[Federal Register Volume 64, Number 29 (Friday, February 12, 1999)]
[Rules and Regulations]
[Pages 7084-7089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3441]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[DoD 6010.8-R]
RIN 0720-AA30


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); Individual Case Management

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

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SUMMARY: This final rule implements provisions of the 1993 National 
Defense Authorization Act which allows the Secretary of Defense to 
establish a case management program for CHAMPUS beneficiaries with 
extraordinary medical or psychological disorders and to allow such 
beneficiaries medical or psychological services, supplies, or durable 
medical equipment excluded by law or regulation as a TRICARE/CHAMPUS 
benefit. Under this program, waiver of benefit limits or exclusions to 
the basic TRICARE/CHAMPUS program may be authorized for beneficiaries 
when the provision of such services or supplies is cost effective and 
clinically appropriate, as compared to historical or projected TRICARE/
CHAMPUS utilization of health care services. Such waivers will also 
provide families in crisis time for transition to other sources of 
support when TRICARE/CHAMPUS benefits have been exhausted. This case 
management program is designed to provide a cost-effective plan of care 
by targeting appropriate resources to meet the individual needs of the 
beneficiary.

DATED: March 15, 1999.

FOR FURTHER INFORMATION CONTACT: CDR Tracy Malone, TRICARE Management 
Activity, (703) 681-1745.

SUPPLEMENTARY INFORMATION: The Civilian Health and Medical Program of 
the Uniformed Services (CHAMPUS) supplements the availability of health 
care in military hospitals and clinics.

Statutory Authority

    The case management program is based on the authority of 10 U.S.C. 
1079(a)(17), which provides:

    The Secretary of Defense may establish a program for the 
individual case management of a person covered by this section or 
section 1086 of this title who has extraordinary medical or 
psychological disorders and, under such a program, may waive benefit 
limitations contained in paragraph (5) and (13) of this subsection 
or section 1077(b)(1) of this title and authorize the payment for 
comprehensive home health care services, supplies, and equipment if 
the Secretary determines that such a waiver is cost effective and 
appropriate.

Statutory and Legislative History

    This provision was enacted in 1992 by Congress as section 704 of 
the National Defense Authorization Act for Fiscal Year 1993, Pub. L. 
102-484, Oct. 23, 1992. It is substantively identical to a provision 
recommended by the Department of Defense in a report to Congress 
submitted a few months earlier by the Assistant Secretary of Defense 
(Health Affairs) and entitled, ``Report to Congress: Comprehensive Home 
Health Care as a CHAMPUS Benefit.'' The 1992 Report to Congress and 
statutory

[[Page 7085]]

