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

effects of this rule elsewhere in this 

preamble. 

F. Environment 

We have analyzed this proposed rule 

under Department of Homeland 

Security Management Directive 023–01, 

which guides the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321–4370f), and have made a 

preliminary determination that this 

action is one of a category of actions that 

do not individually or cumulatively 

have a significant effect on the human 

environment. This proposed rule 

involves two safety zones lasting one 

hour that would prohibit entry within a 

one-mile section of the Lower 

Mississippi River. They are categorically 

excluded from further review under 

paragraph L60(a) of Appendix A, Table 

1 of DHS Instruction Manual 023–01– 

001–01, Rev. 01. A preliminary Record 

of Environmental Consideration 

supporting this determination is 

available in the docket where indicated 

under ADDRESSES. We seek any 

comments or information that may lead 

to the discovery of a significant 

environmental impact from this 

proposed rule. 

G. Protest Activities 

The Coast Guard respects the First 

Amendment rights of protesters. 

Protesters are asked to contact the 

person listed in the FOR FURTHER

INFORMATION CONTACT section to 

coordinate protest activities so that your 

message can be received without 

jeopardizing the safety or security of 

people, places, or vessels. 

V. Public Participation and Request for 

Comments 

We view public participation as 

essential to effective rulemaking, and 

will consider all comments and material 

received during the comment period. 

Your comment can help shape the 

outcome of this rulemaking. If you 

submit a comment, please include the 

docket number for this rulemaking, 

indicate the specific section of this 

document to which each comment 

applies, and provide a reason for each 

suggestion or recommendation. 

We encourage you to submit 

comments through the Federal 

eRulemaking Portal at http://

www.regulations.gov. If your material 

cannot be submitted using http://

www.regulations.gov, contact the person 

in the FOR FURTHER INFORMATION

CONTACT section of this document for 

alternate instructions. 

We accept anonymous comments. All 

comments received will be posted 

without change to http://

www.regulations.gov and will include 

any personal information you have 

provided. For more about privacy and 

the docket, visit http://

www.regulations.gov/privacyNotice. 

Documents mentioned in this NPRM 

as being available in the docket, and all 

public comments, will be in our online 

docket at http://www.regulations.gov 

and can be viewed by following that 

website’s instructions. Additionally, if 

you go to the online docket and sign up 

for email alerts, you will be notified 

when comments are posted or a final 

rule is published. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard proposes to 

amend 33 CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

■ 1. The authority citation for part 165 

continues to read as follows: 

Authority: 33 U.S.C. 1231; 50 U.S.C. 191; 

33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; 

Department of Homeland Security Delegation 

No. 0170.1. 

■ 2. Add § 165.T08–1058 to read as 

follows: 

§ 165.T08–1058 Safety Zones; Lower 

Mississippi River, New Orleans, LA 

(a) Safety Zones. The following areas 

are a safety zone: 

(1) Bayou Country Music Fest, New 

Orleans, LA. 

(i) Location: All navigable waters of 

the Lower Mississippi River between 

mile marker (MM) 95.4 and MM 96.4, 

above Head of Passes. 

(ii) Effective Period: This rule is 

effective from 7:45 p.m. through 8:45 

p.m. on May 25, 2018. 

(2) NOLA Tricentennial 2018 Jazz and 

Heritage Fest. 

(i) Location: All navigable waters of 

the Lower Mississippi River between 

mile marker (MM) 94 and MM 95, above 

Head of Passes. 

(ii) Effective Period: This rule is 

effective from 8 p.m. through 9 p.m. on 

May 6, 2018. 

(b) Regulations. (1) In accordance 

with the general regulations in § 165.23 

of this part, entry into these zones is 

prohibited unless specifically 

authorized by the Captain of the Port 

Sector New Orleans (COTP) or a 

designated representative. A designated 

representative is a commissioned, 

warrant, or petty officer of the U.S. 

Coast Guard assigned to units under the 

operational control of USCG Sector New 

Orleans. 

(2) Vessels requiring entry into this 

safety zone must request permission 

from the COTP or a designated 

representative. They may be contacted 

on VHF–FM Channel 16 or 67. 

(3) Persons and vessels permitted to 

enter these safety zones must transit at 

their slowest safe speed and comply 

with all lawful directions issued by the 

COTP or the designated representative. 

(c) Information broadcasts. The COTP 

or a designated representative will 

inform the public through Broadcast 

Notices to Mariners of any changes in 

the planned schedule. 

Dated: January 11, 2018. 

Wayne R. Arguin, 

Captain, U.S. Coast Guard, Captain of the 

Port Sector New Orleans. 

[FR Doc. 2018–00652 Filed 1–16–18; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 17 

RIN 2900–AP02 

Civilian Health and Medical Program of 

the Department of Veterans Affairs 

AGENCY: Department of Veterans Affairs. 

ACTION: Proposed rule. 

SUMMARY: The Department of Veterans 

Affairs (VA) proposes to amend its 

regulations governing the Civilian 

Health and Medical Program of the 

Department of Veterans Affairs 

(CHAMPVA). The proposed revisions 

would clarify and update these 

regulations to conform to changes in law 

and policy that control the 

administration of CHAMPVA and 

would include details concerning the 

administration of CHAMPVA that are 

not reflected in current regulations. The 

proposed revisions would also expand 

covered services and supplies to include 

certain preventive services and 

eliminate cost-share amounts and 

deductibles for certain covered services. 

DATES: Written comments must be 

received on or before March 19, 2018. 

ADDRESSES: Written comments may be 

submitted through http://

www.Regulations.gov; by mail or handdelivery to the Director, Regulation and 

Policy Management (00REG), 

Department of Veterans Affairs, 810 

Vermont Avenue NW, Room 1068, 

Washington, DC 20420; or by fax to 

(202) 273–9026. Comments should 

indicate that they are submitted in 


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response to ‘‘RIN 2900–AP02, Civilian 

Health and Medical Program of the 

Department of Veterans Affairs.’’ Copies 

of comments received will be available 

for public inspection in the Office of 

Regulation Policy and Management, 

Room 1063B, between the hours of 8:00 

a.m. and 4:30 p.m. Monday through 

Friday (except holidays). Please call 

(202) 461–4902 for an appointment. 

(This is not a toll-free number.) In 

addition, during the comment period, 

comments may be viewed online 

through the Federal Docket Management 

System at http://www.Regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Joseph Duran, Director, Policy and 

Planning, Office of Community Care 

(OCC), 3773 Cherry Creek North Drive, 

Denver, Colorado 80209, 

Joseph.Duran2@va.gov, (303) 370–1637. 

(This is not a toll-free number.) 

SUPPLEMENTARY INFORMATION: The 

Civilian Health and Medical Program of 

the Department of Veterans Affairs 

(CHAMPVA) is a health benefits 

program in which the Department of 

Veterans Affairs (VA) shares the cost of 

covered medical care services and 

supplies with spouses, children, 

survivors, and certain caregivers of 

veterans who meet eligibility criteria 

under 38 U.S.C. 1781. CHAMPVA 

beneficiaries must not be eligible for 

TRICARE, a health care program 

administered by the Department of 

Defense (DoD) that is also authorized to 

provide health care to certain family 

members of veterans. Certain Primary 

Family Caregivers designated under 38 

U.S.C. 1720G(a)(7)(A) are eligible under 

section 1781 as long as they are not 

entitled to services under a health-plan 

contract as that term is defined in 38 

U.S.C. 1725(f). 

Under section 1781, VA ‘‘shall 

provide for medical care in the same or 

similar manner and subject to the same 

or similar limitations as medical care is 

furnished to certain dependents and 

survivors of active duty and retired 

members of the Armed Forces under 

chapter 55 of title 10 [United States 

Code] (CHAMPUS).’’ 38 U.S.C. 1781(b). 

CHAMPUS was the original program 

administered by DoD to provide civilian 

health benefits for active duty military 

personnel, military retirees, and their 

dependents. 32 CFR 199.1. Although the 

CHAMPUS program is still referenced 

in DoD regulations, DoD effectively 

replaced the CHAMPUS program with 

what is commonly known as the 

‘‘TRICARE Standard’’ plan 

(‘‘TRICARE’’). See 32 CFR 199.1(r), 

199.17(a)(6)(ii)(C) (identifying 

‘‘TRICARE Standard’’ as the basic 

CHAMPUS program). TRICARE’s 

current benefit structure offers varying 

degrees of medical benefits under 

multiple plan options beyond its 

Standard plan, but we administer 

CHAMPVA in the same or similar 

manner as TRICARE Standard only, 

because that basic program is the one 

that is referenced by the CHAMPUS 

authority. Thus, all references in this 

rulemaking to ‘‘TRICARE’’ are to the 

TRICARE Standard plan, which we refer 

to simply as ‘‘TRICARE’’ throughout 

most of this rulemaking for ease of 

reference. 

VA interprets the mandate in 38 

U.S.C. 1781(b) to administer CHAMPVA 

in the ‘‘same or similar manner . . . as 

medical care is furnished . . . under 

title 10 chapter 55 (CHAMPUS)’’ to 

mean that we must generally administer 

CHAMPVA in a ‘‘same or similar 

manner’’ as the TRICARE Standard 

plan. The phrase ‘‘same or similar 

manner’’ does not require the programs 

to be administered in an identical 

manner. Rather, we broadly interpret 

this language as affording us needed 

flexibility to administer the program for 

CHAMPVA beneficiaries. For this 

reason, not every aspect of CHAMPVA 

will find a corollary in the TRICARE 

Standard Plan. 

TRICARE has undergone changes in 

legal authority and policy that have 

prompted these proposed revisions to 

our CHAMPVA regulations. This 

rulemaking is intended to ensure that 

our regulations continue to be, again 

broadly speaking, the same or similar to 

the regulations and policies governing 

TRICARE. As noted throughout this 

proposed rule, there are necessary 

variations from TRICARE, particularly 

due to TRICARE’s current benefit 

structure with varying degrees of 

medical benefits under multiple plan 

options, but we believe these variations 

satisfy the same or similar requirement 

in 38 U.S.C. 1781(b). 

This rulemaking also proposes 

clarifications and revisions that will 

improve our ability to effectively 

administer CHAMPVA, as well as 

technical revisions to make our 

regulations more understandable. 

17.270 General Provisions and 

Definitions 

Current § 17.270(a) broadly discusses 

general administrative provisions of 

CHAMPVA, and current § 17.270(b) 

establishes certain definitions for the 

CHAMPVA regulations. We would 

revise the title of § 17.270 to clearly 

indicate that it contains both general 

provisions as well as definitions and 

would revise and reorganize the current 

definitions as well as add new 

definitions. Finally, we would add a 

new paragraph (c) to permit VA to 

waive, under certain circumstances, any 

requirements in the CHAMPVA 

regulations that are not otherwise 

required by statute, as is allowed under 

TRICARE. See 32 CFR 199.1(n). Waiver 

would be limited to very unusual and 

limited circumstances when waiver was 

determined to be in the best interests of 

VA; would not set a precedent for future 

decisions; and would not be used to 

deny any individual any right, benefit, 

or privilege provided to him or her by 

statute or these regulations. 

Proposed § 17.270(a) would continue 

to provide an overview of CHAMPVA, 

including a general summary of the 

manner in which CHAMPVA is 

administered. We would refer to 

CHAMPUS, as we do in the current 

regulation, but would also reference 

TRICARE because the reference to 

CHAMPUS is outdated, as explained 

above, and may be misunderstood by 

CHAMPVA beneficiaries. Current 

§ 17.270(a) states that CHAMPVA is 

administered by the ‘‘Health 

Administration Center’’ (HAC) (referred 

to now as the Office of Community Care 

(OCC)), which is located in Denver, 

Colorado. We propose to delete this 

statement because that fact is not 

substantively relevant to the regulations. 

These revisions are not substantively 

different from current § 17.270(a). 

Proposed § 17.270(a)(1) would state 

that an authorized non-VA provider 

may provide medical services and 

supplies that are covered by 

CHAMPVA. This is current practice and 

would reflect in regulation VA’s 

authority to provide CHAMPVAcovered services and supplies under 38 

U.S.C. 1781(b)(2). As explained in 

greater detail below in connection with 

proposed § 17.272(b)(3), CHAMPVAcovered services and supplies are those 

provided by authorized non-VA 

providers who agree to provide covered 

services and supplies to CHAMPVA 

beneficiaries in exchange for payment of 

the CHAMPVA determined allowable 

amount. Proposed § 17.270(a)(2) would 

also reference VA’s alternate authority 

under section 1781(b) to provide 

medical care to CHAMPVA beneficiaries 

through VA medical facilities equipped 

to provide the care and services if such 

resources are not being used for the care 

of eligible veterans. This initiative is 

called the CHAMPVA In-house 

Treatment Initiative (CITI) and would be 

referenced as such in proposed 

§ 17.270(a)(2). CITI affords beneficiaries 

the same medical services available to 

veterans. CITI claims submitted to OCC 

are processed in the same manner as all 

other CHAMPVA claims. However, a 

monthly transfer of funds, or Transfer 


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Dispersing Authority (TDA), from OCC 

to the providing VA facility is used to 

reimburse CITI claims whereas 

electronic funds transfer or paper 

checks are used to reimburse 

beneficiaries and providers for non-CITI 

claims. 

With regards to CHAMPVA 

beneficiaries receiving care in VA 

medical facilities through CITI, we have 

historically interpreted section 1781(b) 

to mean that such care may be provided 

only if the CHAMPVA beneficiary is not 

also eligible for Medicare benefits. We 

base this interpretation on the fact that 

CHAMPVA has always been the last 

payer for CHAMPVA-covered medical 

services and supplies when a 

CHAMPVA beneficiary has Medicare 

(included in this rulemaking’s 

definition of ‘‘other health insurance’’ 

(OHI), see 38 U.S.C. 1781(d)(2)). The 

mandated coordination of benefits 

found in section 1781(d)(2) is 

essentially the same as the requirement 

in TRICARE codified at 32 CFR 199.8, 

which provides that if a TRICARE 

beneficiary is eligible for both Medicare 

and TRICARE, Medicare is the primary 

payer and TRICARE is the secondary 

payer. In addition, this policy limitation 

for CITI is reasonable because VA is a 

publicly funded health care system that 

cannot bill Medicare (see section 

1814(c) and section 1835(d) of the 

Social Security Act, codified at 42 

U.S.C. 1395f(c) and 1395n(d)). 

Moreover, Medicare is an entitlement 

program, whereas the provision of 

CHAMPVA medical benefits is subject 

to the availability of appropriations 

which, for any given time period, might 

or might not be sufficient to cover all 

CHAMPVA-covered medical services 

and supplies in a VA medical facility. 

Requiring beneficiaries to use their 

Medicare benefits first accomplishes our 

goal of protecting all patients’ access to 

care. Therefore, we would further clarify 

in proposed § 17.270(a)(2) that any 

CHAMPVA beneficiary who is also 

eligible for Medicare benefits may not 

receive medical services and supplies 

through CITI. 

