but not billed as a facility-type charge under proposed 
paragraphs (a) through (d), would be included as examples in proposed 
paragraph (e), namely anesthesia services; laboratory services; and 
other professional services associated with individual authorized non-
VA providers. These examples are not all-inclusive.
    Proposed Sec.  17.275(f) would establish in regulation the current 
payment methodology for outpatient CHAMPVA pharmacy points of service. 
CHAMPVA negotiates rates with retail pharmacies through its contract 
with the pharmacy benefit manager. For services and supplies obtained 
from a retail ``in-network'' pharmacy, proposed Sec.  17.275(f)(1) 
would establish that VA pays the lesser of the billed amount or the 
contracted rate. For supplies from a retail ``out-of-network'' 
pharmacy, proposed Sec.  17.275(f)(2) would establish that VA pays the 
lesser of the billed amount plus a dispensing fee or the average 
wholesale price plus a dispensing fee.
    Proposed Sec.  17.275(g) would set forth in regulation the current 
CHAMPVA reimbursement methodology for the provision of services in a 
Skilled Nursing Facility (SNF). This methodology is based on the CMS 
prospective payment system for SNFs under 42 CFR part 413, subpart J 
(Medicare Resource Utilization Group (RUG) rates), which is the same 
methodology used in TRICARE regulations to calculate SNF payments. See 
32 CFR 199.14(b).
    Proposed Sec.  17.275(h) would set forth in regulation the current 
reimbursement methodology for durable medical equipment, prosthetics, 
orthotics, and supplies (DMEPOS). Reimbursement of DMEPOS would be 
based on the same amounts established under the CMS DMEPOS fee schedule 
under 42 CFR part 414, subpart D, which is the same methodology used in 
TRICARE regulations to calculate DMEPOS payments. See 32 CFR 199.14(k). 
The allowed amount would be that which is in effect in the specific 
geographic location at the time CHAMPVA-covered services and supplies 
are provided to a CHAMPVA beneficiary.
    Proposed Sec.  17.275(i) would establish in regulation the current 
payment methodology for all ambulance services. CHAMPVA adopts 
Medicare's Ambulance Fee Schedule (AFS) for ambulance services, which 
is based on the same methodology used by TRICARE. See TRICARE 
Reimbursement Manual 6010.61-M, Chapter 1 (``General''), section 14 
(``Ambulance Services'') (April 1, 2015). Ambulance services are paid 
based on the lesser of the Medicare AFS or the billed amount. Payments 
for ambulance services furnished by a Critical Access Hospital (CAH) 
are paid on the same basis as the CTC method under paragraph (c) of 
this section.
    Proposed Sec.  17.275(j) would establish in regulation the current 
reimbursement methodology for hospice care. This methodology uses rates 
in the CMS hospice per diem rate payment system, which is the same 
methodology used in TRICARE regulations to calculate hospice payments. 
See 32 CFR 199.14(g)(9).
    Proposed Sec.  17.275(k) would establish in regulation a 
reimbursement methodology for intermittent or part-time home health 
services similar to the methodology used in TRICARE, which is based on 
Medicare's payment methods and rates. See 32 CFR 199.14(h). Under this 
methodology, a fixed case-mix and wage-adjusted national 60-day episode 
payment amount will act as payment in full for costs associated with 
furnishing home health services with exceptions allowing for additional 
payment to be established. This would be a new limitation in payments 
for services but is in line with the 60-day episode amount specified in 
the TRICARE regulation. See 32 CFR 199.14(h).
    Proposed Sec.  17.275(l) would establish in regulation the current 
reimbursement methodology for facility charges associated with 
procedures performed in a freestanding surgery center, which is the 
basis of a prospectively determined amount, similar to that used by 
TRICARE. See 32 CFR 199.14(d). These facility charges would not include 
physician fees, anesthesiologist fees, or fees of other authorized non-
VA providers; such independent professional fees would be submitted 
separately from facility fees and calculated under the methodology in 
proposed Sec.  17.275(e). Ambulatory surgery procedures performed in 
CAHs or in hospital outpatient departments are to be reimbursed in 
accordance with the provisions of paragraph (c) or (d) respectively of 
this section.
    Proposed Sec.  17.275(m) states that VA shall determine the 
appropriate reimbursement method or methods to be used in the extension 
of CHAMPVA benefits for otherwise covered medical services and supplies 
provided by hospitals or other institutional providers, physicians or 
other individual professional providers, or other providers outside the 
United States. The authority to establish these reimbursement methods 
is similar to that in TRICARE regulation. See 32 CFR 199.14(n).
    Proposed Sec.  17.275(n) would establish in regulation the 
reimbursement methodology for inpatient services provided in a Sole 
Community Hospital (SCH). TRICARE reimbursement approximates Medicare 
reimbursement for SCHs. TRICARE reimburses on a two-step process. 
TRICARE makes an initial payment based upon multiplying the billed 
amount by the applicable TRICARE percentage, which is the greater of 
the SCH's most recently available cost-to-charge ratio from the CMS 
inpatient Provider Specific File or the TRICARE allowed-to-billed 
ratio. The second step is a year-end adjustment to compare the 
aggregate allowable cost under the first method to the aggregate amount 
that would have been allowed for the same care using the DRG method. In 
the event that the DRG method amount is the greater, the year-end 
adjustment will be the amount by which it exceeds the aggregate 
allowable costs. See 32 CFR 199.14(a)(7). Due to certain limitations, 
CHAMPVA cannot be the same as TRICARE but can be

[[Page 2407]]

similar. CHAMPVA would compare the cost-to-charge ratio reimbursement 
amount versus the DRG reimbursement amount and then pay the higher of 
the two methods.

17.276 Claim-Filing Deadlines

    Proposed Sec.  17.276 is a revision and renumbering of current 
Sec.  17.275. First, we propose to remove the reference to ``the 
Center'' and ``[t]he Director, Health Administration Center, or his or 
her designee'' in Sec.  17.276(a) and (b), as renumbered by this 
rulemaking. Our intent is to indicate that VA is responsible for 
administering CHAMPVA and has discretion to assign claims processing 
responsibility within the Department.
    Proposed Sec.  17.276(c) would clarify that claims for services and 
supplies provided to an individual before the date of the event that 
qualifies the individual as eligible under Sec.  17.271 are not 
reimbursable.
    We further propose to add new paragraph (d) to proposed Sec.  
17.276 to clarify CHAMPVA policy concerning double coverage situations. 
We would clearly state that CHAMPVA is the last payer to all OHI, with 
the exceptions noted previously, which would mean that in cases of 
double coverage, any CHAMPVA benefits would generally not be paid until 
the claim has first been filed with the OHI and a final payment 
determination or explanation of benefits has been issued by the other 
insurer or payer. This is consistent with the purpose of TRICARE's 
double coverage provisions in 32 CFR 199.8, which address double 
coverage situations with OHI. Once CHAMPVA, as the last payer, makes 
its payment to the authorized non-VA provider, the CHAMPVA 
beneficiary's personal liability for the cost of care is then fully 
extinguished, as discussed earlier. However, TRICARE has special rules 
for double coverage situations involving TRICARE beneficiaries who also 
have Medicare benefits. See 32 CFR 199.8(e)(1). In the case of double 
coverage based on the availability of both CHAMPVA and Medicare 
benefits, the provisions of current Sec.  17.271(b) would still apply 
and be unchanged by this proposed rulemaking. Under current Sec.  
17.271(b), VA is the secondary payer to Medicare, as required under 38 
U.S.C. 1781(d)(2).

17.277 Appeals

    Proposed Sec.  17.277 is a revision and renumbering of current 
Sec.  17.276. We would make two minor revisions to current Sec.  
17.276. First, we would remove references to ``Director, Health 
Administration Center, or his or her designee'' (an outdated reference 
within the current Office of Community Care) and replace it with a 
reference to ``VA.'' This is necessary to ensure that VA is effectively 
put forth as the general administrator of CHAMPVA. In addition, we 
would clarify when a beneficiary has OHI, an appeal must first be filed 
with the OHI, and a determination made, before submitting an appeal to 
CHAMPVA. We would also like to note that there may be instances where 
we would not require a beneficiary to appeal with their OHI first, such 
as when the OHI deems the issue non-appealable. Neither of these 
revisions are substantive changes. We will also keep the note located 
in current Sec.  17.276, relocating it to the body of new Sec.  17.277.
    We propose to renumber current Sec. Sec.  17.277-17.278 to 
Sec. Sec.  17.278-17.279. Additionally, as with proposed Sec.  17.277, 
we would remove reference to ``the Center'' in current Sec.  17.277 and 
in its place insert ``VA.'' This revision would clarify that it is VA, 
and not HAC independently, that has the authority to pursue medical 
care cost recovery in accordance with applicable law. We would also 
remove the reference to third-party liability in proposed Sec.  17.278 
because it is unnecessary. VA's specific authority to recover for 
medical care costs applies to responsible third parties. We would not 
make any substantive changes to proposed Sec.  17.279.

Effect of Rulemaking

    The Code of Federal Regulations, as proposed to be revised by this 
proposed rulemaking, would represent the exclusive legal authority on 
this subject. No contrary rules or procedures would be authorized. All 
VA guidance would be read to conform with this proposed rulemaking if 
possible or, if not possible, such guidance would be superseded by this 
rulemaking.

Paperwork Reduction Act

    This proposed rule contains no provisions constituting a collection 
of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would 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. The new proposed payment methods in this rulemaking 
will include new reimbursement rates for the Outpatient Prospective 
Payment System (OPPS), Home Health Prospective Payment System (HH PPS), 
and Sole Community Hospitals (SCHs) reimbursement methodologies. These 
revised methodologies would not significantly affect small businesses 
due to the following reasons: (1) The health care industry, to include 
Medicare and TRICARE, is currently using these payment methods and most 
providers are used to these reimbursement rates, if not expecting to 
receive them; (2) CHAMPVA's beneficiary population is relatively small 
compared to these other health care payers. Further support and data 
can also be found in VA's impact analysis as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of this 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published from FY 2004 Through Fiscal Year to Date.'' Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment would be exempt from the 
initial and final regulatory flexibility analysis requirements of 5 
U.S.C. 603 and 604.

Executive Orders 12866, 13563 and 13771

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy

[[Page 2408]]

issues arising out of legal mandates, the President's priorities, or 
the principles set forth in this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and OMB has 
determined the regulatory action to be economically significant, 
because it will have an annual effect on the economy of $100 million or 
more. As noted above, VA's impact analysis is available as a supporting 
document at http://www.regulations.gov, usually within 48 hours after 
the rulemaking document is published. Additionally, a copy of this 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published from FY 2004 Through Fiscal Year to Date.''
    This proposed rule is not expected to be subject to the 
requirements of EO13771 because this proposed rule is expected to 
result in no more than de minimis costs.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule would have no such 
effect on State, local, or tribal governments, or on the private 
sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.009, Veterans Medical 
Care Benefits; 64.010, Veterans Nursing Home Care; and 64.011, Veterans 
Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans 
Prosthetic Appliances; and 64.019, Veterans Rehabilitation Alcohol and 
Drug Dependence.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on October 2, 2017, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Archives and records, 
Claims, Dental health, Drug abuse, Health care, Health facilities, 
Health professions, Health records, Medical devices, Mental health 
programs, Nursing homes, Veterans.

    Dated: January 5, 2018.
Michael Shores,
Director, Office of Regulation Policy & Management, Office of the 
Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, The Department of Veterans 
Affairs (VA) proposes to amend 38 CFR part 17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read in part as 
follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.
* * * * *
0
2. Revise Sec.  17.270 to read as follows:


Sec.  17.270  General provisions and definitions.

    (a) Overview of CHAMPVA. CHAMPVA is the Civilian Health and Medical 
Program of the Department of Veterans Affairs (VA). Generally, CHAMPVA 
furnishes 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 under chapter 55 of title 10, United States Code 
(CHAMPUS), commonly referred to as the TRICARE Standard plan. Under 
CHAMPVA, VA shares the cost of medically necessary services and 
supplies with eligible beneficiaries within the 50 United States, the 
District of Columbia, the U.S. territories, and abroad. Under CHAMPVA, 
medical services and supplies may be provided as follows:
    (1) By an authorized non-VA provider.
    (2) By a VA provider at a VA facility, on a resource-available 
basis through the CHAMPVA In-house Treatment Initiative (CITI) only to 
CHAMPVA beneficiaries who are not also eligible for Medicare.
    (3) Through VA Medications by Mail (MbM).
    (i) Only CHAMPVA beneficiaries who do not have any other type of 
health insurance that pays for prescriptions, including Medicare Part 
D, may use MbM.
    (ii) Smoking cessation pharmaceutical supplies will only be 
provided through MbM and only to CHAMPVA beneficiaries that are not 
also eligible for Medicare.
    (b) Definitions. The following definitions apply to CHAMPVA 
(Sec. Sec.  17.270 through 17.278):
    Accepted assignment refers to the action of an authorized non-VA 
provider who accepts responsibility for the care of a CHAMPVA 
beneficiary and thereby agrees to accept the CHAMPVA determined 
allowable amount as full payment for services and supplies rendered to 
the beneficiary. (The provider's acceptance of the CHAMPVA determined 
allowable amount extinguishes the beneficiary's payment liability to 
the provider with the exception of applicable cost shares and 
deductibles.)
    Authorized non-VA provider means an individual or institutional 
non-VA provider of CHAMPVA-covered medical services and supplies that 
meets any of the following criteria:
    (i) Is licensed or certified by a State to provide the medical 
services and supplies; or
    (ii) Where a State does not offer licensure or certification, is 
otherwise certified by an appropriate national or professional 
association that sets standards for the specific medical provider.
    Calendar year means January 1 through December 31.
    CHAMPVA beneficiary means a person enrolled under Sec.  17.271.
    CHAMPVA-covered services and supplies mean those medical services 
and supplies that are medically necessary and appropriate for the 
treatment of a condition and that are not specifically excluded under 
Sec.  17.272(a)(1) through (84).
    CHAMPVA determined allowable amount has the meaning set forth in 
Sec.  17.272(b)(1).
    CHAMPVA In-house Treatment Initiative (CITI) means the initiative 
under 38 U.S.C. 1781(b) under which participating VA medical facilities 
provide medical services and supplies to CHAMPVA beneficiaries who are 
not also eligible for Medicare, subject to availability of space and 
resources.
    Child has the definition established in 38 U.S.C. 101.
    Claim means a request by an authorized non-VA provider or by a 
CHAMPVA beneficiary for payment or reimbursement for medical services 
and supplies provided to a CHAMPVA beneficiary.
    Fiscal year means October 1 through September 30.
    Medications by Mail (MbM) means the initiative under which VA 
provides outpatient prescription medications

[[Page 2409]]

through the mail to CHAMPVA beneficiaries.
    Other health insurance (OHI) means health insurance plans or 
programs (including Medicare) or third-party coverage that provide 
coverage to a CHAMPVA beneficiary for expenses incurred for medical 
services and supplies.
    Payer refers to OHI, as defined in this section, that is obligated 
to pay for CHAMPVA-covered medical services and supplies. In a 
situation in which, in addition to CHAMPVA, one or more payers is/are 
responsible to pay for such services and supplies (i.e., a ``double 
coverage'' situation), there would be a primary payer (i.e., the payer 
obligated to pay first), secondary payer (i.e., the payer obligated to 
pay after the primary payer), etc. In double coverage situations, 
CHAMPVA would be the last payer.
    Service-connected has the definition established in 38 U.S.C. 101.
    Spouse refers to a person who is married to a veteran and whose 
marriage is valid as determined under 38 U.S.C. 103(c).
    Surviving spouse refers to a person who was married to and is the 
widow(er) of a veteran as determined under 38 U.S.C. 103(c).
    (c) Discretionary authority. When it is determined to be in the 
best interest of VA, VA may waive any requirement in Sec. Sec.  17.270 
through 17.278, except any requirement specifically set forth in 38 
U.S.C. 1781, or otherwise imposed by statute. It is VA's intent that 
such discretionary authority would be used only under very unusual and 
limited circumstances and not to deny any individual any right, 
benefit, or privilege provided to him or her by statute or these 
regulations. Any such waiver shall apply only to the individual 
circumstance or case involved and will in no way be construed to be 
precedent-setting.

(Authority: 38 U.S.C. 501, 1781)


0
3. Amend Sec.  17.271 by:
0
a. Removing the word ``and'' at the end of paragraph (a)(3).
0
b. Redesignating paragraph (a)(4) as paragraph (a)(5).
0
c. Adding a new paragraph (a)(4).
0
d. Revising the authority citation following paragraph (a).
    The addition and revision read as follows:


Sec.  17.271  Eligibility.

    (a) * * *
    (4) An individual designated as a Primary Family Caregiver, under 
38 CFR 71.25(f), who is not entitled to care or services under a 
health-plan contract (as defined in 38 U.S.C. 1725(f)(2)); and
* * * * *

(Authority: 38 U.S.C. 501, 1720G(a)(7)(A), 1781)

* * * * *
0
4. Amend Sec.  17.272 by:
0
a. Revising paragraph (a)(2).
0
b. In paragraph (a)(3) introductory text, removing the phrase 
``(Medicaid excluded)''.
0
c. Adding paragraphs (a)(3)(iii) and (iv).
0
d. Revising paragraph (a)(21)(ix).
0
e. Removing paragraph (a)(26).
0
f. Redesignating paragraphs (a)(27) through (38) as paragraphs (a)(26) 
through (37), respectively.
0
g. In newly redesignated paragraph (a)(30), revising the introductory 
text and paragraphs (a)(30)(v) and (vi) and adding paragraphs 
(a)(30)(xi) through (xiv).
0
h. Removing paragraph (a)(39).
0
i. Redesignating paragraphs (a)(40) through (56) as paragraphs (a)(38) 
through (54), respectively.
0
j. In newly redesiganted paragraph (a)(40)(iv), removing 
``(a)(42)(iii)(A)'' and adding in its place ``(a)(40)(iii)(A).''
0
k. Removing paragraph (a)(57).
0
l. Redesignating paragraphs (a)(58) through (71) as paragraphs (a)(55) 
through (68), respectively.
0
m. Revising newly redesignated paragraphs (a)(57) through (59).
0
n. Removing paragraph (a)(72).
0
o. Redesignating paragraphs (a)(73) through (86) as paragraphs (a)(69) 
through (82), respectively.
0
p. Revising newly redesignated paragraph (a)(76).
0
q. Adding paragraphs (a)(83) and (84).
0
r. Revising paragraph (b).
    The revisions and additions read as follows:


Sec.  17.272  Benefits limitations/exclusions.

    (a) * * *
    (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 the services and supplies are otherwise not excluded from CHAMPVA 
coverage.
    (3) * * *
    (iii) Indian Health Service.
    (iv) CHAMPVA supplemental policies.
* * * * *
    (21) * * *
    (ix) Treatment for stabilization of myofascial pain dysfunction 
syndrome, also referred to as temporomandibular joint disorder (TMD). 
Authorization is limited to initial imaging such as radiographs, 
Computed Tomography, or Magnetic Resonance Imaging; up to four office 
visits; and the construction of an occlusal splint.
* * * * *
    (30) Preventive care (such as employment-requested physical 
examinations and routine screening procedures). The following 
exceptions apply, including but not limited to:
* * * * *
    (v) Cervical cancer screening.
    (vi) Breast cancer screening.
* * * * *
    (xi) Colorectal cancer screening.
    (xii) Prostate cancer screening.
    (xiii) Annual physical examination.
    (xiv) Vaccinations/immunizations.
* * * * *
    (57) Unless a waiver for extended coverage is granted in advance: 
Inpatient mental health services in excess of 30 days in any calendar 
year (or in an admission), in the case of a patient 19 years of age or 
older; 45 days in any calendar 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 calendar year (or in an admission).
    (58) Outpatient mental health services in excess of 23 visits in a 
calendar year unless a waiver for extended coverage is granted in 
advance.
    (59) Institutional services for partial hospitalization in excess 
of 60 treatment days in any calendar year (or in an admission) unless a 
waiver for extended coverage is granted in advance.
* * * * *
    (76) Over-the-counter products except for pharmaceutical smoking 
cessation supplies that are approved by the U.S. Food and Drug 
Administration, prescribed, and provided through MbM, and insulin and 
related diabetic testing supplies and syringes.
* * * * *
    (83) Medications not approved by the U.S. Food and Drug 
Administration (FDA), excluding FDA exceptions to the approval 
requirement.
    (84) Services and supplies related to the treatment of dyslexia.
    (b) Costs of services and supplies to the extent such amounts are 
billed over the CHAMPVA determined allowable amount are specifically 
excluded from coverage.
    (1) The CHAMPVA determined allowable amount is the maximum level of 
payment by CHAMPVA to an authorized non-VA provider for the provision 
of CHAMPVA-covered services and supplies to a CHAMPVA

[[Page 2410]]

beneficiary. The CHAMPVA determined allowable amount is determined 
before consideration of cost sharing and the application of deductibles 
or OHI.
    (2) A Medicare-participating hospital must accept the CHAMPVA 
determined allowable amount for inpatient services provided to a 
CHAMPVA beneficiary as payment in full. See 42 CFR 489.25.
    (3) An authorized non-VA provider who accepts responsibility for 
the care of a CHAMPVA beneficiary thereby agrees to accept the CHAMPVA 
determined allowable amount as full payment for services and supplies 
rendered to the beneficiary (i.e., accepted assignment). The provider's 
acceptance of the CHAMPVA determined allowable amount extinguishes the 
beneficiary's payment liability to the provider. Any attempts to 
collect any additional amount from the CHAMPVA beneficiary may result 
in the provider being excluded from Federal benefits programs. See 42 
CFR 1003.105.
* * * * *
0
5. Amend Sec.  17.273 by:
0
a. Revising the introductory text and paragraph (d).
0
b. Removing paragraph (e).
0
c. Redesignating paragraph (f) as paragraph (e).
0
d. Adding new paragraph (f).
    The revisions and addition read as follows:


Sec.  17.273  Preauthorization.

