Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5061 

ADDRESSES: The public hearing is being 

held in the IRS Auditorium, Internal 

Revenue Service Building, 1111 

Constitution Avenue NW., Washington, 

DC 20224. Due to building security 

procedures, visitors must enter at the 

Constitution Avenue entrance. In 

addition, all visitors must present photo 

identification to enter the building. 

Send Submissions to CC:PA:LPD:PR 

(REG–139483–13), Room 5205, Internal 

Revenue Service, P.O. Box 7604, Ben 

Franklin Station, Washington, DC 

20044. Submissions may be handdelivered Monday through Friday to 

CC:PA:LPD:PR (REG–139483–13), 

Couriers Desk, Internal Revenue 

Service, 1111 Constitution Avenue NW., 

Washington, DC 20224 or sent 

electronically via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS–2015–0047). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations, Ryan A. 

Bowen at (202) 317–6937; concerning 

submissions of comments, the hearing 

and/or to be placed on the building 

access list to attend the hearing Regina 

Johnson at (202) 317–6901 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The notice of public hearing on a 

proposed rulemaking that is the subject 

of this document is under sections 367 

and 482 of the Internal Revenue Code. 

Need for Correction 

As published, the notice of public 

hearing on proposed rulemaking 

contains an omission in its summary 

that may prove to be misleading and is 

in need of clarification. 

Correction of Publication 

Accordingly, the notice of public 

hearing on proposed rulemaking (REG– 

139483–13), that are subject to FR Doc. 

2016–00961, is corrected as follows: 

On page 3069, in the preamble, 

second column, under the caption 

SUMMARY, the last line of the paragraph 

is corrected to read ‘‘Code. This 

document also provides notice of public 

hearing on the proposed regulations 

under section 482 clarifying the 

coordination of the transfer pricing rules 

under section 482 with other Internal 

Revenue Code provisions.’’. 

Martin V. Franks, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. 2016–01807 Filed 1–29–16; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[DOD–2015–HA–0109] 

RIN 0720–AB65 

TRICARE; Mental Health and 

Substance Use Disorder Treatment 

AGENCY: Office of the Secretary, 

Department of Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: This rulemaking proposes 

comprehensive revisions to the 

TRICARE regulation to reduce 

administrative barriers to access to 

mental health benefit coverage and to 

improve access to substance use 

disorder (SUD) treatment for TRICARE 

beneficiaries, consistent with earlier 

Department of Defense and Institute of 

Medicine recommendations, current 

standards of practice in mental health 

and addiction medicine, and governing 

laws. This proposed rule has four main 

objectives: (1) To eliminate quantitative 

and qualitative treatment limitations on 

SUD and mental health benefit coverage 

and align beneficiary cost-sharing for 

mental health and SUD benefits with 

those applicable to medical/surgical 

benefits; (2) to expand covered mental 

health and SUD treatment under 

TRICARE, to include coverage of 

intensive outpatient programs and 

treatment of opioid use disorder; (3) to 

streamline the requirements for mental 

health and SUD institutional providers 

to become TRICARE authorized 

providers; and (4) to develop TRICARE 

reimbursement methodologies for newly 

recognized mental health and SUD 

intensive outpatient programs and 

opioid treatment programs. 

DATES: Written comments received at 

the addresses indicated below will be 

considered for possible revisions to this 

rule in development of the final rule. 

Comments must be received on or 

before April 1, 2016. 

ADDRESSES: You may submit comments 

identified by docket number and or 

Regulatory Information Number (RIN) 

number and title, by either of the 

following methods: 

• Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting documents. 

• Mail: Department of Defense, Office 

of the Deputy Chief Management 

Officer, Directorate of Oversight and 

Compliance, Regulatory and Audit 

Matters Office, 9010 Defense Pentagon, 

Washington, DC 20301–9010. 

Instructions: All submissions received 

must include the agency name and 

docket number or RIN for this Federal 

Register document. The general policy 

for comments and other submissions 

from members of the public is to make 

these submissions available for public 

viewing on the Internet at http://

www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Patricia Moseley, Defense Health 

Agency, Clinical Support Division, 

Condition-Based Specialty Care Section, 

703–681–0064. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary 

A. Purpose of the Proposed Rule 

1. The Need for the Regulatory Action 

This proposed rule seeks to 

comprehensively update TRICARE 

mental health and substance use 

disorder benefits, consistent with earlier 

Department of Defense and Institute of 

Medicine recommendations, current 

standards of practice in mental health 

and addiction medicine, and our 

governing laws. The Department of 

Defense remains intently focused on 

ensuring the mental health of our 

service members and their families, as 

this continues to be a top priority. The 

Department is also working to further 

de-stigmatize mental health treatment 

and expand the ways by which our 

beneficiaries can access authorized 

mental health services. This proposed 

regulatory action is in furtherance of 

these goals and imperative in order to 

eliminate requirements that may be 

viewed as barriers to medically 

necessary and appropriate mental health 

services. 

(a) Eliminating Quantitative and 

Qualitative Treatment Limitations on 

SUD and Mental Health Benefit 

Coverage and Aligning Beneficiary CostSharing for Mental Health and SUD 

Benefits With Those Applicable to 

Medical/Surgical Benefits 

The requirements of the Mental 

Health Parity Act (MHPA) of 1996 and 

the Paul Wellstone and Pete Domenici 

Mental Health Parity and Addiction 

Equity Act (MHPAEA) of 2008, as well 

as the plan benefit provisions contained 

in the Patient Protection and Affordable 

Care Act (PPACA) do not apply to the 

TRICARE program. The provisions of 

MHPAEA and PPACA serve as models 

for TRICARE in proposing changes to 

existing benefit coverage. These changes 

intend to reduce administrative barriers 


rmajette on DSK2TPTVN1PROD with PROPOSALS
5062 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

to treatment and increase access to 

medically or psychologically necessary 

mental health care consistent with 

TRICARE statutory authority. 

Section 703 of the National Defense 

Authorization Act (NDAA) National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2015, signed into law 

December 19, 2014, amends section 

1079 of title 10 of the U.S.C. to remove 

prior existing statutory limits and 

requirements on TRICARE coverage of 

inpatient mental health services. This 

proposed rule is necessary to conform 

the regulation to provisions in the 

recently enacted law. Specifically, 

TRICARE coverage is no longer subject 

to an annual limit on stays in inpatient 

mental health facilities of 30 days for 

adults and 45 days for children. In 

addition, TRICARE coverage is no 

longer subject to a 150-day annual limit 

for stays at Residential Treatment 

Centers (RTCs) for eligible beneficiaries. 

In addition to the elimination of these 

statutory inpatient day limits, and 

corresponding waiver provisions, the 

proposed rule also seeks to eliminate 

other regulatory quantitative and 

qualitative treatment limitations, 

consistent with principles of mental 

health parity and our governing laws. 

These include the 60-day partial 

hospitalization program limitation; 

annual and lifetime limitations on SUD 

treatment; presumptive limitations on 

outpatient services including the 

number of psychotherapy sessions per 

week and family therapy sessions for 

the treatment of SUD per benefit period; 

and limitations on the smoking 

cessation program. While there are clear 

waiver provisions in place for all of the 

existing quantitative treatment benefit 

limitations in order to ensure that 

beneficiaries have access to medically or 

psychologically necessary and 

appropriate care, these presumptive 

limitations may serve as an 

administrative barrier and thus 

disincentive to continued care 

regardless of the continued medical 

necessity of such care. 

Additionally, this rulemaking 

proposes to remove the categorical 

exclusion on treatment of gender 

dysphoria. This proposed change will 

permit coverage of all non-surgical 

medically necessary and appropriate 

care in the treatment of gender 

dysphoria, consistent with the program 

requirements applicable for treatment of 

all mental or physical illnesses. Surgical 

care remains prohibited by statute at 10 

U.S.C. 1079(a)(11), as discussed further 

below. 

Finally, following the recent repeal 

(section 703 of the NDAA for FY 15) of 

the statutory authority (previously 

codified at 10 U.S.C. 1079(i)(2)) for 

separate beneficiary financial liability 

for mental health benefits, the proposed 

rule revises the cost-sharing 

requirements for mental health and SUD 

benefits to be consistent with those that 

are applicable to TRICARE medical and 

surgical benefits. 

(b) Expanding Coverage To Include 

Mental Health and SUD Intensive 

Outpatient Programs and Treatment of 

Opioid Use Disorder 

Currently, TRICARE benefits do not 

fully reflect the full range of 

contemporary SUD treatment 

approaches (i.e., outpatient counseling 

and intensive outpatient program (IOP)) 

that are now endorsed by the American 

Society of Addiction Medicine (ASAM), 

the Department of Health and Human 

Services (DHHS) Substance Abuse and 

Mental Health Services Administration 

(SAMHSA), and the VA/DoD Clinical 

Practice Guidelines (CPGs) for SUDs. 

Some existing benefit coverage 

restrictions inhibit access to community 

based outpatient services; may cause 

beneficiaries to be separated from their 

families while they are receiving 

treatment in geographically distant 

facilities; and may result in beneficiaries 

electing to forgo treatment. Further, 

restrictions may lead to difficulty 

receiving appropriate step-down care 

following acute inpatient and 

residential treatment services. TRICARE 

currently limits SUD treatment to 

TRICARE-authorized SUD 

Rehabilitation Facilities (SUDRFs) and 

hospitals. 