Proposed § 17.270(a)(3) would newly 

indicate in regulation that outpatient 

prescription medications may be 

provided to certain CHAMPVA 

beneficiaries through Medications by 

Mail (MbM), administered by VA. 

Proposed paragraph (a)(3)(i) would 

further provide that VA’s MbM provides 

prescription medications through the 

mail to CHAMPVA beneficiaries who do 

not have any OHI that pays for 

prescriptions, including Medicare Part 

D. This restriction largely is consistent 

with TRICARE policy on the provision 

of medications by mail, except that 

TRICARE covers prescribed medications 

for beneficiaries with OHI in two 

instances: When the prescribed 

medication is not covered by the OHI or 

when the beneficiary’s OHI prescription 

benefit has been exhausted. See 

TRICARE Pharmacy Program Handbook 

(October 2015), pages 18–19. 

CHAMPVA is unable to duplicate these 

two exceptions due to system 

limitations, meaning that CHAMPVA 

will only provide prescription 

medications through the mail to 

beneficiaries who do not have any OHI 

prescription coverage. Despite this, 

CHAMPVA’s inclusion of prescription 

medications is, broadly speaking, 

sufficiently similar to TRICARE that VA 

remains in substantial compliance with 

the requirements of section 1781(b). 

Proposed paragraph (a)(3)(ii) would 

provide that smoking cessation 

pharmaceutical supplies are available 

only through MbM. Section 713 of the 

Duncan Hunter National Defense 

Authorization Act for Fiscal Year 2009, 

Public Law 110–417 (October 14, 2008) 

(‘‘2009 NDAA’’) required DoD to 

establish a smoking cessation program 

under TRICARE under which specified 

smoking cessation benefits are to be 

made available to beneficiaries who are 

not also eligible for Medicare. This 

TRICARE benefit is codified at 32 CFR 

199.4(e)(30). As to the pharmaceutical 

component of this TRICARE benefit, 

smoking cessation pharmaceutical 

agents (which VA refers to as 

pharmaceutical supplies) are available 

only through Military Treatment 

Facility (MTF) pharmacies or the 

TRICARE Mail Order Program. See 32 

CFR 199.4(e)(30)(ii)(A) and 

199.21(h)(2)(iii). Similar to 32 CFR 

199.4(e)(30)(i), proposed 

§ 17.270(a)(3)(ii) would provide that the 

same smoking cessation supplies will be 

made available to CHAMPVA 

beneficiaries who are not eligible for 

Medicare. Additionally, smoking 

cessation pharmaceutical supplies 

would be available only through MbM. 

For purposes of CITI, we would not 

provide smoking cessation 

pharmaceutical supplies through VA 

facility pharmacies because it is 

administratively more efficient for 

CHAMPVA to provide these through 

MbM, and because, in complying with 

the requirements of section 1781(b), as 

discussed above, VA facility pharmacies 

would be required to administer any 

needed smoking cessation 

pharmaceutical supplies first to veterans 

before providing them to CHAMPVA 

beneficiaries. We would also remove the 

restriction on smoking cessation 

services and supplies in current 

§ 17.272(a)(57), as discussed later in this 

proposed rule. 

For clarity, we would establish 

abbreviations for the Civilian Health 

and Medical Program of the Department 

of Veterans Affairs as ‘‘CHAMPVA’’ and 

the Department of Veterans Affairs as 

‘‘VA.’’ The current regulations refer to 

the part of VA that administratively 

handles CHAMPVA claims as the 

‘‘Center’’ in several places (see current 

§§ 17.275–17.277), and to the ‘‘Health 

Administration Center’’ in other places 

(see current §§ 17.270, 17.275–17.276), 

and we believe that referring to ‘‘VA’’ is 

more appropriately descriptive and 

would eliminate ambiguity. 

Proposed § 17.270(b) would establish 

definitions for the CHAMPVA 

regulations. We would define ‘‘accepted 

assignment’’ as the action of an 

authorized non-VA provider who 

accepts responsibility for the care of a 

CHAMPVA beneficiary and thereby 

agrees to accept the CHAMPVA 

determined allowable amount as full 

payment for services and supplies 

rendered to the beneficiary. This 

extinguishes the beneficiary’s payment 

liability to the provider with the 

exception of applicable cost shares and 

deductibles. This definition is 

consistent with our explanation for 

proposed § 17.272(b)(3), which further 

outlines the necessity for defining 

‘‘accepted assignment.’’ Our current 

regulations do not define the term 

‘‘authorized provider,’’ but the term 

‘‘authorized provider’’ (and variations 

thereof) is used throughout current 

§ 17.272 to refer to an institutional or 

individual provider of CHAMPVAcovered services and supplies. The term 

is used to describe persons or 

institutions that are considered 

appropriately licensed or credentialed 

to competently provide medical services 

and supplies to CHAMPVA 

beneficiaries and that VA will pay to 

provide such services and supplies. In 

addition, an ‘‘authorized provider’’ has 

historically been interpreted in 

CHAMPVA to be a non-VA medical 

provider. To capture this historical 

interpretation in full, we would define 

an ‘‘authorized non-VA provider’’ to 

mean an individual or institutional nonVA provider of CHAMPVA-covered 

medical services and supplies who is 

licensed or certified by a State to 

provide the covered medical services 

and supplies, or is otherwise certified 

by an appropriate national or 

professional association that sets 

standards for the specific medical 

provider. This requirement for State 

licensure or other certification would be 

similar to TRICARE, which requires that 

its providers be either licensed or 


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certified by a State, or, where States do 

not offer licensure or certification, be 

otherwise certified by an appropriate 

national or professional association that 

sets standards for the specific medical 

provider. See TRICARE Policy Manual 

6010.60–M, Chapter 11 (‘‘Providers’’), 

section 3.2 (‘‘State Licensure And 

Certification’’). (For general operationaltype information, one can also refer to 

TRICARE Operations Manual 6010.59– 

M, Chapter 4, (‘‘Provider Certification 

And Credentialing’’) (April 1, 2015).) 

We would define ‘‘calendar year’’ as 

the period of time between and 

including January 1 through December 

31. This is plain language and is 

consistent with the generally 

understood meaning of the phrase 

‘‘calendar year.’’ 

The term ‘‘CHAMPVA beneficiary’’ 

would be defined as a person enrolled 

for CHAMPVA under § 17.271. This 

would be a program-specific definition, 

but it is in plain language and is 

consistent with the generally 

understood meaning of the word 

‘‘beneficiary.’’ To clarify, an individual 

is enrolled in CHAMPVA only after the 

individual has successfully completed 

the application process (i.e., where the 

individual submits a completed VA 

Form 10–10d to VA, and VA has 

confirmed the individual’s eligibility). 

We would define ‘‘CHAMPVAcovered services and supplies’’ to mean 

those medical services and supplies that 

are medically necessary and appropriate 

for the treatment of a condition and that 

are not specifically excluded from 

coverage under proposed § 17.272(a)(1) 

through (84) (current § 17.272(a)(1) 

through (86)). 

We would define ‘‘CHAMPVA 

determined allowable amount’’ by 

referencing the proposed paragraph that 

would relate to this term, proposed 

§ 17.272(b)(1). 

We would define ‘‘CHAMPVA Inhouse Treatment Initiative (CITI)’’ to 

mean the initiative under section 

1781(b) under which participating VA 

medical facilities provide medical 

services and supplies to CHAMPVA 

beneficiaries who are not also eligible 

for Medicare, subject to availability of 

space and resources. 

We would define the term ‘‘child’’ 

consistent with 38 U.S.C. 101, as we do 

in the current regulation at § 17.270(b). 

We would define the term ‘‘claim’’ 

consistent with the current use and 

understanding of the term in the context 

of CHAMPVA, as a request by an 

authorized non-VA provider or 

CHAMPVA beneficiary for payment or 

reimbursement for medical services and 

supplies provided to a CHAMPVA 

beneficiary. 

We would define ‘‘fiscal year’’ as the 

period of time starting on October 1 and 

ending on September 30. This is plain 

language and is consistent with the 

generally understood meaning of the 

phrase ‘‘fiscal year’’ as used within the 

Federal Government. 

We would define ‘‘Medications by 

Mail (MbM)’’ to mean the initiative 

under which VA provides outpatient 

prescription medications through the 

mail to CHAMPVA beneficiaries. 

We would define ‘‘other health 

insurance’’ (OHI) as a health insurance 

plan or program (to include Medicare) 

or third-party coverage that provides 

coverage to a CHAMPVA beneficiary for 

expenses incurred for medical services 

and supplies. The inclusion of Medicare 

is consistent with the TRICARE 

regulation related to double coverage. 

See 32 CFR 199.8(d)(1). 

We would define the term ‘‘payer’’ to 

mean OHI, as defined in this 

rulemaking, that is obligated to pay for 

CHAMPVA-covered medical services 

and supplies. In a situation in which 

more than one insurer is responsible to 

pay for such services and supplies (e.g., 

a ‘‘double coverage’’ situation), there 

would be a primary payer (i.e., the payer 

obligated to pay first), a secondary payer 

(i.e., the payer obligated to pay after the 

primary payer), etc. In double coverage 

situations, CHAMPVA would be the last 

payer, after payment by the primary 

payer and all other secondary payers. 

Defining a ‘‘payer’’ and designating 

different payer types would not affect 

the administration of CHAMPVA 

because these concepts of relative 

payment responsibility are all accepted 

and understood by the insurance 

industry and current CHAMPVA 

beneficiaries and are an essential part of 

current CHAMPVA billing practices. For 

instance, Medicare would be the 

primary payer in situations governed by 

current § 17.271(b) (which remains 

unchanged by this proposed 

rulemaking). See 38 U.S.C. 1781(d)(2). 

The definition of ‘‘service-connected’’ 

in current § 17.270(b) would be 

unchanged and given the same meaning 

as that term in 38 U.S.C. 101. However, 

the terms ‘‘spouse’’ and ‘‘surviving 

spouse’’ would no longer have the 

definitions of these same terms in 38 

U.S.C. 101(31) and (3), respectively, as 

those definitions are outdated; instead, 

these terms would both be determined 

by operation of 38 U.S.C. 103(c). 

Consistent with the waiver provisions 

of TRICARE, see 32 CFR 199.1(n), new 

proposed paragraph (c) would establish 

the discretionary authority of VA to 

waive, when it is deemed to be in the 

best interest of VA, any regulatory 

requirement of this part that is not 

required by 38 U.S.C. 1781 or otherwise 

imposed by statute. This discretionary 

waiver authority would be limited to 

very unusual and limited circumstances 

and would not set a precedent for future 

decisions. In addition, it would not be 

used to deny any individual any right, 

benefit, or privilege provided by statute 

or these regulations. This new provision 

would enable VA to allow payment 

under CHAMPVA in cases, for example, 

where, by operation of CHAMPVA 

rules, the claim is subject to complex 

administrative or accounting procedures 

that ultimately result in determination 

of the claim’s technical noncompliance 

when the underlying claim is otherwise 

appropriate. Where a claimant’s noncompliance with a purely policy or 

administrative-based technical 

requirement is both unintentional and 

harmless, we believe it would be in 

VA’s best interest to have the authority 

to waive the regulatory requirement and 

allow payment. 

17.271 Eligibility 

Current § 17.271 identifies persons 

who may be eligible for CHAMPVA 

benefits. We would revise § 17.271(a) to 

recognize as CHAMPVA beneficiaries 

those individuals designated as Primary 

Family Caregivers under 38 CFR 

71.25(f). This substantive addition to the 

eligibility criterion would be made 

pursuant to the Caregivers and Veterans 

Omnibus Health Services Act of 2010, 

Public Law 111–163, section 102, which 

amended 38 U.S.C. 1781(a) by adding a 

new subsection (a)(4) authorizing VA to 

provide CHAMPVA benefits to ‘‘an 

individual designated as a primary 

provider of personal care services under 

[38 U.S.C. 1720G(a)(7)(A)] who is not 

entitled to care or services under a 

health-plan contract (as defined in [38 

U.S.C. 1725(f)]).’’ We amend CHAMPVA 

eligibility criteria to recognize these 

Primary Family Caregivers as 

CHAMPVA beneficiaries but not to 

establish substantive eligibility rules in 

the CHAMPVA regulations to determine 

whether an individual is a Primary 

Family Caregiver. (VA’s regulations 

governing the Caregivers Benefits 

Program established by 38 U.S.C. 1720G 

are codified at 38 CFR part 71, and the 

specific rules governing the 

identification of such individuals are 

found at 38 CFR 71.15 through 71.25.) 

We would redesignate current 

§ 17.271(a)(4) as § 17.271(a)(5) and add 

a new proposed § 17.271(a)(4) to state 

that a Primary Family Caregiver is 

eligible for CHAMPVA benefits if they 

are not entitled to care or services under 

a health-plan contract (as defined in 38 

U.S.C. 1725(f)(2)). We note that VA is 

already providing CHAMPVA services 


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and supplies to these individuals 

pursuant to the statutory mandate in 

section 1720G(a)(3)(A)(ii)(IV) and under 

the Caregivers Benefits Program 

regulations. This revision would simply 

update the CHAMPVA regulations to 

conform to these laws. 

17.272 Benefits Limitations/Exclusions 

Current § 17.272 provides general 

information about what medical 

services and supplies are covered by 

CHAMPVA and lists coverage 

limitations along with the exclusions. 

The general information concerning 

coverage in current § 17.272(a) 

continues to be accurate, and we do not 

propose any changes to paragraph (a). 

Some of the coverage limitations and 

exclusions listed in the numbered 

paragraphs under § 17.272(a) require 

revision due to either changed standards 

in clinical practice or changes in 

TRICARE coverage. 

Current § 17.272(a)(2) excludes the 

provision of services and supplies 

required as a result of an occupational 

disease or injury for which benefits are 

payable under workers’ compensation 

or a similar protection plan. We propose 

to update the verbiage to clarify the 

exclusion for the reader. 

Current § 17.272(a)(3) excludes the 

provision of services and supplies that 

are paid directly or indirectly by local, 

State, or Federal government agencies, 

with certain exceptions listed in 

§ 17.272(a)(3)(i) and (ii) where 

CHAMPVA assumes primary payer 

status. We propose to add Indian Health 

Service and CHAMPVA supplemental 

policies as exceptions where 

CHAMPVA assumes primary payer 

status. This would be consistent with 

current CHAMPVA practice as well as 

the TRICARE regulation related to 

double coverage. See 32 CFR 

199.8(b)(4)(ii) and (iv). We also propose 

to remove the ‘‘(Medicaid excluded)’’ 

parenthetical language in current 

§ 17.272(a)(3), because § 17.272(a)(3)(i) 

already expressly excepts ‘‘Medicaid’’ 

from the general exclusion in 

§ 17.272(a)(3). 

