[Federal Register Volume 64, Number 163 (Tuesday, August 24, 1999)]
[Rules and Regulations]
[Pages 46133-46141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21741]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

RIN-0720-AA51


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); Revisions to the Eligibility Requirements

AGENCY: Office of the Secretary, DoD.

ACTION: Final Rule.

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SUMMARY: This final rule revises the comprehensive CHAMPUS regulation 
pertaining to basic CHAMPUS benefits in accordance with several 
statutory changes. This final rule: sets forth the requirements for 
reinstatement of CHAMPUS eligibility for beneficiaries under age 65 who 
would otherwise have lost eligibility for CHAMPUS due to eligibility 
for Medicare as a result of disability or end-stage renal disease 
(ESRD); establishes new classes of CHAMPUS eligibles; establishes the 
Transitional Assistance Management Program which provides transitional 
health care for members (and their dependents) who served on active 
duty in support of a contingency operation and for members (and their 
dependents) who are involuntarily separated from active duty; allows 
former spouses who buy a conversion health policy to keep CHAMPUS 
eligibility for twenty-four (24) months for preexisting conditions that 
are not covered by the conversion policy; and makes minor technical 
revisions to the double coverage provisions. In order to expedite 
compliance with the statutory requirements, all of these provisions 
have been implemented under interim instructions. This final rule also 
adds a new category of eligible beneficiary under the Continued Health 
Care Benefit Program.

DATES: This final rule is effective September 23, 1999.

ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and 
Reimbursement Systems, Aurora, CO 80011-9043.

FOR FURTHER INFORMATION CONTACT: Stephen E. Isaacson, Medical Benefits 
and Reimbursement Systems, TMA, telephone (303) 676-3572.

SUPPLEMENTARY INFORMATION:
    The following specific paragraphs of Sec. 199.3 have eligibility 
dates as follows:

------------------------------------------------------------------------
                 Paragraph                        Eligibility Date
------------------------------------------------------------------------
(b)(2)(ii)(H)(2)..........................  October 23, 1992.
(b)(2)(ii)(H)(3)..........................  November 14, 1986.
(b)(2)(ii)(H)(4) (pertaining to placement   July 1, 1994.
 by a court).
(b)(2)(ii)(H)(4) (pertaining to placement   October 5, 1994.
 by a recognized placement agency).
(b)(2)(iii)(A)(1).........................  November 14, 1986.
(b)(2)(iii)(A)(2).........................  October 23, 1992.
(e)(1)(i).................................  April 6, 1991.
Sec.  199.3(e)(1)(ii).....................  October 1, 1990.
(e)(1)(iii)...............................  October 1, 1990.
(f)(3)(viii)..............................  October 1, 1991.
(f)(3)(ix)................................  October 1, 1991.
------------------------------------------------------------------------

I. Summary of Final Rule Provisions

    This final rule adds or revises a number of eligibility provisions. 
Following is a brief summary of the classes of beneficiaries affected 
by this final rule. Generally, each class is eligible for CHAMPUS as a 
result of the change, and we have included the other salient points 
regarding each, but the reader should refer to the proposed rule that 
was published on December 23, 1997, for a detailed discussion regarding 
the specific conditions and requirements for each class.
CHAMPUS/Medicare dual eligibles
--Must be under age 65, eligible for Medicare due to disability or end-
stage renal disease, and enrolled in Medicare Part B
--Applies to all categories of CHAMPUS beneficiaries except dependents 
of active-duty members
--Effective October 1, 1991

    Dependents of a person who dies of an injury, illness, or disease 
incurred on the way to or from training with a duration of 30 days or 
less

--Retiree cost-sharing
--Effective November 14, 1986
Victims of abuse
--By a member who was discharged or dismissed as a result of a court-
martial conviction for the abuse
--Eligibility limited to one year from member's separation
--Coverage limited to treatment of conditions resulting from abuse
--Effective November 14, 1986 through October 16, 1998
--Effective October 17, 1998, covered services need not be related to 
the abuse and eligibility coincides with the period that the abused 
dependent is in receipt of transitional compensation under section 1059 
of title 10 U.S.C.
--By a member or former member who loses eligibility to retired pay as 
a result of the abuse
--Effective October 23, 1992

    Students who become incapable of self-support

--Must be full-time student
--The incapacitating condition must occur between the ages of 21 and 23
--Effective October 23, 1992

    Dependents of an active duty member who dies while on active duty

--These individuals have always been eligible for CHAMPUS with retiree 
cost-sharing
--The most recent change provides that all care is to be cost-shared as 
active duty
--Special cost-sharing is limited to one year
--Effective October 1, 1993
--For dependents of active-duty members who die while on active duty 
between January 1, 1993, and October 1, 1993, only care for pre-
existing conditions is to be cost-shared as active duty.

    Dependents placed in the custody of a member or former member by a 
court or a recognized placement agency.

--Effective July 1, 1994, if placed by a court
--Effective October 5, 1994, if placed by a recognized placement agency
--This category of beneficiary is also added to the Continued Health 
Care Benefit Program effective October 5, 1994.
Transitional Assistance Management Program (TAMP)
--Claims for all individuals eligible under TAMP are cost-shared as 
active-duty dependents
--Members released from active duty in connection with contingency 
operations
--Eligible up to thirty (30) days
--Effective April 6, 1991
--Members involuntarily separated with less than six (6) years of 
service
--Eligible up to sixty (60) days
--Effective October 1, 1990
--Members involuntarily separated with six (6) or more years of service
--Eligible up to 120 days
--Effective October 1, 1990


[[Page 46134]]


    The minor technical revisions to the double coverage provisions in 
section 199.8 and the addition of a new category of eligible 
beneficiary under the Continued Health Care Benefit Program contained 
in section 199.20 are unchanged from the proposed rule. The reader 
should refer to the proposed rule for a discussion of these provisions.

II. Public Comments

    We provided a 60-day comment period on the proposed rule. We 
received no public comments, but we received a comment from another 
federal agency with which we are required to coordinate rules. Below we 
provide a summary of the comment and our response.
    Comment--The commenter indicated that the language in paragraphs 
(f)(3)(viii) and (g)(1) does not accurately reflect the Medicare 
eligibility provisions for persons with end-stage renal disease (ESRD).
    Response--A description of the Medicare eligibility requirements 
for persons with ESRD is not necessary to this rule, since those 
requirements are set forth in 42 CFR 406.13. We have deleted the 
language from the final rule.