enactment were the outgrowth of a series of legislative provisions 
dating back to 1985, when Congress directed the Department of Defense 
to ``conduct a pilot test project of providing home health care'' to 
certain CHAMPUS beneficiaries. Department of Defense Appropriations 
Act, 1986, PUb. L. 99-190, Section 8084. A similar provision was 
enacted a year later. Department of Defense Appropriations Act, 1987, 
Pub. L. 99-591, Section 9074.
    In 1987, Congress directed the Department of Defense to establish a 
second, expanded demonstration project. The statute required DoD to 
``conduct an expanded pilot project of providing home Health care as 
part of an individualized case-managed range of benefits that may 
reasonably deviate from otherwise payable types, amounts and levels of 
care'' for patients ``with exceptionally serious, long-range, costly 
and incapacitating physical or mental conditions.'' Department of 
Defense Appropriations Act, 1988, Pub. L. 100-202, Section 8071. A 
similar provision was enacted the following year. Department of Defense 
Appropriations act, 1989, Pub. L. 100-463, Section 8058. Based on these 
two demonstration projects, in 1991, the House and Senate 
Appropriations Committees directed the Department of Defense to 
investigate the possibility of including comprehensive home health care 
as a CHAMPUS benefit and report to Congress on its findings. H. Rept. 
No. 102-95, p. 89; S. Rept. No. 102-154, p. 37. The resulting report to 
Congress led to enactment of section 1079(a)(17), which is being 
implemented by this final rule.
    In enacting this provision, Congress took another major step to 
direct and allow DoD to, in the words of the previous statute, 
``reasonably deviate from'' the normal, restrictive statutory coverage 
for health services for patients with ``exceptionally serious, long-
range, costly and incapacitating'' conditions. Pub. L. 100-202, Section 
8071. A dominant statutory restriction affecting health care for such 
patients is the statutory exclusion of ``domiciliary or custodial 
care.'' 10 U.S.C. Section 1077(b)(1). This exclusion is made applicable 
to CHAMPUS by the introductory text of 10 U.S.C. Section 1079(a) and is 
implemented in its most important respect for CHAMPUS by regulations at 
32 CFR sections 199.2 and 199.4(e)(12).
    These regulations are well known and have been the subject of 
litigation from time to time in recent years, including a widely 
circulated, adverse District of Columbia Court of Appeals decision in 
1987. Barnett v. Weinberger, 818 F.2d 953 (D.C. Cir. 1987); see also 
Fiduk v. Montgomery, No. 3:96-CV-409 RM (N.D. Ind., Mar. 27, 1998). The 
regulations are also well known to Congress, which has moved to create 
reasonable exceptions to the statutory and regulatory exclusion of 
custodial care.
    This was, in fact, a primary reason Congress established the case 
management program by enacting section 1079(a)(17), and why the statute 
expressly authorizes a waiver of the custodial care exclusion section 
of 1077(b)(1) under the case management program when ``the Secretary 
determines that such a waiver is cost-effective and appropriate.'' This 
congressional purpose was explicitly stated in the explanation of the 
members of the Conference Committee that agreed to the final version of 
the section 1079(a)(17). The Conference Report explains:

    The conferees believe the case management program is the best 
approach to address the need of beneficiaries for whom regular 
CHAMPUS benefits are limited by the custodial care exclusion and 
other restrictions contained in the Law and CHAMPUS regulations.

H. Conf. Rept. 102-966, 102d Cong., 2d Sess., 719. The Department of 
Defense agrees with Congress that the case management program is the 
best approach to address the custodial care issue. Culminating a series 
of statutory enactments dating back to 1985, the case management 
program will allow CHAMPUS to assist beneficiaries who need long-term 
custodial care to transition to programs, which, unlike CHAMPUS, 
provide long-term custodial care. This was a principal objective of 
Congress in enacting the case management program and is a principal 
focus of the regulatory implementation of the program.

Case Management

    Case management is used in many TRICARE/CHAMPUS settings to 
organize acute and outpatient health care services. This final rule 
focuses specifically on the use of case management to address complex 
health care needs of catastrophically ill or injured beneficiaries, It 
offers a system for organizing multidisciplinary services often 
required for management of extraordinary medical or psychological 
disorders and provides a bridge between acute and long term care 
services generally excluded under TRICARE/CHAMPUS. It is designed to 
improve quality of care, control costs, and support patients and 
families through catastrophic medical events.
    The TRICARE/CHAMPUS individual case management program seeks to 
achieve cost effective quality health care by considering alternatives 
to current TRICARE/CHAMPUS benefit limitations or exclusions that, when 
provided, are cost effective and clinically appropriate. Section 199.4 
provides, as a case management related benefit, authority for services 
or supplies that would otherwise be excluded as non-medical or 
duplicate durable equipment, custodial care, or domiciliary care. 
Waivers of benefit limits will be approved and coordinated by case 
managers and may include, but are not limited to, services or supplies 
such as home healthcare, medical supplies, back-up durable medical 
equipment, extended skilled nursing care and home health aides. 
Services or supplies provided in the home by other than already 
recognized providers of care must fall under the auspices of a home 
health care agency which has been either authorized by Medicare or 
licensed by the State in which it operates. Providers of other services 
as a result of such waivers must be licensed or certified by the 
prevailing authority for that service. Section 199.2 revises the 
definition of ``treatment plan'' to include inpatient and outpatient 
care and adds definitions for waiver of benefit limits, case 
management, case manager, case management multidisciplinary team, 
extraordinary condition, and primary caregiver.