Current § 17.272(a)(21) excludes 

dental care generally, with exceptions to 

such exclusion listed in paragraphs 

(a)(21)(i) through (xii). We would amend 

paragraph (a)(21)(ix) to clarify that the 

provision of initial imaging services for 

the treatment of temporomandibular 

joint disorder (TMD) could specifically 

include Computed Tomography (CT) 

and Magnetic Resonance Imaging (MRI) 

services. We believe the sole reference 

to ‘‘initial radiographs’’ in current 

§ 17.272(a)(21)(ix) is outdated and that 

modern industry standards include the 

use of CT scans as well as MRIs for 

diagnosing TMD. A CT scan provides a 

more detailed image of the bones in the 

joint, and an MRI provides a more 

detailed image of the soft tissue to 

determine proper positioning as the jaw 

moves. We would also update 

§ 17.272(a)(21)(ix) to refer to the more 

updated and clinically appropriate 

terminology ‘‘temporomandibular joint 

disorder (TMD).’’ These revisions would 

update CHAMPVA regulations with 

current standards of clinical practice for 

the benefit of CHAMPVA beneficiaries. 

A majority of the remaining proposed 

changes to CHAMPVA coverage 

exclusions in proposed § 17.272(a)(1) 

through (82) are based on changes to 

TRICARE coverage and policy. Virtually 

all coverage limitations and exclusions 

in current § 17.272(a)(1)–(86), as shown 

in the chart below, are substantially 

identical to services and supplies 

excluded from, or limited under, 

TRICARE coverage under 32 CFR 

199.4(g), or as otherwise noted in the 

chart. 

LIST OF COMPARABLE CHAMPVA AND

TRICARE EXCLUSIONS

CHAMPVA provision (identified 

paragraphs are 

from 38 CFR 

17.272(a)) 

TRICARE provision (identified 

paragraphs are from 32 CFR 

199.4(g), or as otherwise 

noted) 

(1) ......................... (11). 

(2) ......................... (23). 

(3) ......................... (13). 

(4) ......................... (1). 

(5) ......................... (2). 

(6) ......................... (3). 

(7) ......................... (4). 

(8) ......................... (5). 

(9) ......................... (6). 

(10) ....................... (7). 

(11) ....................... (8). 

(12) ....................... (9). 

(13) ....................... (14). 

(14), (81) ............... (15). 

(15) ....................... (16). 

(16) ....................... (17). 

(17) ....................... (19). 

(18) ....................... (21). 

(19), (82) ............... (24). 

(20) ....................... (26). 

(21) ....................... (27). 

(22) ....................... (28). 

(23) ....................... (29). 

(24) ....................... (30). 

(25) ....................... (31). 

(27) ....................... (33). 

(28) ....................... (34). 

(29) ....................... (35). 

(30) ....................... (36). 

(31) ....................... (37). 

(32) ....................... (38). 

(33) ....................... (39). 

(34) ....................... (40). 

(35) ....................... (41). 

(36) ....................... (20), (42). 

(37) ....................... (43). 

(38) ....................... (44). 

(40) ....................... (46). 

(41) ....................... (47). 

(42) ....................... (50). 

(43) ....................... (51). 

(44) ....................... (48). 

(45) ....................... (49). 

LIST OF COMPARABLE CHAMPVA AND

TRICARE EXCLUSIONS—Continued 

CHAMPVA provision (identified 

paragraphs are 

from 38 CFR 

17.272(a)) 

TRICARE provision (identified 

paragraphs are from 32 CFR 

199.4(g), or as otherwise 

noted) 

(46) ....................... (52). 

(47) ....................... (53). 

(48) ....................... (54). 

(49) ....................... (55). 

(50) ....................... (56). 

(51) ....................... (57). 

(52) ....................... (58). 

(53) ....................... (60). 

(54) ....................... (61). 

(55), (57) ............... (62). 

(56) ....................... (64). 

(57) ....................... (65). 

(58) ....................... (66). 

(59) ....................... (67). 

(60) ....................... (72). 

(62) ....................... 32 CFR 199.4(a)(12) and 

(b)(10)(iv). 

(63) through (65) .. 32 CFR 199.4(e)(4) and (h). 

(66) ....................... (73). 

(67), (68) ............... 32 CFR 199.2(b) and 

199.4(e)(2). 

(69) ....................... 32 CFR 199.4(c)(3)(ix) and 

199.4(e)(4). 

(70), (71) ............... 32 CFR 199.4(e)(17). 

(73) ....................... 32 CFR 199.4(g)(15)(iv). 

(74) ....................... (69). 

(75) ....................... 32 CFR 199.4(a)(1). 

(76) ....................... 32 CFR 199.4(g)(74). 

(77) ....................... (39), (42). 

(78) ....................... (25). 

(79) ....................... 32 CFR 199.4(g)(15). 

(80) ....................... 32 CFR 199.2(b) and 

199.4(b)(2)(v), (b)(3)(iii), 

(b)(5)(v), (d)(3)(vi), (e)(11)(i). 

(83) ....................... 32 CFR 199.4(c)(2), (c)(3), 

(e)(8)(i)(E). 

(84) ....................... 32 CFR 199.4(e)(8). 

(85), (86) ............... 32 CFR 199.2(b), 199.4(e)(8), 

(g)(24). 

We note that even where our current 

provisions are not identical to a 

TRICARE provision, our intent has 

consistently been to apply CHAMPVA 

comparable exclusions or limitations in 

the same or similar manner to their 

TRICARE counterpart in accordance 

with 38 U.S.C. 1781(b). The same is true 

for our proposed revisions below, which 

are consistent with changes in DoD’s 

administration of TRICARE. 

The first change we would make to 

our limitations and exclusions based on 

TRICARE regulatory and policy changes 

concerns current § 17.272(a)(26), which 

is not addressed in the chart above 

because it correlates with a provision 

that has been removed from TRICARE 

regulations. See 60 FR 12419 (March 7, 

1995). Therefore, we propose to remove 

this exclusion from our regulations as 

well. Paragraph (a)(26) in current 

§ 17.272 excludes coverage for services 

and supplies, including psychological 

testing, provided in connection with a 

specific developmental disorder. By 

removing this exclusion, CHAMPVA 

would now cover this service, and we 

would redesignate current 


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§ 17.272(a)(27) through (38) as 

§ 17.272(a)(26) through (37), 

respectively. 

Under section 711 of the 2009 NDAA, 

TRICARE must waive all beneficiary 

costs associated with certain preventive 

services, unless the beneficiary is also 

Medicare-eligible. TRICARE regulations 

were revised to delete from 32 CFR 

199.4(g)(37) the list of preventive 

services not excluded from coverage, 

and these services were moved to new 

§ 199.4(e)(28) so that they instead would 

be reflected as preventive services under 

TRICARE for which out-of-pocket costs 

are eliminated. See 76 FR 81368 

(December 28, 2011). We would revise 

our current exclusion of preventive care 

in § 17.272(a)(31) (proposed to be 

redesignated as § 17.272(a)(30)) to 

except the same preventive services 

identified in paragraphs (d)(1)(A) 

through (F) of section 711 of the 2009 

NDAA and, further, do so in a manner 

that, on the whole, reflects the manner 

in which these services are provided 

under TRICARE. Section 711 of the 

2009 NDAA sets forth the following 

preventive services for which 

beneficiaries shall pay no associated 

costs: Colorectal cancer screening; 

breast cancer screening; cervical cancer 

screening; prostate cancer screening; 

annual physical exam; vaccinations. 

Current § 17.272(a)(31)(i) through (x) set 

forth exceptions to the general exclusion 

of certain specific preventive care. 

Respectively, the terms of current 

paragraphs (a)(31)(v) and (vi) already 

except ‘‘[p]ap smears’’ and 

‘‘[m]ammography tests’’ and so 

effectively capture ‘‘cervical cancer 

screening’’ and ‘‘breast cancer 

screening’’ as referred to in the 2009 

NDAA. However, because the singular 

terms ‘‘mammography test’’ and ‘‘pap 

smear’’ are outdated, we are updating to 

‘‘breast cancer screening’’ and ‘‘cervical 

cancer screening.’’ Therefore, proposed 

§ 17.272(a)(30) would revise the 

exceptions to the general exclusion of 

preventive care to include the four 

remaining preventive services specified 

in the 2009 NDAA, namely colorectal 

cancer screening; prostate cancer 

screening; annual physical examination; 

and vaccinations/immunizations. 

We note that the TRICARE final rule 

that implemented the amendments 

made by section 711 of the 2009 NDAA 

does not include an annual physical 

exam benefit for all TRICARE 

beneficiaries; instead, such benefit is 

limited to certain dependents of Active 

Duty military personnel who are 

traveling outside the United States and 

for beneficiaries ages 5 through 11 who 

require such exams for school 

enrollment. This benefit is also not 

exempt from cost sharing requirements. 

See 76 FR 81368, and 32 CFR 

199.4(e)(29). Broadly interpreting our 

mandate in section 1781(b), VA 

proposes to modify the current 

exclusion of preventive care in current 

§ 17.272(a)(31) insofar as it defines that 

term to include annual physical 

examinations and create an exception 

permitting such exams. Despite the 

limited availability of such 

examinations under TRICARE, it is 

noteworthy that TRICARE nonetheless 

covers some preventive services that are 

typically provided as part of an annual 

physical examination such as blood 

pressure screening, cholesterol testing, 

and body measurements. See TRICARE 

Policy Manual 6010.60–M 

(‘‘Medicine’’), Chapter 7, section 2.1 

(‘‘Clinical Preventive Services-TRICARE 

Standard’’) (April 1, 2015). To be paid 

for by TRICARE, however, these types of 

health promotion and disease 

prevention services must be billed in 

connection with another preventive 

service delineated in TRICARE’s policy 

manual. Id. We do not believe limiting 

the provision of annual physical 

examinations to only a few select groups 

is appropriate from a clinical 

perspective. Further, in the exercise of 

our discretion, when broadly 

interpreting the mandate of section 

1781(b), we conclude it lies within our 

discretion to determine that this benefit 

should be made available to all 

CHAMPVA beneficiaries. This is 

particularly the case given that some 

individual health promotion and 

disease prevention services that are 

typically provided as part of an annual 

physical examination would eventually 

be approved by TRICARE as long as 

they are coupled or associated with 

billing submitted for a covered service. 

(The nature and delivery of those 

services remains the same whether 

delivered as part of an annual 

examination or under the umbrella of 

another service for which TRICARE 

billing is permitted.) Furthermore, VA 

finds that annual physical examinations 

are beneficial for both CHAMPVA 

beneficiaries and VA, by serving to 

identify serious medical issues before 

they progress and their clinical 

management becomes more difficult and 

resource-intensive. Even though our 

proposed approach would include 

elements of an annual physical 

examination not otherwise included as 

an adjunct service provided under a 

covered benefit as described above, we 

believe our approach is sufficiently 

‘‘similar’’ to TRICARE. Therefore, we 

propose to create an exception to the 

exclusion of preventive care, permitting 

an annual physical examination to be 

among the benefits available to all 

CHAMPVA beneficiaries. 

We also note that we would except 

‘‘[v]accinations/immunizations’’ from 

the general exclusion of preventive 

services. Although subsection (d)(1)(F) 

of section 711 of the 2009 NDAA 

exempts ‘‘vaccination’’ only, TRICARE’s 

guidance on this issue additionally 

exempts immunizations. See TRICARE 

Reimbursement Manual 6010.61–M 

Chapter 2 (‘‘Beneficiary Liability’’), 

section 1 (‘‘Cost-Shares And 

Deductibles’’) (April 1, 2015). We 

believe these terms have identical 

meanings and would use both terms just 

to be clear that this preventive service 

is covered regardless of whether it is 

called an ‘‘immunization’’ or a 

‘‘vaccination.’’ 

Current § 17.272(a)(39) excludes 

coverage for audiological services or 

speech therapy, except when prescribed 

by a physician and rendered as part of 

a treatment addressing a physical defect, 

which correlates with a provision not 

addressed in the chart above because it 

has been removed from TRICARE 

regulations. See 75 FR 50880 (August 

18, 2010). Therefore, we propose to 

remove this exclusion from our 

regulations as well. By removing this 

exclusion, CHAMPVA would now cover 

this service, and we would redesignate 

current § 17.272(a)(40) through (56) as 

§ 17.272(a)(38) through (54), 

respectively. 

As stated earlier in this rulemaking, 

pursuant to section 713 of the 2009 

NDAA, TRICARE must make available 

smoking cessation benefits, as specified 

in the law, to beneficiaries who are not 

also eligible for Medicare. The four 

categories of smoking cessation benefits 

available to these beneficiaries are set 

forth in TRICARE’s regulations under 32 

CFR 199.4(e)(30)(ii)(A)–(D). Hence, we 

would revise our regulations by 

removing our correlate restriction on 

smoking cessation services and supplies 

in current § 17.272(a)(57). In removing 

current § 17.272(a)(57), current 

paragraphs (a)(58) through (71) would 

be redesignated as paragraphs (a)(55) 

through (68), respectively. 

Redesignated paragraphs (a)(57) 

through (59) would be revised to 

reference coverage of mental health 

benefits in a ‘‘calendar year’’ versus the 

current reference to ‘‘fiscal year.’’ We 

propose to change the yearly basis of 

this coverage because our beneficiaries 

and providers are more familiar with 

calendar year events, and the impact of 

the change from fiscal to calendar on the 

functioning of CHAMPVA would be 

minimal. 


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With the proposed removal of 

§ 17.272(a)(57) and subsequent 

redesignations of paragraphs noted 

above, current paragraph (a)(67) would 

be redesignated as paragraph (a)(64). 

CHAMPVA would continue to exclude 

the performance of abortions, except 

when a physician certifies that the life 

of the mother would be endangered if 

the fetus were carried to term. This is 

the same restriction in current TRICARE 

regulations (see 32 CFR 199.4(e)(2)), 

although statute and TRICARE policy 

statements recently established an 

additional exception to the general ban 

on abortions. Specifically, section 704 of 

the National Defense Authorization Act 

for Fiscal Year 2013, Public Law 112– 

239 (2013 NDAA), amended 10 U.S.C. 

1093(a) and (b) to expand the 

circumstances under which funds 

available to DoD and MTFs may be used 

to provide and perform abortions in 

cases of pregnancy resulting from an act 

of rape or incest. Despite the recent 

amendments to section 1093 of title 10 

and TRICARE policy, we do not propose 

same or similar changes to CHAMPVA’s 

current exclusion at this time because 

TRICARE regulations do not provide for 

it. Additionally, such changes would 

create an even greater disparity between 

the women’s health care benefits 

afforded veterans and CHAMPVA 

beneficiaries. 