An amendment to the regulation is 

necessary to authorize TRICARE benefit 

coverage of medically and 

psychologically necessary services and 

supplies which represent appropriate 

medical care and that are generally 

accepted by qualified professionals to be 

reasonable and adequate for the 

diagnosis and treatment of mental 

disorders. Office-based individual 

outpatient treatment is an effective, 

empirically-validated level of treatment 

for substance use disorder endorsed by 

The ASAM Criteria: Treatment Criteria 

for Addictive, Substance-Related, and 

Co-Occurring Conditions, Third Edition, 

2013. Furthermore, TRICARE coverage 

of medication assisted treatment (MAT) 

for opioid use disorder, extended 

through regulatory revisions, as 

published in the Federal Register on 

October 22, 2013 (78 FR 62427), is 

currently limited to MAT provided by a 

TRICARE authorized SUDRF. This 

proposed revision of the TRICARE SUD 

treatment benefit will allow office-based 

opioid treatment (OBOT) by individual 

TRICARE-authorized physicians and 

will also add coverage of qualified 

opioid treatment programs (OTPs) as 

TRICARE authorized institutional 

providers of SUD treatment for opioid 

use disorder, which will expand access 

to this type of care. 

(c) Streamlining Requirements for 

Institutional Mental Health and SUD 

Providers To Become TRICARE 

Authorized Providers 

The current TRICARE certification 

requirements for institutional mental 

health and SUD providers were 

implemented over 20 years ago and 

designed to create comprehensive, 

stand-alone standards to address the full 

spectrum of requirements and 

expectations for mental health facilities 

and providers, rather than as mere 

supplements to the standards employed 

by the Joint Commission, which at the 

time had moved toward a more general 

set of facility standards. Over the last 

several decades, the accreditation 

process for institutional providers has 

evolved, and these standards are now 

monitored through a number of 

industry-accepted accrediting bodies. 

While TRICARE’s comprehensive 

certification standards were once 

considered necessary to ensure quality 

and safety, these comprehensive 

certification requirements are now 

proving to be overly restrictive and at 

times inconsistent with current 

industry-based institutional provider 

standards and organization. There are 

currently several geographic areas that 

are inadequately served because 

providers in those regions do not meet 

TRICARE certification requirements, 

even though they may meet the industry 

standard. The proposed rule seeks to 

streamline TRICARE regulations to be 

consistent with industry standards for 

authorization of qualified institutional 

providers of mental health and SUD 

treatment. It is anticipated that these 

revisions will result in an increase in 

the number and geographic coverage 

areas of participating institutional 

providers of mental health and SUD 

treatment for TRICARE beneficiaries. 

(d) TRICARE Reimbursement 

Methodologies for Newly Recognized 

Mental Health and SUD Intensive 

Outpatient Programs and Opioid 

Treatment Programs 

Along with recognition of several new 

categories of TRICARE authorized 

providers, the proposed rule establishes 

reimbursement methodologies for these 

providers. Specifically, new 

reimbursement methodologies have 

been proposed for IOPs for mental 

health and SUD treatment as well as 

OTPs, as these providers have not 


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Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5063 

previously been recognized by TRICARE 

and thus appropriate reimbursement 

methodologies must be established. 

Existing reimbursement methodologies 

for SUDRFs, RTCs, and PHPs will 

continue to apply. 

2. Legal Authority for the Regulatory 

Action 

This regulation is proposed under the 

authorities of 10 U.S.C., section 1073, 

which authorizes the Secretary of 

Defense to make decisions concerning 

TRICARE and to administer the medical 

and dental benefits provided in title 10 

U.S.C., chapter 55. The Department is 

authorized to provide medically 

necessary and appropriate medical care 

for mental and physical illnesses, 

injuries and bodily malfunctions, 

including hospitalization, outpatient 

care, drugs, and treatment of mental 

conditions under 10 U.S.C. 1077(a)(1) 

through (3) and (5). Although section 

1077 identifies the types of health care 

to be provided in military treatment 

facilities (MTFs) to those authorized 

such care under section 1076, these 

same types of health care (with certain 

specified exceptions) are authorized for 

coverage within the civilian health care 

sector for ADFMs under section 1079 

and for retirees and their dependents 

under section 1086. In general, the 

scope of TRICARE benefits covered 

within the civilian health care sector 

and the TRICARE authorized providers 

of those benefits are found at 32 CFR 

199.4 and 199.6, respectively. 

TRICARE beneficiary cost-sharing is 

governed by statute and regulation 

based upon both the beneficiary 

category and TRICARE option being 

utilized. Pursuant to 10 U.S.C. 

1079(b)(1), dependents of members of 

the uniformed services utilizing 

TRICARE Standard are responsible for a 

$25 beneficiary cost-share for each 

covered inpatient admission to a 

hospital, or the amount the beneficiary 

or sponsor would have been charged 

had the inpatient care been provided in 

a Uniformed Service hospital, 

whichever is greater. Section 1079(i)(2) 

permits the Secretary to prescribe 

separate payment requirements for the 

provision of mental health services and, 

under this authority, the Secretary did 

prescribe different copays for mental 

health versus medical/surgical benefits 

for active duty family members under 

the TRICARE Standard option as well as 

for retirees, their family members, and 

survivors under the TRICARE Prime 

option. 

Under TRICARE Standard, an 

inpatient cost-sharing amount for 

mental health services of $20 per day for 

each day of inpatient admission was 

established by regulation (32 CFR 

199.4(f)(2)(ii)(D)) and applies to 

admissions to any hospital for mental 

health services, any residential 

treatment facility, any substance use 

rehabilitation facility, and any partial 

hospitalization program (PHP) 

providing mental health services. 

Section 731 of the NDAA for FY 1994 

(Pub. L. 103–160) directed the Secretary 

of Defense to implement a health benefit 

option modelled on health maintenance 

organization plans offered in the private 

sector. This uniform health maintenance 

organization (HMO) benefit is known as 

TRICARE Prime and was implemented 

through regulation (32 CFR 199.17 and 

199.18). Pursuant to 10 U.S.C. 1097(e), 

the Secretary of Defense is authorized to 

prescribe by regulation a premium, 

deductible, copayment, or other charge 

for health care for Prime beneficiaries. 

The specific cost-sharing requirements 

for Prime are found at 32 CFR 199.18. 

Under TRICARE Prime, the regulation 

(32 CFR 199.18(f)(3)(ii) and (e)(3)) 

established an outpatient copay of $25 

per mental health visit and $17 per 

group outpatient mental health visit and 

$40 per diem charge for inpatient 

mental health for retirees, their family 

members, and survivors. In establishing 

TRICARE Prime, these separate and 

higher copayments for mental health 

services were determined to be 

necessary to preserve the distinct 

treatment of mental health services as 

authorized by law in effect at the time. 

Section 703 of the NDAA for FY 2015 

enacted a statutory amendment to 10 

U.S.C. 1079, effective December 19, 

2014. This action removed the authority 

for separate patient cost-sharing of 

mental health services and necessitates 

regulatory changes to re-classify partial 

hospitalization services as outpatient 

services for purposes of cost-sharing and 

to bring the active duty family member 

Standard inpatient cost-sharing 

regulations into alignment with the 

statute. The proposed regulatory 

changes further equalize the retiree and 

dependent mental health copay 

amounts to the medical/surgical copay 

amounts under TRICARE Prime. 

With respect to institutional provider 

reimbursement, pursuant to 10 U.S.C. 

1079(i)(2), the Secretary is required to 

publish regulations establishing the 

amount to be paid to any provider of 

services, including hospitals, 

comprehensive outpatient rehabilitation 

facilities, and any other institutional 

facility providing services for which 

payment may be made. The amount of 

such payments shall be determined, to 

the extent practicable, in accordance 

with the same reimbursement rules as 

apply to payments to providers of 

services of the same type under 

Medicare. TRICARE provider 

reimbursement methods are found at 32 

CFR 199.14. When it is not practicable 

to adopt Medicare’s methods or 

Medicare has no established 

reimbursement methodology (e.g. 

Medicare does not reimburse 

freestanding SUDRFs or PHPs that are 

not hospital-based or part of a 

Community Mental Health Clinic, while 

TRICARE does), TRICARE establishes 

its own rates through proposed and final 

rulemaking. This rule invites comments 

on the approach proposed to be adopted 

by TRICARE. 

B. Summary of the Major Provisions of 

the Proposed Rule 

The proposed rule makes a number of 

comprehensive revisions to the 

TRICARE mental health and SUD 

treatment coverage. In an effort to 

further de-stigmatize SUD care, 

treatment of SUDs is no longer 

separately identified as a limited special 

benefit under 32 CFR 199.4(e) but rather 

has now been incorporated into the 

general mental health provisions in 

§ 199.4(b) governing institutional 

benefits and § 199.4(c) governing 

professional service benefits. Further, 

this proposed rule seeks to eliminate a 

number of mental health and SUD 

quantitative and qualitative treatment 

limitations, and corresponding waiver 

provisions, instead relying on 

determinations of medical necessity and 

appropriate utilization management 

tools, as are used for all other medical 

and surgical benefits. Proposed 

revisions include eliminating: 

• All inpatient mental health day 

limits, following the statutory revisions 

to 10 U.S.C. 1079; 

• The 60-day partial hospitalization 

and SUDRF residential treatment 

limitations; 

• Annual and lifetime limitations on 

SUD treatment; 

• Presumptive limitations on 

outpatient services including the sixhours per year limit on psychological 

testing; the limit of two sessions per 

week for outpatient therapy; and limits 

for family therapy (15 visits) and 

outpatient therapy (60 visits) provided 

in free-standing or hospital based 

SUDRFs; 

• The limit of two smoking cessation 

quit attempts in a consecutive 12 month 

period and 18 face-to-face counseling 

sessions per attempt; and 

• The regulatory prohibition that 

categorically excludes all treatment of 

gender dysphoria. 