    Preauthorization or advance approval is required for any of the 
following, except when the benefit is covered by the CHAMPVA 
beneficiary's other health insurance (OHI):
* * * * *
    (d) Dental care. For limitations on dental care, see Sec.  
17.272(a)(21)(i) through (xii).
* * * * *
    (f) CHAMPVA will perform a retrospective medical necessity review 
during the coordination of benefits process if:
    (1) It is determined that CHAMPVA is the responsible payer for 
services and supplies but CHAMPVA preauthorization was not obtained 
prior to delivery of the services or supplies; and,
    (2) The claim for payment is filed within the appropriate one-year 
period.
* * * * *
0
6. Amend Sec.  17.274 by:
0
a. Revising paragraphs (a), (b), and (c).
0
b. Adding a heading for paragraph (d).
0
c. Adding paragraph (e).
    The revisions and additions read as follows:


Sec.  17.274  Cost sharing.

    (a) Cost sharing generally. CHAMPVA is a cost sharing program in 
which the cost of covered services is shared with the CHAMPVA 
beneficiary. CHAMPVA pays the CHAMPVA determined allowable amount less 
the CHAMPVA deductible, if applicable, and less the CHAMPVA beneficiary 
cost share.
    (1) CHAMPVA beneficiary cost-share requirements do not apply to the 
following:
    (i) Supplies provided through VA MbM.
    (ii) Any medical services and supplies provided to a CHAMPVA 
beneficiary through CITI.
    (iii) The following services, even if not provided through CITI:
    (A) Colorectal cancer screening.
    (B) Breast cancer screening.
    (C) Cervical cancer screening.
    (D) Prostate cancer screening.
    (E) Annual physical exams.
    (F) Vaccinations/immunizations.
    (G) Well child care from birth to age six, as described in Sec.  
17.272(a)(30)(i).
    (iv) Hospice services.
    (v) Or other services as determined by the Secretary of Veterans 
Affairs.
    (2) [Reserved]
    (b) Deductibles. In addition to the CHAMPVA beneficiary cost share, 
an annual (calendar year) outpatient deductible requirement ($50 per 
beneficiary or $100 per family) must be satisfied prior to VA payment 
of outpatient benefits. The deductible requirement is waived for:
    (1) CHAMPVA-covered services and supplies provided through VA MbM 
or through CITI.
    (2) Inpatient services.
    (3) Preventive services listed in paragraph (a)(1)(iii) of this 
section.
    (4) Hospice services.
    (5) Or other services as determined by the Secretary of Veterans 
Affairs.
    (c) Cost sharing limitations. To provide financial protection 
against the impact of a long-term illness or injury, there is a $3,000 
calendar year limit or ``catastrophic cap'' per CHAMPVA eligible family 
on the CHAMPVA beneficiary's out-of-pocket costs for allowable services 
and supplies. After a family has paid $3,000 in out-of-pocket costs, to 
include both cost share and deductible amounts, in a calendar year, 
CHAMPVA will pay the full allowable amounts for the remaining CHAMPVA-
covered services and supplies through the end of that calendar year. 
Credits to the annual catastrophic cap are limited to the applied 
annual deductible(s) and the CHAMPVA beneficiary cost-share amount. 
Costs above the CHAMPVA determined allowable amount, as well as costs 
associated with non-covered medical services and supplies, are not 
credited toward the catastrophic cap calculation.
    (d) Non-payment. * * *
    (e) Cost share calculation. The CHAMPVA beneficiary's cost-share 
amount, if not waived under paragraph (a)(1) of this section, is 25 
percent of the CHAMPVA determined allowable amount in excess of the 
annual calendar year deductible (see Sec.  17.275 for procedures 
related to the calculation of the allowable amount for CHAMPVA-covered 
services and supplies), except for the following:
    (1) For inpatient services subject to the CHAMPVA Diagnosis Related 
Group (DRG) payment system, the cost share is the lesser of:
    (i) The per diem rate multiplied by the number of inpatient days;
    (ii) 25 percent of the hospital's billed amount; or
    (iii) The base CHAMPVA DRG rate.
    (2) For inpatient mental health low volume hospitals and units 
(less than 25 mental health discharges per federal fiscal year), the 
cost share is the lesser of:
    (i) The fixed per diem rate multiplied by the number of inpatient 
days; or
    (ii) 25 percent of the hospital's billed charges.
* * * * *


Sec. Sec.  17.275 through 17.278  [Redesignated as Sec. Sec.  17.276 
through 17.279]

0
7. Redesignate Sec. Sec.  17.275 through 17.278 as Sec. Sec.  17.276 
through 17.279.
0
8. Add new Sec.  17.275 to read as follows:


Sec.  17.275  CHAMPVA determined allowable amount calculation.

    CHAMPVA calculates the allowable amount in the following ways, for 
the following covered services and supplies:
    (a) Inpatient hospital services (non-mental health). Unless exempt 
or subject to a methodology under paragraph (b) or (c) of this section, 
inpatient hospital services provided in the 50 States, the District of 
Columbia, and Puerto Rico are subject to the CHAMPVA Diagnosis Related 
Group (DRG)-based reimbursement methodology. Under the CHAMPVA DRG-
based payment system, hospitals are paid a predetermined amount per 
discharge for inpatient hospital services, which will not exceed the 
billed amount. Certain inpatient services will be reimbursed under the 
CHAMPVA Cost-to-Charge (CTC) reimbursement methodology.
    (b) Inpatient hospital services (mental health). The CHAMPVA 
inpatient mental health per diem reimbursement methodology is used to 
calculate

[[Page 2411]]

reimbursement for inpatient mental health hospital care in specialty 
psychiatric hospitals and psychiatric units of general acute hospitals 
that are exempt from the CHAMPVA DRG-based payment system. The per diem 
rate is calculated by multiplying the daily rate by the number of days 
(length of stay). The daily rate is updated each fiscal year for both 
high volume hospitals (25 or more discharges per fiscal year) and low 
volume hospitals (fewer than 25 discharges per fiscal year).
    (c) Other inpatient hospital services. (1) The CHAMPVA CTC 
reimbursement methodology is used to calculate reimbursement for 
inpatient care furnished by hospitals or facilities that are exempt 
from either of the methodologies in paragraph (a) or (b) of this 
section. Such hospitals or facilities will be paid at the CHAMPVA CTC 
ratio times the billed charges that are customary and not in excess of 
rates or fees the hospital or facility charges the general public for 
similar services in a community.
    (2) The following hospitals and services are subject to the CHAMPVA 
CTC payment methodology:
    (i) Any hospital that qualifies as a cancer hospital under Medicare 
standards and has elected to be exempt from the Centers for Medicare 
and Medicaid Services (CMS) prospective payment system.
    (ii) Christian Science sanatoriums.
    (iii) Critical Access Hospitals.
    (iv) Any hospital outside the 50 States, the District of Columbia, 
or Puerto Rico.
    (v) Hospitals within hospitals.
    (vi) Long-term care hospitals.
    (vii) Non-Medicare participating hospitals.
    (viii) Non-VA Federal Health Care Facilities (e.g., military 
treatment facilities, Indian Health Service).
    (ix) Rehabilitation hospitals.
    (x) Hospital or hospital-based services subject to State waiver in 
any State that has implemented a separate DRG-based payment system or 
similar payment system in order to control costs.
    (xi) Hospitals and services as determined by the Secretary of 
Veterans Affairs.
    (d) Outpatient hospital services. The CHAMPVA outpatient 
prospective payment system (OPPS) is used to calculate the allowable 
amount for outpatient services provided in hospitals subject to 
Medicare OPPS. This will include the utilization of TRICARE's 
reimbursement methodology to include specific coding requirements, 
ambulatory payment classifications (APCs), nationally established APC 
amounts, and associated adjustments.
    (e) Outpatient and inpatient non-hospital services. Payments to 
individual authorized non-VA providers (not hospitals) for CHAMPVA-
covered medical services and supplies provided on an outpatient or 
inpatient basis, including but not limited to, anesthesia services, 
laboratory services, and other professional fees associated with 
individual authorized non-VA providers, are reimbursed based on the 
lesser of:
    (1) The CHAMPVA Maximum Allowable Charge;
    (2) The prevailing amount, which is the amount equal to the maximum 
reasonable amount allowed providers for a specific procedure in a 
specific locality; or,
    (3) The billed amount.
    (f) Pharmacy services and supplies. The CHAMPVA pharmacy services 
and supplies payment methodology is based on specific CHAMPVA pharmacy 
points of service, which dictate the amounts paid by VA. VA pays:
    (1) For services and supplies obtained from a retail in-network 
pharmacy, the lesser of the billed amount or the contracted rate; or
    (2) For supplies obtained from a retail out-of-network pharmacy, 
the lesser of the billed amount plus a dispensing fee or the average 
wholesale price plus a dispensing fee.
    (g) Skilled Nursing Facility (SNF) care. The CHAMPVA SNF 
reimbursement methodology is based on the CMS prospective payment 
system for SNFs under 42 CFR part 413, subpart J (Medicare Resource 
Utilization Group (RUG) rates).
    (h) Durable medical equipment, prosthetics, orthotics, and supplies 
(DMEPOS). The CHAMPVA DMEPOS reimbursement methodology is based on the 
same amounts established under the CMS DMEPOS fee schedule under 42 CFR 
part 414, subpart D. The CHAMPVA determined allowable amount for DMEPOS 
is the amount in effect in the specific geographic location at the time 
CHAMPVA-covered medical services and supplies are provided to a CHAMPVA 
beneficiary.
    (i) Ambulance services. CHAMPVA adopts Medicare's Ambulance Fee 
Schedule (AFS) for ambulance services, with the exception of services 
furnished by a Critical Access Hospital (CAH). Ambulance services are 
paid based on the lesser of the Medicare AFS or the billed amount. 
Ambulance services provided by a CAH are paid on the same bases as the 
CTC method under paragraph (c) of this section.
    (j) Hospice care. CHAMPVA hospice reimbursement methodology uses 
Medicare per diem hospice rates.
    (k) Home health care (intermittent or part-time). CHAMPVA home 
health care reimbursement methodology, based on Medicare's home health 
prospective payment system, uses a fixed case-mix and wage-adjusted 
national 60-day episode payment amount to act as payment in full for 
costs associated with furnishing home health services with exceptions 
allowing for additional payment to be established.
    (l) Ambulatory surgery. The CHAMPVA reimbursement methodology for 
facility charges associated with procedures performed in a freestanding 
ambulatory surgery center is based on a prospectively determined 
amount, similar to that used by TRICARE. These facility charges do not 
include physician fees, anesthesiologist fees, or fees of other 
authorized non-VA providers; such independent professional fees must be 
submitted separately from facility fees and are calculated under the 
methodology in paragraph (e) of this section.
    (m) CHAMPVA-covered medical services and supplies provided outside 
the United States. VA shall determine the appropriate reimbursement 
method(s) for CHAMPVA-covered medical services and supplies provided by 
authorized non-VA providers outside the United States.
    (n) Sole Community Hospitals. The CHAMPVA reimbursement methodology 
for inpatient services provided in a Sole Community Hospital (SCH) will 
be the greater of: The allowable amount determined by multiplying the 
billed charges by the SCH's most recently available cost-to-charge 
ratio from the CMS Inpatient Provider Specific File or the DRG 
reimbursement rate.

(Authority: 38 U.S.C. 501, 1781)


0
9. Amend newly redesignated Sec.  17.276 by:
0
b. Revising paragraphs (a) introductory text and (b).
0
c. Adding paragraphs (c) and (d).
    The revisions and additions read as follows:


Sec.  17.276  Claim-filing deadlines.

    (a) Unless an exception is granted under paragraph (b) of this 
section, claims for medical services and supplies must be filed no 
later than:
* * * * *
    (b) Requests for an exception to the claim filing deadline must be 
submitted in writing 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

[[Page 2412]]

claim filing deadline will be reviewed individually and considered on 
its own merit. VA may grant exceptions to the requirements in paragraph 
(a) of this section if it 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.
    (c) Claims for CHAMPVA-covered services and supplies provided 
before the date of the event that qualifies an individual under Sec.  
17.271 are not reimbursable.
    (d) CHAMPVA is the last payer to OHI, as that term is defined in 
Sec.  17.270(b). CHAMPVA benefits will generally not be paid until the 
claim has been filed with the OHI and the OHI has issued a final 
payment determination or explanation of benefits. CHAMPVA is secondary 
payer to Medicare per the terms of Sec.  17.271(b).
* * * * *
0
10. Revise newly redesignated Sec.  17.277 to read as follows:


Sec.  17.277  Appeals.

    Notice of the initial determination regarding payment of CHAMPVA 
benefits will be provided to the CHAMPVA beneficiary on a CHAMPVA 
Explanation of Benefits (EOB) form. The EOB form is generated by the 
CHAMPVA automated payment processing system. If a CHAMPVA beneficiary 
or provider disagrees with the determination concerning CHAMPVA-covered 
services and supplies or calculation of benefits, he or she may request 
reconsideration. Such requests must be submitted to VA in writing 
within one year of the date of the initial determination. The request 
must state why the CHAMPVA claimant 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, VA will issue a written determination to the claimant 
that affirms, reverses, or modifies the previous decision. If the 
claimant is still dissatisfied, within 90 days of the date of the 
decision he or she may make a written request for review by VA. After 
reviewing the claim and any relevant supporting documentation, VA will 
issue a written determination to the claimant that affirms, reverses, 
or modifies the previous decision. The decision of VA with respect to 
benefit coverage and computation of benefits is final. When a CHAMPVA 
beneficiary has other health insurance (OHI), an appeal must first be 
filed with the OHI, and a determination made, before submitting the 
appeal to CHAMPVA with limited exceptions such as if the OHI deems the 
issue non-appealable. 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. 38 CFR 20.101.

(Authority: 38 U.S.C. 501, 1781)


0
11. Revise newly redesignated Sec.  17.278 to read as follows:


Sec.  17.278  Medical care cost recovery.

    VA will actively pursue medical care cost recovery in accordance 
with applicable law.

(Authority: 42 U.S.C. 2651; 38 U.S.C. 501, 1781)


[FR Doc. 2018-00332 Filed 1-16-18; 8:45 am]
 BILLING CODE 8320-01-P



                                                 2396                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 effects of this rule elsewhere in this                  without change to http://                              Coast Guard assigned to units under the
                                                 preamble.                                               www.regulations.gov and will include                   operational control of USCG Sector New
                                                                                                         any personal information you have                      Orleans.
                                                 F. Environment
                                                                                                         provided. For more about privacy and                      (2) Vessels requiring entry into this
                                                   We have analyzed this proposed rule                   the docket, visit http://                              safety zone must request permission
                                                 under Department of Homeland                            www.regulations.gov/privacyNotice.                     from the COTP or a designated
                                                 Security Management Directive 023–01,                     Documents mentioned in this NPRM                     representative. They may be contacted
                                                 which guides the Coast Guard in                         as being available in the docket, and all              on VHF–FM Channel 16 or 67.
                                                 complying with the National                             public comments, will be in our online                    (3) Persons and vessels permitted to
                                                 Environmental Policy Act of 1969 (42                    docket at http://www.regulations.gov                   enter these safety zones must transit at
                                                 U.S.C. 4321–4370f), and have made a                     and can be viewed by following that                    their slowest safe speed and comply
                                                 preliminary determination that this                     website’s instructions. Additionally, if               with all lawful directions issued by the
                                                 action is one of a category of actions that             you go to the online docket and sign up                COTP or the designated representative.
                                                 do not individually or cumulatively                     for email alerts, you will be notified                    (c) Information broadcasts. The COTP
                                                 have a significant effect on the human                  when comments are posted or a final                    or a designated representative will
                                                 environment. This proposed rule                         rule is published.                                     inform the public through Broadcast
                                                 involves two safety zones lasting one                                                                          Notices to Mariners of any changes in
                                                 hour that would prohibit entry within a                 List of Subjects in 33 CFR Part 165                    the planned schedule.
                                                 one-mile section of the Lower                             Harbors, Marine safety, Navigation                     Dated: January 11, 2018.
                                                 Mississippi River. They are categorically               (water), Reporting and recordkeeping                   Wayne R. Arguin,
                                                 excluded from further review under                      requirements, Security measures,
                                                                                                                                                                Captain, U.S. Coast Guard, Captain of the
                                                 paragraph L60(a) of Appendix A, Table                   Waterways.                                             Port Sector New Orleans.
                                                 1 of DHS Instruction Manual 023–01–                       For the reasons discussed in the                     [FR Doc. 2018–00652 Filed 1–16–18; 8:45 am]
                                                 001–01, Rev. 01. A preliminary Record                   preamble, the Coast Guard proposes to
                                                                                                                                                                BILLING CODE 9110–04–P
                                                 of Environmental Consideration                          amend 33 CFR part 165 as follows:
                                                 supporting this determination is
                                                 available in the docket where indicated                 PART 165—REGULATED NAVIGATION
                                                 under ADDRESSES. We seek any                            AREAS AND LIMITED ACCESS AREAS                         DEPARTMENT OF VETERANS
                                                 comments or information that may lead                                                                          AFFAIRS
                                                 to the discovery of a significant                       ■ 1. The authority citation for part 165
                                                 environmental impact from this                          continues to read as follows:                          38 CFR Part 17
                                                 proposed rule.                                            Authority: 33 U.S.C. 1231; 50 U.S.C. 191;            RIN 2900–AP02
                                                                                                         33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5;
                                                 G. Protest Activities                                   Department of Homeland Security Delegation             Civilian Health and Medical Program of
                                                   The Coast Guard respects the First                    No. 0170.1.                                            the Department of Veterans Affairs
                                                 Amendment rights of protesters.                         ■ 2. Add § 165.T08–1058 to read as                     AGENCY:    Department of Veterans Affairs.
                                                 Protesters are asked to contact the                     follows:
                                                 person listed in the FOR FURTHER                                                                               ACTION:   Proposed rule.
                                                 INFORMATION CONTACT section to                          § 165.T08–1058 Safety Zones; Lower
                                                                                                                                                                SUMMARY:   The Department of Veterans
                                                 coordinate protest activities so that your              Mississippi River, New Orleans, LA
                                                                                                                                                                Affairs (VA) proposes to amend its
                                                 message can be received without                           (a) Safety Zones. The following areas                regulations governing the Civilian
                                                 jeopardizing the safety or security of                  are a safety zone:                                     Health and Medical Program of the
                                                 people, places, or vessels.                               (1) Bayou Country Music Fest, New                    Department of Veterans Affairs
                                                                                                         Orleans, LA.                                           (CHAMPVA). The proposed revisions
                                                 V. Public Participation and Request for                   (i) Location: All navigable waters of
                                                 Comments                                                                                                       would clarify and update these
                                                                                                         the Lower Mississippi River between
                                                                                                                                                                regulations to conform to changes in law
                                                    We view public participation as                      mile marker (MM) 95.4 and MM 96.4,
                                                                                                                                                                and policy that control the
                                                 essential to effective rulemaking, and                  above Head of Passes.
                                                                                                                                                                administration of CHAMPVA and
                                                 will consider all comments and material                    (ii) Effective Period: This rule is
                                                                                                                                                                would include details concerning the
                                                 received during the comment period.                     effective from 7:45 p.m. through 8:45
                                                                                                                                                                administration of CHAMPVA that are
                                                 Your comment can help shape the                         p.m. on May 25, 2018.
                                                                                                            (2) NOLA Tricentennial 2018 Jazz and                not reflected in current regulations. The
                                                 outcome of this rulemaking. If you
                                                                                                         Heritage Fest.                                         proposed revisions would also expand
                                                 submit a comment, please include the
                                                                                                            (i) Location: All navigable waters of               covered services and supplies to include
                                                 docket number for this rulemaking,
                                                                                                         the Lower Mississippi River between                    certain preventive services and
                                                 indicate the specific section of this
                                                                                                         mile marker (MM) 94 and MM 95, above                   eliminate cost-share amounts and
                                                 document to which each comment
                                                                                                         Head of Passes.                                        deductibles for certain covered services.
                                                 applies, and provide a reason for each
                                                 suggestion or recommendation.                              (ii) Effective Period: This rule is                 DATES: Written comments must be
                                                    We encourage you to submit                           effective from 8 p.m. through 9 p.m. on                received on or before March 19, 2018.
                                                 comments through the Federal                            May 6, 2018.                                           ADDRESSES: Written comments may be
                                                 eRulemaking Portal at http://                              (b) Regulations. (1) In accordance                  submitted through http://
ethrower on DSK3G9T082PROD with PROPOSALS