III. Changes In the Final Rule

    We have made four changes in the final rule to correct errors we 
discovered in the proposed rule.
    The first involves a mathematical error in the supplementary 
information of the proposed rule. In Section II.D. we provided examples 
of coordination of benefits calculations for certain Medicare 
beneficiaries whose CHAMPUS eligibility has been reinstated. In Example 
1, Step 4, the result is $3,938.45 and not $4,043.95 as was published 
in the proposed rule. This does not affect the final result of these 
calculations, but it is important to ensure the steps are accurate.
    The second involves paragraph (b)(2)(ii)(H)(2). In the proposed 
rule this paragraph included the words ``has not attained the age of 
21''. The basic requirement that a child be under 21 is contained 
elsewhere and this paragraph allows an exception to that requirement. 
Therefore, we have deleted the words ``has not attained the age of 
21''.
    The third involves paragraph (c)(5)(v). In the past, an 
incapacitated individual age 21 or older (age 23 or older if a student) 
could be adopted and gain CHAMPUS eligibility. The statute has been 
revised to restrict adoptions only to individuals that meet the 
requirements of a dependent at the time of adoption. As a result, we 
have deleted paragraph (c)(5)(v).
    The fourth involves paragraph (c)(7). We have added additional 
material to this paragraph to distinguish the different beginning 
eligibility dates for children who are victims of abuse by a person who 
is discharged from a Uniformed Service as a result of committing the 
abuse as opposed to a person who has eligibility to receive retired pay 
on the basis of years of service terminated as a result of committing 
the abuse.
    We have also made changes to paragraphs (b)(2)(iii)(A)(1), 
(c)(3)(i), and (c)(7) to include the provisions of Section 732 of the 
National Defense Authorization Act for FY 1999 (Pub. L. 105-261). This 
statutory change removed the limitation on the extent of services 
available to certain victims of abuse (i.e., the services must be 
related to the abuse) so that they are entitled to all benefits 
available under the Program. It also replaced the one year limitation 
on services available to them with the period that the abused dependent 
is in receipt of transitional compensation under section 1059 of title 
10 U.S.C.

IV. Regulatory Procedures.

    The Regulatory Flexibility Act (RFA) requires that each federal 
agency prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation which would 
have a significant impact on a substantial number of small entities.
    This final rule is not a significant regulatory action under 
Executive Order 12866. The changes set forth in this final rule are 
minor revisions to the existing regulation. Since this final rule does 
not impose information collection requirements, it does not need to be 
reviewed by the Executive Office of Management and Budget under 
authority of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 
35).

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 abused 
dependent, deceased reservist, former member, member, reservist, and 
spouse, in alphabetical order, and by revising the definitions for 
child, deceased service member, Defense Enrollment Eligibility 
Reporting System (DEERS), dependent, sponsor, widow or widower to read 
as follows:


Sec. 199.2  Definitions.

* * * * *
    (b) * * *
    Abused dependent. An eligible spouse or child, who meets the 
criteria in Sec. 199.3 of this part, of a former member who received a 
dishonorable or bad-conduct discharge or was dismissed from a Uniformed 
Service as a result of a court-martial conviction for an offense 
involving physical or emotional abuse or was administratively 
discharged as a result of such an offense, or of a member or former 
member who has had their entitlement to receive retired pay terminated 
because of misconduct involving physical or emotional abuse.
* * * * *
    Child. An unmarried child of a member or former member, who meets 
the criteria (including age requirements) in Sec. 199.3 of this part.
* * * * *
    Deceased member. A person who, at the time of his or her death, was 
an active duty member of a Uniformed Service under a call or order that 
did not specify a period of 30 days or less.
* * * * *
    Deceased reservist. A reservist in a Uniformed Service who incurs 
or aggravates an injury, illness, or disease, during, or on the way to 
or from, active duty training for a period of 30 days or less or 
inactive duty training and dies as a result of that specific injury, 
illness or disease.
* * * * *
    Deceased retiree. A person who, at the time of his or her death, 
was entitled to retired or retainer pay or equivalent pay based on duty 
in a Uniformed Service. For purposes of this part, it also includes a 
person who died before attaining age 60 and at the time of his or her 
death would have been eligible for retired pay as a reservist but for 
the fact that he or she was not 60 years of age, and had elected to 
participate in the Survivor Benefit Plan established under 10 U.S.C. 
chapter 73.
* * * * *
    Defense Enrollment Eligibility Reporting System (DEERS). An 
automated system maintained by the Department of Defense for the 
purpose of:
    (1) Enrolling members, former members and their dependents, and
    (2) Verifying members', former members' and their dependents' 
eligibility for health care benefits in the direct care facilities and 
for CHAMPUS.
* * * * *

[[Page 46135]]

    Dependent. Individuals whose relationship to the sponsor (including 
NATO members who are stationed in or passing through the United States 
on official business when authorized) leads to entitlement to benefits 
under this part. (See Sec. 199.3 of this part for specific categories 
of dependents).
* * * * *
    Former member. A retiree, deceased member, deceased retiree, or 
deceased reservist in certain circumstances (see section 199.3 for 
additional information related to certain deceased reservists' 
dependents' eligibility). Under conditions specified under Sec. 199.3 
of this part, former member may also include a member of the Uniformed 
Services who has been discharged from active duty (or, in some cases, 
full-time National Guard duty), whether voluntarily or involuntarily, 
under other than adverse conditions and qualifies for CHAMPUS benefits 
under the Transitional Assistance Management Program or the Continued 
Health Care Benefit Program.
* * * * *
    Member. A person on active duty in a Uniformed Service under a call 
or order that does not specify a period of 30 days or less. (For 
CHAMPUS cost-sharing purposes only, a former member who received a 
dishonorable or bad-conduct discharge or was dismissed from a Uniformed 
Service as a result of a court-martial conviction for an offense 
involving physical or emotional abuse or was administratively 
discharged as a result of such an offense is considered a member).
* * * * *
    Reservist. A person who is under an active duty call or order to 
one of the Uniformed Services for a period of 30 days or less or is on 
inactive training.
* * * * *
    Sponsor. A member or former member of a Uniformed Service upon 
whose status his or her dependents' eligibility for CHAMPUS is based. A 
sponsor also includes a person who, while a member of the Uniformed 
Services and after becoming eligible to be retired on the basis of 
years of service, has his or her eligibility to receive retired pay 
terminated as a result of misconduct involving abuse of a spouse or 
dependent child. It also includes NATO members who are stationed in or 
passing through the United States on official business when authorized. 
It also includes individuals eligible for CHAMPUS under the 
Transitional Assistance Management Program.
* * * * *
    Spouse. A lawful husband or wife, who meets the criteria in 
Sec. 199.3 of this part, regardless of whether or not dependent upon 
the member or former member for his or her own support.
* * * * *
    Widow or Widower. A person who was a spouse at the time of death of 
a member or former member and who has not remarried.
* * * * *
    3. Section 199.3 is revised to read as follows:


Sec. 199.3  Eligibility.