The rule also proposes changes to 

cost-sharing for mental health treatment 

for TRICARE Prime and Standard/Extra 


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5064 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

beneficiaries to align with the 

applicable cost-sharing provisions for 

other non-mental health inpatient and 

outpatient benefits. Additionally, 

revisions have been proposed to clearly 

identify services that will be cost-shared 

on an inpatient (e.g., inpatient 

admissions to a hospital, residential 

treatment center, SUDRF residential 

treatment program, or skilled nursing 

facility) versus outpatient (including 

partial hospitalization programs, 

intensive outpatient treatment services, 

and opioid treatment program services) 

cost-sharing basis to ensure consistency 

with the statutory requirements in 10 

U.S.C. 1079 and 1086. In many cases, 

these proposed modifications to costsharing would enhance TRICARE 

beneficiary access to care through lower 

out-of-pocket costs. 

The proposed regulatory language 

defines and authorizes new services by 

TRICARE authorized institutional and 

individual providers of SUD care 

outside of SUDRF settings at §§ 199.2 

and 199.6. Revisions to treatment 

benefits at § 199.4 and § 199.6 would 

allow intensive outpatient programs 

(IOPs) for mental health and SUD 

treatment; care in opioid treatment 

programs (OTPs); and outpatient SUD 

treatment (i.e., office-based opioid 

treatment, psychosocial treatment and 

family therapy) by individual TRICARE 

authorized providers. 

Significant revisions to 32 CFR 199.6 

are proposed in order to eliminate the 

administratively burdensome provider 

certification process and streamline 

approval for institutional mental health 

and SUD providers to become TRICARE 

authorized providers. In multiple 

regions providers may meet industry 

standards but do not meet TRICARE 

certification requirements. 

Consequently providers in these regions 

are unable to serve TRICARE 

beneficiaries. The applicable provisions 

for residential treatment centers, 

psychiatric and SUD partial 

hospitalization programs, and SUDRFs, 

have been rewritten in their entirety to 

address institutional provider eligibility, 

organization and administration, 

participation agreement requirements 

and any other requirements for approval 

as a TRICARE authorized provider. The 

requirement and formal process of 

certification is proposed for elimination. 

Similarly, new regulatory provisions 

have been proposed for the newly 

recognized categories of institutional 

providers, namely IOPs and OTPs. 

Finally, amendments to 32 CFR 

199.14, which specifies provider 

reimbursement methods, are proposed 

to establish allowable all-inclusive per 

diem payment rates for psychiatric and 

SUD PHP, IOP and OTP services. 

C. Costs and Benefits 

The proposed amendment is not 

anticipated to have an annual effect on 

the economy of $100 million or more. 

An independent government cost 

estimate found that this proposed rule is 

estimated to have a net increase in costs 

of approximately $55 million. The 

government’s regulatory impact analysis 

based on this cost estimate can be found 

in the docket folder associated with this 

proposed rule at http://

www.regulations.gov/

#!docketDetail;D=DOD-2015-HA-0109. 

To summarize, provisions to implement 

mental health parity account for 

approximately $34 million (62%) of the 

$55 net cost increase. While modifying 

mental health cost-sharing will increase 

costs, these revisions are required as the 

former statutory authority for mental 

health-specific cost sharing has been 

deleted from the statute (section 703 of 

the NDAA for FY15). As a result, the 

existing statutory cost-shares are 

utilized and this aligns mental health 

cost-shares with the current medicalsurgical cost-shares. The largest cost 

increase ($21.6 million) is attributable to 

lowering outpatient mental health costsharing for Non-Active Duty Dependent 

(NADD) TRICARE beneficiaries (from 

$25 per visit to the medical/surgical 

outpatient cost-sharing of $12 per visit). 

Elimination of the statutory day limits 

for inpatient psychiatric and Residential 

Treatment Center (RTC) care for 

children (to comply with section 703 of 

the NDAA for FY15) will only 

minimally increase costs. This is 

because these previously published 

presumptive day limits were also 

subject to waivers and TRICARE had 

been reimbursing for medically 

necessary inpatient stays with waivers 

when continued medical necessity was 

supported. Eliminating the limit of two 

sessions per week for outpatient therapy 

is estimated to incur an increased cost 

($7.5 million), but this is based on the 

conservative assumption that the 

proportion of NADD beneficiaries who 

will pursue three psychotherapy 

sessions per week is comparable to the 

proportion of Active Duty Service 

Members (ADSMs) who do so (17%), 

even though ADSMs incur no costsharing and most receive psychotherapy 

within MTFs instead of civilian 

providers. Eliminating other limits (e.g., 

annual and lifetime limits on SUD 

treatment, smoking cessation program 

limits, and others as outlined above) 

will have a relatively minimal increase 

in costs. Overall, the benefit of removing 

these quantitative limits to mental 

health treatment will ensure that all 

beneficiaries receive the appropriate 

amount of care based on medical and 

psychological necessity. 

Creating additional levels, providers, 

and types of mental health care (e.g., 

intensive outpatient programs, opioid 

treatment programs, non-surgical 

coverage for gender dysphoria, and also 

allowing outpatient substance use 

treatment) will increase costs to the 

program by approximately $16.8 

million. Some of the cost increases will 

be offset through utilization of lower 

and less expensive levels of care (e.g., 

IOP versus residential or full day PHP) 

and prevention of relapse requiring 

more costly, intensive inpatient 

intervention. Currently, PHPs are the 

only step-down care from inpatient 

substance use disorder treatment 

currently covered by TRICARE. In many 

rural and sparely-populated states, such 

as Utah, Arizona, New Mexico, South 

Dakota, Wyoming, Idaho, and Montana, 

there are relatively few PHPs (on 

average 20 or fewer, with 4 states having 

fewer than 10 PHPs). IOPs in these rural 

states, on the other hand, are four times 

more plentiful than PHPs, and TRICARE 

coverage of IOP substance use disorder 

treatment will greatly increase 

beneficiary access to SUD treatment, 

particularly in these remote geographic 

areas. Similarly, in FY14, 15,000 

services of psychotherapy by individual 

professional providers were denied for 

beneficiaries with an SUD. Coverage of 

outpatient SUD treatment by TRICARE 

authorized individual providers will 

facilitate early intervention for SUDs 

and help reduce relapse following more 

intensive treatment though the 

availability of outpatient aftercare from 

these professionals. Additionally, 

TRICARE currently has an estimated 

15,000 to 20,000 beneficiaries with 

opioid use disorder who, under the 

current benefit, cannot access 

medication-assisted treatment (MAT; 

e.g., buprenorphine or methadone). 

According to SAMHSA, there are 

approximately 1155 OTPs in the United 

States and 31,363 physicians with a 

DEA waiver to provide MAT for opioid 

use disorder, but none of these facilities 

or providers is TRICARE-authorized or 

eligible to be reimbursed by TRICARE 

under current regulation. Once the 

changes proposed in this rule are 

implemented, TRICARE beneficiaries 

will have ready access to MAT on an 

outpatient basis as recommended by 

ASAM and clinical practice guidelines 

developed jointly by the Department of 

Veterans Affairs (VA) and DoD. 

Streamlining requirements for 

institutional providers to become 

TRICARE authorized providers of 


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mental health and SUD care will incur 

an estimated increased cost of $3.2 

million due to an anticipated increase in 

the number of institutional providers 

joining the TRICARE network. To focus 

on RTC care as an example, TRICARE 

strives to provide a robust mental health 

treatment benefit to our child 

beneficiaries, but access to RTC care for 

children is significantly limited in many 

geographic areas by TRICARE’s existing 

certification requirements. Less than 

one sixth of RTCs certified by the Joint 

Commission are currently TRICARE 

certified, and only about one half of 

individual states have at least one 

TRICARE-certified RTC. California, 

Oklahoma, Alabama, and Louisiana all 

have no TRICARE-certified RTCs but do 

have sizeable TRICARE populations. 

Revising TRICARE institutional 

provider authorization requirements for 

RTCs will make it much more likely that 

parents will seek RTC care for their 

children whose behavioral health 

condition is so severe as to require RTC 

services, and this change to the 

TRICARE behavioral health benefit is 

projected to increase utilization of RTC 

services by 20 percent. Ultimately, the 

net increase in costs associated with this 

proposed rule will greatly be 

outweighed by the enhanced mental 

health benefits, options and access 

available to beneficiaries. 

II. Discussion of the Proposed Rule 

A. Background 

TRICARE implemented both financial 

and treatment controls to manage care, 

ensure quality, and control costs for 

medically or psychologically necessary 

and appropriate mental health and 

substance use care. In part, these 

controls have been implemented in 

response to Congressional concerns. In 

the National Defense Authorization Act 

for Fiscal Year 1991 and the Defense 

Appropriations Act for Fiscal Year 1991, 

Congress addressed the problem of 

spiraling costs for mental health 

services under the Civilian Health and 

Medical Program of the Uniformed 

Services (CHAMPUS). As stated by the 

House Armed Services Committee: 

The cost of mental health and substance 

abuse is of particular concern to the 

committee. While CHAMPUS expenditures 

have generally increased by 50 percent 

between 1986 and 1989, CHAMPUS mental 

health expenditures have more than doubled. 

Last year mental health costs accounted for 

about one-quarter of CHAMPUS’s total 

spending far above the typical proportion in 

private employers’ health care plans. These 

statutes established: (1) The new day limits 

for inpatient mental health services: 30 days 

for acute care for patients 19 years of age and 

older, 45 days for acute care for patients 

under 19 years of age, and 150 days of 

residential treatment-each of these limits 

subject to waiver that takes into account the 

level, intensity and availability of the care 

needs of the patient; and (2) mandated prior 

authorization for all nonemergency inpatient 

mental health admissions. 