                                                 www.regulations.gov. If your material                   with the general regulations in § 165.23               www.Regulations.gov; by mail or hand-
                                                 cannot be submitted using http://                       of this part, entry into these zones is                delivery to the Director, Regulation and
                                                 www.regulations.gov, contact the person                 prohibited unless specifically                         Policy Management (00REG),
                                                 in the FOR FURTHER INFORMATION                          authorized by the Captain of the Port                  Department of Veterans Affairs, 810
                                                 CONTACT section of this document for                    Sector New Orleans (COTP) or a                         Vermont Avenue NW, Room 1068,
                                                 alternate instructions.                                 designated representative. A designated                Washington, DC 20420; or by fax to
                                                    We accept anonymous comments. All                    representative is a commissioned,                      (202) 273–9026. Comments should
                                                 comments received will be posted                        warrant, or petty officer of the U.S.                  indicate that they are submitted in


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                            2397

                                                 response to ‘‘RIN 2900–AP02, Civilian                   current benefit structure offers varying               new paragraph (c) to permit VA to
                                                 Health and Medical Program of the                       degrees of medical benefits under                      waive, under certain circumstances, any
                                                 Department of Veterans Affairs.’’ Copies                multiple plan options beyond its                       requirements in the CHAMPVA
                                                 of comments received will be available                  Standard plan, but we administer                       regulations that are not otherwise
                                                 for public inspection in the Office of                  CHAMPVA in the same or similar                         required by statute, as is allowed under
                                                 Regulation Policy and Management,                       manner as TRICARE Standard only,                       TRICARE. See 32 CFR 199.1(n). Waiver
                                                 Room 1063B, between the hours of 8:00                   because that basic program is the one                  would be limited to very unusual and
                                                 a.m. and 4:30 p.m. Monday through                       that is referenced by the CHAMPUS                      limited circumstances when waiver was
                                                 Friday (except holidays). Please call                   authority. Thus, all references in this                determined to be in the best interests of
                                                 (202) 461–4902 for an appointment.                      rulemaking to ‘‘TRICARE’’ are to the                   VA; would not set a precedent for future
                                                 (This is not a toll-free number.) In                    TRICARE Standard plan, which we refer                  decisions; and would not be used to
                                                 addition, during the comment period,                    to simply as ‘‘TRICARE’’ throughout                    deny any individual any right, benefit,
                                                 comments may be viewed online                           most of this rulemaking for ease of                    or privilege provided to him or her by
                                                 through the Federal Docket Management                   reference.                                             statute or these regulations.
                                                 System at http://www.Regulations.gov.                      VA interprets the mandate in 38                       Proposed § 17.270(a) would continue
                                                 FOR FURTHER INFORMATION CONTACT:                        U.S.C. 1781(b) to administer CHAMPVA                   to provide an overview of CHAMPVA,
                                                 Joseph Duran, Director, Policy and                      in the ‘‘same or similar manner . . . as               including a general summary of the
                                                 Planning, Office of Community Care                      medical care is furnished . . . under                  manner in which CHAMPVA is
                                                 (OCC), 3773 Cherry Creek North Drive,                   title 10 chapter 55 (CHAMPUS)’’ to                     administered. We would refer to
                                                 Denver, Colorado 80209,                                 mean that we must generally administer                 CHAMPUS, as we do in the current
                                                 Joseph.Duran2@va.gov, (303) 370–1637.                   CHAMPVA in a ‘‘same or similar                         regulation, but would also reference
                                                 (This is not a toll-free number.)                       manner’’ as the TRICARE Standard                       TRICARE because the reference to
                                                                                                         plan. The phrase ‘‘same or similar                     CHAMPUS is outdated, as explained
                                                 SUPPLEMENTARY INFORMATION: The
                                                                                                         manner’’ does not require the programs                 above, and may be misunderstood by
                                                 Civilian Health and Medical Program of                  to be administered in an identical                     CHAMPVA beneficiaries. Current
                                                 the Department of Veterans Affairs                      manner. Rather, we broadly interpret                   § 17.270(a) states that CHAMPVA is
                                                 (CHAMPVA) is a health benefits                          this language as affording us needed                   administered by the ‘‘Health
                                                 program in which the Department of                      flexibility to administer the program for              Administration Center’’ (HAC) (referred
                                                 Veterans Affairs (VA) shares the cost of                CHAMPVA beneficiaries. For this                        to now as the Office of Community Care
                                                 covered medical care services and                       reason, not every aspect of CHAMPVA                    (OCC)), which is located in Denver,
                                                 supplies with spouses, children,                        will find a corollary in the TRICARE                   Colorado. We propose to delete this
                                                 survivors, and certain caregivers of                    Standard Plan.                                         statement because that fact is not
                                                 veterans who meet eligibility criteria                     TRICARE has undergone changes in                    substantively relevant to the regulations.
                                                 under 38 U.S.C. 1781. CHAMPVA                           legal authority and policy that have                   These revisions are not substantively
                                                 beneficiaries must not be eligible for                  prompted these proposed revisions to                   different from current § 17.270(a).
                                                 TRICARE, a health care program                          our CHAMPVA regulations. This                            Proposed § 17.270(a)(1) would state
                                                 administered by the Department of                       rulemaking is intended to ensure that                  that an authorized non-VA provider
                                                 Defense (DoD) that is also authorized to                our regulations continue to be, again                  may provide medical services and
                                                 provide health care to certain family                   broadly speaking, the same or similar to               supplies that are covered by
                                                 members of veterans. Certain Primary                    the regulations and policies governing                 CHAMPVA. This is current practice and
                                                 Family Caregivers designated under 38                   TRICARE. As noted throughout this                      would reflect in regulation VA’s
                                                 U.S.C. 1720G(a)(7)(A) are eligible under                proposed rule, there are necessary                     authority to provide CHAMPVA-
                                                 section 1781 as long as they are not                    variations from TRICARE, particularly                  covered services and supplies under 38
                                                 entitled to services under a health-plan                due to TRICARE’s current benefit                       U.S.C. 1781(b)(2). As explained in
                                                 contract as that term is defined in 38                  structure with varying degrees of                      greater detail below in connection with
                                                 U.S.C. 1725(f).                                         medical benefits under multiple plan                   proposed § 17.272(b)(3), CHAMPVA-
                                                    Under section 1781, VA ‘‘shall                       options, but we believe these variations               covered services and supplies are those
                                                 provide for medical care in the same or                 satisfy the same or similar requirement                provided by authorized non-VA
                                                 similar manner and subject to the same                  in 38 U.S.C. 1781(b).                                  providers who agree to provide covered
                                                 or similar limitations as medical care is                  This rulemaking also proposes                       services and supplies to CHAMPVA
                                                 furnished to certain dependents and                     clarifications and revisions that will                 beneficiaries in exchange for payment of
                                                 survivors of active duty and retired                    improve our ability to effectively                     the CHAMPVA determined allowable
                                                 members of the Armed Forces under                       administer CHAMPVA, as well as                         amount. Proposed § 17.270(a)(2) would
                                                 chapter 55 of title 10 [United States                   technical revisions to make our                        also reference VA’s alternate authority
                                                 Code] (CHAMPUS).’’ 38 U.S.C. 1781(b).                   regulations more understandable.                       under section 1781(b) to provide
                                                 CHAMPUS was the original program                                                                               medical care to CHAMPVA beneficiaries
                                                 administered by DoD to provide civilian                 17.270 General Provisions and                          through VA medical facilities equipped
                                                 health benefits for active duty military                Definitions                                            to provide the care and services if such
                                                 personnel, military retirees, and their                   Current § 17.270(a) broadly discusses                resources are not being used for the care
                                                 dependents. 32 CFR 199.1. Although the                  general administrative provisions of                   of eligible veterans. This initiative is
                                                 CHAMPUS program is still referenced                     CHAMPVA, and current § 17.270(b)                       called the CHAMPVA In-house
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                                                 in DoD regulations, DoD effectively                     establishes certain definitions for the                Treatment Initiative (CITI) and would be
                                                 replaced the CHAMPUS program with                       CHAMPVA regulations. We would                          referenced as such in proposed
                                                 what is commonly known as the                           revise the title of § 17.270 to clearly                § 17.270(a)(2). CITI affords beneficiaries
                                                 ‘‘TRICARE Standard’’ plan                               indicate that it contains both general                 the same medical services available to
                                                 (‘‘TRICARE’’). See 32 CFR 199.1(r),                     provisions as well as definitions and                  veterans. CITI claims submitted to OCC
                                                 199.17(a)(6)(ii)(C) (identifying                        would revise and reorganize the current                are processed in the same manner as all
                                                 ‘‘TRICARE Standard’’ as the basic                       definitions as well as add new                         other CHAMPVA claims. However, a
                                                 CHAMPUS program). TRICARE’s                             definitions. Finally, we would add a                   monthly transfer of funds, or Transfer


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                                                 2398                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 Dispersing Authority (TDA), from OCC                    TRICARE covers prescribed medications                  § 17.272(a)(57), as discussed later in this
                                                 to the providing VA facility is used to                 for beneficiaries with OHI in two                      proposed rule.
                                                 reimburse CITI claims whereas                           instances: When the prescribed                            For clarity, we would establish
                                                 electronic funds transfer or paper                      medication is not covered by the OHI or                abbreviations for the Civilian Health
                                                 checks are used to reimburse                            when the beneficiary’s OHI prescription                and Medical Program of the Department
                                                 beneficiaries and providers for non-CITI                benefit has been exhausted. See                        of Veterans Affairs as ‘‘CHAMPVA’’ and
                                                 claims.                                                 TRICARE Pharmacy Program Handbook                      the Department of Veterans Affairs as
                                                    With regards to CHAMPVA                              (October 2015), pages 18–19.                           ‘‘VA.’’ The current regulations refer to
                                                 beneficiaries receiving care in VA                      CHAMPVA is unable to duplicate these                   the part of VA that administratively
                                                 medical facilities through CITI, we have                two exceptions due to system                           handles CHAMPVA claims as the
                                                 historically interpreted section 1781(b)                limitations, meaning that CHAMPVA                      ‘‘Center’’ in several places (see current
                                                 to mean that such care may be provided                  will only provide prescription                         §§ 17.275–17.277), and to the ‘‘Health
                                                 only if the CHAMPVA beneficiary is not                  medications through the mail to                        Administration Center’’ in other places
                                                 also eligible for Medicare benefits. We                 beneficiaries who do not have any OHI                  (see current §§ 17.270, 17.275–17.276),
                                                 base this interpretation on the fact that               prescription coverage. Despite this,                   and we believe that referring to ‘‘VA’’ is
                                                 CHAMPVA has always been the last                        CHAMPVA’s inclusion of prescription                    more appropriately descriptive and
                                                 payer for CHAMPVA-covered medical                       medications is, broadly speaking,                      would eliminate ambiguity.
                                                 services and supplies when a                            sufficiently similar to TRICARE that VA                   Proposed § 17.270(b) would establish
                                                 CHAMPVA beneficiary has Medicare                        remains in substantial compliance with                 definitions for the CHAMPVA
                                                 (included in this rulemaking’s                          the requirements of section 1781(b).                   regulations. We would define ‘‘accepted
                                                 definition of ‘‘other health insurance’’                                                                       assignment’’ as the action of an
                                                                                                            Proposed paragraph (a)(3)(ii) would                 authorized non-VA provider who
                                                 (OHI), see 38 U.S.C. 1781(d)(2)). The
                                                                                                         provide that smoking cessation                         accepts responsibility for the care of a
                                                 mandated coordination of benefits
                                                                                                         pharmaceutical supplies are available                  CHAMPVA beneficiary and thereby
                                                 found in section 1781(d)(2) is
                                                                                                         only through MbM. Section 713 of the                   agrees to accept the CHAMPVA
                                                 essentially the same as the requirement
                                                                                                         Duncan Hunter National Defense                         determined allowable amount as full
                                                 in TRICARE codified at 32 CFR 199.8,
                                                                                                         Authorization Act for Fiscal Year 2009,                payment for services and supplies
                                                 which provides that if a TRICARE
                                                                                                         Public Law 110–417 (October 14, 2008)                  rendered to the beneficiary. This
                                                 beneficiary is eligible for both Medicare
                                                                                                         (‘‘2009 NDAA’’) required DoD to                        extinguishes the beneficiary’s payment
                                                 and TRICARE, Medicare is the primary
                                                 payer and TRICARE is the secondary                      establish a smoking cessation program                  liability to the provider with the
                                                 payer. In addition, this policy limitation              under TRICARE under which specified                    exception of applicable cost shares and
                                                 for CITI is reasonable because VA is a                  smoking cessation benefits are to be                   deductibles. This definition is
                                                 publicly funded health care system that                 made available to beneficiaries who are                consistent with our explanation for
                                                 cannot bill Medicare (see section                       not also eligible for Medicare. This                   proposed § 17.272(b)(3), which further
                                                 1814(c) and section 1835(d) of the                      TRICARE benefit is codified at 32 CFR                  outlines the necessity for defining
                                                 Social Security Act, codified at 42                     199.4(e)(30). As to the pharmaceutical                 ‘‘accepted assignment.’’ Our current
                                                 U.S.C. 1395f(c) and 1395n(d)).                          component of this TRICARE benefit,                     regulations do not define the term
                                                 Moreover, Medicare is an entitlement                    smoking cessation pharmaceutical                       ‘‘authorized provider,’’ but the term
                                                 program, whereas the provision of                       agents (which VA refers to as                          ‘‘authorized provider’’ (and variations
                                                 CHAMPVA medical benefits is subject                     pharmaceutical supplies) are available                 thereof) is used throughout current
                                                 to the availability of appropriations                   only through Military Treatment                        § 17.272 to refer to an institutional or
                                                 which, for any given time period, might                 Facility (MTF) pharmacies or the                       individual provider of CHAMPVA-
                                                 or might not be sufficient to cover all                 TRICARE Mail Order Program. See 32                     covered services and supplies. The term
                                                 CHAMPVA-covered medical services                        CFR 199.4(e)(30)(ii)(A) and                            is used to describe persons or
                                                 and supplies in a VA medical facility.                  199.21(h)(2)(iii). Similar to 32 CFR                   institutions that are considered
                                                 Requiring beneficiaries to use their                    199.4(e)(30)(i), proposed                              appropriately licensed or credentialed
                                                 Medicare benefits first accomplishes our                § 17.270(a)(3)(ii) would provide that the              to competently provide medical services
                                                 goal of protecting all patients’ access to              same smoking cessation supplies will be                and supplies to CHAMPVA
                                                 care. Therefore, we would further clarify               made available to CHAMPVA                              beneficiaries and that VA will pay to
                                                 in proposed § 17.270(a)(2) that any                     beneficiaries who are not eligible for                 provide such services and supplies. In
                                                 CHAMPVA beneficiary who is also                         Medicare. Additionally, smoking                        addition, an ‘‘authorized provider’’ has
                                                 eligible for Medicare benefits may not                  cessation pharmaceutical supplies                      historically been interpreted in
                                                 receive medical services and supplies                   would be available only through MbM.                   CHAMPVA to be a non-VA medical
                                                 through CITI.                                           For purposes of CITI, we would not                     provider. To capture this historical
                                                    Proposed § 17.270(a)(3) would newly                  provide smoking cessation                              interpretation in full, we would define
                                                 indicate in regulation that outpatient                  pharmaceutical supplies through VA                     an ‘‘authorized non-VA provider’’ to
                                                 prescription medications may be                         facility pharmacies because it is                      mean an individual or institutional non-
                                                 provided to certain CHAMPVA                             administratively more efficient for                    VA provider of CHAMPVA-covered
                                                 beneficiaries through Medications by                    CHAMPVA to provide these through                       medical services and supplies who is
                                                 Mail (MbM), administered by VA.                         MbM, and because, in complying with                    licensed or certified by a State to
                                                 Proposed paragraph (a)(3)(i) would                      the requirements of section 1781(b), as                provide the covered medical services
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                                                 further provide that VA’s MbM provides                  discussed above, VA facility pharmacies                and supplies, or is otherwise certified
                                                 prescription medications through the                    would be required to administer any                    by an appropriate national or
                                                 mail to CHAMPVA beneficiaries who do                    needed smoking cessation                               professional association that sets
                                                 not have any OHI that pays for                          pharmaceutical supplies first to veterans              standards for the specific medical
                                                 prescriptions, including Medicare Part                  before providing them to CHAMPVA                       provider. This requirement for State
                                                 D. This restriction largely is consistent               beneficiaries. We would also remove the                licensure or other certification would be
                                                 with TRICARE policy on the provision                    restriction on smoking cessation                       similar to TRICARE, which requires that
                                                 of medications by mail, except that                     services and supplies in current                       its providers be either licensed or


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                            2399

                                                 certified by a State, or, where States do                  We would define ‘‘fiscal year’’ as the              required by 38 U.S.C. 1781 or otherwise
                                                 not offer licensure or certification, be                period of time starting on October 1 and               imposed by statute. This discretionary
                                                 otherwise certified by an appropriate                   ending on September 30. This is plain                  waiver authority would be limited to
                                                 national or professional association that               language and is consistent with the                    very unusual and limited circumstances
                                                 sets standards for the specific medical                 generally understood meaning of the                    and would not set a precedent for future
                                                 provider. See TRICARE Policy Manual                     phrase ‘‘fiscal year’’ as used within the              decisions. In addition, it would not be
                                                 6010.60–M, Chapter 11 (‘‘Providers’’),                  Federal Government.                                    used to deny any individual any right,
                                                 section 3.2 (‘‘State Licensure And                         We would define ‘‘Medications by                    benefit, or privilege provided by statute
                                                 Certification’’). (For general operational-             Mail (MbM)’’ to mean the initiative                    or these regulations. This new provision
                                                 type information, one can also refer to                 under which VA provides outpatient                     would enable VA to allow payment
                                                 TRICARE Operations Manual 6010.59–                      prescription medications through the                   under CHAMPVA in cases, for example,
                                                 M, Chapter 4, (‘‘Provider Certification                 mail to CHAMPVA beneficiaries.                         where, by operation of CHAMPVA
                                                 And Credentialing’’) (April 1, 2015).)                     We would define ‘‘other health                      rules, the claim is subject to complex
                                                    We would define ‘‘calendar year’’ as                 insurance’’ (OHI) as a health insurance                administrative or accounting procedures
                                                 the period of time between and                          plan or program (to include Medicare)                  that ultimately result in determination
                                                 including January 1 through December                    or third-party coverage that provides                  of the claim’s technical noncompliance
                                                 31. This is plain language and is                       coverage to a CHAMPVA beneficiary for                  when the underlying claim is otherwise
                                                 consistent with the generally                           expenses incurred for medical services                 appropriate. Where a claimant’s non-
                                                 understood meaning of the phrase                        and supplies. The inclusion of Medicare                compliance with a purely policy or
                                                 ‘‘calendar year.’’                                      is consistent with the TRICARE                         administrative-based technical
                                                    The term ‘‘CHAMPVA beneficiary’’                     regulation related to double coverage.                 requirement is both unintentional and
                                                 would be defined as a person enrolled                   See 32 CFR 199.8(d)(1).                                harmless, we believe it would be in
                                                 for CHAMPVA under § 17.271. This                           We would define the term ‘‘payer’’ to               VA’s best interest to have the authority
                                                 would be a program-specific definition,                 mean OHI, as defined in this                           to waive the regulatory requirement and
                                                 but it is in plain language and is                      rulemaking, that is obligated to pay for               allow payment.
                                                 consistent with the generally                           CHAMPVA-covered medical services
                                                 understood meaning of the word                          and supplies. In a situation in which                  17.271 Eligibility
                                                 ‘‘beneficiary.’’ To clarify, an individual              more than one insurer is responsible to                   Current § 17.271 identifies persons
                                                 is enrolled in CHAMPVA only after the                   pay for such services and supplies (e.g.,              who may be eligible for CHAMPVA
                                                 individual has successfully completed                   a ‘‘double coverage’’ situation), there                benefits. We would revise § 17.271(a) to
                                                 the application process (i.e., where the                would be a primary payer (i.e., the payer              recognize as CHAMPVA beneficiaries
                                                 individual submits a completed VA                       obligated to pay first), a secondary payer             those individuals designated as Primary
                                                 Form 10–10d to VA, and VA has                           (i.e., the payer obligated to pay after the            Family Caregivers under 38 CFR
                                                 confirmed the individual’s eligibility).                primary payer), etc. In double coverage                71.25(f). This substantive addition to the
                                                    We would define ‘‘CHAMPVA-                           situations, CHAMPVA would be the last                  eligibility criterion would be made
                                                 covered services and supplies’’ to mean                 payer, after payment by the primary                    pursuant to the Caregivers and Veterans
                                                 those medical services and supplies that                payer and all other secondary payers.                  Omnibus Health Services Act of 2010,
                                                 are medically necessary and appropriate                    Defining a ‘‘payer’’ and designating                Public Law 111–163, section 102, which
                                                 for the treatment of a condition and that               different payer types would not affect                 amended 38 U.S.C. 1781(a) by adding a
                                                 are not specifically excluded from                      the administration of CHAMPVA                          new subsection (a)(4) authorizing VA to
                                                 coverage under proposed § 17.272(a)(1)                  because these concepts of relative                     provide CHAMPVA benefits to ‘‘an
                                                 through (84) (current § 17.272(a)(1)                    payment responsibility are all accepted                individual designated as a primary
                                                 through (86)).                                          and understood by the insurance                        provider of personal care services under
                                                    We would define ‘‘CHAMPVA                            industry and current CHAMPVA                           [38 U.S.C. 1720G(a)(7)(A)] who is not
                                                 determined allowable amount’’ by                        beneficiaries and are an essential part of             entitled to care or services under a
                                                 referencing the proposed paragraph that                 current CHAMPVA billing practices. For                 health-plan contract (as defined in [38
                                                 would relate to this term, proposed                     instance, Medicare would be the                        U.S.C. 1725(f)]).’’ We amend CHAMPVA
                                                 § 17.272(b)(1).                                         primary payer in situations governed by                eligibility criteria to recognize these
                                                    We would define ‘‘CHAMPVA In-                        current § 17.271(b) (which remains                     Primary Family Caregivers as
                                                 house Treatment Initiative (CITI)’’ to                  unchanged by this proposed                             CHAMPVA beneficiaries but not to
                                                 mean the initiative under section                       rulemaking). See 38 U.S.C. 1781(d)(2).                 establish substantive eligibility rules in
                                                 1781(b) under which participating VA                       The definition of ‘‘service-connected’’             the CHAMPVA regulations to determine
                                                 medical facilities provide medical                      in current § 17.270(b) would be                        whether an individual is a Primary
                                                 services and supplies to CHAMPVA                        unchanged and given the same meaning                   Family Caregiver. (VA’s regulations
                                                 beneficiaries who are not also eligible                 as that term in 38 U.S.C. 101. However,                governing the Caregivers Benefits
                                                 for Medicare, subject to availability of                the terms ‘‘spouse’’ and ‘‘surviving                   Program established by 38 U.S.C. 1720G
                                                 space and resources.                                    spouse’’ would no longer have the                      are codified at 38 CFR part 71, and the
                                                    We would define the term ‘‘child’’                   definitions of these same terms in 38                  specific rules governing the
                                                 consistent with 38 U.S.C. 101, as we do                 U.S.C. 101(31) and (3), respectively, as               identification of such individuals are
                                                 in the current regulation at § 17.270(b).               those definitions are outdated; instead,               found at 38 CFR 71.15 through 71.25.)
                                                    We would define the term ‘‘claim’’                   these terms would both be determined                   We would redesignate current
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                                                 consistent with the current use and                     by operation of 38 U.S.C. 103(c).                      § 17.271(a)(4) as § 17.271(a)(5) and add
                                                 understanding of the term in the context                   Consistent with the waiver provisions               a new proposed § 17.271(a)(4) to state
                                                 of CHAMPVA, as a request by an                          of TRICARE, see 32 CFR 199.1(n), new                   that a Primary Family Caregiver is
                                                 authorized non-VA provider or                           proposed paragraph (c) would establish                 eligible for CHAMPVA benefits if they
                                                 CHAMPVA beneficiary for payment or                      the discretionary authority of VA to                   are not entitled to care or services under
                                                 reimbursement for medical services and                  waive, when it is deemed to be in the                  a health-plan contract (as defined in 38
                                                 supplies provided to a CHAMPVA                          best interest of VA, any regulatory                    U.S.C. 1725(f)(2)). We note that VA is
                                                 beneficiary.                                            requirement of this part that is not                   already providing CHAMPVA services