    (a) General.--This section sets forth those persons who, by the 
provisions of 10 U.S.C. chapter 55, and the NATO Status of Forces 
Agreement, are eligible for CHAMPUS benefits. A determination that a 
person is eligible does not automatically entitle such a person to 
CHAMPUS payments. Before any CHAMPUS benefits may be extended, 
additional requirements, as set forth in other sections of this part, 
must be met. Additionally, the use of CHAMPUS may be denied if a 
Uniformed Service medical treatment facility capable of providing the 
needed care is available. CHAMPUS relies primarily on the Defense 
Enrollment Eligibility Reporting System (DEERS) for eligibility 
verification.
    (b) CHAMPUS eligibles--(1) Retiree. A member or former member of a 
Uniformed Service who is entitled to retired, retainer, or equivalent 
pay based on duty in a Uniformed Service.
    (2) Dependent. Individuals whose relationship to the sponsor leads 
to entitlement to benefits. CHAMPUS eligible dependents include the 
following:
    (i) Spouse. A lawful husband or wife of a member or former member. 
The spouse of a deceased member or retiree must not be remarried. A 
former spouse also may qualify for benefits as a dependent spouse. A 
former spouse is a spouse who was married to a military member, or 
former member, but whose marriage has been terminated by a final decree 
of divorce, dissolution or annulment. To be eligible for CHAMPUS 
benefits, a former spouse must meet the criteria described in 
paragraphs (b)(2)(i)(A) through (b)(2)(i)(E) of this section and must 
qualify under the group defined in paragraph (b)(2)(i)(F)(1) or 
(b)(2)(i)(F)(2) of this section.
    (A) Must be unremarried; and
    (B) Must not be covered by an employer-sponsored health plan; and
    (C) Must have been married to a member or former member who 
performed at least 20 years of service which can be credited in 
determining the member's or former member's eligibility for retired or 
retainer pay; and
    (D) Must not be eligible for Part A of Title XVIII of the Social 
Security Act (Medicare) except as provided in paragraphs (f)(3)(viii) 
and (f)(3)(ix) of this section; and
    (E) Must not be the dependent of a NATO member; and
    (F) Must meet the requirements of paragraph (b)(2)(i)(F)(1) or 
(b)(2)(i)(F)(2) of this section:
    (1) The former spouse must have been married to the same member or 
former member for at least 20 years, at least 20 of which were 
creditable in determining the member's or former member's eligibility 
for retired or retainer pay. Eligibility continues indefinitely unless 
affected by any of the conditions of paragraphs (b)(2)(i)(A) through 
(b)(2)(i)(E) of this section.
    (i) If the date of the final decree of divorce, dissolution, or 
annulment was before February 1, 1983, the former spouse is eligible 
for CHAMPUS coverage of health care received on or after January 1, 
1985.
    (ii) If the date of the final decree of the divorce, dissolution, 
or annulment was on or after February 1, 1983, the former spouse is 
eligible for CHAMPUS coverage of health care which is received on or 
after the date of the divorce, dissolution, or annulment.
    (2) The former spouse must have been married to the same member or 
former member for at least 20 years, and at least 15, but less than 20 
of those married years were creditable in determining the member's or 
former member's eligibility for retired or retainer pay.
    (i) If the date of the final decree of divorce, dissolution, or 
annulment is before April 1, 1985, the former spouse is eligible only 
for care received on or after January 1, 1985, or the date of the 
divorce, dissolution, or annulment, whichever is later. Eligibility 
continues indefinitely unless affected by any of the conditions of 
paragraphs (b)(2)(i)(A) through (b)(2)(i)(E) of this section.
    (ii) If the date of the final decree of divorce, dissolution or 
annulment is on or after April 1, 1985, but before September 29, 1988, 
the former spouse is eligible only for care received from the date of 
the decree of divorce, dissolution, or annulment until December 31, 
1988, or for two years from the date of the divorce, dissolution, or 
annulment, whichever is later.
    (iii) If the date of the final decree of divorce, dissolution, or 
annulment is on or after September 29, 1988, the former spouse is 
eligible only for care received within the 365 days (366 days in the 
case of a leap year) immediately following the date of the divorce, 
dissolution, or annulment.

[[Page 46136]]

    (ii) Child. A dependent child is an unmarried child of a member or 
former member who has not reached his or her twenty-first (21st) 
birthday, except an incapacitated adopted child meeting the 
requirements of paragraph (b)(2)(ii)(H)(2) of this section, and who 
bears one of the following relationships to a member or former member 
of one of the Uniformed Services:
    (A) A legitimate child; or
    (B) An adopted child whose adoption has been legally completed on 
or before the child's twenty-first (21st) birthday; or
    (C) A legitimate stepchild; or
    (D) An illegitimate child of a member or former member whose 
paternity/maternity has been determined judicially, and the member or 
former member directed to support the child; or
    (E) An illegitimate child of a member or former member whose 
paternity/maternity has not been determined judicially, who resides 
with or in the home provided by the member or former member, and is or 
continues to be dependent upon the member or former member for over 
one-half of his or her support, or who was so dependent on the former 
member at the time of the former member's death; or
    (F) An illegitimate child of a spouse of a member who resides with 
or in a home provided by the member and is, and continues to be 
dependent upon the member for over one-half of his or her support; or
    (G) An illegitimate child of a spouse of a former member who 
resides with or in a home provided by a former member or the former 
member's spouse at the time of death of the former member, and is, or 
continues to be, or was, dependent upon the former member for more than 
one-half of his or her support at the time of death; or
    (H) An individual who falls into one of the following classes:
    (1) A student. A child determined to be a member of one of the 
classes in paragraphs (b)(2)(ii)(A) through (b)(2)(ii)(G) of this 
section, who is not married, has passed his or her 21st birthday but 
has not passed his or her 23rd birthday, is dependent upon the member 
or former member for over 50 percent of his or her support or was 
dependent upon the member or former member for over 50 percent of his 
or her support on the date of the member's or former member's death, 
and is pursuing a full-time course of education in an institution of 
higher learning approved by the Secretary of Defense or the Department 
of Education (as appropriate) or by a state agency under 38 U.S.C. 
chapters 34 and 35.

    Note: Courses of education offered by institutions listed in the 
``Education Directory,'' ``Higher Education'' or ``Accredited Higher 
Institutions'' issued periodically by the Department of Education 
meet the criteria approved by the Administering Secretary or the 
Secretary of Education. For determination of approval of courses 
offered by a foreign institution, by an institution not listed in 
either of the above directories, or by an institution not approved 
by a state agency pursuant to 38 U.S.C. chapters 34 and 35, a 
statement may be obtained from the Department of Education, 
Washington, D.C. 20202.