Eligibility

    Although participation in the TRICARE/CHAMPUS case management 
program is voluntary, certain conditions must exist for a beneficiary 
to be eligible for participation. These conditions are: (1) The 
presence of an extraordinary medical condition which has resulted in 
high utilization of TRICARE/CHAMPUS resources, (2) the cost 
effectiveness of providing the alternative services or supplies, (3) 
the willingness of the beneficiary to participate, and (4) a competent 
patient or the presence of a primary caregiver in the home when the 
services provided include home health care.

Custodial Care

    We expect patients and their families will require varying levels 
of support and time to stabilize following a catastrophic illness. Case 
managers will determine on a case-by-case basis the need and 
appropriate amount of time for temporary waivers to custodial care 
exclusions. Waivers to custodial care exclusions will be subject to a 
lifetime maximum of 365 days and must be cost effective when compared 
to available covered services. Such waivers are

[[Page 7086]]

designed to allow families sufficient opportunity for transition to 
alternative funding sources and services.

Prior Authorization

    Prior authorization from case managers will be required before the 
delivery of any case managed benefits. Because eligibility for a waiver 
of benefit limits/exclusions is based on an in depth assessment of 
medical needs, as well as the cost effectiveness and clinical 
appropriateness of alternate services, any services provided absent 
prior authorization will not be covered by TRICARE/CHAMPUS. 
Retrospective requests for coverage under this program will not be 
authorized.

Military Health System Resource Management

    To ensure cost efficient as well as cost-effective use of 
resources, the Department of Defense requires establishment of case 
management programs, as described in this rule, in all TRICARE/CHAMPUS 
managed care support contracts. Managed care support contractors will 
be authorized to make available case management services to Military 
Medical Treatment Facilities (MTFs). MTFs will be provided the 
opportunity to refer potential candidates to the appropriate TRICARE/
CHAMPUS case manager. Where possible, MTFs will provide care and 
services or supplies in support of regional case management programs.

Beneficiary Acknowledgment

    Case management is a collaborative process involving the case 
manager, beneficiary, primary caregiver, and professional health care 
providers. For case management to be successful, the beneficiary and 
primary caregiver must participate in the process and be aware of and 
agree with the requirements of the program. To document the 
understanding of their roles, rights and responsibilities, a standard 
acknowledgment, signed by the beneficiary (or representative) and the 
primary caregiver, will be required prior to the start of case 
management services.

Denial/Appeals Process

    Beneficiaries and/or providers who dispute a determination 
regarding medical appropriateness or necessity of proposed services or 
treatment under the case management program might appeal those 
decisions. The existing Appeal and Hearing Procedures outlined in 32 
CFR section 199.10 will be used for these cases.

CHAMPUS HHC/HHC-CM Demonstration

    The 1986 Home Health Care and 1988 Home Health Care-Case Management 
Demonstration projects were developed to test whether case management, 
coupled with home healthcare benefits, could reduce medical costs and 
improve services to CHAMPUS beneficiaries. Under the 1986 
demonstration, case management services were limited to beneficiaries 
who, in the absence of case managed home health care, would have 
remained hospitalized. The 1988 program was less restrictive and no 
longer required case management services only as a substitute for 
continued hospitalization. The General Accounting Office (GAO) 
addressed the effectiveness of methods for identifying potentially 
eligible beneficiaries and establishing the clinical appropriateness 
and cost-effectiveness of services provided. In its report, ``DEFENSE 
HEALTH CARE: Further Testing and Evaluation of Case Managed Home Care 
Is Needed,'' the GAO identified a need for stronger cost controls and 
improved targeting of potential candidates before implementation of a 
permanent case management program under CHAMPUS. With the GAO's 
recommendations and observations in mind, the Department is 
establishing this TRICARE/CHAMPUS case management program which 
provides clinically appropriate, cost effective alternatives to covered 
services, organizes complex or multidisciplinary services, and allows 
families a transition period to arrange for long term care not provided 
under TRICARE/CHAMPUS. The organized delivery of services for these 
patients is designed to improve continuity and quality of care, lower 
overall costs to the Department, and result in better quality of life.