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                                                 2400                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 and supplies to these individuals                       diagnosing TMD. A CT scan provides a                             LIST OF COMPARABLE CHAMPVA AND
                                                 pursuant to the statutory mandate in                    more detailed image of the bones in the                           TRICARE EXCLUSIONS—Continued
                                                 section 1720G(a)(3)(A)(ii)(IV) and under                joint, and an MRI provides a more
                                                 the Caregivers Benefits Program                         detailed image of the soft tissue to                              CHAMPVA provi-                 TRICARE provision (identified
                                                                                                                                                                            sion (identified
                                                 regulations. This revision would simply                 determine proper positioning as the jaw                            paragraphs are                paragraphs are from 32 CFR
                                                                                                                                                                                                            199.4(g), or as otherwise
                                                 update the CHAMPVA regulations to                       moves. We would also update                                         from 38 CFR                              noted)
                                                 conform to these laws.                                                                                                        17.272(a))
                                                                                                         § 17.272(a)(21)(ix) to refer to the more
                                                 17.272 Benefits Limitations/Exclusions                  updated and clinically appropriate                               (46) .......................   (52).
                                                                                                         terminology ‘‘temporomandibular joint                            (47) .......................   (53).
                                                    Current § 17.272 provides general                    disorder (TMD).’’ These revisions would                          (48) .......................   (54).
                                                 information about what medical                                                                                           (49) .......................   (55).
                                                                                                         update CHAMPVA regulations with                                  (50) .......................   (56).
                                                 services and supplies are covered by                    current standards of clinical practice for                       (51) .......................   (57).
                                                 CHAMPVA and lists coverage                              the benefit of CHAMPVA beneficiaries.                            (52) .......................   (58).
                                                 limitations along with the exclusions.                     A majority of the remaining proposed                          (53) .......................   (60).
                                                 The general information concerning                                                                                       (54) .......................   (61).
                                                                                                         changes to CHAMPVA coverage                                      (55), (57) ...............     (62).
                                                 coverage in current § 17.272(a)                         exclusions in proposed § 17.272(a)(1)                            (56) .......................   (64).
                                                 continues to be accurate, and we do not                 through (82) are based on changes to                             (57) .......................   (65).
                                                 propose any changes to paragraph (a).                   TRICARE coverage and policy. Virtually                           (58) .......................   (66).
                                                 Some of the coverage limitations and                                                                                     (59) .......................   (67).
                                                                                                         all coverage limitations and exclusions                          (60) .......................   (72).
                                                 exclusions listed in the numbered                       in current § 17.272(a)(1)–(86), as shown                         (62) .......................   32 CFR 199.4(a)(12) and
                                                 paragraphs under § 17.272(a) require                    in the chart below, are substantially                                                             (b)(10)(iv).
                                                 revision due to either changed standards                identical to services and supplies                               (63) through (65) ..           32 CFR 199.4(e)(4) and (h).
                                                 in clinical practice or changes in                                                                                       (66) .......................   (73).
                                                                                                         excluded from, or limited under,                                 (67), (68) ...............     32 CFR 199.2(b) and
                                                 TRICARE coverage.                                       TRICARE coverage under 32 CFR                                                                     199.4(e)(2).
                                                    Current § 17.272(a)(2) excludes the                  199.4(g), or as otherwise noted in the                           (69) .......................   32 CFR 199.4(c)(3)(ix) and
                                                 provision of services and supplies                      chart.                                                                                            199.4(e)(4).
                                                 required as a result of an occupational                                                                                  (70), (71) ...............     32 CFR 199.4(e)(17).
                                                 disease or injury for which benefits are                                                                                 (73) .......................   32 CFR 199.4(g)(15)(iv).
                                                                                                         LIST OF COMPARABLE CHAMPVA AND                                   (74) .......................   (69).
                                                 payable under workers’ compensation
                                                 or a similar protection plan. We propose
                                                                                                                TRICARE EXCLUSIONS                                        (75) .......................   32 CFR 199.4(a)(1).
                                                                                                                                                                          (76) .......................   32 CFR 199.4(g)(74).
                                                 to update the verbiage to clarify the                    CHAMPVA provi-                                                  (77) .......................   (39), (42).
                                                                                                                                          TRICARE provision (identified   (78) .......................   (25).
                                                 exclusion for the reader.                                 sion (identified               paragraphs are from 32 CFR
                                                    Current § 17.272(a)(3) excludes the                    paragraphs are                                                 (79) .......................   32 CFR 199.4(g)(15).
                                                                                                                                            199.4(g), or as otherwise
                                                                                                            from 38 CFR                                                   (80) .......................   32 CFR 199.2(b) and
                                                 provision of services and supplies that                                                              noted)
                                                                                                              17.272(a))                                                                                   199.4(b)(2)(v), (b)(3)(iii),
                                                 are paid directly or indirectly by local,                                                                                                                 (b)(5)(v), (d)(3)(vi), (e)(11)(i).
                                                                                                         (1) .........................   (11).
                                                 State, or Federal government agencies,                  (2) .........................   (23).
                                                                                                                                                                          (83) .......................   32 CFR 199.4(c)(2), (c)(3),
                                                 with certain exceptions listed in                                                                                                                         (e)(8)(i)(E).
                                                                                                         (3) .........................   (13).                            (84) .......................   32 CFR 199.4(e)(8).
                                                 § 17.272(a)(3)(i) and (ii) where                        (4) .........................   (1).                             (85), (86) ...............     32 CFR 199.2(b), 199.4(e)(8),
                                                 CHAMPVA assumes primary payer                           (5) .........................   (2).                                                              (g)(24).
                                                                                                         (6) .........................   (3).
                                                 status. We propose to add Indian Health                 (7) .........................   (4).
                                                 Service and CHAMPVA supplemental                        (8) .........................   (5).                                We note that even where our current
                                                 policies as exceptions where                            (9) .........................   (6).                             provisions are not identical to a
                                                 CHAMPVA assumes primary payer                           (10) .......................    (7).                             TRICARE provision, our intent has
                                                                                                         (11) .......................    (8).
                                                 status. This would be consistent with                   (12) .......................    (9).
                                                                                                                                                                          consistently been to apply CHAMPVA
                                                 current CHAMPVA practice as well as                     (13) .......................    (14).                            comparable exclusions or limitations in
                                                 the TRICARE regulation related to                       (14), (81) ...............      (15).                            the same or similar manner to their
                                                 double coverage. See 32 CFR                             (15) .......................    (16).                            TRICARE counterpart in accordance
                                                                                                         (16) .......................    (17).
                                                 199.8(b)(4)(ii) and (iv). We also propose               (17) .......................    (19).
                                                                                                                                                                          with 38 U.S.C. 1781(b). The same is true
                                                 to remove the ‘‘(Medicaid excluded)’’                   (18) .......................    (21).                            for our proposed revisions below, which
                                                 parenthetical language in current                       (19), (82) ...............      (24).                            are consistent with changes in DoD’s
                                                 § 17.272(a)(3), because § 17.272(a)(3)(i)               (20) .......................    (26).                            administration of TRICARE.
                                                                                                         (21) .......................    (27).
                                                 already expressly excepts ‘‘Medicaid’’                  (22) .......................    (28).
                                                                                                                                                                             The first change we would make to
                                                 from the general exclusion in                           (23) .......................    (29).                            our limitations and exclusions based on
                                                 § 17.272(a)(3).                                         (24) .......................    (30).                            TRICARE regulatory and policy changes
                                                    Current § 17.272(a)(21) excludes                     (25) .......................    (31).                            concerns current § 17.272(a)(26), which
                                                                                                         (27) .......................    (33).
                                                 dental care generally, with exceptions to               (28) .......................    (34).
                                                                                                                                                                          is not addressed in the chart above
                                                 such exclusion listed in paragraphs                     (29) .......................    (35).                            because it correlates with a provision
                                                 (a)(21)(i) through (xii). We would amend                (30) .......................    (36).                            that has been removed from TRICARE
                                                 paragraph (a)(21)(ix) to clarify that the               (31) .......................    (37).                            regulations. See 60 FR 12419 (March 7,
                                                                                                         (32) .......................    (38).
                                                 provision of initial imaging services for               (33) .......................    (39).                            1995). Therefore, we propose to remove
                                                 the treatment of temporomandibular                      (34) .......................    (40).                            this exclusion from our regulations as
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                                                 joint disorder (TMD) could specifically                 (35) .......................    (41).                            well. Paragraph (a)(26) in current
                                                                                                         (36) .......................    (20), (42).                      § 17.272 excludes coverage for services
                                                 include Computed Tomography (CT)                        (37) .......................    (43).
                                                 and Magnetic Resonance Imaging (MRI)                    (38) .......................    (44).                            and supplies, including psychological
                                                 services. We believe the sole reference                 (40) .......................    (46).                            testing, provided in connection with a
                                                 to ‘‘initial radiographs’’ in current                   (41) .......................    (47).                            specific developmental disorder. By
                                                                                                         (42) .......................    (50).
                                                 § 17.272(a)(21)(ix) is outdated and that                (43) .......................    (51).
                                                                                                                                                                          removing this exclusion, CHAMPVA
                                                 modern industry standards include the                   (44) .......................    (48).                            would now cover this service, and we
                                                 use of CT scans as well as MRIs for                     (45) .......................    (49).                            would redesignate current


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                            2401

                                                 § 17.272(a)(27) through (38) as                         exempt from cost sharing requirements.                 an annual physical examination to be
                                                 § 17.272(a)(26) through (37),                           See 76 FR 81368, and 32 CFR                            among the benefits available to all
                                                 respectively.                                           199.4(e)(29). Broadly interpreting our                 CHAMPVA beneficiaries.
                                                    Under section 711 of the 2009 NDAA,                  mandate in section 1781(b), VA                            We also note that we would except
                                                 TRICARE must waive all beneficiary                      proposes to modify the current                         ‘‘[v]accinations/immunizations’’ from
                                                 costs associated with certain preventive                exclusion of preventive care in current                the general exclusion of preventive
                                                 services, unless the beneficiary is also                § 17.272(a)(31) insofar as it defines that             services. Although subsection (d)(1)(F)
                                                 Medicare-eligible. TRICARE regulations                  term to include annual physical                        of section 711 of the 2009 NDAA
                                                 were revised to delete from 32 CFR                      examinations and create an exception                   exempts ‘‘vaccination’’ only, TRICARE’s
                                                 199.4(g)(37) the list of preventive                     permitting such exams. Despite the                     guidance on this issue additionally
                                                 services not excluded from coverage,                    limited availability of such                           exempts immunizations. See TRICARE
                                                 and these services were moved to new                    examinations under TRICARE, it is                      Reimbursement Manual 6010.61–M
                                                 § 199.4(e)(28) so that they instead would               noteworthy that TRICARE nonetheless                    Chapter 2 (‘‘Beneficiary Liability’’),
                                                 be reflected as preventive services under               covers some preventive services that are               section 1 (‘‘Cost-Shares And
                                                 TRICARE for which out-of-pocket costs                   typically provided as part of an annual                Deductibles’’) (April 1, 2015). We
                                                 are eliminated. See 76 FR 81368                         physical examination such as blood                     believe these terms have identical
                                                 (December 28, 2011). We would revise                    pressure screening, cholesterol testing,               meanings and would use both terms just
                                                 our current exclusion of preventive care                and body measurements. See TRICARE                     to be clear that this preventive service
                                                 in § 17.272(a)(31) (proposed to be                      Policy Manual 6010.60–M                                is covered regardless of whether it is
                                                 redesignated as § 17.272(a)(30)) to                     (‘‘Medicine’’), Chapter 7, section 2.1                 called an ‘‘immunization’’ or a
                                                 except the same preventive services                                                                            ‘‘vaccination.’’
                                                                                                         (‘‘Clinical Preventive Services-TRICARE
                                                 identified in paragraphs (d)(1)(A)                                                                                Current § 17.272(a)(39) excludes
                                                                                                         Standard’’) (April 1, 2015). To be paid
                                                 through (F) of section 711 of the 2009                                                                         coverage for audiological services or
                                                                                                         for by TRICARE, however, these types of
                                                 NDAA and, further, do so in a manner                                                                           speech therapy, except when prescribed
                                                                                                         health promotion and disease
                                                 that, on the whole, reflects the manner                                                                        by a physician and rendered as part of
                                                                                                         prevention services must be billed in
                                                 in which these services are provided                                                                           a treatment addressing a physical defect,
                                                                                                         connection with another preventive
                                                 under TRICARE. Section 711 of the                                                                              which correlates with a provision not
                                                                                                         service delineated in TRICARE’s policy
                                                 2009 NDAA sets forth the following                                                                             addressed in the chart above because it
                                                                                                         manual. Id. We do not believe limiting
                                                 preventive services for which                                                                                  has been removed from TRICARE
                                                 beneficiaries shall pay no associated                   the provision of annual physical
                                                                                                         examinations to only a few select groups               regulations. See 75 FR 50880 (August
                                                 costs: Colorectal cancer screening;
                                                                                                         is appropriate from a clinical                         18, 2010). Therefore, we propose to
                                                 breast cancer screening; cervical cancer
                                                                                                         perspective. Further, in the exercise of               remove this exclusion from our
                                                 screening; prostate cancer screening;
                                                                                                         our discretion, when broadly                           regulations as well. By removing this
                                                 annual physical exam; vaccinations.
                                                                                                         interpreting the mandate of section                    exclusion, CHAMPVA would now cover
                                                 Current § 17.272(a)(31)(i) through (x) set
                                                                                                         1781(b), we conclude it lies within our                this service, and we would redesignate
                                                 forth exceptions to the general exclusion
                                                                                                         discretion to determine that this benefit              current § 17.272(a)(40) through (56) as
                                                 of certain specific preventive care.
                                                                                                         should be made available to all                        § 17.272(a)(38) through (54),
                                                 Respectively, the terms of current
                                                                                                         CHAMPVA beneficiaries. This is                         respectively.
                                                 paragraphs (a)(31)(v) and (vi) already
                                                 except ‘‘[p]ap smears’’ and                             particularly the case given that some                     As stated earlier in this rulemaking,
                                                 ‘‘[m]ammography tests’’ and so                          individual health promotion and                        pursuant to section 713 of the 2009
                                                 effectively capture ‘‘cervical cancer                   disease prevention services that are                   NDAA, TRICARE must make available
                                                 screening’’ and ‘‘breast cancer                         typically provided as part of an annual                smoking cessation benefits, as specified
                                                 screening’’ as referred to in the 2009                  physical examination would eventually                  in the law, to beneficiaries who are not
                                                 NDAA. However, because the singular                     be approved by TRICARE as long as                      also eligible for Medicare. The four
                                                 terms ‘‘mammography test’’ and ‘‘pap                    they are coupled or associated with                    categories of smoking cessation benefits
                                                 smear’’ are outdated, we are updating to                billing submitted for a covered service.               available to these beneficiaries are set
                                                 ‘‘breast cancer screening’’ and ‘‘cervical              (The nature and delivery of those                      forth in TRICARE’s regulations under 32
                                                 cancer screening.’’ Therefore, proposed                 services remains the same whether                      CFR 199.4(e)(30)(ii)(A)–(D). Hence, we
                                                 § 17.272(a)(30) would revise the                        delivered as part of an annual                         would revise our regulations by
                                                 exceptions to the general exclusion of                  examination or under the umbrella of                   removing our correlate restriction on
                                                 preventive care to include the four                     another service for which TRICARE                      smoking cessation services and supplies
                                                 remaining preventive services specified                 billing is permitted.) Furthermore, VA                 in current § 17.272(a)(57). In removing
                                                 in the 2009 NDAA, namely colorectal                     finds that annual physical examinations                current § 17.272(a)(57), current
                                                 cancer screening; prostate cancer                       are beneficial for both CHAMPVA                        paragraphs (a)(58) through (71) would
                                                 screening; annual physical examination;                 beneficiaries and VA, by serving to                    be redesignated as paragraphs (a)(55)
                                                 and vaccinations/immunizations.                         identify serious medical issues before                 through (68), respectively.
                                                    We note that the TRICARE final rule                  they progress and their clinical                          Redesignated paragraphs (a)(57)
                                                 that implemented the amendments                         management becomes more difficult and                  through (59) would be revised to
                                                 made by section 711 of the 2009 NDAA                    resource-intensive. Even though our                    reference coverage of mental health
                                                 does not include an annual physical                     proposed approach would include                        benefits in a ‘‘calendar year’’ versus the
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                                                 exam benefit for all TRICARE                            elements of an annual physical                         current reference to ‘‘fiscal year.’’ We
                                                 beneficiaries; instead, such benefit is                 examination not otherwise included as                  propose to change the yearly basis of
                                                 limited to certain dependents of Active                 an adjunct service provided under a                    this coverage because our beneficiaries
                                                 Duty military personnel who are                         covered benefit as described above, we                 and providers are more familiar with
                                                 traveling outside the United States and                 believe our approach is sufficiently                   calendar year events, and the impact of
                                                 for beneficiaries ages 5 through 11 who                 ‘‘similar’’ to TRICARE. Therefore, we                  the change from fiscal to calendar on the
                                                 require such exams for school                           propose to create an exception to the                  functioning of CHAMPVA would be
                                                 enrollment. This benefit is also not                    exclusion of preventive care, permitting               minimal.