    (2) An incapacitated child. A child determined to be a member of 
one of the classes in paragraphs (b)(2)(ii)(A) through (b)(2)(ii)(G) of 
this section, who is not married and is incapable of self-support 
because of a mental or physical disability that:
    (i) Existed before the child's twenty-first (21st) birthday; or
    (ii) Occurred between the ages of 21 and 23 while the child was 
enrolled in a full-time course of study in an institution of higher 
learning approved by the Administering Secretary or the Department of 
Education (see NOTE to paragraph (b)(2)(ii)(H)(2)(iii) of this 
section), and is or was at the time of the member's or former member's 
death dependent on the member or former member for over one-half of his 
or her support; and
    (iii) The incapacity is continuous. (If the incapacity 
significantly improves or ceases at any time, CHAMPUS eligibility 
cannot be reinstated on the basis of the incapacity, unless the 
incapacity recurs and the beneficiary is under age 21, or is under age 
23 and is enrolled as a full-time student under paragraph 
(b)(2)(ii)(H)(2)(ii) of this section. If the child was not 
incapacitated after that date, no CHAMPUS eligibility exists on the 
basis of the incapacity. However, incapacitated children who marry and 
who subsequently become unmarried through divorce, annulment, or death 
of spouse, may be reinstated as long as they still meet all other 
requirements).

    Note: An institution of higher learning is a college, 
university, or similar institution, including a technical or 
business school, offering post-secondary level academic instruction 
that leads to an associate or higher degree, if the school is 
empowered by the appropriate State education authority under State 
law to grant an associate, or higher, degree. When there is no State 
law to authorize the granting of a degree, the school may be 
recognized as an institution of higher learning if it is accredited 
for degree programs by a recognized accrediting agency. The term 
also shall include a hospital offering educational programs at the 
post-secondary level regardless of whether the hospital grants a 
post-secondary degree. The term also shall include an educational 
institution that is not located in a State, that offers a course 
leading to a standard college degree, or the equivalent, and that is 
recognized as such by the Secretary of Education (or comparable 
official) of the country, or other jurisdiction, in which the 
institution is located (38 U.S.C. chapter 34, section 1661, and 
chapter 35, section 1701.
    Courses of education offered by institutions listed in the 
``Education Directory,'' ``Higher Education'' or ``Accredited Higher 
Institutions'' issued periodically by the Department of Education 
meet the criteria approved by the Administering Secretary or the 
Secretary of Education. For determination of approval of courses 
offered by a foreign institution, by an institution not listed in 
either of the above directories, or by an institution not approved 
by a state agency pursuant to chapters 34 and 35 of 38 U.S.C., a 
statement may be obtained from the Department of Education, 
Washington, D.C. 20202.

    (3) A child of a deceased reservist. A child, who is determined to 
be a member of one of the classes in paragraphs (b)(2)(ii)(A) through 
(b)(2)(ii)(G) of this section, of a reservist in a Uniformed Service 
who incurs or aggravates an injury, illness, or disease, during, or on 
the way to or from, active duty training for a period of 30 days or 
less or inactive duty training, and the reservist dies as a result of 
that specific injury, illness or disease.
    (4) A child placed in legal custody of a member or former member. A 
child who is placed in legal custody of a member or former member by a 
court or who is placed in the home of a member or former member by a 
recognized placement agency in anticipation of the legal adoption of 
the child.
    (iii) Abused dependents.--(A) Categories of abused dependents. An 
abused dependent may be either a spouse or a child. Eligibility for 
either class of abused dependent results from being either:
    (1) The spouse (including a former spouse) or child of a member who 
has received a dishonorable or bad-conduct discharge, or dismissal from 
a Uniformed Service as a result of a court-martial conviction for an 
offense involving physical or emotional abuse of the spouse or child, 
or was administratively discharged as a result of such an offense. 
Until October 17, 1998, Medical benefits are limited to care related to 
the physical or emotional abuse and for a period of 12 months following 
the member's separation from the Uniformed Service. On or after October 
17, 1998, medical benefits can include all under the Basic Program and 
under the Program for Persons with Disabilities for the period that the 
spouse or child is in receipt of

[[Page 46137]]