Public Comments

    The proposed rule was published in the Federal Register Thursday, 
January 4, 1996, (61 FR 339). Significant effort has been undetaken in 
the ensuing months to resolve several difficult issues, primarily 
relating to long term care. Providing a reasonable safety net for 
beneficiaries who require custodial or long-term services continues to 
be a difficult challenge for the health care industry. With this 
management program, the Department is attempting to strike a delicate 
balance between its primary mission of medical readiness and 
appropriate support for medical system beneficiaries when they are most 
vulnerable.
    We received seven comment letters, all of which were from providers 
and provider associations. Several commentors were quite detailed, 
providing helpful insights and the benefit of many years' experience. 
We thank those who took the time to provide suggestions, many of which 
have been incorporated into this final rule. Significant items raised 
by commentors and our analysis of the comments are summarized below.

1. Access to Case Management Benefits

    Several commentors expressed concern that the proposed rule limited 
case management services to catastrophically ill or injured patients 
and placed undue emphasis on the use of inpatient acute services as a 
prerequisite for this program. They point out that case management is 
widely used in private sector health plans to enhance the cost 
effective delivery of quality care for a wide range of patients, not 
just those facing catastrophic events. We are aware that case 
management has many applications, some of which are already required 
and used by the Department in both military medical treatment 
facilities and by TRICARE Managed Care Support contractors. The broad 
application of case management in these settings requires no new 
regulatory authority. This final rule specifically addresses the unique 
circumstances of catastrophic illness and provides new authority to 
waive benefit limitations/exclusions when there are more cost 
effective, clinically appropriate alternatives to higher intensity 
covered services. We agree that use of impatient services as a 
prerequisite for participation in this case management program 
inappropriately excludes opportunities for better management of certain 
complex of catastrophic illnesses. We have clarified eligibility 
requirements to extend case management benefits to individuals who have 
demonstrated extraordinarily high TRICARE/CHAMPUS resource utilization, 
regardless of whether or not treatment has included an acute inpatient 
stay.

2. Quality and Outcomes

    One provider expressed concern that there was insufficient emphasis 
on quality of care, quality of life, and outcomes in the proposed rule. 
While cost effectiveness is an important requirement for application of 
the new waiver authority described in this rule, it does not take 
precedence over quality of care. Proposed treatment provided as part of 
this program must be clinically appropriate, high quality and cost 
effective. In addition to outcome measures already used by DoD, 
specific

[[Page 7087]]

performance measures for this program will be developed and included in 
more detailed operational guidance.

3. Primary Cargiver

    We received many comments on our requirement for the presence of a 
primary caregiver as a condition for participation in this program. 
This requirement was based on the idea that individuals who required a 
monitored or controlled environment could not safely move outside 
institutional care without the presence of a primary caregiver, most 
likely a family member. We reasoned that primary caregivers would be 
essential components in this transfer, not only to assure the patient's 
safety, but also to participate in the effective implementation of a 
case management treatment plan. Commentors presented several scenarios 
in which individuals who would benefit from this program may not have a 
primary caregiver as described in the proposed rule. We agree with 
these comments and have modified the eligibility requirement to state 
there must be a patient capable of self-support or be assisted by a 
primary caregiver. We have retained the requirement for presence of a 
primary caregiver when the program includes a waiver for provision of 
custodial care services in the home.