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                                                 2402                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                    With the proposed removal of                         ‘‘over-the-counter products’’ and would                (a)(26), current paragraphs (a)(27)
                                                 § 17.272(a)(57) and subsequent                          additionally expand the exception to                   through (38) would be redesignated as
                                                 redesignations of paragraphs noted                      this exclusion to cover over-the-counter               (a)(26) through (37), respectively, with
                                                 above, current paragraph (a)(67) would                  smoking cessation pharmaceutical                       the substantive changes to redesignated
                                                 be redesignated as paragraph (a)(64).                   supplies that are approved by the U.S.                 (a)(30) as noted above. With the
                                                 CHAMPVA would continue to exclude                       Food and Drug Administration (FDA),                    proposed removal of current paragraph
                                                 the performance of abortions, except                    prescribed, and provided through MbM.                  (a)(39), current paragraphs (a)(40)
                                                 when a physician certifies that the life                These changes would be consistent with                 through (56) would be redesignated as
                                                 of the mother would be endangered if                    TRICARE regulations, which require a                   (a)(38) through (54), respectively, with
                                                 the fetus were carried to term. This is                 prescription from an authorized                        no substantive changes. With the
                                                 the same restriction in current TRICARE                 provider for smoking cessation                         deletion of the current paragraphs
                                                 regulations (see 32 CFR 199.4(e)(2)),                   pharmaceutical agents (even for FDA-                   (a)(57) and (72), current paragraphs
                                                 although statute and TRICARE policy                     approved over-the-counter smoking                      (a)(58) through (86) would be
                                                 statements recently established an                      cessation agents). See 32 CFR                          redesignated as (a)(55) through (82),
                                                 additional exception to the general ban                 199.4(e)(30)(ii)(A).                                   respectively, with the minor substantive
                                                 on abortions. Specifically, section 704 of                 Section 702 of the 2013 NDAA grants                 changes as noted above to redesignated
                                                 the National Defense Authorization Act                  the Secretary of Defense the authority to              paragraphs (a)(57) through (59) and
                                                 for Fiscal Year 2013, Public Law 112–                   add certain over-the-counter                           (a)(76). Lastly, we would add new
                                                 239 (2013 NDAA), amended 10 U.S.C.                      medications to the TRICARE formulary                   paragraphs (a)(83) and (84).
                                                 1093(a) and (b) to expand the                           so that such medications may be                           Current § 17.272(b) establishes the
                                                 circumstances under which funds                         administered as if they were                           ‘‘CHAMPVA determined allowable
                                                 available to DoD and MTFs may be used                   prescription medications. CHAMPVA                      amount,’’ and paragraph (b)(1) states
                                                 to provide and perform abortions in                     does not have a same or similar uniform                that the term ‘‘allowable amount’’ is the
                                                 cases of pregnancy resulting from an act                formulary as DoD that could be altered                 maximum amount that CHAMPVA will
                                                 of rape or incest. Despite the recent                   to include certain over-the-counter                    pay an authorized provider for a
                                                 amendments to section 1093 of title 10                  medications, and we do not interpret                   covered benefit, which is determined
                                                 and TRICARE policy, we do not propose                   section 702 as granting authority to alter             prior to cost sharing and the application
                                                 same or similar changes to CHAMPVA’s                    VA’s uniform formulary. Therefore, we                  of deductibles or OHI. (This means, for
                                                 current exclusion at this time because                  would not amend our regulations in                     instance, that the cost-share would be a
                                                 TRICARE regulations do not provide for                  response to section 702 of the 2013                    percentage of the entire CHAMPVA
                                                 it. Additionally, such changes would                    NDAA. Our regulation as revised and                    determined allowable amount.)
                                                 create an even greater disparity between                redesignated § 17.272(a)(76) would                     However, this is merely a definition and
                                                 the women’s health care benefits                        permit CHAMPVA to provide the same                     not a statement of coverage limitation or
                                                 afforded veterans and CHAMPVA                           over-the-counter smoking cessation                     exclusions. We would revise paragraph
                                                 beneficiaries.                                          supplies as permitted in TRICARE                       (b) to clearly indicate that amounts
                                                    Current § 17.272(a)(72) excludes from                policy.                                                above the CHAMPVA determined
                                                 coverage drug maintenance programs                         Lastly, we would add two new                        allowable amount are excluded from
                                                 where one addictive drug is substituted                 exclusions to § 17.272. Proposed                       CHAMPVA coverage. The actual
                                                 for another such as methadone                           paragraph (a)(83) would exclude                        payment methodology—the amount to
                                                 substituted for heroin. A TRICARE final                 medications that are not approved by                   which cost sharing and deductibles will
                                                 rule published on October 22, 2013, and                 the FDA, excluding FDA exceptions to                   be applied—is addressed in proposed
                                                 effective November 21, 2013, removes a                  the approval requirement. Current                      § 17.274(e) and is discussed below.
                                                 correlate restriction from TRICARE                      CHAMPVA regulations are silent                            Proposed § 17.272(b)(1) would
                                                 regulations, and so we propose to                       regarding the need for medications to                  explain that the CHAMPVA determined
                                                 similarly remove § 17.272(a)(72). See 78                meet FDA approval requirements;                        allowable amount is the maximum level
                                                 FR 62427 (October 22, 2013); 32 CFR                     however, this has not been a problem as                of payment to an authorized non-VA
                                                 199.4(e)(4)(ii). We agree with the stated               a matter of practice because applicable                provider for CHAMPVA-covered
                                                 rationale in the related TRICARE                        standards of care generally require                    services and supplies and that this
                                                 proposed rule that the current                          prescribed medications to be FDA-                      allowable amount is determined before
                                                 restriction fails to recognize the                      approved or excluded as an exception                   cost sharing and the application of
                                                 accumulated medical evidence                            from the approval requirement. Still, we               deductibles or OHI is considered. This
                                                 supporting certain maintenance                          wish to formally and expressly exclude                 is a restatement of current
                                                 programs as one component of the                        medications that do not meet these                     § 17.272(b)(1), except that we would use
                                                 continuum of care necessary for the                     requirements. In addition, to provide                  the term ‘‘authorized non-VA provider’’
                                                 effective treatment of substance use                    benefits in the same or similar manner                 to encompass all those providers listed
                                                 disorders. See 76 FR 81899 (December                    and subject to the same or similar                     in current § 17.272(b)(1) and include the
                                                 29, 2011). In removing current                          limitations as TRICARE, paragraph                      term ‘‘supplies’’ after ‘‘covered services’’
                                                 § 17.272(a)(72), current paragraphs                     (a)(84) would establish exclusions for                 to underscore they too can be covered.
                                                 (a)(73) through (86) would be                           services and supplies related to the                   See current 38 CFR 17.272(b)(1)
                                                 redesignated as paragraphs (a)(69)                      treatment of dyslexia. See 38 CFR                      (referencing ‘‘a hospital or other
                                                 through (82), respectively.                             199.4(g)(32). This change merely reflects              authorized institutional provider, a
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                                                    Current § 17.272(a)(80), as proposed                 in regulation current CHAMPVA                          physician or other authorized
                                                 to be redesignated as paragraph (a)(76),                practice and policy.                                   individual professional provider, or
                                                 excludes from CHAMPVA benefits                             Due to the multiple proposed                        other authorized provider for covered
                                                 medications not requiring a                             deletions and additions in                             services’’). We believe use of the one
                                                 prescription, except for insulin and                    § 17.272(a)(1)–(86), we reiterate that we              term ‘‘authorized non-VA provider’’ as
                                                 related diabetic testing supplies and                   would redesignate most of the current                  defined in proposed § 17.270(b)
                                                 syringes. We would revise redesignated                  paragraphs under § 17.272(a). With the                 properly captures all provider types
                                                 paragraph (a)(76) to instead exclude                    proposed removal of current paragraph                  now listed in § 17.272(b)(1) and


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                              2403

                                                 simplifies the regulatory reference to                  and we believe using it in this                        preauthorization for durable medical
                                                 providers for the benefit of CHAMPVA                    regulation as described would increase                 equipment as a covered service or
                                                 beneficiaries. Proposed § 17.272(b)(1)                  clarity in payment practices for both                  supply. Removal of § 17.273(e) would be
                                                 would also clearly state that the                       CHAMPVA beneficiaries and authorized                   consistent with TRICARE policy. See
                                                 CHAMPVA determined allowable                            non-VA providers.                                      TRICARE Policy Manual 6010.60–M,
                                                 amount is payment made by VA to an                        Current § 17.272(b)(4) provides that a               Chapter 8 (‘‘Other Services’’), section
                                                 authorized non-VA provider for the                      provider who has collected and not                     2.1 (‘‘Durable Medical Equipment: Basic
                                                 provision of CHAMPVA-covered                            made an appropriate refund, or attempts                Program’’) (April 1, 2015). Based on this
                                                 services and supplies to a CHAMPVA                      to collect from the beneficiary any                    removal, we would redesignate current
                                                 beneficiary.                                            amount in excess of the CHAMPVA                        § 17.273(f) as § 17.273(e).
                                                    Current § 17.272(b)(2) states that a                 determined allowable amount may be                        Finally, we would add new proposed
                                                 Medicare-participating hospital must                    subject to exclusion from Federal                      § 17.273(f) to detail the reviews of
                                                 accept the CHAMPVA determined                           benefit programs. The underlying                       medical necessity. Since CHAMPVA is
                                                 allowable amount for inpatient services                 authority for this rule is 42 CFR                      a secondary payer, VA would be
                                                 as payment in full and references 42                    1003.105, which establishes the terms                  required to perform reviews of medical
                                                 CFR parts 489 and 1003. While this is                   for a health care provider’s permissive                necessity on a retrospective basis. If
                                                 a true statement of law under 42 CFR                    or mandatory exclusion from                            during the coordination of benefits
                                                 489.25, the references to 42 CFR parts                  participation in the Medicare program                  process it is determined that CHAMPVA
                                                 489 and 1003 are vague, and part 1003                   and other Federal health care programs.                would be the responsible payer for the
                                                 is not relevant to the issue of what                    Exclusion may result, for instance, if a               services and supplies but CHAMPVA
                                                 amounts Medicare-participating                          provider files false claims under these                preauthorization was not obtained prior
                                                 hospitals must accept as payment in full                programs. We would move this                           to delivery of the services or supplies,
                                                 from CHAMPVA. See 42 CFR part 1003                      information to proposed § 17.272(b)(3)                 we would obtain the necessary
                                                 (describing civil money penalties,                      for increased clarity and would remove                 information and perform a retrospective
                                                 assessments, and exclusions generally                   mention of providers not making an                     medical necessity review. We would
                                                 for individuals who violate provisions                  appropriate refund of amounts collected                also propose that any claims, where a
                                                 of or agreements with Federal health                    from beneficiaries, as the purpose of 38               retrospective review occurs, are filed
                                                 care programs). Proposed § 17.272(b)(2)                 U.S.C. 1781(e) and proposed                            within the appropriate one-year period.
                                                 would state that inpatient services are                 § 17.272(b)(3) is for these amounts to
                                                                                                                                                                17.274 Cost Sharing
                                                 ‘‘provided to a CHAMPVA beneficiary’’                   never be collected by the provider. By
                                                 and use a single, clarifying reference to               moving this information to proposed                       Current § 17.274(a) provides in
                                                 42 CFR 489.25.                                          paragraph (b)(3), we would also remove                 general that CHAMPVA is a cost sharing
                                                    Section 503 of The Caregivers and                    current paragraph (b)(4).                              program in which the cost of
                                                 Veterans Omnibus Health Services Act                                                                           CHAMPVA-covered services and
                                                 of 2010, Public Law 111–163, revised 38                 17.273 Preauthorization                                supplies is shared with the beneficiary,
                                                 U.S.C. 1781 by adding new subsection                      CHAMPVA preauthorization                             with the exception of services obtained
                                                 (e), which states: ‘‘Payment by the                     requirements for certain medical care                  through VA medical facilities. This
                                                 Secretary under this section on behalf of               and services are based on CHAMPVA                      provision would remain substantively
                                                 a covered beneficiary for medical care                  needs and are substantially the same or                the same, but we would add new
                                                 shall constitute payment in full and                    similar as those required by TRICARE.                  paragraphs (a)(1)(i) and (ii) to explicate,
                                                 extinguish any liability on the part of                 See 32 CFR 199.4 passim. We propose                    respectively, that the former language
                                                 the beneficiary for that care.’’ Current                to revise the preauthorization                         ‘‘services obtained through VA
                                                 § 17.272(b)(3) states that: ‘‘An                        requirements by adding language to                     facilities’’ refers to services and supplies
                                                 authorized provider of covered medical                  indicate when a beneficiary has ‘‘other                provided both through MbM and
                                                 services or supplies must accept the                    health insurance’’ that provides primary               through CITI. That is, the exception to
                                                 CHAMPVA determined allowable                            coverage for the benefit,                              this cost-share requirement would
                                                 amount as payment in full.’’ Proposed                   preauthorization requirements will not                 extend specifically to each of these
                                                 § 17.272(b)(3) would state more clearly                 apply. TRICARE waives                                  initiatives (as these initiatives would be
                                                 that ‘‘accepted assignment’’ refers to the              preauthorization requirements in all                   defined by this proposed rulemaking).
                                                 action of an authorized non-VA                          instances when OHI, to include                            Subsections (d)(1)(A) through (d)(1)(F)
                                                 provider who accepts responsibility for                 Medicare, is the primary payer. See                    of section 711 of the 2009 NDAA, as
                                                 the care of a CHAMPVA beneficiary and                   TRICARE Policy Manual 6010.60–M,                       discussed earlier, set forth certain
                                                 thereby agrees to accept the CHAMPVA                    Chapter 1 (‘‘Administration’’), section                preventive services for which TRICARE
                                                 determined allowable amount as full                     6.1 (‘‘Special Authorization                           waives all out-of-pocket costs, even if
                                                 payment for services and supplies                       Requirements’’) (April 1, 2015). To                    the beneficiary has not paid the amount
                                                 rendered to the beneficiary. The                        provide benefits in a similar fashion, we              necessary to cover the beneficiary’s
                                                 provider’s acceptance of the CHAMPVA                    would waive any requirement for                        deductible requirement for the year. We
                                                 determined allowable amount                             preauthorization where OHI (as defined                 propose to revise § 17.274(a) to make
                                                 extinguishes the beneficiary’s payment                  by this rulemaking) covers the benefit.                clear that there will be no associated
                                                 liability to the provider with the                      We would also revise current                           cost share for CHAMPVA beneficiaries
                                                 exception of applicable cost shares and                 § 17.273(d) to refer to dental coverage                for such services. (We address waiving
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                                                 deductibles. Proposed § 17.272(b)(3)                    limitations in § 17.272(a)(21)(i)–(xii) to             the associated deductible requirement
                                                 would not be substantively different                    avoid a potential misconception that                   later in the discussion of proposed
                                                 than current paragraph (b)(3) but would                 preauthorization is generally required                 § 17.274(b)). We would add new
                                                 clarify that the action of accepting                    for dental services. CHAMPVA clearly                   paragraphs (a)(1)(iii)(A)–(G) to § 17.274
                                                 payment is the equivalent of accepting                  excludes all dental services, except for               to waive CHAMPVA beneficiary cost-
                                                 assignment. The term ‘‘accepted                         those listed in current § 17.272(a)(21)(i)–            share requirements for the same
                                                 assignment’’ is used currently in the                   (xii). We would remove current                         preventive services identified in
                                                 administration of CHAMPVA payments,                     § 17.273(e) and not require                            paragraphs (d)(1)(A) through (F) of


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                                                 2404                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 section 711 of the 2009 NDAA. Section                   rationale as expressed above for                       cost share calculation in proposed
                                                 711 also authorizes, but does not                       proposed new § 17.274(a)(1)(i) and (ii),               paragraph (e) to § 17.274.
                                                 require, the Secretary of Defense to                    respectively. We would also move the                      We propose to add a new paragraph
                                                 extend the waiver of beneficiary costs to               exception to the deductible requirement                (e) to § 17.274 which would set forth the
                                                 other preventive services. As such, we                  in current § 17.274(b) (last sentence) for             principles found in current policy
                                                 state in regulation that the list of                    any inpatient services to a new                        manuals that VA uses to establish
                                                 services is not all-inclusive, enabling us              § 17.274(b)(2). Proposed § 17.274(b)(3)                CHAMPVA beneficiary cost-share
                                                 to add supplemental items to the list in                would except the listed preventive                     amounts. The calculation methodologies
                                                 the future if needed, while enabling us                 services in proposed                                   that would be described in proposed
                                                 to be sufficiently similar to TRICARE.                  § 17.274(a)(1)(iii)(A)–(G) from the                    § 17.274(e) represent current CHAMPVA
                                                 See Public Law 110–417, section                         general deductible requirement in                      practice and therefore would not
                                                 711(d)(1)(G). TRICARE regulations and                   current and proposed § 17.274(b), in                   increase or decrease the out-of-pocket
                                                 policy guidance extend this waiver to                   accordance with the mandate in section                 costs for CHAMPVA beneficiaries. The
                                                 well-child visits for children under 6                  711 of the 2009 NDAA. See Public Law                   methodologies described in proposed
                                                 years of age. See 32 CFR 199.4(e)(28)(iv),              110–417, section 711(a)(2) (mandating                  § 17.274(e) are also consistent with
                                                 (f); TRICARE Reimbursement Manual                       that a beneficiary not be charged for                  TRICARE cost-share calculation
                                                 6010.61–M, Chapter 2 (‘‘Beneficiary                     preventive services during a year even                 methodologies for the same or similar
                                                 Liability’’), section 1 (‘‘Cost-Shares and              if the beneficiary has not paid the                    types of care, except as indicated below.
                                                 Deductibles), 1.3.3.10.1.6 (Preventive                  amount necessary to cover the                             In accordance with current practice,
                                                 Services’’). We would include this same                 beneficiary’s deductible for the year. See             and as proposed in § 17.274(e), the
                                                 waiver in proposed paragraph                            32 CFR 199.4(f)(12)). Proposed                         CHAMPVA beneficiary’s cost-share
                                                 (a)(1)(iii)(G) of § 17.274. We would                    § 17.274(b)(4) would waive the                         amount, if applicable, is 25 percent of
                                                 waive any cost-share requirement for                    CHAMPVA beneficiary deductible                         the CHAMPVA determined allowable
                                                 hospice services in proposed                            requirement for hospice services, as is                amount in excess of the annual calendar
                                                 § 17.274(a)(1)(iv). This waiver is similar              done similarly under TRICARE                           year deductible for most CHAMPVA-
                                                 to the cost-share waiver for hospice                    regulations. See 32 CFR 199.14(g)(9).                  covered services and supplies. This
                                                 services in TRICARE regulation. See 32                  Lastly, to remain similar to TRICARE, in               calculation is similar to that used in
                                                 CFR 199.14(g)(9). Lastly, to remain                     § 17.274(b)(5), we would add a waiver                  TRICARE to determine cost-share
                                                 similar to TRICARE, in § 17.274(a)(1)(v),               for other services as determined by the                amounts for a majority of TRICARE
                                                 we would add a waiver for other                         Secretary of Veterans Affairs.                         covered services. See 32 CFR
                                                 services as determined by the Secretary                                                                        199.4(f)(3)(ii)(C) and (f)(3)(iii). Proposed
                                                                                                            Current § 17.274(c) establishes a                   § 17.274(e)(1) and (2) would establish
                                                 of Veterans Affairs.                                    calendar year limit on the ‘‘cost-share
                                                    For TRICARE, the waiver of                                                                                  the services for which the general rule
                                                                                                         amount’’ incurred by a CHAMPVA                         of a 25 percent cost share does not
                                                 beneficiary costs associated with
                                                                                                         beneficiary through the payment of both                always apply. Proposed paragraph (e)(1)
                                                 preventive services in proposed
                                                                                                         cost-shares and deductible amounts (See                would establish in regulation the
                                                 § 17.274(a)(1)(iii)(A) through (G) do not
                                                                                                         current 38 CFR 17.274(c), indicating                   current calculation VA uses to
                                                 apply to any TRICARE beneficiary who
                                                                                                         that the cap is ‘‘limited to the applied               determine CHAMPVA beneficiary cost
                                                 is also Medicare-eligible. See Public
                                                                                                         annual deductible(s) and the beneficiary               share for inpatient facility services and
                                                 Law 110–417, section 711(b). We would
                                                 not exclude Medicare-eligible                           cost-share amount.’’). Proposed                        supplies that are subject to the
                                                 beneficiaries from cost sharing waivers                 § 17.274(c) would retain this basic                    CHAMPVA Diagnosis Related Group
                                                 for preventive services as this would                   information but would refer instead to                 (DRG) payment system. The CHAMPVA
                                                 unfairly disadvantage them as compared                  a cap on ‘‘out-of-pocket costs’’ instead of            DRG system, like that used by TRICARE
                                                 to other CHAMPVA beneficiaries with                     ‘‘cost-share amounts’’ so that it is clear             under 32 CFR 199.14, is based on the
                                                 OHI. By not including this waiver,                      that both cost share and deductible                    Centers for Medicare and Medicaid
                                                 CHAMPVA will treat all beneficiaries                    amounts apply to this cap. Current                     Services (CMS) prospective payment
                                                 with OHI the same. Additionally, we                     § 17.274(c)(i) establishes an annual cap               system for hospital services, as set forth
                                                 believe most preventive services                        of cost sharing of $7,500 per CHAMPVA                  in 42 CFR part 412. For services based
                                                 provided to Medicare-eligible                           eligible family ‘‘through December 31,                 on the CHAMPVA DRG system, the
                                                 beneficiaries will be paid in full by                   2001’’, which is an outdated provision.                CHAMPVA beneficiary cost share
                                                 Medicare, and, therefore, CHAMPVA                       Current § 17.274(c)(ii) further                        would be the lesser of the per diem rate
                                                 will not assume any payment                             establishes a current cap of $3000 per                 multiplied by the number of inpatient
                                                 responsibility. In the event a cost share               CHAMPVA eligible family, which was                     days; or, 25 percent of the hospital’s
                                                 or deductible is applied for preventive                 ‘‘[e]ffective January 1, 2002.’’ Under                 billed amount; or, the base CHAMPVA
                                                 services, CHAMPVA will treat those                      proposed § 17.274(c), we would                         DRG rate. This calculation is similar to
                                                 claims as it would the claims for any                   establish an annual (calendar year) cap                that used in TRICARE regulation. See 32
                                                 other beneficiary with OHI.                             on out-of-pocket costs of $3,000 per                   CFR 199.4(f)(3)(ii)(A) and (f)(8)(ii).
                                                    The general provisions in current                    CHAMPVA eligible family. The annual                       Proposed § 17.274(e)(2) would
                                                 § 17.274(b) related to establishing an                  cap amount would be unchanged from                     establish the CHAMPVA beneficiary
                                                 annual deductible requirement (in                       what currently exists but would use the                cost share for covered inpatient facility
                                                 addition to beneficiary cost share)                     new terminology proposed above for the                 services and supplies that are subject to
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                                                 would remain substantively the same.                    sake of clarity. We would also remove                  the CHAMPVA mental health low
                                                 We would move the exception to this                     current § 17.274(c)(i) and (ii).                       volume per diem reimbursement
                                                 general requirement in current                             We do not propose any substantive                   methodology. This methodology covers
                                                 § 17.274(b) (last sentence) for services                changes to current § 17.274(d) as this                 mental health inpatient services for
                                                 obtained through VA facilities to a new                 provision is legally adequate, and we                  lower volume hospitals and units (less
                                                 § 17.274(b)(1) and also explain that it                 are not proposing to revise policies                   than 25 mental health discharges per
                                                 refers to services and supplies provided                related to it. However, we are adding a                federal fiscal year). For these services,
                                                 through MbM or CITI under the same                      subject heading in an effort to mirror the             the CHAMPVA beneficiary cost share