Current § 17.272(a)(72) excludes from 

coverage drug maintenance programs 

where one addictive drug is substituted 

for another such as methadone 

substituted for heroin. A TRICARE final 

rule published on October 22, 2013, and 

effective November 21, 2013, removes a 

correlate restriction from TRICARE 

regulations, and so we propose to 

similarly remove § 17.272(a)(72). See 78 

FR 62427 (October 22, 2013); 32 CFR 

199.4(e)(4)(ii). We agree with the stated 

rationale in the related TRICARE 

proposed rule that the current 

restriction fails to recognize the 

accumulated medical evidence 

supporting certain maintenance 

programs as one component of the 

continuum of care necessary for the 

effective treatment of substance use 

disorders. See 76 FR 81899 (December 

29, 2011). In removing current 

§ 17.272(a)(72), current paragraphs 

(a)(73) through (86) would be 

redesignated as paragraphs (a)(69) 

through (82), respectively. 

Current § 17.272(a)(80), as proposed 

to be redesignated as paragraph (a)(76), 

excludes from CHAMPVA benefits 

medications not requiring a 

prescription, except for insulin and 

related diabetic testing supplies and 

syringes. We would revise redesignated 

paragraph (a)(76) to instead exclude 

‘‘over-the-counter products’’ and would 

additionally expand the exception to 

this exclusion to cover over-the-counter 

smoking cessation pharmaceutical 

supplies that are approved by the U.S. 

Food and Drug Administration (FDA), 

prescribed, and provided through MbM. 

These changes would be consistent with 

TRICARE regulations, which require a 

prescription from an authorized 

provider for smoking cessation 

pharmaceutical agents (even for FDAapproved over-the-counter smoking 

cessation agents). See 32 CFR 

199.4(e)(30)(ii)(A). 

Section 702 of the 2013 NDAA grants 

the Secretary of Defense the authority to 

add certain over-the-counter 

medications to the TRICARE formulary 

so that such medications may be 

administered as if they were 

prescription medications. CHAMPVA 

does not have a same or similar uniform 

formulary as DoD that could be altered 

to include certain over-the-counter 

medications, and we do not interpret 

section 702 as granting authority to alter 

VA’s uniform formulary. Therefore, we 

would not amend our regulations in 

response to section 702 of the 2013 

NDAA. Our regulation as revised and 

redesignated § 17.272(a)(76) would 

permit CHAMPVA to provide the same 

over-the-counter smoking cessation 

supplies as permitted in TRICARE 

policy. 

Lastly, we would add two new 

exclusions to § 17.272. Proposed 

paragraph (a)(83) would exclude 

medications that are not approved by 

the FDA, excluding FDA exceptions to 

the approval requirement. Current 

CHAMPVA regulations are silent 

regarding the need for medications to 

meet FDA approval requirements; 

however, this has not been a problem as 

a matter of practice because applicable 

standards of care generally require 

prescribed medications to be FDAapproved or excluded as an exception 

from the approval requirement. Still, we 

wish to formally and expressly exclude 

medications that do not meet these 

requirements. In addition, to provide 

benefits in the same or similar manner 

and subject to the same or similar 

limitations as TRICARE, paragraph 

(a)(84) would establish exclusions for 

services and supplies related to the 

treatment of dyslexia. See 38 CFR 

199.4(g)(32). This change merely reflects 

in regulation current CHAMPVA 

practice and policy. 

Due to the multiple proposed 

deletions and additions in 

§ 17.272(a)(1)–(86), we reiterate that we 

would redesignate most of the current 

paragraphs under § 17.272(a). With the 

proposed removal of current paragraph 

(a)(26), current paragraphs (a)(27) 

through (38) would be redesignated as 

(a)(26) through (37), respectively, with 

the substantive changes to redesignated 

(a)(30) as noted above. With the 

proposed removal of current paragraph 

(a)(39), current paragraphs (a)(40) 

through (56) would be redesignated as 

(a)(38) through (54), respectively, with 

no substantive changes. With the 

deletion of the current paragraphs 

(a)(57) and (72), current paragraphs 

(a)(58) through (86) would be 

redesignated as (a)(55) through (82), 

respectively, with the minor substantive 

changes as noted above to redesignated 

paragraphs (a)(57) through (59) and 

(a)(76). Lastly, we would add new 

paragraphs (a)(83) and (84). 

Current § 17.272(b) establishes the 

‘‘CHAMPVA determined allowable 

amount,’’ and paragraph (b)(1) states 

that the term ‘‘allowable amount’’ is the 

maximum amount that CHAMPVA will 

pay an authorized provider for a 

covered benefit, which is determined 

prior to cost sharing and the application 

of deductibles or OHI. (This means, for 

instance, that the cost-share would be a 

percentage of the entire CHAMPVA 

determined allowable amount.) 

However, this is merely a definition and 

not a statement of coverage limitation or 

exclusions. We would revise paragraph 

(b) to clearly indicate that amounts 

above the CHAMPVA determined 

allowable amount are excluded from 

CHAMPVA coverage. The actual 

payment methodology—the amount to 

which cost sharing and deductibles will 

be applied—is addressed in proposed 

§ 17.274(e) and is discussed below. 

Proposed § 17.272(b)(1) would 

explain that the CHAMPVA determined 

allowable amount is the maximum level 

of payment to an authorized non-VA 

provider for CHAMPVA-covered 

services and supplies and that this 

allowable amount is determined before 

cost sharing and the application of 

deductibles or OHI is considered. This 

is a restatement of current 

§ 17.272(b)(1), except that we would use 

the term ‘‘authorized non-VA provider’’ 

to encompass all those providers listed 

in current § 17.272(b)(1) and include the 

term ‘‘supplies’’ after ‘‘covered services’’ 

to underscore they too can be covered. 

See current 38 CFR 17.272(b)(1) 

(referencing ‘‘a hospital or other 

authorized institutional provider, a 

physician or other authorized 

individual professional provider, or 

other authorized provider for covered 

services’’). We believe use of the one 

term ‘‘authorized non-VA provider’’ as 

defined in proposed § 17.270(b) 

properly captures all provider types 

now listed in § 17.272(b)(1) and 


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simplifies the regulatory reference to 

providers for the benefit of CHAMPVA 

beneficiaries. Proposed § 17.272(b)(1) 

would also clearly state that the 

CHAMPVA determined allowable 

amount is payment made by VA to an 

authorized non-VA provider for the 

provision of CHAMPVA-covered 

services and supplies to a CHAMPVA 

beneficiary. 

Current § 17.272(b)(2) states that a 

Medicare-participating hospital must 

accept the CHAMPVA determined 

allowable amount for inpatient services 

as payment in full and references 42 

CFR parts 489 and 1003. While this is 

a true statement of law under 42 CFR 

489.25, the references to 42 CFR parts 

489 and 1003 are vague, and part 1003 

is not relevant to the issue of what 

amounts Medicare-participating 

hospitals must accept as payment in full 

from CHAMPVA. See 42 CFR part 1003 

(describing civil money penalties, 

assessments, and exclusions generally 

for individuals who violate provisions 

of or agreements with Federal health 

care programs). Proposed § 17.272(b)(2) 

would state that inpatient services are 

‘‘provided to a CHAMPVA beneficiary’’ 

and use a single, clarifying reference to 

42 CFR 489.25. 

Section 503 of The Caregivers and 

Veterans Omnibus Health Services Act 

of 2010, Public Law 111–163, revised 38 

U.S.C. 1781 by adding new subsection 

(e), which states: ‘‘Payment by the 

Secretary under this section on behalf of 

a covered beneficiary for medical care 

shall constitute payment in full and 

extinguish any liability on the part of 

the beneficiary for that care.’’ Current 

§ 17.272(b)(3) states that: ‘‘An 

authorized provider of covered medical 

services or supplies must accept the 

CHAMPVA determined allowable 

amount as payment in full.’’ Proposed 

§ 17.272(b)(3) would state more clearly 

that ‘‘accepted assignment’’ refers to the 

action of an authorized non-VA 

provider who accepts responsibility for 

the care of a CHAMPVA beneficiary and 

thereby agrees to accept the CHAMPVA 

determined allowable amount as full 

payment for services and supplies 

rendered to the beneficiary. The 

provider’s acceptance of the CHAMPVA 

determined allowable amount 

extinguishes the beneficiary’s payment 

liability to the provider with the 

exception of applicable cost shares and 

deductibles. Proposed § 17.272(b)(3) 

would not be substantively different 

than current paragraph (b)(3) but would 

clarify that the action of accepting 

payment is the equivalent of accepting 

assignment. The term ‘‘accepted 

assignment’’ is used currently in the 

administration of CHAMPVA payments, 

and we believe using it in this 

regulation as described would increase 

clarity in payment practices for both 

CHAMPVA beneficiaries and authorized 

non-VA providers. 

Current § 17.272(b)(4) provides that a 

provider who has collected and not 

made an appropriate refund, or attempts 

to collect from the beneficiary any 

amount in excess of the CHAMPVA 

determined allowable amount may be 

subject to exclusion from Federal 

benefit programs. The underlying 

authority for this rule is 42 CFR 

1003.105, which establishes the terms 

for a health care provider’s permissive 

or mandatory exclusion from 

participation in the Medicare program 

and other Federal health care programs. 

Exclusion may result, for instance, if a 

provider files false claims under these 

programs. We would move this 

information to proposed § 17.272(b)(3) 

for increased clarity and would remove 

mention of providers not making an 

appropriate refund of amounts collected 

from beneficiaries, as the purpose of 38 

U.S.C. 1781(e) and proposed 

§ 17.272(b)(3) is for these amounts to 

never be collected by the provider. By 

moving this information to proposed 

paragraph (b)(3), we would also remove 

current paragraph (b)(4). 

17.273 Preauthorization 

CHAMPVA preauthorization 

requirements for certain medical care 

and services are based on CHAMPVA 

needs and are substantially the same or 

similar as those required by TRICARE. 

See 32 CFR 199.4 passim. We propose 

to revise the preauthorization 

requirements by adding language to 

indicate when a beneficiary has ‘‘other 

health insurance’’ that provides primary 

coverage for the benefit, 

preauthorization requirements will not 

apply. TRICARE waives 

preauthorization requirements in all 

instances when OHI, to include 

Medicare, is the primary payer. See 

TRICARE Policy Manual 6010.60–M, 

Chapter 1 (‘‘Administration’’), section 

6.1 (‘‘Special Authorization 

Requirements’’) (April 1, 2015). To 

provide benefits in a similar fashion, we 

would waive any requirement for 

preauthorization where OHI (as defined 

by this rulemaking) covers the benefit. 

We would also revise current 

§ 17.273(d) to refer to dental coverage 

limitations in § 17.272(a)(21)(i)–(xii) to 

avoid a potential misconception that 

preauthorization is generally required 

for dental services. CHAMPVA clearly 

excludes all dental services, except for 

those listed in current § 17.272(a)(21)(i)– 

(xii). We would remove current 

§ 17.273(e) and not require 

preauthorization for durable medical 

equipment as a covered service or 

supply. Removal of § 17.273(e) would be 

consistent with TRICARE policy. See 

TRICARE Policy Manual 6010.60–M, 

Chapter 8 (‘‘Other Services’’), section 

2.1 (‘‘Durable Medical Equipment: Basic 

Program’’) (April 1, 2015). Based on this 

removal, we would redesignate current 

§ 17.273(f) as § 17.273(e). 

Finally, we would add new proposed 

§ 17.273(f) to detail the reviews of 

medical necessity. Since CHAMPVA is 

a secondary payer, VA would be 

required to perform reviews of medical 

necessity on a retrospective basis. If 

during the coordination of benefits 

process it is determined that CHAMPVA 

would be the responsible payer for the 

services and supplies but CHAMPVA 

preauthorization was not obtained prior 

to delivery of the services or supplies, 

we would obtain the necessary 

information and perform a retrospective 

medical necessity review. We would 

also propose that any claims, where a 

retrospective review occurs, are filed 

within the appropriate one-year period. 

17.274 Cost Sharing 

Current § 17.274(a) provides in 

general that CHAMPVA is a cost sharing 

program in which the cost of 

CHAMPVA-covered services and 

supplies is shared with the beneficiary, 

with the exception of services obtained 

through VA medical facilities. This 

provision would remain substantively 

the same, but we would add new 

paragraphs (a)(1)(i) and (ii) to explicate, 

respectively, that the former language 

‘‘services obtained through VA 

facilities’’ refers to services and supplies 

provided both through MbM and 

through CITI. That is, the exception to 

this cost-share requirement would 

extend specifically to each of these 

initiatives (as these initiatives would be 

defined by this proposed rulemaking). 

Subsections (d)(1)(A) through (d)(1)(F) 

of section 711 of the 2009 NDAA, as 

discussed earlier, set forth certain 

preventive services for which TRICARE 

waives all out-of-pocket costs, even if 

the beneficiary has not paid the amount 

necessary to cover the beneficiary’s 

deductible requirement for the year. We 

propose to revise § 17.274(a) to make 

clear that there will be no associated 

cost share for CHAMPVA beneficiaries 

for such services. (We address waiving 

the associated deductible requirement 

later in the discussion of proposed 

§ 17.274(b)). We would add new 

paragraphs (a)(1)(iii)(A)–(G) to § 17.274 

to waive CHAMPVA beneficiary costshare requirements for the same 

preventive services identified in 

paragraphs (d)(1)(A) through (F) of 


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section 711 of the 2009 NDAA. Section 

711 also authorizes, but does not 

require, the Secretary of Defense to 

extend the waiver of beneficiary costs to 

other preventive services. As such, we 

state in regulation that the list of 

services is not all-inclusive, enabling us 

to add supplemental items to the list in 

the future if needed, while enabling us 

to be sufficiently similar to TRICARE. 

See Public Law 110–417, section 

711(d)(1)(G). TRICARE regulations and 

policy guidance extend this waiver to 

well-child visits for children under 6 

years of age. See 32 CFR 199.4(e)(28)(iv), 

(f); TRICARE Reimbursement Manual 

6010.61–M, Chapter 2 (‘‘Beneficiary 

Liability’’), section 1 (‘‘Cost-Shares and 

Deductibles), 1.3.3.10.1.6 (Preventive 

Services’’). We would include this same 

waiver in proposed paragraph 

(a)(1)(iii)(G) of § 17.274. We would 

waive any cost-share requirement for 

hospice services in proposed 

§ 17.274(a)(1)(iv). This waiver is similar 

to the cost-share waiver for hospice 

services in TRICARE regulation. See 32 

CFR 199.14(g)(9). Lastly, to remain 

similar to TRICARE, in § 17.274(a)(1)(v), 

we would add a waiver for other 

services as determined by the Secretary 

of Veterans Affairs. 