Additionally, in the early 1990s, two 

Comptroller General Reports 

highlighted the need for mental health 

program reform within the Civilian 

Health and Medical Program of the 

Uniform Services (CHAMPUS). At the 

time, there were widespread concerns 

with the quality of mental health care 

within CHAMPUS as well as fraud and 

abuse. The Reports highlighted 

weaknesses within the benefit that 

resulted in unnecessary hospital 

admissions, excessive inpatient stays 

and sometimes, inadequate quality of 

care. The first of these two reports, 

‘‘Defense Health Care: Additional 

Improvements Needed in CHAMPUS’s 

Mental Health Program,’’ GAO/HRD– 

93–34, May 1993, stated that, although 

DoD has taken actions to improve the 

program, several problems persist.’’ A 

second Comptroller General Report, 

‘‘Psychiatric Fraud and Abuse: 

Increased Scrutiny of Hospital Stays is 

Needed to Lessen Federal Health 

Program Vulnerability,’’ (GAO/HRD– 

93–92, September 1993) called for 

improvements in the CHAMPUS mental 

health program to include reversing the 

financial incentives to use inpatient care 

by introducing larger copayments for 

CHAMPUS inpatient care. 

In response to these concerns, the 

certification standards for mental health 

facilities as well as treatment limits and 

cost-sharing requirements applicable to 

mental health and SUD services under 

the TRICARE program were 

implemented in a 1995 Final Rule, 

‘‘Civilian Health and Medical Program 

of the Uniformed Services (CHAMPUS): 

Mental Health Services.’’ These 

standards, limits, and requirements 

have remained in place over the last 20 

years. 

In 1996, Congress enacted the Mental 

Health Parity Act of 1996 (MHPA 1996) 

which required employment-related 

group health plans and health insurance 

coverage offered in connection with 

group health plans to provide parity in 

aggregate lifetime and annual dollar 

limits for mental health benefits and 

medical and surgical benefits. In 

October 2008, the Paul Wellstone and 

Pete Domenici Mental Health Parity and 

Addiction Equity Act (MHPAEA) was 

signed into law as part of the Tax 

Extenders and Alternative Minimum 

Tax Relief Act of 2008. The changes 

made by MHPAEA consist of new 

requirements, including parity for 

substance use disorder benefits, as well 

as amendments to the existing mental 

health parity provisions enacted in 

MHPA. This law requires group health 

insurance plans that provide both 

medical/surgical and mental health or 

substance use disorder benefits to meet 

parity standards. Specifically, financial 

requirements (e.g., deductibles, copayments, or coinsurance) and 

treatment limitations (e.g., days of 

coverage and number of visits) that 

apply to mental health or substance use 

disorder benefits cannot be more 

restrictive than the predominant 

financial requirements and treatment 

limitations that apply to substantially 

all medical/surgical benefits. The 

MHPAEA was amended by the Patient 

Protection and Affordable Care Act, as 

amended by the Health Care and 

Education Reconciliation Act of 2010, to 

also apply to individual health 

insurance coverage. TRICARE is not a 

group health plan subject to the MHPA 

1996, the MHPAEA of 2008, or the 

Health Care and Education 

Reconciliation Act of 2010. However, 

the provisions of these acts serve as a 

model for TRICARE in proposing 

changes to existing benefit coverage so 

as to reduce administrative barriers to 

treatment and increase access to 

medically or psychologically necessary 

mental health care consistent with 

TRICARE statutory authority. 

In July 2011, DoD issued a Report to 

Congress entitled, ‘‘Comprehensive Plan 

on Prevention, Diagnosis, and 

Treatment of Substance Use Disorders 

and Disposition of Substance Use 

Offenders in the Armed Forces,’’ in 

which the Department identified to 

Congress the need to revise certain 

aspects of TRICARE regulatory language 

governing SUD treatment services to 

provide a benefit that takes into account 

generally accepted standards of practice. 

The report is available for download at 

http://health.mil/About-MHS/DefenseHealth-Agency/Special-Staff/ 

Congressional-Relations/Reports-toCongress. DoD’s findings were affirmed 

in 2012 by an independent study 

conducted by the Institute of Medicine 

(IOM) entitled, ‘‘Substance Use 

Disorders in the U.S. Armed Forces,’’ 

(available at www.iom.edu/reports/ 

2012/Substance-Use-Disorders-in-theArmed-Forces.aspx). 

The Department seeks to revise and 

streamline TRICARE regulations to be 

consistent with industry standards, as 

well as to incorporate applicable 

recommendations from the July 2011 

Congressional report, the IOM 2012 

study, and evidence-based practices 

delineated by the U.S. Department of 

Veterans Affairs (VA) and DoD clinical 


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practice guidelines (VA/DoD CPGs) for 

SUD to improve access to medically or 

psychologically necessary SUD 

treatment for TRICARE beneficiaries in 

accordance with generally accepted 

standards of practice. 

B. Expanded TRICARE Coverage of 

Mental Health and SUD Treatment 

1. Eliminating Quantitative and 

Qualitative Treatment Limitations on 

SUD and Mental Health Benefit 

Coverage 

There are existing waiver provisions 

for all of the quantitative treatment 

benefit limitations to ensure 

beneficiaries have access to medically or 

psychologically necessary and 

appropriate treatment. However, these 

limitations, which were designed to 

contain costs and address abuses 

decades ago, along with differential 

financial cost-sharing requirements 

relative to medical/surgical care are 

currently viewed as barriers to coverage 

of mental health services. 

This proposed rule seeks to remove a 

number of quantitative and qualitative 

limits for coverage of mental health and 

SUD care under the TRICARE Program, 

including: 

• All inpatient mental health day (30 

days maximum for adults and 45 days 

maximum for children at 32 CFR 

199.4(b)(9)) and annual day limits (150 

days at 32 CFR 199.4(b)(8)) for RTC care 

for beneficiaries 21 years and younger, 

following the statutory revisions to 10 

U.S.C. 1079; 

• The 60-day limitation on partial 

hospitalization (32 CFR 199.4(b)(10)(iv)) 

and SUDRF residential treatment (32 

CFR 199.4(e)(4)(ii)(A)); 

• Annual (60 days in a benefit period) 

and lifetime (three treatment episodes— 

32 CFR 199.4(e)(4)(ii)) limitations on 

SUD treatment; 

• Presumptive limitations on 

outpatient services including the sixhour per year limit on psychological 

testing (32 CFR 199.4(c)(3)(ix)(A)(5)) 

and the limit of two sessions per week 

for outpatient therapy (32 CFR 

199.4(c)(3)(ix)(B)); 

• Limits on family therapy (15 visits 

(32 CFR 199.4(e)(4)(ii)(C)) and 

outpatient therapy (60 visits—(32 CFR 

199.4(e)(4)(ii)(B)) provided in freestanding or hospital based SUDRFs; and 

• The limit of two smoking cessation 

quit attempts in a consecutive 12 month 

period and 18 face-to-face counseling 

sessions per attempt (32 CFR 

199.4(e)(30)). 

This proposed rule will allow 

coverage of outpatient treatment that is 

medically or psychologically necessary, 

including family therapy and other 

covered diagnostic and therapeutic 

services, by a TRICARE authorized 

institutional provider or by authorized 

individual mental health providers 

without limits on the number of 

treatment sessions. The removal of these 

limitations also recognizes that SUDs 

are chronic conditions with periodic 

phases of relapse and readmission, often 

requiring multiple interventions over 

several years to achieve full remission. 

All claims submitted for services under 

TRICARE remain subject to review for 

quality and appropriate utilization in 

accordance with the Quality and 

Utilization Review Peer Review 

Organization Program, under 10 U.S.C. 

1079(n) and 32 CFR 199.15. 

The proposed rule also removes 

certain regulatory exclusions for the 

treatment of gender dysphoria for 

TRICARE beneficiaries who are 

diagnosed by a TRICARE authorized, 

qualified mental health professional, 

practicing within the scope of his or her 

license, to be suffering from a mental 

disorder, as defined in 32 CFR. 199.2. It 

is no longer justifiable to categorically 

exclude and not cover currently 

accepted medically and psychologically 

necessary treatments for gender 

dysphoria (such as psychotherapy, 

pharmacotherapy, and hormone 

replacement therapy) that are not 

otherwise excluded by statute. (Section 

1079(a)(11) of title 10, U.S.C., excludes 

from CHAMPUS coverage surgery 

which improves physical appearance 

but is not expected to significantly 

restore functions, including mammary 

augmentation, face lifts, and sex gender 

changes.) 

2. Aligning Beneficiary Cost-Sharing for 

Mental Health and SUD Benefits With 

Those Applicable to Medical/Surgical 

Benefits 

Following the recent repeal of 

statutory authority for separate 

beneficiary financial liability for mental 

health benefits, the proposed rule 

eliminates any differential in costsharing between mental health and SUD 

benefits and medical/surgical benefits. 

The following regulatory changes to 32 

CFR 199.4(f) and 32 CFR 199.18 will 

reduce financial barriers to both 

outpatient and inpatient mental health 

and SUD benefits while, consistent with 

statutory requirements, minimizing outof-pocket risk for those beneficiaries. 

TRICARE Prime Co-Pays 

Active duty family members enrolled 

in TRICARE Prime pay no copayment 

for inpatient or outpatient services. 

Currently, retirees and their dependents 

enrolled in Prime pay higher copays for 

inpatient and outpatient mental health 

services than for other similar nonmental health services. Retirees and all 

other non-active duty dependents 

enrolled in Prime would see the 

following changes: 

• The co-pay for individual 

outpatient mental health visits would be 

reduced from $25 to $12. 

• The co-pay for group outpatient 

mental health visits would be reduced 

from $17 to $12. 

The per diem charge of $40 for mental 

health and SUD inpatient admissions 

would be reduced to the non-mental 

health per diem rate of $11, with a 

minimum charge of $25 per admission. 

TRICARE Standard Cost-Sharing 

Currently, active duty family 

members (ADFMs) utilizing TRICARE 

Standard/Extra pay a higher per diem 

for mental health inpatient care than for 

other inpatient stays. ADFMs would see 

the following change: 

• The per diem cost-share for 

inpatient mental health services would 

be reduced from $20/day to the daily 

charge ($18/day for FY16) that would 

have been charged had the inpatient 

care been provided in a Uniformed 

Services hospital. 