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                             2405

                                                 would be the lesser of a fixed per diem                 obtained in the community, which we                    would be calculated based on the daily
                                                 amount multiplied by the number of                      believe is a reasonable interpretation of              rate times the number of days (length of
                                                 inpatient days or 25 percent of the                     the goals of section 712 of the 2013                   stay). CHAMPVA’s mental health per
                                                 hospital’s billed charges. This                         NDAA in establishing fixed cost-share                  diem rates are updated each fiscal year
                                                 calculation is similar to that used in                  amounts.                                               for both high volume hospitals (25 or
                                                 TRICARE regulations. See 32 CFR                                                                                more discharges per fiscal year) and low
                                                                                                         17.275 CHAMPVA Determined
                                                 199.4(f)(3)(ii)(B) and (f)(8)(ii).                                                                             volume hospitals (less than 25
                                                                                                         Allowable Amount Calculation
                                                   Although, as noted above, a majority                                                                         discharges per fiscal year). The per diem
                                                                                                            We propose to add a new § 17.275 to                 rates used by CHAMPVA are
                                                 of the CHAMPVA cost-share
                                                                                                         describe the various payment                           determined by TRICARE per diem rates.
                                                 methodologies are the same or similar as
                                                                                                         methodologies used by CHAMPVA to                       See 32 CFR 199.14(a).
                                                 TRICARE’s, we would not adopt a
                                                                                                         calculate the CHAMPVA determined                          Proposed § 17.275(c) would establish
                                                 recent TRICARE exception to its general
                                                                                                         allowable amount for covered services                  in regulation the CHAMPVA CTC
                                                 25 percent cost-share rule for
                                                                                                         and supplies. CHAMPVA uses the same                    payment system that is used to calculate
                                                 prescription medications. Section 712 of
                                                                                                         or similar payment methodologies to                    the CHAMPVA determined allowable
                                                 the 2013 NDAA requires the Secretary
                                                                                                         establish allowable reimbursement                      amount for inpatient services furnished
                                                 of DoD, through regulations, to establish
                                                                                                         amounts for providers as TRICARE. See                  by hospitals or facilities that are exempt
                                                 specified fixed dollar amounts for cost
                                                                                                         32 CFR 199.14. As with the cost-share                  from the CHAMPVA DRG-based
                                                 shares for pharmacy benefits (e.g.,                     methodologies that would be described                  payment system or the CHAMPVA
                                                 generic, formulary, and non-formulary                   in § 17.274(e), proposed § 17.275                      inpatient mental health per diem
                                                 agents or medications). We would not                    represents current practice except as                  payment system. TRICARE establishes
                                                 establish similar fixed cost-share                      noted below and would not cause                        an alternate methodology to calculate
                                                 amounts because CHAMPVA does not                        changes for CHAMPVA beneficiaries.                     payments for inpatient services that are
                                                 have an established uniform formulary                   The reason that § 17.274(e) (regarding                 exempt from its DRG and inpatient
                                                 and, therefore, is unable to identify all               cost share) and § 17.275 (regarding                    mental health per diem payment
                                                 medications which may be prescribed or                  CHAMPVA determined allowable                           systems. See 32 CFR 199.14(a)(4).
                                                 approximate their standard retail                       amount) would be separated is to clarify               Proposed § 17.275(c)(1) would establish
                                                 pricing to determine, with certainty,                   for CHAMPVA beneficiaries how much                     the CHAMPVA CTC methodology used
                                                 that a fixed dollar amount would satisfy                of the CHAMPVA determined allowable                    to calculate costs for hospitals or
                                                 beneficiaries’ cost-share liability.                    amount they are responsible for as a cost              facilities by multiplying a CTC ratio by
                                                 Generally, CHAMPVA coverage of                          share (e.g., 25 percent) and additionally              billed charges. We would further
                                                 medications depends upon whether                        to provide beneficiaries and providers                 propose that the billed charges from the
                                                 medications are approved by the FDA                     with an idea of how such allowable                     applicable hospitals and facilities must
                                                 for the indications for which they are                  amounts are calculated.                                be customary and not in excess of rates
                                                 prescribed (as explained above in                          Proposed § 17.275(a) would establish                or fees the hospital or facility charges
                                                 connection with new proposed                            in regulation the CHAMPVA                              the general public for similar services in
                                                 § 17.272(a)(83)). Additionally, the fixed               determined allowable amount for                        a community. This requirement that the
                                                 cost-share amounts required by section                  reimbursement of inpatient hospital                    applicable billed charges not be in
                                                 712 of the 2013 NDAA would apply                        services based on the CHAMPVA DRG-                     excess of what is charged of the general
                                                 even to medications administered                        based payment system. Proposed                         public is similar to TRICARE’s
                                                 through TRICARE’s mail order service;                   paragraph (a) would explain that, unless               requirements. See 32 CFR
                                                 whereas, under proposed § 17.274(a)(1),                 exempt or subject to a methodology in                  199.14(a)(4)(i). Proposed
                                                 as revised for clarity, cost-sharing                    proposed paragraph (b) or (c), hospital                § 17.275(c)(2)(i) through (x) would
                                                 requirements would not apply to                         services provided in the 50 States, the                establish the types of hospitals and
                                                 services and supplies provided through                  District of Columbia, and Puerto Rico                  services subject to the CHAMPVA CTC
                                                 VA’s MbM. As a matter of policy, VA                     are subject to the CHAMPVA DRG-based                   methodology, similar to TRICARE at 32
                                                 does not wish to apply a cost share for                 payment system. The CHAMPVA DRG                        CFR 199.14(a)(1)(ii)(D)(1) through (10)
                                                 mail order pharmacy supplies provided                   system, similar to that used by TRICARE                and (a)(1)(ii)(E). We would also add in
                                                 to CHAMPVA beneficiaries. We believe                    under 32 CFR 199.14, is also based on                  proposed § 17.275(c)(2)(xi) that
                                                 that this departure from TRICARE is                     the CMS prospective payment system as                  hospitals and services as determined by
                                                 necessary to ensure the most                            set forth in 42 CFR part 412. Certain                  the Secretary of Veterans Affairs may be
                                                 appropriate care for CHAMPVA                            services provided in a DRG reimbursed                  subject to the CHAMPVA CTC
                                                 beneficiaries. Although we would not                    facility will be reimbursed under the                  methodology.
                                                 establish fixed cost-share amounts for                  CHAMPVA Cost-to-Charge (CTC)                              Proposed § 17.275(d) would establish
                                                 medications similar to those set forth in               payment method. See, e.g., 32 CFR                      in regulation the CHAMPVA outpatient
                                                 section 712 of the 2013 NDAA, we                        199.14(c). However, we will not list                   prospective payment system (OPPS)
                                                 would revise our regulations to clarify                 these specifically in regulations as the               used to calculate the allowable amount
                                                 the methodology CHAMPVA uses to                         list of services may change more often                 for outpatient services provided in a
                                                 determine allowable amounts paid for                    than regulations can be updated.                       hospital subject to Medicare OPPS. This
                                                 outpatient medications obtained in the                     Proposed § 17.275(b) would establish                will include the utilization of
                                                 community (explained later in the                       in regulation the current CHAMPVA                      TRICARE’s reimbursement methodology
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                                                 discussion of proposed § 17.275(f)),                    inpatient mental health per diem                       to include specific coding requirements,
                                                 upon which the 25 percent CHAMPVA                       payment system used to calculate                       ambulatory payment classifications
                                                 beneficiary cost share is based. We                     reimbursement for inpatient mental                     (APCs), nationally established APC
                                                 believe these clarifications would                      health hospital care in specialty                      amounts, and associated adjustments
                                                 provide more transparency related to                    psychiatric hospitals and psychiatric                  (e.g., discounting for multiple surgery
                                                 pharmacy costs and subsequent                           units of general acute hospitals that are              procedures, wage adjustments for
                                                 CHAMPVA beneficiary cost-share                          exempt from the CHAMPVA DRG-based                      variations in labor-related costs across
                                                 amounts for pharmaceutical supplies                     payment system. The per diem rate                      geographical regions, and outlier


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                                                 2406                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 calculations). The CHAMPVA OPPS is                         Proposed § 17.275(g) would set forth                health services with exceptions
                                                 the same as that utilized by TRICARE                    in regulation the current CHAMPVA                      allowing for additional payment to be
                                                 under 32 CFR 199.14, which is similar                   reimbursement methodology for the                      established. This would be a new
                                                 to Medicare’s basic OPPS methodology.                   provision of services in a Skilled                     limitation in payments for services but
                                                 There are differences between                           Nursing Facility (SNF). This                           is in line with the 60-day episode
                                                 TRICARE’s OPPS methodology and                          methodology is based on the CMS                        amount specified in the TRICARE
                                                 Medicare’s basic OPPS methodology                       prospective payment system for SNFs                    regulation. See 32 CFR 199.14(h).
                                                 due to variations in benefit structure                  under 42 CFR part 413, subpart J                          Proposed § 17.275(l) would establish
                                                 and beneficiary population. CHAMPVA                     (Medicare Resource Utilization Group                   in regulation the current reimbursement
                                                 is adopting TRICARE’s OPPS because                      (RUG) rates), which is the same                        methodology for facility charges
                                                 the CHAMPVA beneficiary population                      methodology used in TRICARE                            associated with procedures performed
                                                 is more similar to the TRICARE                          regulations to calculate SNF payments.                 in a freestanding surgery center, which
                                                 beneficiary population than to the                      See 32 CFR 199.14(b).                                  is the basis of a prospectively
                                                 Medicare beneficiary population. See 32                    Proposed § 17.275(h) would set forth                determined amount, similar to that used
                                                 CFR 199.14(a)(6)(ii).                                   in regulation the current reimbursement                by TRICARE. See 32 CFR 199.14(d).
                                                    Proposed § 17.275(e) would establish                 methodology for durable medical                        These facility charges would not
                                                 in regulation the reimbursement                         equipment, prosthetics, orthotics, and                 include physician fees, anesthesiologist
                                                 methodology for services and supplies                   supplies (DMEPOS). Reimbursement of                    fees, or fees of other authorized non-VA
                                                 provided by authorized non-VA                           DMEPOS would be based on the same                      providers; such independent
                                                 providers on an outpatient or inpatient                 amounts established under the CMS                      professional fees would be submitted
                                                 basis where the services are distinct                   DMEPOS fee schedule under 42 CFR                       separately from facility fees and
                                                 from facility-type charges in proposed                  part 414, subpart D, which is the same                 calculated under the methodology in
                                                 § 17.275(a) through (d). Proposed                       methodology used in TRICARE                            proposed § 17.275(e). Ambulatory
                                                 § 17.275(e) would explain that the                      regulations to calculate DMEPOS                        surgery procedures performed in CAHs
                                                 CHAMPVA determined allowable                            payments. See 32 CFR 199.14(k). The                    or in hospital outpatient departments
                                                 amount paid to authorized non-VA                        allowed amount would be that which is                  are to be reimbursed in accordance with
                                                 providers (not hospitals) for services                  in effect in the specific geographic                   the provisions of paragraph (c) or (d)
                                                 and supplies provided on an outpatient                  location at the time CHAMPVA-covered                   respectively of this section.
                                                                                                         services and supplies are provided to a                   Proposed § 17.275(m) states that VA
                                                 or inpatient basis is the lesser of: The
                                                                                                         CHAMPVA beneficiary.                                   shall determine the appropriate
                                                 CHAMPVA maximum allowable charge
                                                                                                            Proposed § 17.275(i) would establish                reimbursement method or methods to be
                                                 (equivalent to the maximum allowable                    in regulation the current payment                      used in the extension of CHAMPVA
                                                 charge for similar services provided by                 methodology for all ambulance services.                benefits for otherwise covered medical
                                                 other than hospitals and skilled nursing                CHAMPVA adopts Medicare’s                              services and supplies provided by
                                                 facilities under TRICARE, see 32 CFR                    Ambulance Fee Schedule (AFS) for                       hospitals or other institutional
                                                 199.14(c)); the prevailing amount,                      ambulance services, which is based on                  providers, physicians or other
                                                 which is the amount equal to the                        the same methodology used by                           individual professional providers, or
                                                 maximum reasonable amount allowed                       TRICARE. See TRICARE                                   other providers outside the United
                                                 providers for a specific procedure in a                 Reimbursement Manual 6010.61–M,                        States. The authority to establish these
                                                 specific locality; or the billed amount.                Chapter 1 (‘‘General’’), section 14                    reimbursement methods is similar to
                                                 Certain services that typically may be                  (‘‘Ambulance Services’’) (April 1, 2015).              that in TRICARE regulation. See 32 CFR
                                                 provided within a hospital setting, but                 Ambulance services are paid based on                   199.14(n).
                                                 not billed as a facility-type charge under              the lesser of the Medicare AFS or the                     Proposed § 17.275(n) would establish
                                                 proposed paragraphs (a) through (d),                    billed amount. Payments for ambulance                  in regulation the reimbursement
                                                 would be included as examples in                        services furnished by a Critical Access                methodology for inpatient services
                                                 proposed paragraph (e), namely                          Hospital (CAH) are paid on the same                    provided in a Sole Community Hospital
                                                 anesthesia services; laboratory services;               basis as the CTC method under                          (SCH). TRICARE reimbursement
                                                 and other professional services                         paragraph (c) of this section.                         approximates Medicare reimbursement
                                                 associated with individual authorized                      Proposed § 17.275(j) would establish                for SCHs. TRICARE reimburses on a
                                                 non-VA providers. These examples are                    in regulation the current reimbursement                two-step process. TRICARE makes an
                                                 not all-inclusive.                                      methodology for hospice care. This                     initial payment based upon multiplying
                                                    Proposed § 17.275(f) would establish                 methodology uses rates in the CMS                      the billed amount by the applicable
                                                 in regulation the current payment                       hospice per diem rate payment system,                  TRICARE percentage, which is the
                                                 methodology for outpatient CHAMPVA                      which is the same methodology used in                  greater of the SCH’s most recently
                                                 pharmacy points of service. CHAMPVA                     TRICARE regulations to calculate                       available cost-to-charge ratio from the
                                                 negotiates rates with retail pharmacies                 hospice payments. See 32 CFR                           CMS inpatient Provider Specific File or
                                                 through its contract with the pharmacy                  199.14(g)(9).                                          the TRICARE allowed-to-billed ratio.
                                                 benefit manager. For services and                          Proposed § 17.275(k) would establish                The second step is a year-end
                                                 supplies obtained from a retail ‘‘in-                   in regulation a reimbursement                          adjustment to compare the aggregate
                                                 network’’ pharmacy, proposed                            methodology for intermittent or part-                  allowable cost under the first method to
                                                 § 17.275(f)(1) would establish that VA                  time home health services similar to the               the aggregate amount that would have
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                                                 pays the lesser of the billed amount or                 methodology used in TRICARE, which                     been allowed for the same care using the
                                                 the contracted rate. For supplies from a                is based on Medicare’s payment                         DRG method. In the event that the DRG
                                                 retail ‘‘out-of-network’’ pharmacy,                     methods and rates. See 32 CFR                          method amount is the greater, the year-
                                                 proposed § 17.275(f)(2) would establish                 199.14(h). Under this methodology, a                   end adjustment will be the amount by
                                                 that VA pays the lesser of the billed                   fixed case-mix and wage-adjusted                       which it exceeds the aggregate allowable
                                                 amount plus a dispensing fee or the                     national 60-day episode payment                        costs. See 32 CFR 199.14(a)(7). Due to
                                                 average wholesale price plus a                          amount will act as payment in full for                 certain limitations, CHAMPVA cannot
                                                 dispensing fee.                                         costs associated with furnishing home                  be the same as TRICARE but can be


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                              2407