transitional compensation under section 1059 of title 10 U.S.C.
    (2) The spouse (including a former spouse) or child of a member or 
former member who while a member and as a result of misconduct 
involving abuse of the spouse or child has eligibility to receive 
retired pay on the basis of years of service terminated.
    (B) Requirements for categories of abused dependents.--(1) Abused 
spouse. As long as the spouse is receiving payments from the DoD 
Military Retirement Fund under court order, the spouse is eligible for 
health care under the same conditions as any spouse of a retired 
member. The abused spouse must:
    (i) Under paragraph (b)(2)(iii)(A)(1) of this section, be a lawful 
husband or wife or a former spouse of the member; or
    (ii) Under paragraph (b)(2)(iii)(A)(2) of this section, be a lawful 
husband or wife or a former spouse of the member or former member, and 
the spouse is receiving payments from the Department of Defense 
Military Retirement Fund under 10 U.S.C. 1408(h) pursuant to a court 
order; and
    (A) Be a victim of the abuse; and
    (B) Have been married to the member or former member at the time of 
the abuse; or
    (C) Be the natural or adoptive parent of a dependent child of the 
member or former member who was the victim of the abuse.
    (2) Abused child. The abused child must:
    (i) Under paragraph (b)(2)(iii)(A)(1) of this section, be a 
dependent child of the member or former member.
    (ii) Under paragraph (b)(2)(iii)(A)(2) of this section,
    (A) Have been a member of the household where the abuse occurred; 
and
    (B) Be an unmarried legitimate child, including an adopted child or 
stepchild of the member or former member; and
    (C) Be under the age of 18; or
    (D) Be incapable of self support because of a mental or physical 
incapacity that existed before becoming 18 years of age and be 
dependent on the member or former member for over one-half of his or 
her support; or
    (E) If enrolled in a full-time course of study in an institution of 
higher learning recognized by the Secretary of Defense (for the 
purposed of 10 U.S.C. 1408(h)), be under 23 years of age and be 
dependent on the member or former member for over one-half of his or 
her support.
    (F) The dependent child is eligible for health care, regardless of 
whether any court order exists, under the same conditions as any 
dependent of a retired member.
    (3) TAMP eligibles. A former member, including his or her 
dependents, who is eligible under the provisions of the Transitional 
Assistance Management Program as described in paragraph (e) of this 
Sec. 199.3.
    (c) Beginning dates of eligibility. (1) Beginning dates of 
eligibility depend on the class to which the individual belongs and the 
date the individual became a member of the class. Those who join after 
the class became eligible attain individual eligibility on the date 
they join.
    (2) Beginning dates of eligibility for each class of spouse 
(excluding spouses who are victims of abuse and eligible spouses of 
certain deceased reservists) are as follows:
    (i) A spouse of a member for:
    (A) Medical benefits authorized by the Dependents' Medical Care Act 
of 1956, December 7, 1956;
    (B) Outpatient medical benefits under the Basic Program, October 1, 
1966;
    (C) Inpatient medical benefits under the Basic Program and benefits 
under the Program for Persons with Disabilities, January 1, 1967;
    (ii) A spouse of a former member:
    (A) For medical benefits under the Basic Program, January 1, 1967.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (iii) A former spouse:
    (A) For medical benefits under the Basic Program, dates of 
beginning eligibility are as indicated for each category of eligible 
former spouse identified within paragraph (b)(2)(i) of this section.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (3) Beginning dates of eligibility for spouses who are victims of 
abuse (excluding spouses who are victims of abuse of certain deceased 
reservists) are as follows:
    (i) An abused spouse meeting the requirements of paragraph 
(b)(2)(iii)(A)(1) of this section, including an eligible former spouse:
    (A) For medical and dental care for problems associated with the 
physical or emotional abuse under the Basic Program for a period of up 
to one year (12 months) following the person's separation from the 
Uniformed Service, November 14, 1986.
    (B) For all medical and dental benefits under the Basic Program for 
the period that the spouse is in receipt of transitional compensation 
under section 1059 of title 10 U.S.C., October 17, 1998.
    (C) For medical and dental care for problems associated with the 
physical or emotional abuse under the Program for Persons with 
Disabilities for a period up to one year (12 months) following the 
person's separation from the Uniformed Service, November 14, 1986.
    (D) For all medical and dental benefits described in section 199.5 
for the period that the spouse is in receipt of transitional 
compensation under section 1059 of title 10 U.S.C., October 17, 1998.
    (ii) An abused spouse meeting the requirements of paragraphs 
(b)(2)(iii)(A)(2) of this section, including an eligible former spouse:
    (A) For all benefits under the CHAMPUS Basic Program, October 23, 
1992.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (4) Beginning dates of eligibility for spouses of certain deceased 
reservists, including spouses who are victims of abuse of certain 
deceased reservists, are as follows:
    (i) A spouse meeting the requirements of paragraph (b)(2)(i) of 
this section, including an eligible former spouse:
    (A) For benefits under the Basic Program, November 14, 1986.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (ii) An abused spouse of certain deceased reservists, meeting the 
requirements of paragraphs (b)(2)(iii) of this section, including an 
eligible former spouse, for the limited benefits and period of 
eligibility described in paragraphs (b)(2)(iii) of this section:
    (A) For benefits under the Basic Program, November 14, 1986.
    (B) For benefits under the Program for Persons with Disabilities, 
November 14, 1986.
    (iii) An abused spouse of certain deceased reservists, including an 
eligible former spouse, meeting the requirements of paragraphs 
(b)(2)(iii) of this section:
    (A) For benefits under the Basic Program, October 23, 1992.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (5) Beginning dates of eligibility for each class of dependent 
children, (excluding dependent children of certain deceased reservists, 
abused children and incapacitated children whose incapacity occurred 
between the ages of 21 and 23 while enrolled in a full-time course of 
study in an institution of higher learning), are as follows:
    (i) Legitimate child, adopted child, or legitimate stepchild of a 
member, for:
    (A) Medical benefits authorized by the Dependents' Medical Care Act 
of 1956, December 7, 1956;
    (B) Outpatient medical benefits under the Basic Program, October 1, 
1966;
    (C) Inpatient medical benefits under the Basic Program and benefits 
under the Program for Persons with Disabilities, January 1, 1967;

[[Page 46138]]

    (ii) Legitimate child, adopted child or legitimate stepchild of 
former members:
    (A) For medical benefits under the Basic Program, January 1, 1967.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (iii) Illegitimate child of a male or female member or former 
member whose paternity/maternity has been determined judicially and the 
member or former member has been directed to support the child, for:
    (A) All benefits for which otherwise entitled, August 31, 1972.
    (B) Program for Persons with Disabilities benefits limited to 
dependent children of members only, August 31, 1972.
    (iv) Illegitimate child of:
    (A) A male member or former member whose paternity has not been 
determined judicially:
    (B) A female member or former member who resides with, or in a home 
provided by the member or former member, or who was residing in a home 
provided by the member or former member at the time of the member's or 
former member's death, and who is or continues to be dependent on the 
member for over one-half of his or her support, or was so dependent on 
the member or former member at the time of death;
    (C) A spouse of a member or former member who resides with or in a 
home provided by the member or former member, or the parent who is the 
spouse of the member or former member or was the spouse of a member or 
former member at the time of death, and who is and continues to be 
dependent upon the member or former member for over one-half of his or 
her support, or was so dependent on the member or former member at the 
time of death; for:
    (1) All benefits for which otherwise eligible, January 1, 1969.
    (2) Program for Persons with Disabilities limited to dependent 
children of members only, January 1, 1969.
    (6) Beginning dates of eligibility for children of certain deceased 
reservists who meet the requirements of paragraph (b)(2)(ii)(H)(3) of 
this section, excluding incapacitated children who meet the 
requirements of paragraph (b)(2)(ii)(H)(2) of this section, for:
    (i) Benefits under the Basic program, November 14, 1986.
    (ii) Not eligible for benefits under the Program for Persons with 
Disabilities.
    (7) Beginning dates of eligibility for children who are victims of 
abuse, including incapacitated children who meet the requirements of 
paragraph (b)(2)(ii)(H)(2) of this section are as follows:
    (i) An abused child meeting the requirements of paragraph 
(b)(2)(iii)(A)(1) of this section:
    (A) Medical and dental care for problems associated with the 
physical or emotional abuse under the Basic Program for a period of up 
to one year (12 months) following the person's separation from the 
Uniformed Service, November 14, 1986.
    (B) For all medical and dental benefits under the Basic Program for 
the period that the child is in receipt of transitional compensation 
under section 1059 of title 10 U.S.C., October 17, 1998.
    (C) Medical and dental care for problems associated with the 
physical or emotional abuse under the Program for Persons with 
Disabilities for a period up to one year (12 months) following the 
person's separation from the Uniformed Service, November 14, 1986.
    (D) For all medical and dental benefits described in section 199.5 
for the period that the child is in receipt of transitional 
compensation under section 1059 of title 10 U.S.C., October 17, 1998.
    (ii) An abused child meeting the requirements of paragraphs 
(b)(2)(iii)(A)(2) of this section:
    (A) For all benefits under the CHAMPUS Basic Program, October 23, 
1992.
    (B) Ineligible for benefits under the Program for Persons with 
Disabilities.
    (8) Beginning dates of eligibility for incapacitated children who 
meet the requirements of paragraph (b)(2)(ii)(H)(2) of this section, 
whose incapacity occurred between the ages of 21 and 23 while enrolled 
in a full-time course of study in an institution of higher learning 
approved by the Administering Secretary or the Department of Education, 
and, are or were at the time of the member's or former member's death, 
dependent on the member or former member for over one-half of their 
support, for:
    (i) All benefits for which otherwise entitled, October 23, 1992.
    (ii) Program for Persons with Disabilities benefits limited to 
children of members only, October 23, 1992.
    (9) Beginning dates of eligibility for a child who meets the 
requirements of paragraph (b)(2)(ii)(H)(4) and:
    (i) Has been placed in custody by a court:
    (A) All benefits for which entitled, July 1, 1994.
    (B) Program for Persons with Disabilities benefits limited to 
children of members only, July 1, 1994.
    (ii) Has been placed in custody by a recognized adoption agency:
    (A) All benefits for which entitled, October 5, 1994.
    (B) Program for Persons with Disabilities benefits limited to 
children of members only, October 5, 1994.
    (10) Beginning dates of eligibility for a retiree for:
    (i) Medical benefits under the Basic Program January 1, 1967.
    (ii) Retirees and their dependents are not eligible for benefits 
under the Program for Persons with Disabilities.
    (d) Dual eligibility. Dual eligibility occurs when a person is 
entitled to benefits from two sources. For example, when an active duty 
member is also the dependent of another active duty member, a retiree, 
or a deceased active duty member or retiree, dual eligibility, that is, 
entitlement to direct care from the Uniformed Services medical care 
system and CHAMPUS is the result. Since the active duty status is 
primary, and it is the intent that all medical care be provided an 
active duty member through the Uniformed Services medical care system, 
CHAMPUS eligibility is terminated as of 12:01 a.m. on the day following 
the day the dual eligibility begins. However, any dependent children in 
a marriage of two active duty persons or of an active duty member and a 
retiree, are CHAMPUS eligible in the same manner as dependent children 
of a marriage involving only one CHAMPUS sponsor. Should a spouse or 
dependent who has dual eligibility leave active duty status, that 
person's CHAMPUS eligibility is reinstated as of 12:01 a.m. of the day 
active duty ends, if he or she otherwise is eligible as a dependent of 
a CHAMPUS sponsor.