Retirees and their dependents who are 

not enrolled in Prime but use nonnetwork providers (Standard) for mental 

health care are generally required to pay 

25% of the allowable charges for 

inpatient care (for inpatient services 

subject to the DRG-based payment 

system or mental health per diem 

payment system, beneficiaries pay the 

lesser of the per diem amount (which is 

equivalent to 25% of the CHAMPUSdetermined allowable costs) or 25% of 

the hospital’s billed charges). This 

would not change. Retirees and their 

dependents using Standard and Extra 

are currently responsible for their 

outpatient deductible and outpatient 

cost-sharing of 25% (Standard)/20% 

(Extra) of the CHAMPUS-determined 

allowable costs. This also would not 

change. 

It is also being proposed that costsharing for partial hospitalization 

programs (PHPs) be changed from 

inpatient to outpatient to more 

accurately reflect the services being 

rendered, ensure consistency with the 

applicable statutes governing costsharing, and to further ensure parity 

between the surgical/medical and 

mental health benefit. The definition of 

partial hospitalization, by its very 

nature, is inconsistent with the 

definition of inpatient care. 

Notwithstanding, in a final rule (58 FR 

35403) published on July 1, 1993, and 

pursuant to the authority granted to the 

Secretary to establish different costVerDate Sep<11>2014 13:21 Jan 29, 2016 Jkt 238001 PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 E:\FR\FM\01FEP1.SGM 01FEP1

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shares for mental health care [10 U.S.C. 

1079(j)(2)], partial hospitalization is 

currently classified as an inpatient level 

of care for the purposes of cost-sharing 

by beneficiaries. This classification was 

originally adopted out of concern that 

the cost-sharing associated with 

outpatient care would result in 

substantially higher out-of-pocket 

expenses for TRICARE beneficiaries 

which, in turn, would provide a 

financial incentive for beneficiaries to 

seek a higher level of care (i.e., acute or 

residential) than may be necessary. As 

a result, authority was employed to costshare partial hospitalization services on 

an inpatient basis. It is important to 

note, however, beneficiaries now have 

the ability to minimize cost-sharing 

through enrollment options available 

under the TRICARE managed care 

program. As noted above, ADFMs 

enrolled in TRICARE Prime/Prime 

Remote, do not pay co-pays for inpatient 

or outpatient services. For retirees and 

their dependents enrolled in Prime, the 

current inpatient per diem charge of $40 

for partial hospitalization program 

services would be reduced to an 

outpatient co-pay of $12 per day of 

services. 

Realigning cost-sharing of partial 

hospitalization program services from 

inpatient to outpatient will impact 

ADFMs utilizing TRICARE Standard/ 

Extra. Specifically, for ADFMs, the 

current inpatient per diem charge of 

$20/day (with a minimum $25 charge 

per admission) for partial 

hospitalization program services would 

instead be subject to the applicable 

outpatient deductible and cost-sharing 

of 20% (Standard)/15% (Extra) of the 

PHP per diem rate. For example, if the 

full-day PHP per diem rate is $382, the 

cost-sharing for ADFMs would be 

$57.30 under Extra and $76.40 under 

Standard. However, these ADFMs 

would still retain the option of enrolling 

in TRICARE Prime/Prime Remote, 

where the cost-sharing is $0 (i.e., no 

cost-sharing is applied). The financial 

liability of ADFMs under Extra and 

Standard would be further limited by 

the annual $1,000 catastrophic cap. 

In an analysis to evaluate the 

potential financial impact on non-Prime 

ADFMs (i.e., ADFMs utilizing TRICARE 

Extra and Standard options) of 

converting to PHP outpatient costsharing, it was found that in FY 2014 

there were only 143 non-Prime ADFMs 

that had full-day or half-day PHP care. 

On average, they received 17 PHP 

services during the year with an average 

allowed amount per service of $343. 

Based on these figures, non-Prime 

ADFMs’ out-of-pocket liability 

(accumulated cost-sharing) would be 

approximately $875 under Extra, or 

$1,166 under Standard. (However, 

Standard ADFM liability in this 

example would be limited by the $1,000 

catastrophic cap.) This analysis 

indicates that a very small number of 

non-Prime ADFMs have historically 

used PHP care and that those who have 

would, on average, either already hit or 

would be likely to hit the catastrophic 

cap. It is estimated that shifting to 

outpatient cost-sharing for PHP might 

cause about 50 to 80 additional nonPrime ADFMs to hit the catastrophic 

cap due to the higher PHP cost-sharing. 

Conversion of PHP cost-sharing from 

inpatient to outpatient would more 

accurately reflect the services being 

provided. Further, Congress revoked the 

statutory authority granted to the 

Secretary to establish different costshares for mental health care. These 

factors provide the impetus for adoption 

of outpatient cost-sharing for PHPs. 

3. Intensive Outpatient Program (IOP) 

Care for Psychiatric and Substance Use 

Disorders 

Substance Use Disorder IOP services 

are currently not identified as separate 

levels of care from partial 

hospitalization in TRICARE regulations. 

Although hospital-based and freestanding facilities that are TRICARE 

authorized to offer partial 

hospitalization services can provide less 

intensive IOP, covered at the half-day 

partial hospitalization rate, the existing 

TRICARE certification requirements for 

these programs restrict the typical SUD 

IOP from being recognized as a separate 

program and provider type in its own 

right. SUD IOPs offer a validated level 

of care endorsed by ASAM, and the 

provision of IOP services through 

institutional providers also would have 

the potential benefit of expanding the 

volume of TRICARE participating 

providers and improving access to care. 

While TRICARE beneficiaries may 

currently receive treatment for SUD or 

psychiatric disorders at a TRICARE 

authorized PHP, the proposed rule 

clearly authorizes IOP care as a covered 

benefit for treatment of SUD and 

psychiatric disorders. This proposed 

rule would authorize IOP care by a new 

class of institutional provider, which 

will provide a less restrictive setting 

than an inpatient or partial hospital 

setting. IOP care institutional providers 

will be required to be accredited by an 

accrediting body approved by the 

Director, Defense Health Agency, and 

meet the proposed requirements 

outlined in 32 CFR 199.6(b)(4)(xviii) in 

order to become TRICARE authorized. 

Similar to IOPs for SUD treatment, 

psychiatric IOPs are not currently 

explicitly reimbursed by TRICARE. This 

lack of authorization for IOP psychiatric 

care has restricted coverage options for 

TRICARE beneficiaries who may require 

step-down services from an inpatient 

stay or a PHP. As described regarding 

SUD IOP, psychiatric IOP services are 

considered separate levels of care from 

psychiatric partial hospitalization. 

Although current regulatory language 

defines partial hospitalization broad 

enough to permit coverage of IOP 

treatment conducted under the auspices 

of partial hospitalization, the absence of 

explicit IOP treatment coverage, along 

with the requirement that all IOP level 

of care be rendered by a TRICARE 

certified PHP, has limited access to this 

level of care and has led to confusion 

regarding TRICARE coverage of these 

services. The proposed regulatory 

language explicitly authorizing IOP 

treatment and establishing an 

authorized provider category will 

resolve these issues. 

4. Treatment of Opioid Use Disorder 

This rule proposes expanded 

treatment of opioid use disorder, with 

the provision of medication assisted 

treatment (MAT), through both 

TRICARE authorized institutional and 

individual providers. In addition to 

SUD IOPs, this rule proposes TRICARE 

coverage of opioid treatment programs 

(OTPs), with the inclusion of a 

definition of OTPs in 32 CFR 199.2 and 

the requirements for OTPs to become 

TRICARE authorized institutional 

providers outlined in 32 CFR 

199.6(b)(4)(xix). Additionally, this rule 

proposes coverage of OBOT, as defined 

in 32 CFR 199.2, and coverage of MAT 

on an outpatient basis as extended in 32 

CFR 199.4(c)(3)(ix)(A)(9). 

5. Outpatient Substance Use Disorder 

Treatment by Individual Professional 

Providers 

By current regulation, reimbursement 

for office-based SUD outpatient 

treatment provided by TRICARE 

authorized individual mental health 

providers, as specified in 32 CFR 199.6, 

is not permitted. Such outpatient SUD 

treatment services currently must be 

provided by a TRICARE approved 

institutional provider (i.e., a hospitalbased or free-standing SUDRF). 

However, although some accredited 

TRICARE authorized SUDRFs provide 

office-based SUD outpatient treatment, 

institutional providers of SUD care 

primarily provide services to patients 

requiring a higher level of SUD care. 

This creates a counter-therapeutic 

restriction on access to office-based 

outpatient treatment. To address this 

limitation in access, the proposed 


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5068 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

regulation would revise the current 

reimbursement regime to provide 

coverage for individual outpatient SUD 

care, such as office-based outpatient 

treatment, outside of a SUDRF. 

The 2007 report of the DoD Task 

Force on Mental Health 

(recommendation 5.3.4.8) stated, 

‘‘TRICARE should allow outpatient 

substance abuse care to be provided by 

qualified professionals, regardless of 

whether they are affiliated with a day 

hospital or residential treatment 

program, including standard individual 

or group outpatient care.’’ The DoD Task 

Force recommendation is consistent 

with the American Psychiatric 

Association, ASAM, and SAMHSA 

endorsement of individual therapies as 

an accepted and recommended clinical 

practice, also endorsed by National 

Institute on Drug Abuse, National 

Quality Forum, and VA/DoD CPG for 

Management of Substance Use 

Disorders. These proposed changes to 

the regulation would remove barriers to 

coverage of care for beneficiaries who 

are appropriate for treatment in an 

outpatient office setting, but who would 

otherwise only be able to access care at 

a SUDRF as required by current 

regulations. 