4. Program Operation

    We received numerous detailed comments and suggestions about 
specific operation of the proposed case management program, including 
requirements and contents for treatment plans, reporting requirements 
and methods for transition from case management services, These are 
detailed program elements, which will be included in operational 
policies following publication of this rule.

5. Case Management for Extraordinary Psychological Illnesses

    Several commentors expressed concern that the proposed rule did not 
seem to allow exceptions to benefit exclusions for treatment of 
catastrophic physiological illness. This is not the case. The rule 
proposes case management services and associated appropriate relief 
from otherwise excluded services for both medical and psychological 
disorders. Exceptions to benefit limitations must be medically and/or 
psychologically appropriate and must be cost effective when compared to 
available covered services.

6. Qualifications of Case Managers

    We received comments from a provider association regarding our 
requirement that case managers be either registered nurses or licensed 
social workers with at least two-year case management experience. The 
commentor believed this requirement should be broadened to allow other 
professional specialties, such as physicians or psychologists, to act 
as case managers. Although it is not typical practice for health plans 
to employ physicians, psychologists, or other similarly trained 
professionals as case managers; we have no objection to their acting in 
this capacity. Accordingly, we have modified the case manager 
definition to allow physicians and psychologists with at least two 
years experience in case management to act as case managers for TRICARE 
programs. This rule focuses on care of catastrophic illness or injury 
that requires both basic knowledge of medical and psychological 
disorders and experience in coordinating services for seriously ill 
beneficiaries. Because of this, we do not believe it appropriate to 
reduce professional qualifications from those proposed.

Regulatory Procedures

    Executive Order (EO) 12866 requires that a comprehensive regulatory 
impact analysis be performed on any economically significant regulatory 
action, defined as one which would result in an annual effect of $100 
million or more on the national economy or which would have other 
substantial impacts.
    The Regulatory Flexibility Act (RFA) requires that each Federal 
agency prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation which would 
have a significant impact on a substantial number of small entities.
    This rule is has been reviewed and approved by OMB and under EO 
12866. In addition, we certify that this rule will not significantly 
affect a substantial number of small entities.

Paperwork Reduction Act

    This rule, as written, imposes no burden as defined by the 
Paperwork Reduction Act of 1995. If however, any program implemented 
under this rule causes such a burden to be imposed, approval therefore 
will be sought of the Office of Management and Budget in accordance 
with the Act, prior to implementation.

List of Subjects in 32 CFR Part 199

    Claims, handicapped, health insurance, and military personnel.

    Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

    1. The authority citation for Part 199 continues to read as 
follows:

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

    2. Section 199.2(b) is amended by adding new definitions in 
alphabetical order:


Sec. 199.2  Definitions.

* * * * *
    Case management. Case management is a collaborative process which 
assesses, plans, implements, coordinates, monitors, and evaluates the 
options and services required to meet an individual's health needs, 
using communication and available resources to promote quality, cost 
effective outcomes.
    Case managers. A licensed registered nurse, licensed clinical 
social worker, licensed psychologist or licensed physician who has a 
minimum of two (2) years case management experience.
    Extraordinary condition. A complex clinical condition, which 
resulted, or is expected to result, in extraordinary TRICARE/CHAMPUS 
costs or utilization, based on thresholds established by the Director, 
OCHAMPUS, or designee.
    Primary caregiver. An individual who renders to a beneficiary 
services to support the essentials of daily living (as defined in 
Sec. 199.2) and specific services essential to the safe management of 
the beneficiary's condition.
    Waiver of benefit limits. Extension of current benefit limitations 
under the Case Management Program, of medical care, services, and/or 
equipment, not otherwise a benefit under the TRICARE/CHAMPUS program.
    3. Section 199.4 is amended by adding new paragraphs (e)(20) and 
(i) as follows:


Sec. 199.4  Basic program benefits.