For TRICARE, the waiver of 

beneficiary costs associated with 

preventive services in proposed 

§ 17.274(a)(1)(iii)(A) through (G) do not 

apply to any TRICARE beneficiary who 

is also Medicare-eligible. See Public 

Law 110–417, section 711(b). We would 

not exclude Medicare-eligible 

beneficiaries from cost sharing waivers 

for preventive services as this would 

unfairly disadvantage them as compared 

to other CHAMPVA beneficiaries with 

OHI. By not including this waiver, 

CHAMPVA will treat all beneficiaries 

with OHI the same. Additionally, we 

believe most preventive services 

provided to Medicare-eligible 

beneficiaries will be paid in full by 

Medicare, and, therefore, CHAMPVA 

will not assume any payment 

responsibility. In the event a cost share 

or deductible is applied for preventive 

services, CHAMPVA will treat those 

claims as it would the claims for any 

other beneficiary with OHI. 

The general provisions in current 

§ 17.274(b) related to establishing an 

annual deductible requirement (in 

addition to beneficiary cost share) 

would remain substantively the same. 

We would move the exception to this 

general requirement in current 

§ 17.274(b) (last sentence) for services 

obtained through VA facilities to a new 

§ 17.274(b)(1) and also explain that it 

refers to services and supplies provided 

through MbM or CITI under the same 

rationale as expressed above for 

proposed new § 17.274(a)(1)(i) and (ii), 

respectively. We would also move the 

exception to the deductible requirement 

in current § 17.274(b) (last sentence) for 

any inpatient services to a new 

§ 17.274(b)(2). Proposed § 17.274(b)(3) 

would except the listed preventive 

services in proposed 

§ 17.274(a)(1)(iii)(A)–(G) from the 

general deductible requirement in 

current and proposed § 17.274(b), in 

accordance with the mandate in section 

711 of the 2009 NDAA. See Public Law 

110–417, section 711(a)(2) (mandating 

that a beneficiary not be charged for 

preventive services during a year even 

if the beneficiary has not paid the 

amount necessary to cover the 

beneficiary’s deductible for the year. See 

32 CFR 199.4(f)(12)). Proposed 

§ 17.274(b)(4) would waive the 

CHAMPVA beneficiary deductible 

requirement for hospice services, as is 

done similarly under TRICARE 

regulations. See 32 CFR 199.14(g)(9). 

Lastly, to remain similar to TRICARE, in 

§ 17.274(b)(5), we would add a waiver 

for other services as determined by the 

Secretary of Veterans Affairs. 

Current § 17.274(c) establishes a 

calendar year limit on the ‘‘cost-share 

amount’’ incurred by a CHAMPVA 

beneficiary through the payment of both 

cost-shares and deductible amounts (See 

current 38 CFR 17.274(c), indicating 

that the cap is ‘‘limited to the applied 

annual deductible(s) and the beneficiary 

cost-share amount.’’). Proposed 

§ 17.274(c) would retain this basic 

information but would refer instead to 

a cap on ‘‘out-of-pocket costs’’ instead of 

‘‘cost-share amounts’’ so that it is clear 

that both cost share and deductible 

amounts apply to this cap. Current 

§ 17.274(c)(i) establishes an annual cap 

of cost sharing of $7,500 per CHAMPVA 

eligible family ‘‘through December 31, 

2001’’, which is an outdated provision. 

Current § 17.274(c)(ii) further 

establishes a current cap of $3000 per 

CHAMPVA eligible family, which was 

‘‘[e]ffective January 1, 2002.’’ Under 

proposed § 17.274(c), we would 

establish an annual (calendar year) cap 

on out-of-pocket costs of $3,000 per 

CHAMPVA eligible family. The annual 

cap amount would be unchanged from 

what currently exists but would use the 

new terminology proposed above for the 

sake of clarity. We would also remove 

current § 17.274(c)(i) and (ii). 

We do not propose any substantive 

changes to current § 17.274(d) as this 

provision is legally adequate, and we 

are not proposing to revise policies 

related to it. However, we are adding a 

subject heading in an effort to mirror the 

cost share calculation in proposed 

paragraph (e) to § 17.274. 

We propose to add a new paragraph 

(e) to § 17.274 which would set forth the 

principles found in current policy 

manuals that VA uses to establish 

CHAMPVA beneficiary cost-share 

amounts. The calculation methodologies 

that would be described in proposed 

§ 17.274(e) represent current CHAMPVA 

practice and therefore would not 

increase or decrease the out-of-pocket 

costs for CHAMPVA beneficiaries. The 

methodologies described in proposed 

§ 17.274(e) are also consistent with 

TRICARE cost-share calculation 

methodologies for the same or similar 

types of care, except as indicated below. 

In accordance with current practice, 

and as proposed in § 17.274(e), the 

CHAMPVA beneficiary’s cost-share 

amount, if applicable, is 25 percent of 

the CHAMPVA determined allowable 

amount in excess of the annual calendar 

year deductible for most CHAMPVAcovered services and supplies. This 

calculation is similar to that used in 

TRICARE to determine cost-share 

amounts for a majority of TRICARE 

covered services. See 32 CFR 

199.4(f)(3)(ii)(C) and (f)(3)(iii). Proposed 

§ 17.274(e)(1) and (2) would establish 

the services for which the general rule 

of a 25 percent cost share does not 

always apply. Proposed paragraph (e)(1) 

would establish in regulation the 

current calculation VA uses to 

determine CHAMPVA beneficiary cost 

share for inpatient facility services and 

supplies that are subject to the 

CHAMPVA Diagnosis Related Group 

(DRG) payment system. The CHAMPVA 

DRG system, like that used by TRICARE 

under 32 CFR 199.14, is based on the 

Centers for Medicare and Medicaid 

Services (CMS) prospective payment 

system for hospital services, as set forth 

in 42 CFR part 412. For services based 

on the CHAMPVA DRG system, the 

CHAMPVA beneficiary cost share 

would be the lesser of the per diem rate 

multiplied by the number of inpatient 

days; or, 25 percent of the hospital’s 

billed amount; or, the base CHAMPVA 

DRG rate. This calculation is similar to 

that used in TRICARE regulation. See 32 

CFR 199.4(f)(3)(ii)(A) and (f)(8)(ii). 

Proposed § 17.274(e)(2) would 

establish the CHAMPVA beneficiary 

cost share for covered inpatient facility 

services and supplies that are subject to 

the CHAMPVA mental health low 

volume per diem reimbursement 

methodology. This methodology covers 

mental health inpatient services for 

lower volume hospitals and units (less 

than 25 mental health discharges per 

federal fiscal year). For these services, 

the CHAMPVA beneficiary cost share 


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would be the lesser of a fixed per diem 

amount multiplied by the number of 

inpatient days or 25 percent of the 

hospital’s billed charges. This 

calculation is similar to that used in 

TRICARE regulations. See 32 CFR 

199.4(f)(3)(ii)(B) and (f)(8)(ii). 

Although, as noted above, a majority 

of the CHAMPVA cost-share 

methodologies are the same or similar as 

TRICARE’s, we would not adopt a 

recent TRICARE exception to its general 

25 percent cost-share rule for 

prescription medications. Section 712 of 

the 2013 NDAA requires the Secretary 

of DoD, through regulations, to establish 

specified fixed dollar amounts for cost 

shares for pharmacy benefits (e.g., 

generic, formulary, and non-formulary 

agents or medications). We would not 

establish similar fixed cost-share 

amounts because CHAMPVA does not 

have an established uniform formulary 

and, therefore, is unable to identify all 

medications which may be prescribed or 

approximate their standard retail 

pricing to determine, with certainty, 

that a fixed dollar amount would satisfy 

beneficiaries’ cost-share liability. 

Generally, CHAMPVA coverage of 

medications depends upon whether 

medications are approved by the FDA 

for the indications for which they are 

prescribed (as explained above in 

connection with new proposed 

§ 17.272(a)(83)). Additionally, the fixed 

cost-share amounts required by section 

712 of the 2013 NDAA would apply 

even to medications administered 

through TRICARE’s mail order service; 

whereas, under proposed § 17.274(a)(1), 

as revised for clarity, cost-sharing 

requirements would not apply to 

services and supplies provided through 

VA’s MbM. As a matter of policy, VA 

does not wish to apply a cost share for 

mail order pharmacy supplies provided 

to CHAMPVA beneficiaries. We believe 

that this departure from TRICARE is 

necessary to ensure the most 

appropriate care for CHAMPVA 

beneficiaries. Although we would not 

establish fixed cost-share amounts for 

medications similar to those set forth in 

section 712 of the 2013 NDAA, we 

would revise our regulations to clarify 

the methodology CHAMPVA uses to 

determine allowable amounts paid for 

outpatient medications obtained in the 

community (explained later in the 

discussion of proposed § 17.275(f)), 

upon which the 25 percent CHAMPVA 

beneficiary cost share is based. We 

believe these clarifications would 

provide more transparency related to 

pharmacy costs and subsequent 

CHAMPVA beneficiary cost-share 

amounts for pharmaceutical supplies 

obtained in the community, which we 

believe is a reasonable interpretation of 

the goals of section 712 of the 2013 

NDAA in establishing fixed cost-share 

amounts. 

17.275 CHAMPVA Determined 

Allowable Amount Calculation 

We propose to add a new § 17.275 to 

describe the various payment 

methodologies used by CHAMPVA to 

calculate the CHAMPVA determined 

allowable amount for covered services 

and supplies. CHAMPVA uses the same 

or similar payment methodologies to 

establish allowable reimbursement 

amounts for providers as TRICARE. See 

32 CFR 199.14. As with the cost-share 

methodologies that would be described 

in § 17.274(e), proposed § 17.275 

represents current practice except as 

noted below and would not cause 

changes for CHAMPVA beneficiaries. 

The reason that § 17.274(e) (regarding 

cost share) and § 17.275 (regarding 

CHAMPVA determined allowable 

amount) would be separated is to clarify 

for CHAMPVA beneficiaries how much 

of the CHAMPVA determined allowable 

amount they are responsible for as a cost 

share (e.g., 25 percent) and additionally 

to provide beneficiaries and providers 

with an idea of how such allowable 

amounts are calculated. 

Proposed § 17.275(a) would establish 

in regulation the CHAMPVA 

determined allowable amount for 

reimbursement of inpatient hospital 

services based on the CHAMPVA DRGbased payment system. Proposed 

paragraph (a) would explain that, unless 

exempt or subject to a methodology in 

proposed paragraph (b) or (c), hospital 

services provided in the 50 States, the 

District of Columbia, and Puerto Rico 

are subject to the CHAMPVA DRG-based 

payment system. The CHAMPVA DRG 

system, similar to that used by TRICARE 

under 32 CFR 199.14, is also based on 

the CMS prospective payment system as 

set forth in 42 CFR part 412. Certain 

services provided in a DRG reimbursed 

facility will be reimbursed under the 

CHAMPVA Cost-to-Charge (CTC) 

payment method. See, e.g., 32 CFR 

199.14(c). However, we will not list 

these specifically in regulations as the 

list of services may change more often 

than regulations can be updated. 

Proposed § 17.275(b) would establish 

in regulation the current CHAMPVA 

inpatient mental health per diem 

payment system used to calculate 

reimbursement for inpatient mental 

health hospital care in specialty 

psychiatric hospitals and psychiatric 

units of general acute hospitals that are 

exempt from the CHAMPVA DRG-based 

payment system. The per diem rate 

would be calculated based on the daily 

rate times the number of days (length of 

stay). CHAMPVA’s mental health per 

diem rates are updated each fiscal year 

for both high volume hospitals (25 or 

more discharges per fiscal year) and low 

volume hospitals (less than 25 

discharges per fiscal year). The per diem 

rates used by CHAMPVA are 

determined by TRICARE per diem rates. 

See 32 CFR 199.14(a). 

Proposed § 17.275(c) would establish 

in regulation the CHAMPVA CTC 

payment system that is used to calculate 

the CHAMPVA determined allowable 

amount for inpatient services furnished 

by hospitals or facilities that are exempt 

from the CHAMPVA DRG-based 

payment system or the CHAMPVA 

inpatient mental health per diem 

payment system. TRICARE establishes 

an alternate methodology to calculate 

payments for inpatient services that are 

exempt from its DRG and inpatient 

mental health per diem payment 

systems. See 32 CFR 199.14(a)(4). 

Proposed § 17.275(c)(1) would establish 

the CHAMPVA CTC methodology used 

to calculate costs for hospitals or 

facilities by multiplying a CTC ratio by 

billed charges. We would further 

propose that the billed charges from the 

applicable hospitals and facilities must 

be customary and not in excess of rates 

or fees the hospital or facility charges 

the general public for similar services in 

a community. This requirement that the 

applicable billed charges not be in 

excess of what is charged of the general 

public is similar to TRICARE’s 

requirements. See 32 CFR 

199.14(a)(4)(i). Proposed 

§ 17.275(c)(2)(i) through (x) would 

establish the types of hospitals and 

services subject to the CHAMPVA CTC 

methodology, similar to TRICARE at 32 

CFR 199.14(a)(1)(ii)(D)(1) through (10) 

and (a)(1)(ii)(E). We would also add in 

proposed § 17.275(c)(2)(xi) that 

hospitals and services as determined by 

the Secretary of Veterans Affairs may be 

subject to the CHAMPVA CTC 

methodology. 

Proposed § 17.275(d) would establish 

in regulation the CHAMPVA outpatient 

prospective payment system (OPPS) 

used to calculate the allowable amount 

for outpatient services provided in a 

hospital subject to Medicare OPPS. This 

will include the utilization of 

TRICARE’s reimbursement methodology 

to include specific coding requirements, 

ambulatory payment classifications 

(APCs), nationally established APC 

amounts, and associated adjustments 

(e.g., discounting for multiple surgery 

procedures, wage adjustments for 

variations in labor-related costs across 

geographical regions, and outlier 


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calculations). The CHAMPVA OPPS is 

the same as that utilized by TRICARE 

under 32 CFR 199.14, which is similar 

to Medicare’s basic OPPS methodology. 

There are differences between 

TRICARE’s OPPS methodology and 

Medicare’s basic OPPS methodology 

due to variations in benefit structure 

and beneficiary population. CHAMPVA 

is adopting TRICARE’s OPPS because 

the CHAMPVA beneficiary population 

is more similar to the TRICARE 

beneficiary population than to the 

Medicare beneficiary population. See 32 

CFR 199.14(a)(6)(ii). 

Proposed § 17.275(e) would establish 

in regulation the reimbursement 

methodology for services and supplies 

provided by authorized non-VA 

providers on an outpatient or inpatient 

basis where the services are distinct 

from facility-type charges in proposed 

§ 17.275(a) through (d). Proposed 

§ 17.275(e) would explain that the 

CHAMPVA determined allowable 

amount paid to authorized non-VA 

providers (not hospitals) for services 

and supplies provided on an outpatient 

or inpatient basis is the lesser of: The 

CHAMPVA maximum allowable charge 

(equivalent to the maximum allowable 

charge for similar services provided by 

other than hospitals and skilled nursing 

facilities under TRICARE, see 32 CFR 

199.14(c)); the prevailing amount, 

which is the amount equal to the 

maximum reasonable amount allowed 

providers for a specific procedure in a 

specific locality; or the billed amount. 