    Note: No CHAMPUS eligibility arises as the result of the 
marriage of two active duty members.

    (e) Eligibility Under the Transitional Assistance Management 
Program (TAMP).Transitional health care benefits under CHAMPUS are 
authorized for the applicable time period described, for:
    (1) Up to thirty (30) days or until again covered by an employer-
sponsored health plan, whichever occurs earlier, following release from 
active duty for:
    (i) Activated Guard/Reserve and their dependents,
    (ii) Involuntary stop-loss and their dependents,
    (iii) Voluntary stop-loss and their dependents, and
    (iv) Members who accepted Voluntary Separation Incentives (VSI).
    (2) Sixty (60) days for regular DoD military and their dependents 
when the sponsor is involuntarily separated with less than six years of 
active service. Involuntary separation must occur

[[Page 46139]]

during the five-year period beginning October 1, 1990.
    (3) One hundred twenty (120) days for regular military and their 
dependents when the sponsor is involuntarily separated with six or more 
years of active service. Involuntary separation must occur during the 
five year period beginning October 1, 1990. Each branch of service will 
determine eligibility, including dates, for its members and their 
dependents and provide data to DEERS.
    (f) Changes in status which result in termination of CHAMPUS 
eligibility. Changes in status which result in a loss of CHAMPUS 
eligibility as of 12:01 a.m. of the day following the day the event 
occurred, unless otherwise indicated, are as follows:
    (1) Changes in the status of a member. (i) When an active duty 
member's period of active duty ends, excluding retirement or death.
    (ii) When an active duty member is placed on desertion status 
(eligibility is reinstated when the active duty member is removed from 
desertion status and returned to military control).

    Note: A member serving a sentence of confinement in conjunction 
with a sentence of punitive discharge is still considered on active 
duty until such time as the discharge is executed.

    (2) Changes in the status of a retiree. (i) When a retiree ceases 
to be entitled to retired, retainer, or equivalent pay for any reason, 
the retiree's dependents lose their eligibility unless the dependent is 
otherwise eligible (e.g., some former spouses, some dependents who are 
victims of abuse and some incapacitated children as outlined in 
paragraph (b)(2)(ii)(H)(2) of this section).
    (ii) A retiree also loses eligibility when no longer entitled to 
retired, retainer, or equivalent pay.

    Note: A retiree who waives his or her retired, retainer or 
equivalent pay is still considered a retiree for the purposes of 
CHAMPUS eligibility.

    (3) Changes in the status of a dependent. (i) Divorce, except for 
certain classes of former spouses as provided in paragraph (b)(2)(i) of 
this section and the member or former member's own children (i.e., 
legitimate, adopted, and judicially determined illegitimate children).

    Note: An unadopted stepchild loses eligibility as of 12:01 a.m. 
of the day following the day the divorce becomes final.

    (ii) Annulment, except for certain classes of former spouse as 
provided in paragraph (b)(2)(i) of this section and the member or 
former member's own children (i.e., legitimate, adopted, and judicially 
determined illegitimate children).

    Note: An unadopted stepchild loses eligibility as of 12:01 a.m. 
of the day following the day the annulment becomes final.

    (iii) Adoption, except for adoptions occurring after the death of a 
member or former member.
    (iv) Marriage of a child, except when the marriage is terminated by 
death, divorce, or annulment before the child is 21 or 23 if an 
incapacitated child as provided in paragraph (b)(2)(ii)(H)(2) of this 
section.
    (v) Marriage of a widow or widower, except for the child of the 
widow or widower who was the stepchild of the deceased member or former 
member at the time of death. The stepchild continues CHAMPUS 
eligibility as other classes of dependent children.
    (vi) Attainment of entitlement to hospital insurance benefits (Part 
A) under Medicare except as provided in paragraphs (f)(3)(viii) and 
(f)(3)(ix) of this section. (This also applies to individuals living 
outside the United States where Medicare benefits are not available).
    (vii) Attainment of age 65, except for dependents of active duty 
member's and beneficiaries not eligible for Part A Medicare. CHAMPUS 
eligibility is lost at 12:01 a.m. on the last day of the month 
preceding the month of attainment of age 65.