This proposed rule also covers 

services of TRICARE authorized 

individual mental health providers, 

within the scope of their licensure or 

certification, offering medically or 

psychologically necessary SUD 

treatment services (including outpatient 

and family therapy) outside of a SUDRF, 

to include MAT and treatment of opioid 

use disorder by a TRICARE authorized 

physician delivering OBOT on an 

outpatient basis. 

C. Streamlined Requirements for 

Institutional Providers To Become 

TRICARE Authorized Institutional 

Providers of Mental Health and 

Substance Use Disorder Care 

Nearly two decades ago, the Final 

Rule: ‘‘Civilian Health and Medical 

Program of the Uniformed Services 

(CHAMPUS): Mental Health Services,’’ 

as published in 60 FR 12419, March 7, 

1995, reformed quality of care standards 

and reimbursement methods for 

inpatient mental health services. In the 

1995 Final Rule, standards were 

developed to address identified 

problems of quality of care, fraud, and 

abuse in RTCs, SUDRFs, and PHPs. 

They were developed to provide ‘‘clear 

[and] specific standards for psychiatric 

facilities on staff qualifications, clinical 

practices, and all other aspects directly 

impacting the quality of care.’’ 

Since publication of the 1995 Final 

Rule, several organizations that accredit 

various forms of healthcare delivery 

have developed strong standards to 

protect patient care in mental health 

facilities. There are now a number of 

industry-accepted accrediting bodies 

with standards that meet or exceed the 

current TRICARE-established standards 

(e.g., TJC, Commission on Accreditation 

of Rehabilitation Facilities). Also in the 

interim, scientific knowledge, standards 

of care and patient safety, technology, 

and psychotropic pharmaceuticals have 

improved. Alongside with updating the 

current benefits, we believe 

streamlining procedures to qualify as a 

TRICARE authorized institutional 

provider will not only increase access to 

approved care, but also decrease the 

overall cost of certifying duplicative and 

now unnecessary quality standards first 

implemented by the 1995 Final Rule. 

This proposed rule simplifies the 

regulation to account for existing 

industry-wide accepted accreditation 

standards for TRICARE institutional 

providers of mental health care, 

including RTCs, freestanding PHPs, and 

freestanding SUDRFs. Requirements for 

TRICARE certification beyond industryaccepted accreditation, while once 

considered necessary to ensure quality 

and safety, are now proving to be 

unnecessarily restrictive and 

inconsistent with current institutional 

provider standards and organization. 

Specifically, the proposed rule 

streamlines procedures and 

requirements for SUDRFs, RTCs, PHPs, 

IOPs and OTPs to qualify as TRICARE 

authorized providers, relying primarily 

on accreditation by a national body 

approved by the Director, as opposed to 

detailed, lengthy, stand-alone TRICARE 

requirements (e.g., regarding such things 

as the qualifications and authority of the 

clinical director, staff composition and 

qualifications, and standards for 

physical plant and environment, 

amongst others). In general, mental 

health and SUD institutional providers 

may become TRICARE authorized 

institutional providers if the facility is 

accredited by an accrediting 

organization approved by the Director 

and agrees to execute a participation 

agreement with TRICARE, as outlined in 

the proposed regulations. This 

streamlined approval process is a 

greatly simplified process from the 

current, detailed certification process 

for current institutional providers. 

Furthermore, given that there are now 

a growing number of accrediting bodies 

established for institutional providers of 

mental health care and industry 

standards that are widely accepted, the 

proposed rule eliminates by name 

references to specific accrediting bodies 

(e.g., The Joint Commission (TJC)), 

where appropriate. Instead, the specific 

mention of accrediting bodies is 

replaced with the term, ‘‘an accrediting 

organization, approved by Director.’’ 

This will allow the Defense Health 

Agency (DHA) flexibility in selecting 

and recognizing the authority of various 

accrediting bodies to assist in 

authorization of institutional providers 

of mental health care and SUD care. 

Rather than name all the approved 

accrediting bodies in regulation, DHA 

will identify specific accrediting bodies 

for various types of mental health care 

in TRICARE sub-regulatory policy found 

at manuals.tricare.osd.mil. 

D. TRICARE Reimbursement 

Methodologies for Newly Recognized 

Mental Health and SUD Intensive 

Outpatient Programs and Opioid 

Treatment Programs and Cost-Sharing 

Methodology 

The newly recognized IOPs and 

methadone OTPs established in this rule 

will be reimbursed using bundled per 

diem amounts based on the intensity, 

frequency and duration of services and/ 

or drugs provided in these wellestablished treatment programs. Since 

IOPs provide a step-down in services 

from an inpatient stay or full-day PHP 

(i.e., the intensity, frequency and 

duration of the services provided in 

IOPs are considered to be less than 

those provided in an inpatient or PHP 

setting), the per diems will be 

proportionally reduced from currently 

established full-day PHP per diems. 

This proportional reduction in per 

diems is consistent with past 

methodologies used in establishing fullday and half-day PHP payments. Since 

IOPs are also provided in PHPs as a 

step-down in intensity of care, the IOP 

designation will be used in lieu of halfday PHP for beneficiaries typically 

receiving treatment two to five hours 

per day, two to five times a week, as 

directed by their individualized 

treatment plan, in a PHP authorized 

setting. The IOP services, whether 

provided in a PHP or newly recognized 

IOP setting, will be paid a regionally 

adjusted per diem rate of 75 percent of 

the rate for a full-day PHP. In other 

words, PHP treatments of less than six 

hours—with a minimum of two hours— 

will be recognized as IOPs for coverage 

and reimbursement under the program. 

OTPs that administer methadone as a 

treatment for SUD will be reimbursed a 

bundled weekly per diem payment to 

include the cost of the medication, 

along with integrated psychosocial and 

medical treatment support services. 

When buprenorphine or naltrexone is 

administered, OTPs will, on the other 

hand, be reimbursed on a fee-for-service 


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Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5069 

basis (i.e., separate payments will be 

allowed for both the medication and 

accompanying support services) due to 

the variability in the recommended 

dosage and frequency of the 

administered drugs based on conditions 

requiring medical oversight. The 

individual fee-for-service payments for 

buprenorphine and naltrexone will be 

subject to outpatient cost-sharing on a 

per-visit basis, while the cost-sharing for 

methadone OTP services will be applied 

on a weekly basis. Established per diem 

rates for OTPs administering methadone 

will be updated annually by the 

Medicare update factor used for that 

program’s Inpatient Prospective 

Payment System. 32 CFR 

199.14(a)(4)(ix) is amended in its 

entirety to reflect payment for 

psychiatric and SUD PHP, IOP and OTP 

services as discussed above. 

1. Intensive Outpatient Program 

Reimbursement 

Under current regulatory provisions 

[32 CFR 199.14(a)(2)(ix)(C)], the 

maximum per diem payment amount for 

a full-day partial hospitalization 

program (minimum of six hours) is 40 

percent of the average per diem amount 

per case established under the TRICARE 

mental health per diem reimbursement 

system for both high and low volume 

psychiatric hospitals and units. 

Likewise, PHPs less than six hours (with 

a minimum of three hours) are paid a 

per diem rate at 75 percent of the rate 

for a full-day program. In analysis of the 

reimbursement methodology to be used 

for reimbursement of IOPs, it became 

apparent that the step-down in 

intensity, frequency and duration of 

treatment designated as half-day PHPs, 

were in fact, intensive outpatient 

services provided within a PHP 

authorized setting. While there is some 

variability in the intensity, frequency 

and duration of treatment under both 

programs (that is, less than six hours per 

day with a minimum of three hours for 

half-day PHPs; and two to five times per 

week, two to five hours per day for 

IOPs), it appears that both the services 

rendered and the professional provider 

categories responsible for providing the 

services are quite similar. As a result of 

this observation/analysis, a decision has 

been made to use the IOP designation in 

lieu of half-day PHP for treatment of less 

than six hours per day—with a 

minimum of two hours per day— 

rendered in a PHP authorized setting. 

While the minimum hours have been 

reduced from three to two hours per day 

for coverage/reimbursement, they are 

still within the acceptable range for IOP 

services typically provided in a PHP. 

Since intensive outpatient services can 

be provided in either a PHP or newly 

authorized IOP setting, and IOP services 

are essentially the same as half-day PHP 

services, it is only logical that IOP per 

diems be set at 75 percent of the fullday PHP per diem. This would be the 

case regardless of whether the IOP 

services were provided in a PHP or IOP. 

2. Opioid Treatment Program 

Reimbursement and Cost-Sharing 

As defined in this proposed rule, 

OTPs are outpatient settings for opioid 

treatment that use a therapeutic 

maintenance drug for a drug addiction 

when medically or psychologically 

necessary and appropriate for the 

medical care of a beneficiary undergoing 

supervised treatment for a SUD. The 

program includes an initial assessment, 

along with integrated psychosocial and 

medical treatment and support services. 

Since OTPs are individually tailored 

programs of medication therapy, 

separate reimbursement methodologies 

are being established based on the 

particular medication being 

administered for treatment of the SUD. 

By far the most common medication 

used in OTPs is methadone. Methadone 

OTP care includes initial medical 

intake/assessment, urinalysis and drug 

dispensing and screening as part of the 

bundled rate, as well as ongoing 

counseling services. Based on a 

preliminary review of industry billing 

practices, the proposed weekly bundled 

per diem for administration of 

methadone will include a daily drug 

cost of $3, along with a $15 per day cost 

for integrated psychosocial and medical 

support services. The daily projected 

per diem costs ($18/day) will be 

converted to a weekly per diem rate of 

$126 ($18/day × 7 days) and billed once 

a week to TRICARE using the 

Healthcare Common Procedure Coding 

System (HCPCS) code H0020, ‘‘Alcohol 

and/or drug services; methadone 

administration and/or service.’’ The 

bundled per diem rate is how Medicaid 

and other third-party payers typically 

reimburse for methadone treatment in 

OTPs. The methadone OTP rate will be 

updated annually by the Medicare 

update factor used for other mental 

health care services rendered (i.e. the 

Inpatient Prospective Payment System 

update factor) under TRICARE. The 

updated rates will be effective October 

1 of each year, and will be published 

annually on the TRICARE Web site. 