* * * * *
    (e) Special benefit information.
    * * *
    (20) Case management services. As part of case management for 
beneficiaries with complex medical or psychological conditions, payment 
for services or supplies not otherwise covered by the basic CHAMPUS/
TRICARE program may be authorized when they are provided in accordance 
with Sec. 199.4(i). Waiver of benefit limits/exclusions to the basic 
CHAMPUS/TRICARE program may be cost shared where it is demonstrated 
that the absence of such services would result in the exacerbation of 
an existing extraordinary condition, as defined in Sec. 199.2, to the 
extent that frequent or

[[Page 7088]]

extensive services are required; and such services are a cost effective 
alternative to the Basic CHAMPUS program.
* * * * *
    (i) Case management program. (1) In general. Case management, as it 
applies to this program, provides a collaborative process among the 
case manager, beneficiary, primary caregiver, professional health care 
providers and funding sources to meet the medical needs of an 
individual with an extraordinary condition. It is designed to promote 
quality and cost-effective outcomes through assessment, planning, 
implementing, monitoring and evaluating the options and services 
required. Payment for services or supplies limited or not otherwise 
covered by the basic TRICARE/CHAMPUS program may be authorized when 
they are provided in accordance with paragraph (i) of this section. 
Waiver of benefit limits/exclusions may be cost-shared where it is 
demonstrated that the absence of such services would result in the 
exacerbation of an existing extraordinary condition, as defined in 
Sec. 199.2, to the extent that such services are a cost-effective 
alternative to the basic TRICARE/CHAMPUS program.
    (2) Applicability of case management program. A CHAMPUS eligible 
beneficiary may participate in the case management program if he/she 
has an extraordinary condition, which is disabling and requires 
extensive utilization of TRICARE resources. The medical or 
psychological condition must also:
    (i) Be contained in the latest revision of the International 
Classification of Diseases Clinical Modification, or the Diagnostic and 
Statistical Manual of Mental Disorders;
    (ii) Meet at least one of the following:
    (A) Demonstrate a prior history of high CHAMPUS costs in the year 
immediately preceding eligibility for the case management program; or
    (B) Require clinically appropriate services or supplies from 
multiple providers to address an extraordinary condition; and
    (iii) Can be treated more appropriately and cost effectively at a 
less intensive level of care.
    (3) Prior authorization required. Services or supplies allowable as 
a benefit exception under this Section shall be cost-shared only when a 
beneficiary's entire treatment has received prior authorization through 
an individual case management program.
    (4) Cost effective requirement. Treatment must be determined to be 
cost effective by comparison to alternative treatment that would 
otherwise be required or when compared to existing reimbursement 
methodology. Treatment must meet the requirements of appropriate 
medical care as defined in Sec. 199.2.
    (5) Limited waiver of exclusions and limitations. Limited waivers 
of exclusions and limitations normally applicable to the basic program 
may be granted for specific services or supplies only when a 
beneficiary's entire treatment has received prior authorization through 
the individual case management program described in paragraph (i) of 
this section. The Director, OCHAMPUS may grant a patient-specific 
waiver of benefit limits for services or supplies in the following 
categories, subject to the waiver requirements of this section.
    (i) Durable equipment. The cost of a device or apparatus which does 
not qualify as Durable Medical Equipment (as defined in Sec. 199.2) or 
back-up durable medical equipment may be shared when determined by the 
Director, OCHAMPUS to be cost-effective and clinically appropriate.
    (ii) Custodial care. The cost of services or supplies rendered to a 
beneficiary that would otherwise be excluded as custodial care (as 
defined in Sec. 199.2) may be cost-shared for a maximum lifetime period 
of 365 days when determined by the Director, OCHAMPUS, to be cost 
effective and clinically appropriate. To qualify for a waiver of 
benefit limits of custodial care, the patient must meet all eligibility 
requirements of paragraph (i) of this section, including that the 