    Note: If the person is not eligible for Part A of Medicare, he 
or she must file a Social Security Administration ``Notice of 
Disallowance'' certifying to that fact with the Uniformed Service 
responsible for the issuance of his or her identification card so a 
new card showing CHAMPUS eligibility can be issued. Individuals who 
lose their CHAMPUS eligibility because they have reached the age 
limitation or were eligible for Part A, Medicare cannot be 
reinstated under CHAMPUS. Additionally, individuals entitled only to 
supplementary medical insurance (Part B) of Medicare, but not Part 
A, or Part A through the Premium HI provisions (provided for under 
the 1972 Amendments to the Social Security Act retain eligibility 
under CHAMPUS (refer to section 199.8 of this part for additional 
information when a double coverage situation is involved).

    (viii) End stage renal disease. All beneficiaries, except 
dependents of active duty members, lose their CHAMPUS eligibility when 
Medicare coverage becomes available to a person because of chronic 
renal disease unless the following conditions have been met. CHAMPUS 
eligibility will continue if:
    (A) The individual is under 65 years old;
    (B) The individual became eligible for Medicare under the 
provisions of 42 U.S.C. 426-1(a);
    (C) The individual is enrolled in Part B of Medicare; and
    (D) The individual has applied and qualified for continued CHAMPUS 
eligibility through the Defense Enrollment Eligibility Reporting System 
(DEERS).
    (ix) Individuals with certain disabilities. Each case relating to 
Medicare eligibility resulting from being disabled requires individual 
investigation. All beneficiaries except dependents of active duty 
members lose their CHAMPUS eligibility when Medicare coverage becomes 
available to a disabled person unless the following conditions have 
been met. CHAMPUS eligibility will continue if:
    (A) The individual is under 65 years old;
    (B) The individual became eligible for Medicare under the 
provisions of 42 U.S.C. 426(b)(2);
    (C) The individual is enrolled in Part B of Medicare; and
    (D) The individual has applied and qualified for continued CHAMPUS 
eligibility through the Defense Enrollment Eligibility Reporting System 
(DEERS).
    (x) Disabled students, that is children age 21 or 22, who are 
pursuing a full-time course of higher education and who, either during 
the school year or between semesters, suffer a disabling illness or 
injury with resultant inability to resume attendance at the institution 
remain eligible for CHAMPUS medical benefits for 6 months after the 
disability is removed or until the student passes his or her 23rd 
birthday, whichever occurs first. However, if recovery occurs before 
the 23rd birthday and there is resumption of a full-time course of 
higher education, CHAMPUS benefits can be continued until the 23rd 
birthday. The normal vacation periods during an established school year 
do not change the eligibility status of a dependent child 21 or 22 
years old in a full time student status. Unless an incapacitating 
condition existed before, and at the time of, a dependent child's 21st 
birthday, a dependent child 21 or 22 years old in student status does 
not have eligibility and may not qualify for eligibility under the 
requirements related to mental or physical incapacity as described in 
paragraph (b)(2)(ii)(H)(2) of this section.
    (g) Reinstatement of CHAMPUS eligibility. Circumstances which 
result in reinstatement of CHAMPUS eligibility are as follows:
    (1) End Stage renal disease. Unless CHAMPUS eligibility has been

[[Page 46140]]

continued under paragraph (f)(3)(viii) of the section, when Medicare 
eligibility ceases for end-stage renal disease patients, CHAMPUS 
eligibility resumes if the person is otherwise still eligible. He or 
she is required to take action to be reinstated as a CHAMPUS 
beneficiary and to obtain a new identification card.
    (2) Disability. Some disabilities are permanent, others temporary. 
Each case must be reviewed individually. Unless CHAMPUS eligibility has 
been continued under paragraph (f)(3)(ix) of this section, when 
disability ends and Medicare eligibility ceases, CHAMPUS eligibility 
resumes if the person is otherwise still eligible. Again, he or she is 
required to take action to obtain a new CHAMPUS identification card.
    (h) Determination of eligibility status. Determination of an 
individual's eligibility as a CHAMPUS beneficiary is the primary 
responsibility of the Uniformed Service in which the member or former 
member is, or was, a member, or in the case of dependents of a NATO 
military member, the Service that sponsors the NATO member. For the 
purpose of program integrity, the appropriate Uniformed Service shall, 
upon request of the Director, OCHAMPUS, review the eligibility of a 
specific person when there is reason to question the eligibility 
status. In such cases, a report on the results of the review and any 
action taken will be submitted to the Director, OCHAMPUS, or a 
designee.
    (i) Procedures for determination of eligibility. Procedures for the 
determination of eligibility are prescribed within the Department of 
Defense Instruction 1000.13 available at local military facilities 
personnel offices.
    (j) CHAMPUS procedures for verification of eligibility. (1) 
Eligibility for CHAMPUS benefits will be verified through the Defense 
Enrollment Eligibility Reporting System (DEERS) maintained by the 
Uniformed Services, except for abused dependents as set forth in 
paragraph (b)(2)(iii) of this section. It is the responsibility of the 
CHAMPUS beneficiary, or parent, or legal representative, when 
appropriate, to provide the necessary evidence required for entry into 
the DEERS file to establish CHAMPUS eligibility and to ensure that all 
changes in status that may affect eligibility be reported immediately 
to the appropriate Uniformed Service for action.
    (2) Ineligibility for CHAMPUS benefits may be presumed in the 
absence of prescribed eligibility evidence in the DEERS file.
    (3) The Director, OCHAMPUS, shall issue guidelines as necessary to 
implement the provisions of this section.
    4. Section 199.4 is amended by revising paragraphs (e)(5)(iii)(B), 
(f)(1), (f)(2), introductory text, (f)(2)(ii), introductory text, 
(f)(2)(iii), (f)(2)(iv), (f)(3), introductory text, (f)(3)(i), 
(f)(3)(iii), (f)(4), introductory text and (f)(4)(ii) to read as 
follows:


Sec. 199.4  Basic program benefits.