                                                 similar. CHAMPVA would compare the                      the current Office of Community Care)                  System (HH PPS), and Sole Community
                                                 cost-to-charge ratio reimbursement                      and replace it with a reference to ‘‘VA.’’             Hospitals (SCHs) reimbursement
                                                 amount versus the DRG reimbursement                     This is necessary to ensure that VA is                 methodologies. These revised
                                                 amount and then pay the higher of the                   effectively put forth as the general                   methodologies would not significantly
                                                 two methods.                                            administrator of CHAMPVA. In                           affect small businesses due to the
                                                                                                         addition, we would clarify when a                      following reasons: (1) The health care
                                                 17.276 Claim-Filing Deadlines
                                                                                                         beneficiary has OHI, an appeal must                    industry, to include Medicare and
                                                    Proposed § 17.276 is a revision and                  first be filed with the OHI, and a                     TRICARE, is currently using these
                                                 renumbering of current § 17.275. First,                 determination made, before submitting                  payment methods and most providers
                                                 we propose to remove the reference to                   an appeal to CHAMPVA. We would also                    are used to these reimbursement rates,
                                                 ‘‘the Center’’ and ‘‘[t]he Director, Health             like to note that there may be instances               if not expecting to receive them; (2)
                                                 Administration Center, or his or her                    where we would not require a                           CHAMPVA’s beneficiary population is
                                                 designee’’ in § 17.276(a) and (b), as                   beneficiary to appeal with their OHI                   relatively small compared to these other
                                                 renumbered by this rulemaking. Our                      first, such as when the OHI deems the                  health care payers. Further support and
                                                 intent is to indicate that VA is                        issue non-appealable. Neither of these                 data can also be found in VA’s impact
                                                 responsible for administering                           revisions are substantive changes. We                  analysis as a supporting document at
                                                 CHAMPVA and has discretion to assign                    will also keep the note located in                     http://www.regulations.gov, usually
                                                 claims processing responsibility within                 current § 17.276, relocating it to the                 within 48 hours after the rulemaking
                                                 the Department.                                         body of new § 17.277.                                  document is published. Additionally, a
                                                    Proposed § 17.276(c) would clarify                      We propose to renumber current                      copy of this rulemaking and its impact
                                                 that claims for services and supplies                   §§ 17.277–17.278 to §§ 17.278–17.279.                  analysis are available on VA’s website at
                                                 provided to an individual before the                    Additionally, as with proposed § 17.277,               http://www.va.gov/orpm/, by following
                                                 date of the event that qualifies the                    we would remove reference to ‘‘the                     the link for ‘‘VA Regulations Published
                                                 individual as eligible under § 17.271 are               Center’’ in current § 17.277 and in its                from FY 2004 Through Fiscal Year to
                                                 not reimbursable.                                       place insert ‘‘VA.’’ This revision would               Date.’’ Therefore, pursuant to 5 U.S.C.
                                                    We further propose to add new                        clarify that it is VA, and not HAC                     605(b), this amendment would be
                                                 paragraph (d) to proposed § 17.276 to                   independently, that has the authority to               exempt from the initial and final
                                                 clarify CHAMPVA policy concerning                       pursue medical care cost recovery in                   regulatory flexibility analysis
                                                 double coverage situations. We would                    accordance with applicable law. We                     requirements of 5 U.S.C. 603 and 604.
                                                 clearly state that CHAMPVA is the last                  would also remove the reference to
                                                 payer to all OHI, with the exceptions                                                                          Executive Orders 12866, 13563 and
                                                                                                         third-party liability in proposed                      13771
                                                 noted previously, which would mean                      § 17.278 because it is unnecessary. VA’s
                                                 that in cases of double coverage, any                   specific authority to recover for medical                 Executive Orders 12866 and 13563
                                                 CHAMPVA benefits would generally not                    care costs applies to responsible third                direct agencies to assess the costs and
                                                 be paid until the claim has first been                  parties. We would not make any                         benefits of available regulatory
                                                 filed with the OHI and a final payment                  substantive changes to proposed                        alternatives and, when regulation is
                                                 determination or explanation of benefits                § 17.279.                                              necessary, to select regulatory
                                                 has been issued by the other insurer or                                                                        approaches that maximize net benefits
                                                 payer. This is consistent with the                      Effect of Rulemaking                                   (including potential economic,
                                                 purpose of TRICARE’s double coverage                      The Code of Federal Regulations, as                  environmental, public health and safety
                                                 provisions in 32 CFR 199.8, which                       proposed to be revised by this proposed                effects, and other advantages;
                                                 address double coverage situations with                 rulemaking, would represent the                        distributive impacts; and equity).
                                                 OHI. Once CHAMPVA, as the last payer,                   exclusive legal authority on this subject.             Executive Order 13563 (Improving
                                                 makes its payment to the authorized                     No contrary rules or procedures would                  Regulation and Regulatory Review)
                                                 non-VA provider, the CHAMPVA                            be authorized. All VA guidance would                   emphasizes the importance of
                                                 beneficiary’s personal liability for the                be read to conform with this proposed                  quantifying both costs and benefits,
                                                 cost of care is then fully extinguished,                rulemaking if possible or, if not                      reducing costs, harmonizing rules, and
                                                 as discussed earlier. However, TRICARE                  possible, such guidance would be                       promoting flexibility. Executive Order
                                                 has special rules for double coverage                   superseded by this rulemaking.                         12866 (Regulatory Planning and
                                                 situations involving TRICARE                                                                                   Review) defines a ‘‘significant
                                                 beneficiaries who also have Medicare                    Paperwork Reduction Act                                regulatory action,’’ which requires
                                                 benefits. See 32 CFR 199.8(e)(1). In the                  This proposed rule contains no                       review by the Office of Management and
                                                 case of double coverage based on the                    provisions constituting a collection of                Budget (OMB), as ‘‘any regulatory action
                                                 availability of both CHAMPVA and                        information under the Paperwork                        that is likely to result in a rule that may:
                                                 Medicare benefits, the provisions of                    Reduction Act of 1995 (44 U.S.C. 3501–                 (1) Have an annual effect on the
                                                 current § 17.271(b) would still apply                   3521).                                                 economy of $100 million or more or
                                                 and be unchanged by this proposed                                                                              adversely affect in a material way the
                                                                                                         Regulatory Flexibility Act                             economy, a sector of the economy,
                                                 rulemaking. Under current § 17.271(b),
                                                 VA is the secondary payer to Medicare,                    The Secretary hereby certifies that                  productivity, competition, jobs, the
                                                 as required under 38 U.S.C. 1781(d)(2).                 this proposed rule would not have a                    environment, public health or safety, or
                                                                                                         significant economic impact on a                       State, local, or tribal governments or
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                                                 17.277 Appeals                                          substantial number of small entities as                communities; (2) Create a serious
                                                   Proposed § 17.277 is a revision and                   they are defined in the Regulatory                     inconsistency or otherwise interfere
                                                 renumbering of current § 17.276. We                     Flexibility Act, 5 U.S.C. 601–612. The                 with an action taken or planned by
                                                 would make two minor revisions to                       new proposed payment methods in this                   another agency; (3) Materially alter the
                                                 current § 17.276. First, we would                       rulemaking will include new                            budgetary impact of entitlements,
                                                 remove references to ‘‘Director, Health                 reimbursement rates for the Outpatient                 grants, user fees, or loan programs or the
                                                 Administration Center, or his or her                    Prospective Payment System (OPPS),                     rights and obligations of recipients
                                                 designee’’ (an outdated reference within                Home Health Prospective Payment                        thereof; or (4) Raise novel legal or policy


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                                                 2408                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 issues arising out of legal mandates, the               List of Subjects in 38 CFR Part 17                     beneficiaries that are not also eligible for
                                                 President’s priorities, or the principles                 Administrative practice and                          Medicare.
                                                 set forth in this Executive Order.’’                    procedure, Archives and records,                          (b) Definitions. The following
                                                    The economic, interagency,                           Claims, Dental health, Drug abuse,                     definitions apply to CHAMPVA
                                                 budgetary, legal, and policy                            Health care, Health facilities, Health                 (§§ 17.270 through 17.278):
                                                 implications of this regulatory action                  professions, Health records, Medical                      Accepted assignment refers to the
                                                 have been examined and OMB has                          devices, Mental health programs,                       action of an authorized non-VA
                                                 determined the regulatory action to be                  Nursing homes, Veterans.                               provider who accepts responsibility for
                                                 economically significant, because it will                                                                      the care of a CHAMPVA beneficiary and
                                                                                                           Dated: January 5, 2018.                              thereby agrees to accept the CHAMPVA
                                                 have an annual effect on the economy
                                                                                                         Michael Shores,                                        determined allowable amount as full
                                                 of $100 million or more. As noted
                                                                                                         Director, Office of Regulation Policy &                payment for services and supplies
                                                 above, VA’s impact analysis is available
                                                                                                         Management, Office of the Secretary,                   rendered to the beneficiary. (The
                                                 as a supporting document at http://                     Department of Veterans Affairs.
                                                 www.regulations.gov, usually within 48                                                                         provider’s acceptance of the CHAMPVA
                                                 hours after the rulemaking document is                    For the reasons stated in the                        determined allowable amount
                                                 published. Additionally, a copy of this                 preamble, The Department of Veterans                   extinguishes the beneficiary’s payment
                                                 rulemaking and its impact analysis are                  Affairs (VA) proposes to amend 38 CFR                  liability to the provider with the
                                                 available on VA’s website at http://                    part 17 as follows:                                    exception of applicable cost shares and
                                                 www.va.gov/orpm/, by following the                                                                             deductibles.)
                                                                                                         PART 17—MEDICAL                                           Authorized non-VA provider means
                                                 link for ‘‘VA Regulations Published
                                                 from FY 2004 Through Fiscal Year to                     ■ 1. The authority citation for part 17                an individual or institutional non-VA
                                                 Date.’’                                                 continues to read in part as follows:                  provider of CHAMPVA-covered medical
                                                                                                                                                                services and supplies that meets any of
                                                    This proposed rule is not expected to                  Authority: 38 U.S.C. 501, and as noted in            the following criteria:
                                                 be subject to the requirements of                       specific sections.
                                                                                                                                                                   (i) Is licensed or certified by a State
                                                 EO13771 because this proposed rule is                   *       *    *      *    *                             to provide the medical services and
                                                 expected to result in no more than de                   ■   2. Revise § 17.270 to read as follows:             supplies; or
                                                 minimis costs.
                                                                                                         § 17.270 General provisions and                           (ii) Where a State does not offer
                                                 Unfunded Mandates                                       definitions.                                           licensure or certification, is otherwise
                                                                                                           (a) Overview of CHAMPVA.                             certified by an appropriate national or
                                                    The Unfunded Mandates Reform Act                                                                            professional association that sets
                                                 of 1995 requires, at 2 U.S.C. 1532, that                CHAMPVA is the Civilian Health and
                                                                                                         Medical Program of the Department of                   standards for the specific medical
                                                 agencies prepare an assessment of                                                                              provider.
                                                 anticipated costs and benefits before                   Veterans Affairs (VA). Generally,
                                                                                                         CHAMPVA furnishes medical care in                         Calendar year means January 1
                                                 issuing any rule that may result in the                                                                        through December 31.
                                                 expenditure by State, local, or tribal                  the same or similar manner, and subject
                                                                                                         to the same or similar limitations, as                    CHAMPVA beneficiary means a
                                                 governments, in the aggregate, or by the                                                                       person enrolled under § 17.271.
                                                 private sector, of $100 million or more                 medical care furnished to certain
                                                                                                         dependents and survivors of active duty                   CHAMPVA-covered services and
                                                 (adjusted annually for inflation) in any                                                                       supplies mean those medical services
                                                 one year. This proposed rule would                      and retired members of the Armed
                                                                                                         Forces under chapter 55 of title 10,                   and supplies that are medically
                                                 have no such effect on State, local, or                                                                        necessary and appropriate for the
                                                 tribal governments, or on the private                   United States Code (CHAMPUS),
                                                                                                         commonly referred to as the TRICARE                    treatment of a condition and that are not
                                                 sector.                                                                                                        specifically excluded under
                                                                                                         Standard plan. Under CHAMPVA, VA
                                                 Catalog of Federal Domestic Assistance                  shares the cost of medically necessary                 § 17.272(a)(1) through (84).
                                                                                                         services and supplies with eligible                       CHAMPVA determined allowable
                                                   The Catalog of Federal Domestic                                                                              amount has the meaning set forth in
                                                                                                         beneficiaries within the 50 United
                                                 Assistance numbers and titles for the                                                                          § 17.272(b)(1).
                                                                                                         States, the District of Columbia, the U.S.
                                                 programs affected by this document are                                                                            CHAMPVA In-house Treatment
                                                                                                         territories, and abroad. Under
                                                 64.009, Veterans Medical Care Benefits;                                                                        Initiative (CITI) means the initiative
                                                                                                         CHAMPVA, medical services and
                                                 64.010, Veterans Nursing Home Care;                                                                            under 38 U.S.C. 1781(b) under which
                                                                                                         supplies may be provided as follows:
                                                 and 64.011, Veterans Dental Care;                         (1) By an authorized non-VA                          participating VA medical facilities
                                                 64.012, Veterans Prescription Service;                  provider.                                              provide medical services and supplies
                                                 64.013, Veterans Prosthetic Appliances;                   (2) By a VA provider at a VA facility,               to CHAMPVA beneficiaries who are not
                                                 and 64.019, Veterans Rehabilitation                     on a resource-available basis through                  also eligible for Medicare, subject to
                                                 Alcohol and Drug Dependence.                            the CHAMPVA In-house Treatment                         availability of space and resources.
                                                 Signing Authority                                       Initiative (CITI) only to CHAMPVA                         Child has the definition established in
                                                                                                         beneficiaries who are not also eligible                38 U.S.C. 101.
                                                   The Secretary of Veterans Affairs, or                 for Medicare.                                             Claim means a request by an
                                                 designee, approved this document and                      (3) Through VA Medications by Mail                   authorized non-VA provider or by a
                                                 authorized the undersigned to sign and                  (MbM).                                                 CHAMPVA beneficiary for payment or
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                                                 submit the document to the Office of the                  (i) Only CHAMPVA beneficiaries who                   reimbursement for medical services and
                                                 Federal Register for publication                        do not have any other type of health                   supplies provided to a CHAMPVA
                                                 electronically as an official document of               insurance that pays for prescriptions,                 beneficiary.
                                                 the Department of Veterans Affairs. Gina                including Medicare Part D, may use                        Fiscal year means October 1 through
                                                 S. Farrisee, Deputy Chief of Staff,                     MbM.                                                   September 30.
                                                 Department of Veterans Affairs,                           (ii) Smoking cessation pharmaceutical                   Medications by Mail (MbM) means the
                                                 approved this document on October 2,                    supplies will only be provided through                 initiative under which VA provides
                                                 2017, for publication.                                  MbM and only to CHAMPVA                                outpatient prescription medications


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                             2409

                                                 through the mail to CHAMPVA                             services under a health-plan contract (as              joint disorder (TMD). Authorization is
                                                 beneficiaries.                                          defined in 38 U.S.C. 1725(f)(2)); and                  limited to initial imaging such as
                                                    Other health insurance (OHI) means                   *     *    *     *    *                                radiographs, Computed Tomography, or
                                                 health insurance plans or programs                                                                             Magnetic Resonance Imaging; up to four
                                                                                                         (Authority: 38 U.S.C. 501, 1720G(a)(7)(A),
                                                 (including Medicare) or third-party                     1781)
                                                                                                                                                                office visits; and the construction of an
                                                 coverage that provide coverage to a                                                                            occlusal splint.
                                                 CHAMPVA beneficiary for expenses                        *      *     *     *    *
                                                                                                         ■ 4. Amend § 17.272 by:                                *      *     *     *     *
                                                 incurred for medical services and                                                                                 (30) Preventive care (such as
                                                                                                         ■ a. Revising paragraph (a)(2).
                                                 supplies.                                                                                                      employment-requested physical
                                                                                                         ■ b. In paragraph (a)(3) introductory
                                                    Payer refers to OHI, as defined in this              text, removing the phrase ‘‘(Medicaid                  examinations and routine screening
                                                 section, that is obligated to pay for                   excluded)’’.                                           procedures). The following exceptions
                                                 CHAMPVA-covered medical services                        ■ c. Adding paragraphs (a)(3)(iii) and                 apply, including but not limited to:
                                                 and supplies. In a situation in which, in               (iv).                                                  *      *     *     *     *
                                                 addition to CHAMPVA, one or more                        ■ d. Revising paragraph (a)(21)(ix).                      (v) Cervical cancer screening.
                                                 payers is/are responsible to pay for such               ■ e. Removing paragraph (a)(26).                          (vi) Breast cancer screening.
                                                 services and supplies (i.e., a ‘‘double                 ■ f. Redesignating paragraphs (a)(27)                  *      *     *     *     *
                                                 coverage’’ situation), there would be a                 through (38) as paragraphs (a)(26)                        (xi) Colorectal cancer screening.
                                                 primary payer (i.e., the payer obligated                through (37), respectively.                               (xii) Prostate cancer screening.
                                                 to pay first), secondary payer (i.e., the               ■ g. In newly redesignated paragraph                      (xiii) Annual physical examination.
                                                 payer obligated to pay after the primary                (a)(30), revising the introductory text                   (xiv) Vaccinations/immunizations.
                                                 payer), etc. In double coverage                         and paragraphs (a)(30)(v) and (vi) and
                                                 situations, CHAMPVA would be the last                                                                          *      *     *     *     *
                                                                                                         adding paragraphs (a)(30)(xi) through                     (57) Unless a waiver for extended
                                                 payer.                                                  (xiv).
                                                    Service-connected has the definition                                                                        coverage is granted in advance:
                                                                                                         ■ h. Removing paragraph (a)(39).
                                                 established in 38 U.S.C. 101.                                                                                  Inpatient mental health services in
                                                                                                         ■ i. Redesignating paragraphs (a)(40)
                                                    Spouse refers to a person who is                                                                            excess of 30 days in any calendar year
                                                                                                         through (56) as paragraphs (a)(38)                     (or in an admission), in the case of a
                                                 married to a veteran and whose                          through (54), respectively.
                                                 marriage is valid as determined under                                                                          patient 19 years of age or older; 45 days
                                                                                                         ■ j. In newly redesiganted paragraph
                                                 38 U.S.C. 103(c).                                                                                              in any calendar year (or in an
                                                                                                         (a)(40)(iv), removing ‘‘(a)(42)(iii)(A)’’              admission), in the case of a patient
                                                    Surviving spouse refers to a person                  and adding in its place ‘‘(a)(40)(iii)(A).’’           under 19 years of age; or 150 days of
                                                 who was married to and is the                           ■ k. Removing paragraph (a)(57).
                                                                                                                                                                residential treatment care in any
                                                 widow(er) of a veteran as determined                    ■ l. Redesignating paragraphs (a)(58)
                                                                                                                                                                calendar year (or in an admission).
                                                 under 38 U.S.C. 103(c).                                 through (71) as paragraphs (a)(55)
                                                                                                                                                                   (58) Outpatient mental health services
                                                    (c) Discretionary authority. When it is              through (68), respectively.
                                                                                                                                                                in excess of 23 visits in a calendar year
                                                 determined to be in the best interest of                ■ m. Revising newly redesignated
                                                                                                                                                                unless a waiver for extended coverage is
                                                 VA, VA may waive any requirement in                     paragraphs (a)(57) through (59).
                                                                                                                                                                granted in advance.
                                                 §§ 17.270 through 17.278, except any                    ■ n. Removing paragraph (a)(72).
                                                                                                                                                                   (59) Institutional services for partial
                                                 requirement specifically set forth in 38                ■ o. Redesignating paragraphs (a)(73)
                                                                                                                                                                hospitalization in excess of 60 treatment
                                                 U.S.C. 1781, or otherwise imposed by                    through (86) as paragraphs (a)(69)
                                                                                                                                                                days in any calendar year (or in an
                                                 statute. It is VA’s intent that such                    through (82), respectively.
                                                                                                                                                                admission) unless a waiver for extended
                                                 discretionary authority would be used                   ■ p. Revising newly redesignated
                                                                                                                                                                coverage is granted in advance.
                                                 only under very unusual and limited                     paragraph (a)(76).
                                                 circumstances and not to deny any                       ■ q. Adding paragraphs (a)(83) and (84).               *      *     *     *     *
                                                 individual any right, benefit, or                       ■ r. Revising paragraph (b).                              (76) Over-the-counter products except
                                                 privilege provided to him or her by                        The revisions and additions read as                 for pharmaceutical smoking cessation
                                                 statute or these regulations. Any such                  follows:                                               supplies that are approved by the U.S.
                                                 waiver shall apply only to the                                                                                 Food and Drug Administration,
                                                                                                         § 17.272    Benefits limitations/exclusions.           prescribed, and provided through MbM,
                                                 individual circumstance or case
                                                 involved and will in no way be                             (a) * * *                                           and insulin and related diabetic testing
                                                 construed to be precedent-setting.                         (2) Services and supplies required as               supplies and syringes.
                                                                                                         a result of an occupational disease or                 *      *     *     *     *
                                                 (Authority: 38 U.S.C. 501, 1781)
                                                                                                         injury for which benefits are payable                     (83) Medications not approved by the
                                                 ■ 3. Amend § 17.271 by:                                 under workers’ compensation or similar                 U.S. Food and Drug Administration
                                                 ■ a. Removing the word ‘‘and’’ at the                   protection plan (whether or not such                   (FDA), excluding FDA exceptions to the
                                                 end of paragraph (a)(3).                                benefits have been applied for or paid)                approval requirement.
                                                 ■ b. Redesignating paragraph (a)(4) as                  except when such benefits are                             (84) Services and supplies related to
                                                 paragraph (a)(5).                                       exhausted and the services and supplies                the treatment of dyslexia.
                                                 ■ c. Adding a new paragraph (a)(4).                     are otherwise not excluded from                           (b) Costs of services and supplies to
                                                 ■ d. Revising the authority citation                    CHAMPVA coverage.                                      the extent such amounts are billed over
                                                 following paragraph (a).                                   (3) * * *                                           the CHAMPVA determined allowable
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                                                   The addition and revision read as                        (iii) Indian Health Service.                        amount are specifically excluded from
                                                 follows:                                                   (iv) CHAMPVA supplemental                           coverage.
                                                                                                         policies.                                                 (1) The CHAMPVA determined
                                                 § 17.271   Eligibility.                                 *       *    *    *     *                              allowable amount is the maximum level
                                                   (a) * * *                                                (21) * * *                                          of payment by CHAMPVA to an
                                                   (4) An individual designated as a                        (ix) Treatment for stabilization of                 authorized non-VA provider for the
                                                 Primary Family Caregiver, under 38 CFR                  myofascial pain dysfunction syndrome,                  provision of CHAMPVA-covered
                                                 71.25(f), who is not entitled to care or                also referred to as temporomandibular                  services and supplies to a CHAMPVA