Certain services that typically may be 

provided within a hospital setting, but 

not billed as a facility-type charge under 

proposed paragraphs (a) through (d), 

would be included as examples in 

proposed paragraph (e), namely 

anesthesia services; laboratory services; 

and other professional services 

associated with individual authorized 

non-VA providers. These examples are 

not all-inclusive. 

Proposed § 17.275(f) would establish 

in regulation the current payment 

methodology for outpatient CHAMPVA 

pharmacy points of service. CHAMPVA 

negotiates rates with retail pharmacies 

through its contract with the pharmacy 

benefit manager. For services and 

supplies obtained from a retail ‘‘innetwork’’ pharmacy, proposed 

§ 17.275(f)(1) would establish that VA 

pays the lesser of the billed amount or 

the contracted rate. For supplies from a 

retail ‘‘out-of-network’’ pharmacy, 

proposed § 17.275(f)(2) would establish 

that VA pays the lesser of the billed 

amount plus a dispensing fee or the 

average wholesale price plus a 

dispensing fee. 

Proposed § 17.275(g) would set forth 

in regulation the current CHAMPVA 

reimbursement methodology for the 

provision of services in a Skilled 

Nursing Facility (SNF). This 

methodology is based on the CMS 

prospective payment system for SNFs 

under 42 CFR part 413, subpart J 

(Medicare Resource Utilization Group 

(RUG) rates), which is the same 

methodology used in TRICARE 

regulations to calculate SNF payments. 

See 32 CFR 199.14(b). 

Proposed § 17.275(h) would set forth 

in regulation the current reimbursement 

methodology for durable medical 

equipment, prosthetics, orthotics, and 

supplies (DMEPOS). Reimbursement of 

DMEPOS would be based on the same 

amounts established under the CMS 

DMEPOS fee schedule under 42 CFR 

part 414, subpart D, which is the same 

methodology used in TRICARE 

regulations to calculate DMEPOS 

payments. See 32 CFR 199.14(k). The 

allowed amount would be that which is 

in effect in the specific geographic 

location at the time CHAMPVA-covered 

services and supplies are provided to a 

CHAMPVA beneficiary. 

Proposed § 17.275(i) would establish 

in regulation the current payment 

methodology for all ambulance services. 

CHAMPVA adopts Medicare’s 

Ambulance Fee Schedule (AFS) for 

ambulance services, which is based on 

the same methodology used by 

TRICARE. See TRICARE 

Reimbursement Manual 6010.61–M, 

Chapter 1 (‘‘General’’), section 14 

(‘‘Ambulance Services’’) (April 1, 2015). 

Ambulance services are paid based on 

the lesser of the Medicare AFS or the 

billed amount. Payments for ambulance 

services furnished by a Critical Access 

Hospital (CAH) are paid on the same 

basis as the CTC method under 

paragraph (c) of this section. 

Proposed § 17.275(j) would establish 

in regulation the current reimbursement 

methodology for hospice care. This 

methodology uses rates in the CMS 

hospice per diem rate payment system, 

which is the same methodology used in 

TRICARE regulations to calculate 

hospice payments. See 32 CFR 

199.14(g)(9). 

Proposed § 17.275(k) would establish 

in regulation a reimbursement 

methodology for intermittent or parttime home health services similar to the 

methodology used in TRICARE, which 

is based on Medicare’s payment 

methods and rates. See 32 CFR 

199.14(h). Under this methodology, a 

fixed case-mix and wage-adjusted 

national 60-day episode payment 

amount will act as payment in full for 

costs associated with furnishing home 

health services with exceptions 

allowing for additional payment to be 

established. This would be a new 

limitation in payments for services but 

is in line with the 60-day episode 

amount specified in the TRICARE 

regulation. See 32 CFR 199.14(h). 

Proposed § 17.275(l) would establish 

in regulation the current reimbursement 

methodology for facility charges 

associated with procedures performed 

in a freestanding surgery center, which 

is the basis of a prospectively 

determined amount, similar to that used 

by TRICARE. See 32 CFR 199.14(d). 

These facility charges would not 

include physician fees, anesthesiologist 

fees, or fees of other authorized non-VA 

providers; such independent 

professional fees would be submitted 

separately from facility fees and 

calculated under the methodology in 

proposed § 17.275(e). Ambulatory 

surgery procedures performed in CAHs 

or in hospital outpatient departments 

are to be reimbursed in accordance with 

the provisions of paragraph (c) or (d) 

respectively of this section. 

Proposed § 17.275(m) states that VA 

shall determine the appropriate 

reimbursement method or methods to be 

used in the extension of CHAMPVA 

benefits for otherwise covered medical 

services and supplies provided by 

hospitals or other institutional 

providers, physicians or other 

individual professional providers, or 

other providers outside the United 

States. The authority to establish these 

reimbursement methods is similar to 

that in TRICARE regulation. See 32 CFR 

199.14(n). 

Proposed § 17.275(n) would establish 

in regulation the reimbursement 

methodology for inpatient services 

provided in a Sole Community Hospital 

(SCH). TRICARE reimbursement 

approximates Medicare reimbursement 

for SCHs. TRICARE reimburses on a 

two-step process. TRICARE makes an 

initial payment based upon multiplying 

the billed amount by the applicable 

TRICARE percentage, which is the 

greater of the SCH’s most recently 

available cost-to-charge ratio from the 

CMS inpatient Provider Specific File or 

the TRICARE allowed-to-billed ratio. 

The second step is a year-end 

adjustment to compare the aggregate 

allowable cost under the first method to 

the aggregate amount that would have 

been allowed for the same care using the 

DRG method. In the event that the DRG 

method amount is the greater, the yearend adjustment will be the amount by 

which it exceeds the aggregate allowable 

costs. See 32 CFR 199.14(a)(7). Due to 

certain limitations, CHAMPVA cannot 

be the same as TRICARE but can be 


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similar. CHAMPVA would compare the 

cost-to-charge ratio reimbursement 

amount versus the DRG reimbursement 

amount and then pay the higher of the 

two methods. 

17.276 Claim-Filing Deadlines 

Proposed § 17.276 is a revision and 

renumbering of current § 17.275. First, 

we propose to remove the reference to 

‘‘the Center’’ and ‘‘[t]he Director, Health 

Administration Center, or his or her 

designee’’ in § 17.276(a) and (b), as 

renumbered by this rulemaking. Our 

intent is to indicate that VA is 

responsible for administering 

CHAMPVA and has discretion to assign 

claims processing responsibility within 

the Department. 

Proposed § 17.276(c) would clarify 

that claims for services and supplies 

provided to an individual before the 

date of the event that qualifies the 

individual as eligible under § 17.271 are 

not reimbursable. 

We further propose to add new 

paragraph (d) to proposed § 17.276 to 

clarify CHAMPVA policy concerning 

double coverage situations. We would 

clearly state that CHAMPVA is the last 

payer to all OHI, with the exceptions 

noted previously, which would mean 

that in cases of double coverage, any 

CHAMPVA benefits would generally not 

be paid until the claim has first been 

filed with the OHI and a final payment 

determination or explanation of benefits 

has been issued by the other insurer or 

payer. This is consistent with the 

purpose of TRICARE’s double coverage 

provisions in 32 CFR 199.8, which 

address double coverage situations with 

OHI. Once CHAMPVA, as the last payer, 

makes its payment to the authorized 

non-VA provider, the CHAMPVA 

beneficiary’s personal liability for the 

cost of care is then fully extinguished, 

as discussed earlier. However, TRICARE 

has special rules for double coverage 

situations involving TRICARE 

beneficiaries who also have Medicare 

benefits. See 32 CFR 199.8(e)(1). In the 

case of double coverage based on the 

availability of both CHAMPVA and 

Medicare benefits, the provisions of 

current § 17.271(b) would still apply 

and be unchanged by this proposed 

rulemaking. Under current § 17.271(b), 

VA is the secondary payer to Medicare, 

as required under 38 U.S.C. 1781(d)(2). 

17.277 Appeals 

Proposed § 17.277 is a revision and 

renumbering of current § 17.276. We 

would make two minor revisions to 

current § 17.276. First, we would 

remove references to ‘‘Director, Health 

Administration Center, or his or her 

designee’’ (an outdated reference within 

the current Office of Community Care) 

and replace it with a reference to ‘‘VA.’’ 

This is necessary to ensure that VA is 

effectively put forth as the general 

administrator of CHAMPVA. In 

addition, we would clarify when a 

beneficiary has OHI, an appeal must 

first be filed with the OHI, and a 

determination made, before submitting 

an appeal to CHAMPVA. We would also 

like to note that there may be instances 

where we would not require a 

beneficiary to appeal with their OHI 

first, such as when the OHI deems the 

issue non-appealable. Neither of these 

revisions are substantive changes. We 

will also keep the note located in 

current § 17.276, relocating it to the 

body of new § 17.277. 

We propose to renumber current 

§§ 17.277–17.278 to §§ 17.278–17.279. 

Additionally, as with proposed § 17.277, 

we would remove reference to ‘‘the 

Center’’ in current § 17.277 and in its 

place insert ‘‘VA.’’ This revision would 

clarify that it is VA, and not HAC 

independently, that has the authority to 

pursue medical care cost recovery in 

accordance with applicable law. We 

would also remove the reference to 

third-party liability in proposed 

§ 17.278 because it is unnecessary. VA’s 

specific authority to recover for medical 

care costs applies to responsible third 

parties. We would not make any 

substantive changes to proposed 

§ 17.279. 

Effect of Rulemaking 

The Code of Federal Regulations, as 

proposed to be revised by this proposed 

rulemaking, would represent the 

exclusive legal authority on this subject. 

No contrary rules or procedures would 

be authorized. All VA guidance would 

be read to conform with this proposed 

rulemaking if possible or, if not 

possible, such guidance would be 

superseded by this rulemaking. 

Paperwork Reduction Act 

This proposed rule contains no 

provisions constituting a collection of 

information under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3521). 

Regulatory Flexibility Act 

The Secretary hereby certifies that 

this proposed rule would not have a 

significant economic impact on a 

substantial number of small entities as 

they are defined in the Regulatory 

Flexibility Act, 5 U.S.C. 601–612. The 

new proposed payment methods in this 

rulemaking will include new 

reimbursement rates for the Outpatient 

Prospective Payment System (OPPS), 

Home Health Prospective Payment 

System (HH PPS), and Sole Community 

Hospitals (SCHs) reimbursement 

methodologies. These revised 

methodologies would not significantly 

affect small businesses due to the 

following reasons: (1) The health care 

industry, to include Medicare and 

TRICARE, is currently using these 

payment methods and most providers 

are used to these reimbursement rates, 

if not expecting to receive them; (2) 

CHAMPVA’s beneficiary population is 

relatively small compared to these other 

health care payers. Further support and 

data can also be found in VA’s impact 

analysis as a supporting document at 

http://www.regulations.gov, usually 

within 48 hours after the rulemaking 

document is published. Additionally, a 

copy of this rulemaking and its impact 

analysis are available on VA’s website at 

http://www.va.gov/orpm/, by following 

the link for ‘‘VA Regulations Published 

from FY 2004 Through Fiscal Year to 

Date.’’ Therefore, pursuant to 5 U.S.C. 

605(b), this amendment would be 

exempt from the initial and final 

regulatory flexibility analysis 

requirements of 5 U.S.C. 603 and 604. 

Executive Orders 12866, 13563 and 

13771 

Executive Orders 12866 and 13563 

direct agencies to assess the costs and 

benefits of available regulatory 

alternatives and, when regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, and other advantages; 

distributive impacts; and equity). 

Executive Order 13563 (Improving 

Regulation and Regulatory Review) 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. Executive Order 

12866 (Regulatory Planning and 

Review) defines a ‘‘significant 

regulatory action,’’ which requires 

review by the Office of Management and 

Budget (OMB), as ‘‘any regulatory action 

that is likely to result in a rule that may: 

(1) Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities; (2) Create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency; (3) Materially alter the 

budgetary impact of entitlements, 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) Raise novel legal or policy 


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

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in this Executive Order.’’ 

The economic, interagency, 

budgetary, legal, and policy 

implications of this regulatory action 

have been examined and OMB has 

determined the regulatory action to be 

economically significant, because it will 

have an annual effect on the economy 

of $100 million or more. As noted 

above, VA’s impact analysis is available 

as a supporting document at http://

www.regulations.gov, usually within 48 

hours after the rulemaking document is 

published. Additionally, a copy of this 

rulemaking and its impact analysis are 

available on VA’s website at http://

www.va.gov/orpm/, by following the 

link for ‘‘VA Regulations Published 

from FY 2004 Through Fiscal Year to 

Date.’’ 

This proposed rule is not expected to 

be subject to the requirements of 

EO13771 because this proposed rule is 

expected to result in no more than de 

minimis costs. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

of 1995 requires, at 2 U.S.C. 1532, that 

agencies prepare an assessment of 

anticipated costs and benefits before 

issuing any rule that may result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

(adjusted annually for inflation) in any 

one year. This proposed rule would 

have no such effect on State, local, or 

tribal governments, or on the private 

sector. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance numbers and titles for the 

programs affected by this document are 

64.009, Veterans Medical Care Benefits; 

64.010, Veterans Nursing Home Care; 

and 64.011, Veterans Dental Care; 

64.012, Veterans Prescription Service; 

64.013, Veterans Prosthetic Appliances; 

and 64.019, Veterans Rehabilitation 

Alcohol and Drug Dependence. 

Signing Authority 

The Secretary of Veterans Affairs, or 

designee, approved this document and 

authorized the undersigned to sign and 

submit the document to the Office of the 

Federal Register for publication 

electronically as an official document of 

the Department of Veterans Affairs. Gina 

S. Farrisee, Deputy Chief of Staff, 

Department of Veterans Affairs, 

approved this document on October 2, 

2017, for publication. 

List of Subjects in 38 CFR Part 17 

Administrative practice and 

procedure, Archives and records, 

Claims, Dental health, Drug abuse, 

Health care, Health facilities, Health 

professions, Health records, Medical 

devices, Mental health programs, 

Nursing homes, Veterans. 

Dated: January 5, 2018. 

Michael Shores, 

Director, Office of Regulation Policy & 

Management, Office of the Secretary, 

Department of Veterans Affairs. 

For the reasons stated in the 

preamble, The Department of Veterans 

Affairs (VA) proposes to amend 38 CFR 

part 17 as follows: 

PART 17—MEDICAL 

■ 1. The authority citation for part 17 

continues to read in part as follows: 

Authority: 38 U.S.C. 501, and as noted in 

specific sections. 

* * * * * 

■ 2. Revise § 17.270 to read as follows: 

§ 17.270 General provisions and 

definitions. 

(a) Overview of CHAMPVA. 