absence of the waived services would result in the exacerbation of an 
existing extraordinary condition. In addition:
    (A) The proposed treatment must be cost effective and clinically 
appropriate as determined by the individual case manager. For example, 
the treatment would be determined to be cost effective by comparison to 
alternative care that would otherwise be required or when compared to 
existing reimbursement methodology.
    (B) For patients receiving care at home, there must be a primary 
caregiver or the patient is capable of self-support.
    (iii) Domiciliary care. The cost of services or supplies rendered 
to be a beneficiary what would otherwise be excluded as domiciliary 
care (as defined in Sec. 199.2) may be shared when determined by the 
Director, OCHAMPUS to be cost effective and clinically appropriate. 
Waivers for domiciliary care are subject to the same requirements as 
paragraphs (i)(5)(ii) of this section.
    (iv) In home services. The cost of the following in-home services 
may be shared when determined by the Director, OCHAMPUS to be cost 
effective and clinically appropriate: nursing care, physical, 
occupational, speech therapy, medical social services, intermittent or 
part-time services of a home health aide, beneficiary transportation 
required for treatment plan implementation, and training for the 
beneficiary and primary caregiver sufficient to allow them to assume 
all feasible responsibility for the care of the beneficiary that will 
facilitate movement of the beneficiary to the least resource-intensive, 
clinically appropriate setting. (Qualifications for home health aides 
shall be based on the standards at 42 CFR 848.36.)
    (6) Case management acknowledgment. The beneficiary, or 
representative, and the primary caregiver shall sign a case management 
acknowledgment as a prerequisite to prior authorization of case 
management services. The acknowledgment shall include, in part, all of 
the following provisions:
    (i) The right to participate fully in the development and ongoing 
assessment of the treatment;
    (ii) That all health care services for which TRICARE/CHAMPUS cost 
sharing is sought shall be authorized by the case manager prior to 
their delivery;
    (iii) That there are limitations in scope and duration of the 
planned case management treatment, including provisions to transition 
to other arrangements; and
    (iv) The conditions under which case management services are 
provided, including the requirement that the services must be cost 
effective and clinically appropriate;
    (v) That a beneficiary's participation in the case management 
program shall be discontinued for any of the following reasons:
    (A) The loss of TRICARE/CHAMPUS eligibility;
    (B) A determination that the services or supplies provided are not 
cost effective or clinically appropriate;
    (C) The beneficiary, or representative, and/or primary caregiver, 
terminates participation in writing;
    (D) The beneficiary and/or primary caregiver's failure to comply 
with requirements in this paragraph (i); or
    (E) A determination that the beneficiary's condition no longer 
meets the requirements of participation as described in paragraph (i) 
of this section.
    (7) Other administrative requirements. (i) Qualified providers of 
services or items not covered under the basic

[[Page 7089]]

program, or who are not otherwise eligible for TRICARE/CHAMPUS 
authorized status, may be authorized for a time-limited period when 
such authorization is essential to implement the planned treatment 
under case management. Such providers must not be excluded or suspended 
as a CHAMPUS provider, must hold Medicare or state certification or 
licensure appropriate to the service, and must agree to participate on 
all claims related to the case management treatment.
    (ii) Retrospective requests for authorization of waiver of benefit 
limits/exclusions will not be considered. Authorization of waiver of 
benefit limits/exclusions is allowed only after all other options for 
services or supplies have been considered and either appropriately 
utilized or determined to be clinically inappropriate and/or not cost-
effective.
    (iii) Experimental or investigational treatment or procedures shall 
not be cost-shared as an exception to standard benefits under this 
part.
    (iv) TRICARE/CHAMPUS case management services may be provided by 
contractors designated by the Director, OCHAMPUS.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 99-3441 Filed 2-11-99; 8:45 am]
BILLING CODE 5000-04-M