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                                                 2410                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 beneficiary. The CHAMPVA determined                     § 17.274    Cost sharing.                              medical services and supplies, are not
                                                 allowable amount is determined before                      (a) Cost sharing generally. CHAMPVA                 credited toward the catastrophic cap
                                                 consideration of cost sharing and the                   is a cost sharing program in which the                 calculation.
                                                 application of deductibles or OHI.                      cost of covered services is shared with                   (d) Non-payment. * * *
                                                    (2) A Medicare-participating hospital                the CHAMPVA beneficiary. CHAMPVA                          (e) Cost share calculation. The
                                                 must accept the CHAMPVA determined                      pays the CHAMPVA determined                            CHAMPVA beneficiary’s cost-share
                                                 allowable amount for inpatient services                 allowable amount less the CHAMPVA                      amount, if not waived under paragraph
                                                 provided to a CHAMPVA beneficiary as                    deductible, if applicable, and less the                (a)(1) of this section, is 25 percent of the
                                                 payment in full. See 42 CFR 489.25.                     CHAMPVA beneficiary cost share.                        CHAMPVA determined allowable
                                                    (3) An authorized non-VA provider                       (1) CHAMPVA beneficiary cost-share                  amount in excess of the annual calendar
                                                 who accepts responsibility for the care                 requirements do not apply to the                       year deductible (see § 17.275 for
                                                 of a CHAMPVA beneficiary thereby                        following:                                             procedures related to the calculation of
                                                 agrees to accept the CHAMPVA                               (i) Supplies provided through VA                    the allowable amount for CHAMPVA-
                                                 determined allowable amount as full                     MbM.                                                   covered services and supplies), except
                                                 payment for services and supplies                          (ii) Any medical services and supplies              for the following:
                                                 rendered to the beneficiary (i.e.,                      provided to a CHAMPVA beneficiary                         (1) For inpatient services subject to
                                                 accepted assignment). The provider’s                    through CITI.                                          the CHAMPVA Diagnosis Related Group
                                                 acceptance of the CHAMPVA                                  (iii) The following services, even if               (DRG) payment system, the cost share is
                                                 determined allowable amount                             not provided through CITI:                             the lesser of:
                                                 extinguishes the beneficiary’s payment                     (A) Colorectal cancer screening.                       (i) The per diem rate multiplied by
                                                 liability to the provider. Any attempts to                 (B) Breast cancer screening.                        the number of inpatient days;
                                                 collect any additional amount from the                     (C) Cervical cancer screening.                         (ii) 25 percent of the hospital’s billed
                                                 CHAMPVA beneficiary may result in                          (D) Prostate cancer screening.                      amount; or
                                                 the provider being excluded from                           (E) Annual physical exams.                             (iii) The base CHAMPVA DRG rate.
                                                 Federal benefits programs. See 42 CFR                      (F) Vaccinations/immunizations.                        (2) For inpatient mental health low
                                                                                                            (G) Well child care from birth to age               volume hospitals and units (less than 25
                                                 1003.105.
                                                                                                         six, as described in § 17.272(a)(30)(i).               mental health discharges per federal
                                                 *      *     *     *    *                                  (iv) Hospice services.                              fiscal year), the cost share is the lesser
                                                 ■ 5. Amend § 17.273 by:                                    (v) Or other services as determined by              of:
                                                 ■ a. Revising the introductory text and                 the Secretary of Veterans Affairs.                        (i) The fixed per diem rate multiplied
                                                 paragraph (d).                                             (2) [Reserved]                                      by the number of inpatient days; or
                                                 ■ b. Removing paragraph (e).                               (b) Deductibles. In addition to the                    (ii) 25 percent of the hospital’s billed
                                                 ■ c. Redesignating paragraph (f) as                     CHAMPVA beneficiary cost share, an                     charges.
                                                 paragraph (e).                                          annual (calendar year) outpatient
                                                                                                                                                                *       *    *     *     *
                                                 ■ d. Adding new paragraph (f).                          deductible requirement ($50 per
                                                    The revisions and addition read as                   beneficiary or $100 per family) must be                §§ 17.275 through 17.278 [Redesignated as
                                                 follows:                                                satisfied prior to VA payment of                       §§ 17.276 through 17.279]
                                                                                                         outpatient benefits. The deductible                    ■ 7. Redesignate §§ 17.275 through
                                                 § 17.273   Preauthorization.                            requirement is waived for:                             17.278 as §§ 17.276 through 17.279.
                                                    Preauthorization or advance approval                    (1) CHAMPVA-covered services and                    ■ 8. Add new § 17.275 to read as
                                                 is required for any of the following,                   supplies provided through VA MbM or                    follows:
                                                 except when the benefit is covered by                   through CITI.
                                                 the CHAMPVA beneficiary’s other                            (2) Inpatient services.                             § 17.275 CHAMPVA determined allowable
                                                 health insurance (OHI):                                    (3) Preventive services listed in                   amount calculation.
                                                 *      *      *    *    *                               paragraph (a)(1)(iii) of this section.                   CHAMPVA calculates the allowable
                                                    (d) Dental care. For limitations on                     (4) Hospice services.                               amount in the following ways, for the
                                                 dental care, see § 17.272(a)(21)(i)                        (5) Or other services as determined by              following covered services and supplies:
                                                 through (xii).                                          the Secretary of Veterans Affairs.                       (a) Inpatient hospital services (non-
                                                                                                            (c) Cost sharing limitations. To                    mental health). Unless exempt or
                                                 *      *      *    *    *                               provide financial protection against the               subject to a methodology under
                                                    (f) CHAMPVA will perform a                           impact of a long-term illness or injury,               paragraph (b) or (c) of this section,
                                                 retrospective medical necessity review                  there is a $3,000 calendar year limit or               inpatient hospital services provided in
                                                 during the coordination of benefits                     ‘‘catastrophic cap’’ per CHAMPVA                       the 50 States, the District of Columbia,
                                                 process if:                                             eligible family on the CHAMPVA                         and Puerto Rico are subject to the
                                                    (1) It is determined that CHAMPVA is                 beneficiary’s out-of-pocket costs for                  CHAMPVA Diagnosis Related Group
                                                 the responsible payer for services and                  allowable services and supplies. After a               (DRG)-based reimbursement
                                                 supplies but CHAMPVA                                    family has paid $3,000 in out-of-pocket                methodology. Under the CHAMPVA
                                                 preauthorization was not obtained prior                 costs, to include both cost share and                  DRG-based payment system, hospitals
                                                 to delivery of the services or supplies;                deductible amounts, in a calendar year,                are paid a predetermined amount per
                                                 and,                                                    CHAMPVA will pay the full allowable                    discharge for inpatient hospital services,
                                                    (2) The claim for payment is filed                   amounts for the remaining CHAMPVA-                     which will not exceed the billed
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                                                 within the appropriate one-year period.                 covered services and supplies through                  amount. Certain inpatient services will
                                                 *      *      *    *    *                               the end of that calendar year. Credits to              be reimbursed under the CHAMPVA
                                                 ■ 6. Amend § 17.274 by:                                 the annual catastrophic cap are limited                Cost-to-Charge (CTC) reimbursement
                                                 ■ a. Revising paragraphs (a), (b), and (c).             to the applied annual deductible(s) and                methodology.
                                                 ■ b. Adding a heading for paragraph (d).                the CHAMPVA beneficiary cost-share                       (b) Inpatient hospital services (mental
                                                 ■ c. Adding paragraph (e).                              amount. Costs above the CHAMPVA                        health). The CHAMPVA inpatient
                                                    The revisions and additions read as                  determined allowable amount, as well                   mental health per diem reimbursement
                                                 follows:                                                as costs associated with non-covered                   methodology is used to calculate


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                                                                      Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules                                              2411

                                                 reimbursement for inpatient mental                         (e) Outpatient and inpatient non-                      (k) Home health care (intermittent or
                                                 health hospital care in specialty                       hospital services. Payments to                         part-time). CHAMPVA home health care
                                                 psychiatric hospitals and psychiatric                   individual authorized non-VA providers                 reimbursement methodology, based on
                                                 units of general acute hospitals that are               (not hospitals) for CHAMPVA-covered                    Medicare’s home health prospective
                                                 exempt from the CHAMPVA DRG-based                       medical services and supplies provided                 payment system, uses a fixed case-mix
                                                 payment system. The per diem rate is                    on an outpatient or inpatient basis,                   and wage-adjusted national 60-day
                                                 calculated by multiplying the daily rate                including but not limited to, anesthesia               episode payment amount to act as
                                                 by the number of days (length of stay).                 services, laboratory services, and other               payment in full for costs associated with
                                                 The daily rate is updated each fiscal                   professional fees associated with                      furnishing home health services with
                                                 year for both high volume hospitals (25                 individual authorized non-VA                           exceptions allowing for additional
                                                 or more discharges per fiscal year) and                 providers, are reimbursed based on the                 payment to be established.
                                                 low volume hospitals (fewer than 25                     lesser of:                                                (l) Ambulatory surgery. The
                                                 discharges per fiscal year).                               (1) The CHAMPVA Maximum                             CHAMPVA reimbursement
                                                    (c) Other inpatient hospital services.               Allowable Charge;                                      methodology for facility charges
                                                 (1) The CHAMPVA CTC reimbursement                          (2) The prevailing amount, which is                 associated with procedures performed
                                                 methodology is used to calculate                        the amount equal to the maximum                        in a freestanding ambulatory surgery
                                                 reimbursement for inpatient care                        reasonable amount allowed providers                    center is based on a prospectively
                                                 furnished by hospitals or facilities that               for a specific procedure in a specific                 determined amount, similar to that used
                                                 are exempt from either of the                           locality; or,                                          by TRICARE. These facility charges do
                                                 methodologies in paragraph (a) or (b) of                   (3) The billed amount.                              not include physician fees,
                                                 this section. Such hospitals or facilities                 (f) Pharmacy services and supplies.                 anesthesiologist fees, or fees of other
                                                 will be paid at the CHAMPVA CTC ratio                   The CHAMPVA pharmacy services and                      authorized non-VA providers; such
                                                 times the billed charges that are                       supplies payment methodology is based                  independent professional fees must be
                                                 customary and not in excess of rates or                 on specific CHAMPVA pharmacy points                    submitted separately from facility fees
                                                 fees the hospital or facility charges the               of service, which dictate the amounts                  and are calculated under the
                                                 general public for similar services in a                paid by VA. VA pays:                                   methodology in paragraph (e) of this
                                                 community.                                                 (1) For services and supplies obtained              section.
                                                    (2) The following hospitals and                      from a retail in-network pharmacy, the                    (m) CHAMPVA-covered medical
                                                 services are subject to the CHAMPVA                     lesser of the billed amount or the                     services and supplies provided outside
                                                 CTC payment methodology:                                contracted rate; or                                    the United States. VA shall determine
                                                    (i) Any hospital that qualifies as a                    (2) For supplies obtained from a retail             the appropriate reimbursement
                                                 cancer hospital under Medicare                          out-of-network pharmacy, the lesser of                 method(s) for CHAMPVA-covered
                                                 standards and has elected to be exempt                  the billed amount plus a dispensing fee                medical services and supplies provided
                                                 from the Centers for Medicare and                       or the average wholesale price plus a                  by authorized non-VA providers outside
                                                 Medicaid Services (CMS) prospective                     dispensing fee.                                        the United States.
                                                 payment system.                                            (g) Skilled Nursing Facility (SNF)                     (n) Sole Community Hospitals. The
                                                    (ii) Christian Science sanatoriums.                  care. The CHAMPVA SNF                                  CHAMPVA reimbursement
                                                    (iii) Critical Access Hospitals.                     reimbursement methodology is based on                  methodology for inpatient services
                                                    (iv) Any hospital outside the 50                     the CMS prospective payment system                     provided in a Sole Community Hospital
                                                 States, the District of Columbia, or                    for SNFs under 42 CFR part 413, subpart                (SCH) will be the greater of: The
                                                 Puerto Rico.                                            J (Medicare Resource Utilization Group                 allowable amount determined by
                                                    (v) Hospitals within hospitals.                      (RUG) rates).                                          multiplying the billed charges by the
                                                    (vi) Long-term care hospitals.                          (h) Durable medical equipment,
                                                                                                                                                                SCH’s most recently available cost-to-
                                                    (vii) Non-Medicare participating                     prosthetics, orthotics, and supplies
                                                                                                                                                                charge ratio from the CMS Inpatient
                                                 hospitals.                                              (DMEPOS). The CHAMPVA DMEPOS
                                                                                                                                                                Provider Specific File or the DRG
                                                    (viii) Non-VA Federal Health Care                    reimbursement methodology is based on
                                                                                                                                                                reimbursement rate.
                                                 Facilities (e.g., military treatment                    the same amounts established under the
                                                 facilities, Indian Health Service).                     CMS DMEPOS fee schedule under 42                       (Authority: 38 U.S.C. 501, 1781)
                                                    (ix) Rehabilitation hospitals.                       CFR part 414, subpart D. The                           ■ 9. Amend newly redesignated
                                                    (x) Hospital or hospital-based services              CHAMPVA determined allowable                           § 17.276 by:
                                                 subject to State waiver in any State that               amount for DMEPOS is the amount in                     ■ b. Revising paragraphs (a)
                                                 has implemented a separate DRG-based                    effect in the specific geographic location             introductory text and (b).
                                                 payment system or similar payment                       at the time CHAMPVA-covered medical                    ■ c. Adding paragraphs (c) and (d).
                                                 system in order to control costs.                       services and supplies are provided to a                  The revisions and additions read as
                                                    (xi) Hospitals and services as                       CHAMPVA beneficiary.                                   follows:
                                                 determined by the Secretary of Veterans                    (i) Ambulance services. CHAMPVA
                                                 Affairs.                                                adopts Medicare’s Ambulance Fee                        § 17.276   Claim-filing deadlines.
                                                    (d) Outpatient hospital services. The                Schedule (AFS) for ambulance services,                   (a) Unless an exception is granted
                                                 CHAMPVA outpatient prospective                          with the exception of services furnished               under paragraph (b) of this section,
                                                 payment system (OPPS) is used to                        by a Critical Access Hospital (CAH).                   claims for medical services and supplies
                                                 calculate the allowable amount for                      Ambulance services are paid based on                   must be filed no later than:
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                                                 outpatient services provided in                         the lesser of the Medicare AFS or the                  *     *     *     *      *
                                                 hospitals subject to Medicare OPPS.                     billed amount. Ambulance services                        (b) Requests for an exception to the
                                                 This will include the utilization of                    provided by a CAH are paid on the same                 claim filing deadline must be submitted
                                                 TRICARE’s reimbursement methodology                     bases as the CTC method under                          in writing and include a complete
                                                 to include specific coding requirements,                paragraph (c) of this section.                         explanation of the circumstances
                                                 ambulatory payment classifications                         (j) Hospice care. CHAMPVA hospice                   resulting in late filing along with all
                                                 (APCs), nationally established APC                      reimbursement methodology uses                         available supporting documentation.
                                                 amounts, and associated adjustments.                    Medicare per diem hospice rates.                       Each request for an exception to the


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                                                 2412                 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules

                                                 claim filing deadline will be reviewed                  reviewing the claim and any relevant                   are due on or before March 5, 2018. If
                                                 individually and considered on its own                  supporting documentation, VA will                      you anticipate that you will be
                                                 merit. VA may grant exceptions to the                   issue a written determination to the                   submitting comments, but find it
                                                 requirements in paragraph (a) of this                   claimant that affirms, reverses, or                    difficult to do so within the period of
                                                 section if it determines that there was                 modifies the previous decision. The                    time allowed by this document, you
                                                 good cause for missing the filing                       decision of VA with respect to benefit                 should advise the contact listed below
                                                 deadline. For example, when dual                        coverage and computation of benefits is                as soon as possible.
                                                 coverage exists, CHAMPVA payment, if                    final. When a CHAMPVA beneficiary                      Federal Communications Commission.
                                                 any, cannot be determined until after                   has other health insurance (OHI), an                   Katura Jackson,
                                                 the primary insurance carrier has                       appeal must first be filed with the OHI,
                                                                                                                                                                Federal Register Liaison Officer.
                                                 adjudicated the claim. In such                          and a determination made, before
                                                 circumstances an exception may be                                                                              [FR Doc. 2018–00451 Filed 1–16–18; 8:45 am]
                                                                                                         submitting the appeal to CHAMPVA
                                                 granted provided that the delay on the                  with limited exceptions such as if the                 BILLING CODE 6712–01–P
                                                 part of the primary insurance carrier is                OHI deems the issue non-appealable.
                                                 not attributable to the beneficiary.                    Denial of CHAMPVA benefits based on
                                                 Delays due to provider billing                          legal eligibility requirements may be                  DEPARTMENT OF COMMERCE
                                                 procedures do not constitute a valid                    appealed to the Board of Veterans’
                                                 basis for an exception.                                 Appeals in accordance with 38 CFR part                 National Oceanic and Atmospheric
                                                    (c) Claims for CHAMPVA-covered                       20. Medical determinations are not                     Administration
                                                 services and supplies provided before                   appealable to the Board. 38 CFR 20.101.
                                                 the date of the event that qualifies an                                                                        50 CFR Part 300
                                                                                                         (Authority: 38 U.S.C. 501, 1781)
                                                 individual under § 17.271 are not                                                                              [Docket No. 161228999–7867–01]
                                                 reimbursable.                                           ■ 11. Revise newly redesignated
                                                    (d) CHAMPVA is the last payer to                     § 17.278 to read as follows:                           RIN 0648–BG51
                                                 OHI, as that term is defined in
                                                                                                         § 17.278    Medical care cost recovery.                Commerce Trusted Trader Program
                                                 § 17.270(b). CHAMPVA benefits will
                                                 generally not be paid until the claim has                 VA will actively pursue medical care
                                                                                                         cost recovery in accordance with                       AGENCY:  National Marine Fisheries
                                                 been filed with the OHI and the OHI has                                                                        Service (NMFS), National Oceanic and
                                                 issued a final payment determination or                 applicable law.
                                                                                                                                                                Atmospheric Administration (NOAA),
                                                 explanation of benefits. CHAMPVA is                     (Authority: 42 U.S.C. 2651; 38 U.S.C. 501,             Commerce.
                                                 secondary payer to Medicare per the                     1781)
                                                                                                                                                                ACTION: Proposed rule; request for
                                                 terms of § 17.271(b).                                   [FR Doc. 2018–00332 Filed 1–16–18; 8:45 am]
                                                                                                                                                                comments.
                                                 *      *     *     *    *                               BILLING CODE 8320–01–P
                                                 ■ 10. Revise newly redesignated                                                                                SUMMARY:    The National Marine
                                                 § 17.277 to read as follows:                                                                                   Fisheries Service is proposing this
                                                 § 17.277   Appeals.                                     FEDERAL COMMUNICATIONS                                 Commerce Trusted Trader Program
                                                                                                         COMMISSION                                             (CTTP) as part of an effective seafood
                                                    Notice of the initial determination
                                                                                                                                                                traceability process to combat Illegal,
                                                 regarding payment of CHAMPVA                            47 CFR Part 54                                         Unreported, and Unregulated (IUU)
                                                 benefits will be provided to the
                                                                                                         [WC Docket No. 17–310; FCC 17–164]                     fishing and seafood fraud. The
                                                 CHAMPVA beneficiary on a CHAMPVA
                                                                                                                                                                voluntary CTTP supplements the
                                                 Explanation of Benefits (EOB) form. The
                                                                                                         Promoting Telehealth in Rural                          Seafood Import Monitoring Program
                                                 EOB form is generated by the
                                                                                                         America; Correction                                    (SIMP), recently implemented under the
                                                 CHAMPVA automated payment
                                                                                                                                                                Magnuson-Stevens Fishery
                                                 processing system. If a CHAMPVA                         AGENCY: Federal Communications                         Conservation and Management Act.
                                                 beneficiary or provider disagrees with                  Commission.                                            Qualified importers who choose to
                                                 the determination concerning                            ACTION: Notice; correction.
                                                 CHAMPVA-covered services and                                                                                   participate in the CTTP would benefit
                                                 supplies or calculation of benefits, he or              SUMMARY:   The Federal Communications                  from reduced reporting and
                                                 she may request reconsideration. Such                   Commission (Commission) published a                    recordkeeping requirements, and
                                                 requests must be submitted to VA in                     document in the Federal Register of                    streamlined entry into U.S. commerce
                                                 writing within one year of the date of                  January 3, 2018 seeking comment on                     for seafood imports subject to the SIMP.
                                                 the initial determination. The request                  how to strengthen the Rural Health Care                DATES: Written comments must be
                                                 must state why the CHAMPVA claimant                     Program and improve access to                          received by March 19, 2018.
                                                 believes the decision is in error and                   telehealth in rural America. The                       ADDRESSES: Written comments on this
                                                 must include any new and relevant                       document contained an incorrect reply                  action, identified by NOAA–NMFS–
                                                 information not previously considered.                  comment date.                                          2016–0165, may be submitted by either
                                                 Any request for reconsideration that                    FOR FURTHER INFORMATION CONTACT:                       of the following methods:
                                                 does not identify the reason for dispute                Radhika Karmarkar, Wireline                               • Federal eRulemaking Portal: Go to
                                                 will be returned to the claimant without                Competition Bureau, (202) 418–7400 or                  http://www.regulations.gov/#!
                                                 further consideration. After reviewing                  TTY: (202) 418–0484.                                   docketDetail;D=NOAA-NMFS-2016-
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                                                 the claim and any relevant supporting                                                                          0165, click the ‘‘Comment Now!’’ icon,
                                                 documentation, VA will issue a written                  Correction                                             complete the required fields, and enter
                                                 determination to the claimant that                        In the Federal Register of January 3,                or attach your comments.
                                                 affirms, reverses, or modifies the                      2018, in FR Doc. 2017–28298, on page                      • Mail: Melissa Beaudry, Office of
                                                 previous decision. If the claimant is still             303, in the first column, correct the                  International Affairs and Seafood
                                                 dissatisfied, within 90 days of the date                DATES caption to read:                                 Inspection, NOAA Fisheries, 1315 East-
                                                 of the decision he or she may make a                    DATES: Comments are due on or before                   West Highway, Silver Spring, MD
                                                 written request for review by VA. After                 February 2, 2018, and reply comments                   20910.


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Document Created: 2018-10-26 09:55:24
Document Modified: 2018-10-26 09:55:24
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesWritten comments must be received on or before March 19, 2018.
ContactJoseph Duran, Director, Policy and Planning, Office of Community Care (OCC), 3773 Cherry Creek North Drive, Denver, Colorado 80209, [email protected], (303) 370-1637. (This is not a toll-free number.)
FR Citation83 FR 2396 
RIN Number2900-AP02
CFR AssociatedAdministrative Practice and Procedure; Archives and Records; Claims; Dental Health; Drug Abuse; Health Care; Health Facilities; Health Professions; Health Records; Medical Devices; Mental Health Programs; Nursing Homes and Veterans

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