CHAMPVA is the Civilian Health and 

Medical Program of the Department of 

Veterans Affairs (VA). Generally, 

CHAMPVA furnishes medical care in 

the same or similar manner, and subject 

to the same or similar limitations, as 

medical care furnished to certain 

dependents and survivors of active duty 

and retired members of the Armed 

Forces under chapter 55 of title 10, 

United States Code (CHAMPUS), 

commonly referred to as the TRICARE 

Standard plan. Under CHAMPVA, VA 

shares the cost of medically necessary 

services and supplies with eligible 

beneficiaries within the 50 United 

States, the District of Columbia, the U.S. 

territories, and abroad. Under 

CHAMPVA, medical services and 

supplies may be provided as follows: 

(1) By an authorized non-VA 

provider. 

(2) By a VA provider at a VA facility, 

on a resource-available basis through 

the CHAMPVA In-house Treatment 

Initiative (CITI) only to CHAMPVA 

beneficiaries who are not also eligible 

for Medicare. 

(3) Through VA Medications by Mail 

(MbM). 

(i) Only CHAMPVA beneficiaries who 

do not have any other type of health 

insurance that pays for prescriptions, 

including Medicare Part D, may use 

MbM. 

(ii) Smoking cessation pharmaceutical 

supplies will only be provided through 

MbM and only to CHAMPVA 

beneficiaries that are not also eligible for 

Medicare. 

(b) Definitions. The following 

definitions apply to CHAMPVA 

(§§ 17.270 through 17.278): 

Accepted assignment refers to the 

action of an authorized non-VA 

provider who accepts responsibility for 

the care of a CHAMPVA beneficiary and 

thereby agrees to accept the CHAMPVA 

determined allowable amount as full 

payment for services and supplies 

rendered to the beneficiary. (The 

provider’s acceptance of the CHAMPVA 

determined allowable amount 

extinguishes the beneficiary’s payment 

liability to the provider with the 

exception of applicable cost shares and 

deductibles.) 

Authorized non-VA provider means 

an individual or institutional non-VA 

provider of CHAMPVA-covered medical 

services and supplies that meets any of 

the following criteria: 

(i) Is licensed or certified by a State 

to provide the medical services and 

supplies; or 

(ii) Where a State does not offer 

licensure or certification, is otherwise 

certified by an appropriate national or 

professional association that sets 

standards for the specific medical 

provider. 

Calendar year means January 1 

through December 31. 

CHAMPVA beneficiary means a 

person enrolled under § 17.271. 

CHAMPVA-covered services and 

supplies mean those medical services 

and supplies that are medically 

necessary and appropriate for the 

treatment of a condition and that are not 

specifically excluded under 

§ 17.272(a)(1) through (84). 

CHAMPVA determined allowable 

amount has the meaning set forth in 

§ 17.272(b)(1). 

CHAMPVA In-house Treatment 

Initiative (CITI) means the initiative 

under 38 U.S.C. 1781(b) under which 

participating VA medical facilities 

provide medical services and supplies 

to CHAMPVA beneficiaries who are not 

also eligible for Medicare, subject to 

availability of space and resources. 

Child has the definition established in 

38 U.S.C. 101. 

Claim means a request by an 

authorized non-VA provider or by a 

CHAMPVA beneficiary for payment or 

reimbursement for medical services and 

supplies provided to a CHAMPVA 

beneficiary. 

Fiscal year means October 1 through 

September 30. 

Medications by Mail (MbM) means the 

initiative under which VA provides 

outpatient prescription medications 


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through the mail to CHAMPVA 

beneficiaries. 

Other health insurance (OHI) means 

health insurance plans or programs 

(including Medicare) or third-party 

coverage that provide coverage to a 

CHAMPVA beneficiary for expenses 

incurred for medical services and 

supplies. 

Payer refers to OHI, as defined in this 

section, that is obligated to pay for 

CHAMPVA-covered medical services 

and supplies. In a situation in which, in 

addition to CHAMPVA, one or more 

payers is/are responsible to pay for such 

services and supplies (i.e., a ‘‘double 

coverage’’ situation), there would be a 

primary payer (i.e., the payer obligated 

to pay first), secondary payer (i.e., the 

payer obligated to pay after the primary 

payer), etc. In double coverage 

situations, CHAMPVA would be the last 

payer. 

Service-connected has the definition 

established in 38 U.S.C. 101. 

Spouse refers to a person who is 

married to a veteran and whose 

marriage is valid as determined under 

38 U.S.C. 103(c). 

Surviving spouse refers to a person 

who was married to and is the 

widow(er) of a veteran as determined 

under 38 U.S.C. 103(c). 

(c) Discretionary authority. When it is 

determined to be in the best interest of 

VA, VA may waive any requirement in 

§§ 17.270 through 17.278, except any 

requirement specifically set forth in 38 

U.S.C. 1781, or otherwise imposed by 

statute. It is VA’s intent that such 

discretionary authority would be used 

only under very unusual and limited 

circumstances and not to deny any 

individual any right, benefit, or 

privilege provided to him or her by 

statute or these regulations. Any such 

waiver shall apply only to the 

individual circumstance or case 

involved and will in no way be 

construed to be precedent-setting. 

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

■ 3. Amend § 17.271 by: 

■ a. Removing the word ‘‘and’’ at the 

end of paragraph (a)(3). 

■ b. Redesignating paragraph (a)(4) as 

paragraph (a)(5). 

■ c. Adding a new paragraph (a)(4). 

■ d. Revising the authority citation 

following paragraph (a). 

The addition and revision read as 

follows: 

§ 17.271 Eligibility. 

(a) * * * 

(4) An individual designated as a 

Primary Family Caregiver, under 38 CFR 

71.25(f), who is not entitled to care or 

services under a health-plan contract (as 

defined in 38 U.S.C. 1725(f)(2)); and 

* * * * * 

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

1781) 

* * * * * 

■ 4. Amend § 17.272 by: 

■ a. Revising paragraph (a)(2). 

■ b. In paragraph (a)(3) introductory 

text, removing the phrase ‘‘(Medicaid 

excluded)’’. 

■ c. Adding paragraphs (a)(3)(iii) and 

(iv). 

■ d. Revising paragraph (a)(21)(ix). 

■ e. Removing paragraph (a)(26). 

■ f. Redesignating paragraphs (a)(27) 

through (38) as paragraphs (a)(26) 

through (37), respectively. 

■ g. In newly redesignated paragraph 

(a)(30), revising the introductory text 

and paragraphs (a)(30)(v) and (vi) and 

adding paragraphs (a)(30)(xi) through 

(xiv). 

■ h. Removing paragraph (a)(39). 

■ i. Redesignating paragraphs (a)(40) 

through (56) as paragraphs (a)(38) 

through (54), respectively. 

■ j. In newly redesiganted paragraph 

(a)(40)(iv), removing ‘‘(a)(42)(iii)(A)’’ 

and adding in its place ‘‘(a)(40)(iii)(A).’’ 

■ k. Removing paragraph (a)(57). 

■ l. Redesignating paragraphs (a)(58) 

through (71) as paragraphs (a)(55) 

through (68), respectively. 

■ m. Revising newly redesignated 

paragraphs (a)(57) through (59). 

■ n. Removing paragraph (a)(72). 

■ o. Redesignating paragraphs (a)(73) 

through (86) as paragraphs (a)(69) 

through (82), respectively. 

■ p. Revising newly redesignated 

paragraph (a)(76). 

■ q. Adding paragraphs (a)(83) and (84). 

■ r. Revising paragraph (b). 

The revisions and additions read as 

follows: 

§ 17.272 Benefits limitations/exclusions. 

(a) * * * 

(2) Services and supplies required as 

a result of an occupational disease or 

injury for which benefits are payable 

under workers’ compensation or similar 

protection plan (whether or not such 

benefits have been applied for or paid) 

except when such benefits are 

exhausted and the services and supplies 

are otherwise not excluded from 

CHAMPVA coverage. 

(3) * * * 

(iii) Indian Health Service. 

(iv) CHAMPVA supplemental 

policies. 

* * * * * 

(21) * * * 

(ix) Treatment for stabilization of 

myofascial pain dysfunction syndrome, 

also referred to as temporomandibular 

joint disorder (TMD). Authorization is 

limited to initial imaging such as 

radiographs, Computed Tomography, or 

Magnetic Resonance Imaging; up to four 

office visits; and the construction of an 

occlusal splint. 

* * * * * 

(30) Preventive care (such as 

employment-requested physical 

examinations and routine screening 

procedures). The following exceptions 

apply, including but not limited to: 

* * * * * 

(v) Cervical cancer screening. 

(vi) Breast cancer screening. 

* * * * * 

(xi) Colorectal cancer screening. 

(xii) Prostate cancer screening. 

(xiii) Annual physical examination. 

(xiv) Vaccinations/immunizations. 

* * * * * 

(57) Unless a waiver for extended 

coverage is granted in advance: 

Inpatient mental health services in 

excess of 30 days in any calendar year 

(or in an admission), in the case of a 

patient 19 years of age or older; 45 days 

in any calendar year (or in an 

admission), in the case of a patient 

under 19 years of age; or 150 days of 

residential treatment care in any 

calendar year (or in an admission). 

(58) Outpatient mental health services 

in excess of 23 visits in a calendar year 

unless a waiver for extended coverage is 

granted in advance. 

(59) Institutional services for partial 

hospitalization in excess of 60 treatment 

days in any calendar year (or in an 

admission) unless a waiver for extended 

coverage is granted in advance. 

* * * * * 

(76) Over-the-counter products except 

for pharmaceutical smoking cessation 

supplies that are approved by the U.S. 

Food and Drug Administration, 

prescribed, and provided through MbM, 

and insulin and related diabetic testing 

supplies and syringes. 

* * * * * 

(83) Medications not approved by the 

U.S. Food and Drug Administration 

(FDA), excluding FDA exceptions to the 

approval requirement. 

(84) Services and supplies related to 

the treatment of dyslexia. 

(b) Costs of services and supplies to 

the extent such amounts are billed over 

the CHAMPVA determined allowable 

amount are specifically excluded from 

coverage. 

(1) The CHAMPVA determined 

allowable amount is the maximum level 

of payment by CHAMPVA to an 

authorized non-VA provider for the 

provision of CHAMPVA-covered 

services and supplies to a CHAMPVA 


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beneficiary. The CHAMPVA determined 

allowable amount is determined before 

consideration of cost sharing and the 

application of deductibles or OHI. 

(2) A Medicare-participating hospital 

must accept the CHAMPVA determined 

allowable amount for inpatient services 

provided to a CHAMPVA beneficiary as 

payment in full. See 42 CFR 489.25. 

(3) An authorized non-VA provider 

who accepts responsibility for the care 

of a CHAMPVA beneficiary thereby 

agrees to accept the CHAMPVA 

determined allowable amount as full 

payment for services and supplies 

rendered to the beneficiary (i.e., 

accepted assignment). The provider’s 

acceptance of the CHAMPVA 

determined allowable amount 

extinguishes the beneficiary’s payment 

liability to the provider. Any attempts to 

collect any additional amount from the 

CHAMPVA beneficiary may result in 

the provider being excluded from 

Federal benefits programs. See 42 CFR 

1003.105. 

* * * * * 

■ 5. Amend § 17.273 by: 

■ a. Revising the introductory text and 

paragraph (d). 

■ b. Removing paragraph (e). 

■ c. Redesignating paragraph (f) as 

paragraph (e). 

■ d. Adding new paragraph (f). 

The revisions and addition read as 

follows: 

§ 17.273 Preauthorization. 

Preauthorization or advance approval 

is required for any of the following, 

except when the benefit is covered by 

the CHAMPVA beneficiary’s other 

health insurance (OHI): 

* * * * * 

(d) Dental care. For limitations on 

dental care, see § 17.272(a)(21)(i) 

through (xii). 

* * * * * 

(f) CHAMPVA will perform a 

retrospective medical necessity review 

during the coordination of benefits 

process if: 

(1) It is determined that CHAMPVA is 

the responsible payer for services and 

supplies but CHAMPVA 

preauthorization was not obtained prior 

to delivery of the services or supplies; 

and, 

(2) The claim for payment is filed 

within the appropriate one-year period. 

* * * * * 

■ 6. Amend § 17.274 by: 

■ a. Revising paragraphs (a), (b), and (c). 

■ b. Adding a heading for paragraph (d). 

■ c. Adding paragraph (e). 

The revisions and additions read as 

follows: 

§ 17.274 Cost sharing. 

(a) Cost sharing generally. CHAMPVA 

is a cost sharing program in which the 

cost of covered services is shared with 

the CHAMPVA beneficiary. CHAMPVA 

pays the CHAMPVA determined 

allowable amount less the CHAMPVA 

deductible, if applicable, and less the 

CHAMPVA beneficiary cost share. 

(1) CHAMPVA beneficiary cost-share 

requirements do not apply to the 

following: 

(i) Supplies provided through VA 

MbM. 

(ii) Any medical services and supplies 

provided to a CHAMPVA beneficiary 

through CITI. 

(iii) The following services, even if 

not provided through CITI: 

(A) Colorectal cancer screening. 

(B) Breast cancer screening. 

(C) Cervical cancer screening. 

(D) Prostate cancer screening. 

(E) Annual physical exams. 

(F) Vaccinations/immunizations. 

(G) Well child care from birth to age 

six, as described in § 17.272(a)(30)(i). 

(iv) Hospice services. 

(v) Or other services as determined by 

the Secretary of Veterans Affairs. 

(2) [Reserved] 

(b) Deductibles. In addition to the 

CHAMPVA beneficiary cost share, an 

annual (calendar year) outpatient 

deductible requirement ($50 per 

beneficiary or $100 per family) must be 

satisfied prior to VA payment of 

outpatient benefits. The deductible 

requirement is waived for: 

(1) CHAMPVA-covered services and 

supplies provided through VA MbM or 

through CITI. 

(2) Inpatient services. 

(3) Preventive services listed in 

paragraph (a)(1)(iii) of this section. 

(4) Hospice services. 

(5) Or other services as determined by 

the Secretary of Veterans Affairs. 

(c) Cost sharing limitations. To 

provide financial protection against the 

impact of a long-term illness or injury, 

there is a $3,000 calendar year limit or 

‘‘catastrophic cap’’ per CHAMPVA 

eligible family on the CHAMPVA 

beneficiary’s out-of-pocket costs for 

allowable services and supplies. After a 

family has paid $3,000 in out-of-pocket 

costs, to include both cost share and 

deductible amounts, in a calendar year, 

CHAMPVA will pay the full allowable 

amounts for the remaining CHAMPVAcovered services and supplies through 

the end of that calendar year. Credits to 

the annual catastrophic cap are limited 

to the applied annual deductible(s) and 

the CHAMPVA beneficiary cost-share 

amount. Costs above the CHAMPVA 

determined allowable amount, as well 

as costs associated with non-covered 

medical services and supplies, are not 

credited toward the catastrophic cap 

calculation. 