* * * * *
    (e) * * *
    (5) * * *
    (iii) * * *
    (B) In most instances, for costs related to kidney transplants, 
Medicare (not CHAMPUS) benefits will be applicable. If a CHAMPUS 
beneficiary participates as a kidney donor for a Medicare beneficiary, 
Medicare will pay for expenses in connection with the kidney transplant 
to include all reasonable preparatory, operation and postoperation 
recovery expenses associated with the donation (postoperative recovery 
expenses are limited to the actual period of recovery). (See section 
199.3 of this part for additional information on end stage renal 
disease.)
* * * * *
    (f) * * *
    (1) General. As stated in the introductory paragraph to this 
section, the Basic Program is essentially a supplemental program to the 
Uniformed Services direct medical care system. To encourage use of the 
Uniformed Services direct medical care system wherever its facilities 
are available and appropriate, the Basic Program benefits are designed 
so that it is to the financial advantage of a CHAMPUS beneficiary or 
sponsor to use the direct medical care system. When medical care is 
received from civilian sources, a CHAMPUS beneficiary is responsible 
for payment of certain deductible and cost-sharing amounts in 
connection with otherwise covered services and supplies. By statute, 
this joint financial responsibility between the beneficiary or sponsor 
and CHAMPUS is more favorable for dependents of members than for other 
classes of beneficiaries.
    (2) Dependents of members of the Uniformed Services. CHAMPUS 
beneficiary or sponsor liability set forth for dependents of members is 
as follows:
    (i) * * *
    (ii) Inpatient cost-sharing. Dependents of members of the Uniformed 
Services are responsible for the payment of the first $25 of the 
allowable institutional costs incurred with each covered inpatient 
admission to a hospital or other authorized institutional provider 
(refer to Sec. 199.6 of the part), or the amount the beneficiary or 
sponsor would have been charged had the inpatient care been provided in 
a Uniformed Service hospital, whichever is greater.
* * * * *
    (iii) Outpatient cost-sharing. Dependents of members of the 
Uniformed Services are responsible for payment of 20 percent of the 
CHAMPUS-determined allowable cost or charge beyond the annual fiscal 
year deductible amount (as described in paragraph (f)(2)(i) of this 
section) for otherwise covered services or supplies provided on an 
outpatient basis by authorized providers.
* * * * *
    (iv) Ambulatory surgery. Notwithstanding the above provisions 
pertaining to outpatient cost-sharing, dependents of members of the 
Uniformed Services are responsible for payment of $25 for surgical care 
that is authorized and received while in an outpatient status and that 
has been designated in guidelines issued by the Director, OCHAMPUS, or 
a designee.
* * * * *
    (3) Former members and dependents of former members. CHAMPUS 
beneficiary liability set forth for former members and dependents of 
former members is as follows:
    (i) Annual fiscal year deductible for outpatient services or 
supplies. The annual fiscal year deductible for otherwise covered 
outpatient services or supplies provided former members and dependents 
of former members is the same as the annual fiscal year outpatient 
deductible applicable to dependents of active duty members of rank E-5 
or above (refer to paragraph (f)(2)(i)(A) or (B) of this section).
    (ii) * * *
    (iii) Outpatient cost-sharing. Former members and dependents of 
former members are responsible for payment of 25 percent of the 
CHAMPUS-determined allowable costs or charges beyond the annual fiscal 
year deductible amount (as described in paragraph (f)(2)(i) of this 
section) for otherwise covered services or supplies provided on an 
outpatient basis by authorized providers.
* * * * *
    (4) Former spouses. CHAMPUS beneficiary liability for former 
spouses eligible under the provisions set forth in Sec. 199.3 of this 
part is as follows:
    (i) * * *
    (ii) Inpatient cost-sharing. Eligible former spouses are 
responsible for

[[Page 46141]]

payment of cost-sharing amounts the same as those required for former 
members and dependents of former members.
* * * * *
    6. Section 199.8 is amended by revising paragraphs (a) and (d)(1) 
to read as follows.


Sec. 199.8  Double coverage.

* * * * *
    (a) Introduction. (1) In enacting CHAMPUS legislation, Congress 
clearly has intended that CHAMPUS be the secondary payer to all health 
benefit and insurance plans. 10 U.S.C. 1079(j)(1) specifically 
provides:
    ``A benefit may not be paid under a plan (CHAMPUS) covered by this 
section in the case of a person enrolled in or covered by any other 
insurance, medical service, or health plan to the extent that the 
benefit also is a benefit under the other plan, except in the case of a 
plan (Medicaid) administered under title 19 of the Social Security Act 
(42 U.S.C. 1396, et seq.).''
    (2) The above provision is made applicable specifically to retired 
members, dependents, and survivors by 10 U.S.C. 1086(d). The underlying 
intent, in addition to preventing waste of Federal resources, is to 
ensure that CHAMPUS beneficiaries receive maximum benefits while 
ensuring that the combined payments of CHAMPUS and other health benefit 
and insurance plans do not exceed the total charges.
* * * * *
    (d) * * *
    (1) CHAMPUS and Medicare. Under certain circumstances a CHAMPUS 
beneficiary can also be eligible for Medicare. In any double coverage 
situation involving Medicare, Medicare is always the primary payer. 
When Part A, ``Hospital Insurance,'' of Medicare is involved, the 
Medicare ``lifetime reserve'' benefit must be used before CHAMPUS 
benefits may be used. The procedures to be followed for these 
circumstances are as follows.
    (i) Dependents of active duty members. For dependents of active 
duty members, payment will be determined in accordance with paragraph 
(c) of this section.
    (ii) Medicare end stage renal disease beneficiaries. In any case 
involving a Medicare end stage renal disease beneficiary as provided in 
paragraph (f)(3)(viii) of Sec. 199.3, CHAMPUS secondary payments will 
be determined in accordance with paragraph (c) of this sectioin.
    (iii) Medicare disabled beneficiaries. In any case involving a 
Medicare disabled beneficiary as provided in paragraph (f)(3)(ix) of 
Sec. 199.3, CHAMPUS payment is determined in accordance with paragraph 
(c) of this section.
* * * * *
    7. Section 199.20 is amended by adding paragraph (d)(1)(iv) to read 
as follows.


Sec. 199.20  Continued Health Care Benefit Program (CHCBP).

* * * * *
    (d) * * *
    (1) * * *
    (iv) An unmarried person who:
    (A) Is placed in the legal custody of a member or former member by 
a court or who is placed in the home of a member or former member by a 
recognized placement agency in anticipation of the legal adoption of 
the child; and
    (B) Either:
    (1) Has not attained the age of 21 if not in school or age 23 if 
enrolled in a full time course of study at an institution of higher 
learning; or
    (2) Is incapable of self-support because of a mental or physical 
incapacity which occurred while the person was considered a dependent 
of the member or former member; and
    (C) Is dependent on the member or former member for over one-half 
of the person's support; and
    (D) Resides with the member or former member unless separated by 
the necessity of military service or to receive institutional care as a 
result of disability or incapacitation; and
    (E) Is not a dependent of a member or former member as described in 
Sec. 199.3(b)(2).
* * * * *
    Dated: August 17, 1999.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 99-21741 Filed 8-23-99; 8:45 am]
BILLING CODE 5001-10-P