(d) Non-payment. * * * 

(e) Cost share calculation. The 

CHAMPVA beneficiary’s cost-share 

amount, if not waived under paragraph 

(a)(1) of this section, is 25 percent of the 

CHAMPVA determined allowable 

amount in excess of the annual calendar 

year deductible (see § 17.275 for 

procedures related to the calculation of 

the allowable amount for CHAMPVAcovered services and supplies), except 

for the following: 

(1) For inpatient services subject to 

the CHAMPVA Diagnosis Related Group 

(DRG) payment system, the cost share is 

the lesser of: 

(i) The per diem rate multiplied by 

the number of inpatient days; 

(ii) 25 percent of the hospital’s billed 

amount; or 

(iii) The base CHAMPVA DRG rate. 

(2) For inpatient mental health low 

volume hospitals and units (less than 25 

mental health discharges per federal 

fiscal year), the cost share is the lesser 

of: 

(i) The fixed per diem rate multiplied 

by the number of inpatient days; or 

(ii) 25 percent of the hospital’s billed 

charges. 

* * * * * 

§§ 17.275 through 17.278 [Redesignated as 

§§ 17.276 through 17.279] 

■ 7. Redesignate §§ 17.275 through 

17.278 as §§ 17.276 through 17.279. 

■ 8. Add new § 17.275 to read as 

follows: 

§ 17.275 CHAMPVA determined allowable 

amount calculation. 

CHAMPVA calculates the allowable 

amount in the following ways, for the 

following covered services and supplies: 

(a) Inpatient hospital services (nonmental health). Unless exempt or 

subject to a methodology under 

paragraph (b) or (c) of this section, 

inpatient hospital services provided in 

the 50 States, the District of Columbia, 

and Puerto Rico are subject to the 

CHAMPVA Diagnosis Related Group 

(DRG)-based reimbursement 

methodology. Under the CHAMPVA 

DRG-based payment system, hospitals 

are paid a predetermined amount per 

discharge for inpatient hospital services, 

which will not exceed the billed 

amount. Certain inpatient services will 

be reimbursed under the CHAMPVA 

Cost-to-Charge (CTC) reimbursement 

methodology. 

(b) Inpatient hospital services (mental 

health). The CHAMPVA inpatient 

mental health per diem reimbursement 

methodology is used to calculate 


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reimbursement for inpatient mental 

health hospital care in specialty 

psychiatric hospitals and psychiatric 

units of general acute hospitals that are 

exempt from the CHAMPVA DRG-based 

payment system. The per diem rate is 

calculated by multiplying the daily rate 

by the number of days (length of stay). 

The daily rate is updated each fiscal 

year for both high volume hospitals (25 

or more discharges per fiscal year) and 

low volume hospitals (fewer than 25 

discharges per fiscal year). 

(c) Other inpatient hospital services. 

(1) The CHAMPVA CTC reimbursement 

methodology is used to calculate 

reimbursement for inpatient care 

furnished by hospitals or facilities that 

are exempt from either of the 

methodologies in paragraph (a) or (b) of 

this section. Such hospitals or facilities 

will be paid at the CHAMPVA CTC ratio 

times the billed charges that are 

customary and not in excess of rates or 

fees the hospital or facility charges the 

general public for similar services in a 

community. 

(2) The following hospitals and 

services are subject to the CHAMPVA 

CTC payment methodology: 

(i) Any hospital that qualifies as a 

cancer hospital under Medicare 

standards and has elected to be exempt 

from the Centers for Medicare and 

Medicaid Services (CMS) prospective 

payment system. 

(ii) Christian Science sanatoriums. 

(iii) Critical Access Hospitals. 

(iv) Any hospital outside the 50 

States, the District of Columbia, or 

Puerto Rico. 

(v) Hospitals within hospitals. 

(vi) Long-term care hospitals. 

(vii) Non-Medicare participating 

hospitals. 

(viii) Non-VA Federal Health Care 

Facilities (e.g., military treatment 

facilities, Indian Health Service). 

(ix) Rehabilitation hospitals. 

(x) Hospital or hospital-based services 

subject to State waiver in any State that 

has implemented a separate DRG-based 

payment system or similar payment 

system in order to control costs. 

(xi) Hospitals and services as 

determined by the Secretary of Veterans 

Affairs. 

(d) Outpatient hospital services. The 

CHAMPVA outpatient prospective 

payment system (OPPS) is used to 

calculate the allowable amount for 

outpatient services provided in 

hospitals subject to Medicare OPPS. 

This will include the utilization of 

TRICARE’s reimbursement methodology 

to include specific coding requirements, 

ambulatory payment classifications 

(APCs), nationally established APC 

amounts, and associated adjustments. 

(e) Outpatient and inpatient nonhospital services. Payments to 

individual authorized non-VA providers 

(not hospitals) for CHAMPVA-covered 

medical services and supplies provided 

on an outpatient or inpatient basis, 

including but not limited to, anesthesia 

services, laboratory services, and other 

professional fees associated with 

individual authorized non-VA 

providers, are reimbursed based on the 

lesser of: 

(1) The CHAMPVA Maximum 

Allowable Charge; 

(2) The prevailing amount, which is 

the amount equal to the maximum 

reasonable amount allowed providers 

for a specific procedure in a specific 

locality; or, 

(3) The billed amount. 

(f) Pharmacy services and supplies. 

The CHAMPVA pharmacy services and 

supplies payment methodology is based 

on specific CHAMPVA pharmacy points 

of service, which dictate the amounts 

paid by VA. VA pays: 

(1) For services and supplies obtained 

from a retail in-network pharmacy, the 

lesser of the billed amount or the 

contracted rate; or 

(2) For supplies obtained from a retail 

out-of-network pharmacy, the lesser of 

the billed amount plus a dispensing fee 

or the average wholesale price plus a 

dispensing fee. 

(g) Skilled Nursing Facility (SNF) 

care. The CHAMPVA SNF 

reimbursement methodology is based on 

the CMS prospective payment system 

for SNFs under 42 CFR part 413, subpart 

J (Medicare Resource Utilization Group 

(RUG) rates). 

(h) Durable medical equipment, 

prosthetics, orthotics, and supplies 

(DMEPOS). The CHAMPVA DMEPOS 

reimbursement methodology is based on 

the same amounts established under the 

CMS DMEPOS fee schedule under 42 

CFR part 414, subpart D. The 

CHAMPVA determined allowable 

amount for DMEPOS is the amount in 

effect in the specific geographic location 

at the time CHAMPVA-covered medical 

services and supplies are provided to a 

CHAMPVA beneficiary. 

(i) Ambulance services. CHAMPVA 

adopts Medicare’s Ambulance Fee 

Schedule (AFS) for ambulance services, 

with the exception of services furnished 

by a Critical Access Hospital (CAH). 

Ambulance services are paid based on 

the lesser of the Medicare AFS or the 

billed amount. Ambulance services 

provided by a CAH are paid on the same 

bases as the CTC method under 

paragraph (c) of this section. 

(j) Hospice care. CHAMPVA hospice 

reimbursement methodology uses 

Medicare per diem hospice rates. 

(k) Home health care (intermittent or 

part-time). CHAMPVA home health care 

reimbursement methodology, based on 

Medicare’s home health prospective 

payment system, uses a fixed case-mix 

and wage-adjusted national 60-day 

episode payment amount to act as 

payment in full for costs associated with 

furnishing home health services with 

exceptions allowing for additional 

payment to be established. 

(l) Ambulatory surgery. The 

CHAMPVA reimbursement 

methodology for facility charges 

associated with procedures performed 

in a freestanding ambulatory surgery 

center is based on a prospectively 

determined amount, similar to that used 

by TRICARE. These facility charges do 

not include physician fees, 

anesthesiologist fees, or fees of other 

authorized non-VA providers; such 

independent professional fees must be 

submitted separately from facility fees 

and are calculated under the 

methodology in paragraph (e) of this 

section. 

(m) CHAMPVA-covered medical 

services and supplies provided outside 

the United States. VA shall determine 

the appropriate reimbursement 

method(s) for CHAMPVA-covered 

medical services and supplies provided 

by authorized non-VA providers outside 

the United States. 

(n) Sole Community Hospitals. The 

CHAMPVA reimbursement 

methodology for inpatient services 

provided in a Sole Community Hospital 

(SCH) will be the greater of: The 

allowable amount determined by 

multiplying the billed charges by the 

SCH’s most recently available cost-tocharge ratio from the CMS Inpatient 

Provider Specific File or the DRG 

reimbursement rate. 

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

■ 9. Amend newly redesignated 

§ 17.276 by: 

■ b. Revising paragraphs (a) 

introductory text and (b). 

■ c. Adding paragraphs (c) and (d). 

The revisions and additions read as 

follows: 

§ 17.276 Claim-filing deadlines. 

(a) Unless an exception is granted 

under paragraph (b) of this section, 

claims for medical services and supplies 

must be filed no later than: 

* * * * * 

(b) Requests for an exception to the 

claim filing deadline must be submitted 

in writing and include a complete 

explanation of the circumstances 

resulting in late filing along with all 

available supporting documentation. 

Each request for an exception to the 


ethrower on DSK3G9T082PROD with PROPOSALS
2412 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Proposed Rules 

claim filing deadline will be reviewed 

individually and considered on its own 

merit. VA may grant exceptions to the 

requirements in paragraph (a) of this 

section if it determines that there was 

good cause for missing the filing 

deadline. For example, when dual 

coverage exists, CHAMPVA payment, if 

any, cannot be determined until after 

the primary insurance carrier has 

adjudicated the claim. In such 

circumstances an exception may be 

granted provided that the delay on the 

part of the primary insurance carrier is 

not attributable to the beneficiary. 

Delays due to provider billing 

procedures do not constitute a valid 

basis for an exception. 

(c) Claims for CHAMPVA-covered 

services and supplies provided before 

the date of the event that qualifies an 

individual under § 17.271 are not 

reimbursable. 

(d) CHAMPVA is the last payer to 

OHI, as that term is defined in 

§ 17.270(b). CHAMPVA benefits will 

generally not be paid until the claim has 

been filed with the OHI and the OHI has 

issued a final payment determination or 

explanation of benefits. CHAMPVA is 

secondary payer to Medicare per the 

terms of § 17.271(b). 

* * * * * 

■ 10. Revise newly redesignated 

§ 17.277 to read as follows: 

§ 17.277 Appeals. 

Notice of the initial determination 

regarding payment of CHAMPVA 

benefits will be provided to the 

CHAMPVA beneficiary on a CHAMPVA 

Explanation of Benefits (EOB) form. The 

EOB form is generated by the 

CHAMPVA automated payment 

processing system. If a CHAMPVA 

beneficiary or provider disagrees with 

the determination concerning 

CHAMPVA-covered services and 

supplies or calculation of benefits, he or 

she may request reconsideration. Such 

requests must be submitted to VA in 

writing within one year of the date of 

the initial determination. The request 

must state why the CHAMPVA claimant 

believes the decision is in error and 

must include any new and relevant 

information not previously considered. 

Any request for reconsideration that 

does not identify the reason for dispute 

will be returned to the claimant without 

further consideration. After reviewing 

the claim and any relevant supporting 

documentation, VA will issue a written 

determination to the claimant that 

affirms, reverses, or modifies the 

previous decision. If the claimant is still 

dissatisfied, within 90 days of the date 

of the decision he or she may make a 

written request for review by VA. After 

reviewing the claim and any relevant 

supporting documentation, VA will 

issue a written determination to the 

claimant that affirms, reverses, or 

modifies the previous decision. The 

decision of VA with respect to benefit 

coverage and computation of benefits is 

final. When a CHAMPVA beneficiary 

has other health insurance (OHI), an 

appeal must first be filed with the OHI, 

and a determination made, before 

submitting the appeal to CHAMPVA 

with limited exceptions such as if the 

OHI deems the issue non-appealable. 

Denial of CHAMPVA benefits based on 

legal eligibility requirements may be 

appealed to the Board of Veterans’ 

Appeals in accordance with 38 CFR part 

20. Medical determinations are not 

appealable to the Board. 38 CFR 20.101. 

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

■ 11. Revise newly redesignated 

§ 17.278 to read as follows: 

§ 17.278 Medical care cost recovery. 

VA will actively pursue medical care 

cost recovery in accordance with 

applicable law. 

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

1781) 

[FR Doc. 2018–00332 Filed 1–16–18; 8:45 am] 

BILLING CODE 8320–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54 

[WC Docket No. 17–310; FCC 17–164] 

Promoting Telehealth in Rural 

America; Correction 

AGENCY: Federal Communications 

Commission. 

ACTION: Notice; correction. 

SUMMARY: The Federal Communications 

Commission (Commission) published a 

document in the Federal Register of 

January 3, 2018 seeking comment on 

how to strengthen the Rural Health Care 

Program and improve access to 

telehealth in rural America. The 

document contained an incorrect reply 

comment date. 

FOR FURTHER INFORMATION CONTACT: 

Radhika Karmarkar, Wireline 

Competition Bureau, (202) 418–7400 or 

TTY: (202) 418–0484. 

Correction 

In the Federal Register of January 3, 

2018, in FR Doc. 2017–28298, on page 

303, in the first column, correct the 

DATES caption to read: 

DATES: Comments are due on or before 

February 2, 2018, and reply comments 

are due on or before March 5, 2018. If 

you anticipate that you will be 

submitting comments, but find it 

difficult to do so within the period of 

time allowed by this document, you 

should advise the contact listed below 

as soon as possible. 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer. 

[FR Doc. 2018–00451 Filed 1–16–18; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 300 

[Docket No. 161228999–7867–01] 

RIN 0648–BG51 

Commerce Trusted Trader Program 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The National Marine 

Fisheries Service is proposing this 

Commerce Trusted Trader Program 

(CTTP) as part of an effective seafood 

traceability process to combat Illegal, 

Unreported, and Unregulated (IUU) 

fishing and seafood fraud. The 

voluntary CTTP supplements the 

Seafood Import Monitoring Program 

(SIMP), recently implemented under the 

Magnuson-Stevens Fishery 

Conservation and Management Act. 

Qualified importers who choose to 

participate in the CTTP would benefit 

from reduced reporting and 

recordkeeping requirements, and 

streamlined entry into U.S. commerce 

for seafood imports subject to the SIMP. 

DATES: Written comments must be 

received by March 19, 2018. 

ADDRESSES: Written comments on this 

action, identified by NOAA–NMFS– 

2016–0165, may be submitted by either 

of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov/#!

docketDetail;D=NOAA-NMFS-2016- 

0165, click the ‘‘Comment Now!’’ icon, 

complete the required fields, and enter 

or attach your comments. 

• Mail: Melissa Beaudry, Office of 

International Affairs and Seafood 

Inspection, NOAA Fisheries, 1315 EastWest Highway, Silver Spring, MD 

20910. 


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