Outpatient cost-sharing will be applied 

to a weekly per diem, since the 

copayment amounts for Prime NADDs 

and ADFMs under Extra and Standard 

would be near, or in some cases, above 

the daily charge for OTPs, essentially 

resulting in a non-benefit. 

While the other two medications 

(buprenorphine and naltrexone) are 

more likely to be prescribed and 

administered in an OBOT setting, OTP 

reimbursement methodologies are being 

established for both medications to 

allow OTPs the full range of 

medications currently available for 

treatment of SUDs. Since the 

reimbursement of buprenorphine and 

naltrexone administered in OTPs are not 

conducive to the bundled per diem 

methodology due to variations in dosage 

and frequency of the drug and the nondrug services (e.g., administration fees 

and counseling services) will be 

reimbursed separately on a fee-forservice basis. We recognize that 

Healthcare Common Procedure Coding 

System (HCPCS) and Current Procedural 

Terminology (CPT) codes are updated 

on a regular basis. The following 

referenced codes are current as of the 

writing of this proposed rule. If 

necessary, updated codes will be 

included in the TRICARE Policy Manual 

or TRICARE Reimbursement Manual 

found at manuals.tricare.osd.mil. In the 

case of Buprenorphine, the OTP will bill 

TRICARE using the HCPCS code H0047, 

‘‘Alcohol and/or other drug use services, 

not otherwise specified,’’ for the 

medical intake/assessment, drug 

dispensing and monitoring and 

counseling, along with HCPCS code 

J8499, ‘‘Prescription drug, oral, nonchemotherapeutic, nos,’’ for the 

prescribed medication. The OTP will 

include the National Drug Code for the 

Buprenorphine, along with the dosage 

and acquisition cost on its claim. 

Prevailing rates will be established for 

drug related services (e.g., drug 

monitoring and counseling services) 

billed under HCPCS code H0047, while 

the drug itself will be reimbursed at 95 

percent of the average wholesale price. 

Outpatient cost-sharing will be applied 

on a per-visit basis. The preliminary 

weekly cost estimate for Buprenorphine 

OTPs is $115 per week, assuming that 

the patient is stabilized and visiting the 

OTP twice a week. This is based on an 

estimated drug cost of $10 per day and 

an estimated non-drug cost of $22.50 

per visit [(7 × $10) + (2 × $22.50) = $115/ 

week]. These amounts mentioned above 

are preliminary and estimates and not 

intended to reflect final reimbursement 

rates. 

Naltrexone, unlike methadone and 

buprenorphine, is not an agonist or 

partial agonist, but an inhibitor 

designed to block the brain’s opiate 

receptors, diminishing the urges and 

cravings for alcohol, heroin, and 

prescription painkillers such as 

oxycodone. Due to the extreme cost of 


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injectable naltrexone and the fact that it 

is only administered once a month, the 

drug, its administration fee and ongoing 

counseling will be paid separately on a 

fee-for-service basis. The OTP will bill 

TRICARE using HCPCS code H0047 for 

the counseling services and other OTP 

services. Prevailing rates will be 

established for drug related services 

(e.g., drug monitoring and counseling 

services) billed under HCPCS code 

H0047. The naltrexone injection will be 

billed using the HCPCS code J2315 with 

the number of milligrams used, while its 

administration fee will be billed using 

CPT code 96372. OTP outpatient costsharing will be applied on a per-visit 

basis, which in this case would be once 

a month. The projected monthly amount 

for naltrexone is $1,177 ($1,129 for the 

injectable drug (J2315) + $25 for the 

drug’s administration fee (CPT 96372) + 

$22.50 for other related services (H0047) 

= $1,176.50). These amounts may be 

subject to change based on health care 

market forces, but are not expected to 

change significantly. 

The Director will have discretionary 

authority in establishing the 

reimbursement methodologies for new 

drugs and biologicals that may become 

available for the treatment of SUDs in 

OTPs. The type of reimbursement (e.g., 

fee-for-service versus bundled per diem 

payments) will be dependent in large 

part on the variability of the dosage and 

frequency of the medication being 

administered. 

While TRICARE provider 

reimbursement methods are normally 

tied to Medicare reimbursement, there 

were no Medicare reimbursement rules 

applicable to the above providers of 

services. As a result, DoD particularly 

invites public comment on these 

proposed reimbursement methodologies 

in an effort to ensure they bear a 

reasonable relationship to the cost of 

providing such services. 

3. Removal of Federal Register 

Publication of TRICARE HospitalSpecific Rates and Fixed Daily 

Copayment Amounts 

Under current regulatory provisions 

[32 CFR 199.4(f)(3)(ii)(B) and 32 CFR 

199.14(a)(2)(iv)(C)(4)], annually updated 

psychiatric hospital regional per diems 

and fixed daily copayment amounts are 

to be published in the Federal Register 

at approximately the start of each fiscal 

year. While the initial intent of this 

regulatory requirement was to provide 

widespread notice of changes to 

regional psychiatric hospital per diems 

and fixed copayment mounts, its 

relevancy has been subsequently 

overshadowed by the public’s online 

accessibility to the TRICARE manuals 

and reimbursement rates on the official 

Web site of the Military Health System 

and the DHA (www.health.mil). As a 

result, the public has ready online 

access to psychiatric hospital regional 

per diems and fixed daily copayment 

amounts, as well as maximum rates for 

mental health rates, to include 

freestanding psychiatric PHPs in the 

TRICARE Reimbursement Manual or on 

the official Web site of the Military 

Health System and the DHA 

(www.health.mil). Because of the readily 

available online access to updated 

mental health rates and the ongoing 

administrative burden of publishing 

annual notices to the Federal Register, 

it is being proposed that the regulatory 

requirements be removed and that 

updates to psychiatric hospital regional 

per diems and fixed copayment 

amounts be maintained on the Agency’s 

official Web site. However, psychiatric 

hospitals and units with hospitalspecific rates will continue to be 

notified individually of their rates due 

to confidentiality restrictions. The new 

proposed per diem rates for IOPs and 

methadone OTPs will also be 

maintained and available to the public 

on the official Web site of the Military 

Health System and the DHA 

(www.health.mil). 

E. Additional Proposed Regulatory 

Revisions 

There are a number of additional 

proposed revisions that are more 

technical and administrative in nature 

that we would like to highlight here to 

ensure the public is made aware of these 

changes and the purpose for the 

proposed changes. Within 32 CFR 199.2, 

the definition of ‘‘adequate medical 

documentation, mental health records’’ 

is revised to eliminate specific reference 

to Joint Commission standards and 

instead reference ‘‘standards of an 

accrediting organization approved by 

the Director’’ consistent with the 

changes in accreditation requirements 

as part of the proposed streamlining of 

TRICARE approval of institutional 

providers. The definition of ‘‘mental 

disorder’’ has been revised to include 

SUD. The definition of ‘‘Director’’ has 

been revised to incorporate the Director 

of the Defense Health Agency, 

consistent with DoD’s current 

organizational structure. Additionally, 

throughout the proposed revisions, the 

term ‘‘Director’’ has been substituted for 

all other terms such as ‘‘Director, 

CHAMPUS’’ and ‘‘Director, TRICARE 

Management Activity.’’ A definition of 

‘‘qualified mental health provider’’ has 

been added for easy reference (as it was 

previously discussed in 32 CFR 199.4 

but not specifically defined), and the 

definitions of ‘‘Case managers’’ and 

‘‘Consultants’’ have been amended to 

include qualified mental health 

providers. Additionally, the elimination 

of quantitative limitations has also 

necessitated a number of revisions to 

other sections of the regulation that 

referenced these limits, including 32 

CFR 199.4(e)(2), 32 CFR 199.7(e)(2) and 

32 CFR 199.15(a)(6). Also, 32 CFR 

199.14(a)(2)(iv)(C)(2) clarifies that the 

Medicare’s Inpatient Prospective 

Payment System update factor is used 

for TRICARE’s mental health rates. 

Regulatory Procedures 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review’’ 

Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distribute impacts, and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. Subsequently, the 

Department completed an Independent 

Government Cost Estimate and the 

results are referenced in C. Cost and 

Benefits. This proposed rule has been 

designated a ‘‘significant regulatory 

action,’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the proposed rule has been reviewed by 

the Office of Management and Budget 

(OMB). 

Congressional Review Act, 5 U.S.C. 

804(2) 

Under the Congressional Review Act, 

a major rule may not take effect until at 

least 60 days after submission to 

Congress of a report regarding the rule. 

A major rule is one that would have an 

annual effect on the economy of $100 

million or more or have certain other 

impacts. This proposed rule is not a 

major rule under the Congressional 

Review Act. 

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (RFA), (5 U.S.C. 601) 

The Regulatory Flexibility Act 

requires that each Federal agency 

analyze options for regulatory relief of 

small businesses if a rule has a 

significant impact on a substantial 

number of small entities. For purposes 

of the RFA, small entities include small 


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businesses, nonprofit organizations, and 

small governmental jurisdictions. This 

proposed rule is not an economically 

significant regulatory action, and it will 

not have a significant impact on a 

substantial number of small entities. 

Therefore, this proposed rule is not 

subject to the requirements of the RFA. 

Public Law 104–4, Sec. 202, ‘‘Unfunded 

Mandates Reform Act’’ 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any one year of $100 million in 1995 

dollars, updated annually for inflation. 

That threshold level is currently 

approximately $140 million. This 

proposed rule will not mandate any 

requirements for state, local, or tribal 

governments or the private sector. 

Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

This rulemaking does not contain a 

‘‘collection of information’’ 

requirement, and will not impose 

additional information collection 

requirements on the public under Public 

Law 96–511, ‘‘Paperwork Reduction 

Act’’ (44 U.S.C. chapter 35). 

Executive Order 13132, ‘‘Federalism’’ 

This proposed rule has been 

examined for its impact under E.O. 

13132, and it does not contain policies 

that have federalism implications that 

would have substantial direct effects on 

the States, on the relationship between 

the national Government and the States, 

or on the distribution of powers and 

responsibilities among the various 

levels of Government. Therefore, 

consultation with State and local 

officials is not required. 

Public Comments Invited 

This rulemaking is being issued as a 

proposed rule. DoD invites public 

comments on all provisions of the 

proposed rule. All submissions will be 

considered for possible revision to be 

included in the final rule. 

List of Subjects in 32 CFR Part 199 

Claims, Dental health, Health care, 

Health insurance, Individuals with 

disabilities, Mental health, Mental 

health parity, Military personnel, 

Substance use disorder treatment. 

For the reasons stated in the 

preamble, the Department of Defense 

proposes to amend 32 CFR part 199 as 

set forth below: 

PART 199—CIVILIAN HEALTH AND 

MEDICAL PROGRAM OF THE 

UNIFORMED SERVICES (CHAMPUS) 

■ 1. The authority citation for part 199 

continues to read as follows: 

Authority: 5 U.S.C. 301; 10 U.S.C. chapter 

55. 

■ 2. Section 199.2(b) is amended by: 

■ a. Revising the definitions of 

‘‘Adequate medical documentation, 

mental health records’’, ‘‘Case 

management’’, ‘‘Case managers’’, 

‘‘Consultation’’, and ‘‘Director’’; 

■ b. Adding definitions for ‘‘Intensive 

outpatient program (IOP)’’ and 

‘‘Medication assisted treatment (MAT)’’ 

in alphabetical order; 

■ c. Removing the definition of ‘‘Mental 

disorder’’; 

■ d. Adding definitions for ‘‘Mental 

disorder, to include substance use 

disorder’’, ‘‘Office-based opioid 

treatment’’ and ‘‘Opioid treatment 

program’’ in alphabetical order; 

■ e. Revising the definitions of ‘‘Other 

special institutional providers’’ and 

‘‘Partial hospitalization’’; 

■ f. Adding a definition for ‘‘Qualified 

mental health provider’’ in alphabetical 

order; 

■ g. Revising the definition of 

‘‘Residential treatment center (RTC)’’; 

■ h. Adding a definition for ‘‘Substance 

use disorder rehabilitation facility 

(SUDRF)’’ in alphabetical order; and 

■ i. Revising the definition of 

‘‘Treatment plan’’. 

The revisions and additions read as 

follows: 

§ 199.2 Definitions 

* * * * * 

(b) * * * 

* * * * * 

Adequate medical documentation, 

mental health records. Adequate 

medical documentation provides the 

means for measuring the type, 

frequency, and duration of active 

treatment mechanisms employed and 

progress under the treatment plan. 

Under CHAMPUS, it is required that 

adequate and sufficient clinical records 

be kept by the provider to substantiate 

that specific care was actually and 

appropriately furnished, was medically 

or psychologically necessary (as defined 

by this part), and to identify the 

individual(s) who provided the care. 

Each service provided or billed must be 

documented in the records. In 

determining whether medical records 

are adequate, the records will be 

reviewed under the generally acceptable 

standards (e.g., the standards of an 

accrediting organization approved by 

the Director, and the provider’s state or 

local licensing requirements) and other 

requirements specified by this part. The 

psychiatric and psychological 

evaluations, physician orders, the 

treatment plan, integrated progress 

notes (and physician progress notes if 

separate from the integrated progress 

notes), and the discharge summary are 

the more critical elements of the mental 

health record. However, nursing and 

staff notes, no matter how complete, are 

not a substitute for the documentation 

of services by the individual 

professional provider who furnished 

treatment to the beneficiary. In general, 

the documentation requirements of a 

professional provider are not less in the 

outpatient setting than the inpatient 

setting. Furthermore, even though a 

hospital that provides psychiatric care 

may be accredited under The Joint 

Commission (TJC) manual for hospitals 

rather than the behavioral health 

standards manual, the critical elements 

of the mental health record listed above 

are required for CHAMPUS claims. 

* * * * * 

Case management. Case management 

is a collaborative process which 

assesses, plans, implements, 

coordinates, monitors, and evaluates the 

options and services required to meet an 

individual’s health needs, including 

mental health needs, using 

communication and available resources 

to promote quality, cost effective 

outcomes. 

Case managers. A licensed registered 

nurse, licensed clinical social worker, 

licensed psychologist, licensed 

physician, or qualified mental health 

provider who has a minimum of two (2) 

years case management experience. 

* * * * * 

Consultation. A deliberation with a 

specialist physician, dentist, or 

qualified mental health provider 

requested by the attending physician 

primarily responsible for the medical 

care of the patient, with respect to the 

diagnosis or treatment in any particular 

case. A consulting physician or dentist 

or qualified mental health provider may 

perform a limited examination of a 

given system or one requiring a 

complete diagnostic history and 

examination. To qualify as a 

consultation, a written report to the 

attending physician of the findings of 

the consultant is required. 

Note: Staff consultations required by rules 

and regulations of the medical staff of a 

hospital or other institutional provider do not 

qualify as consultation. 

* * * * * 

Director. The Director of the Defense 

Health Agency, Director, TRICARE 

Management Activity, or Director, 


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Office of CHAMPUS. Any references to 

the Director, Office of CHAMPUS, or 

OCHAMPUS, or TRICARE Management 

Activity, shall mean the Director, 

Defense Health Agency (DHA). Any 

reference to Director shall also include 

any person designated by the Director to 

carry out a particular authority. In 

addition, any authority of the Director 

may be exercised by the Assistant 

Secretary of Defense (Health Affairs). 

* * * * * 

Intensive outpatient program (IOP). A 

treatment setting capable of providing 

an organized day or evening program 

that includes assessment, treatment, 

case management and rehabilitation for 

individuals not requiring 24-hour care 

for mental health disorders, to include 

substance use disorders, as appropriate 

for the individual patient. The program 

structure is regularly scheduled, 

individualized and shares monitoring 

and support with the patient’s family 

and support system. 

* * * * * 

Medication assisted treatment (MAT). 

MAT for diagnosed opioid use disorder 

is a holistic modality for recovery and 

treatment that employs evidence-based 

therapy, including psychosocial 

treatments and psychopharmacology, 

and FDA-approved medications as 

indicated for the management of 

withdrawal symptoms and 

maintenance. 

* * * * * 

Mental disorder, to include substance 

use disorder. For purposes of the 

payment of CHAMPUS benefits, a 

mental disorder is a nervous or mental 

condition that involves a clinically 

significant behavioral or psychological 

syndrome or pattern that is associated 

with a painful symptom, such as 

distress, and that impairs a patient’s 

ability to function in one or more major 

life activities. A substance use disorder 

is a mental condition that involves a 

maladaptive pattern of substance use 

leading to clinically significant 

impairment or distress; impaired control 

over substance use; social impairment; 

and risky use of a substance(s). 

Additionally, the mental disorder must 

be one of those conditions listed in the 

current edition of the Diagnostic and 

Statistical Manual of Mental Disorders. 

‘‘Conditions Not Attributable to a 

Mental Disorder,’’ or V codes, are not 

considered diagnosable mental 

disorders. Co-occurring mental and 

substance use disorders are common 

and assessment should proceed as soon 

as it is possible to distinguish the 

substance related symptoms from other 

independent conditions. 

* * * * * 

Office-based opioid treatment. 

TRICARE authorized providers acting 

within the scope of their licensure or 

certification to prescribe outpatient 

supplies of the medication to assist in 

withdrawal management 

(detoxification) and/or maintenance of 

opioid use disorder, as regulated by 42 

CFR part 8, addressing office-based 

opioid treatment (OBOT). 

* * * * * 

Opioid Treatment Program. Opioid 

Treatment Programs (OTPs) are service 

settings for opioid treatment, either free 

standing or hospital based, that adhere 

to the Department of Health and Human 

Services’ regulations at 42 CFR part 8 

and use medications indicated and 

approved by the Food and Drug 

Administration. Treatment in OTPs 

provides a comprehensive, individually 

tailored program of medication therapy 

integrated with psychosocial and 

medical treatment and support services 

that address factors affecting each 

patient, as certified by the Center for 

Substance Abuse Treatment (CSAT) of 

the Department of Health and Human 

Services’s Substance Abuse and Mental 

Health Services Administration. 

Treatment in OTPs can include 

management of withdrawal symptoms 

(detoxification) from opioids and 

medically supervised withdrawal from 

maintenance medications. Patients 

receiving care for substance use and cooccurring disorders care can be referred 

to, or otherwise concurrently enrolled 

in, OTP services. 

* * * * * 

Other special institutional providers. 

Certain specialized medical treatment 

facilities, either inpatient or outpatient, 

other than those specifically defined, 

that provide courses of treatment 

prescribed by a doctor of medicine or 

osteopathy; when the patient is under 

the supervision of a doctor of medicine 

or osteopathy during the entire course of 

the inpatient admission or the 

outpatient treatment; when the type and 

level of care and services rendered by 

the institution are otherwise authorized 

in this part; when the facility meets all 

licensing or other certification 

requirements that are extant in the 

jurisdiction in which the facility is 

located geographically; which is 

accredited by the Joint Commission or 

other accrediting organization approved 

by the Director if an appropriate 

accreditation program for the given type 

of facility is available; and which is not 

a nursing home, intermediate facility, 

halfway house, home for the aged, or 

other institution of similar purpose. 

* * * * * 

Partial hospitalization. A treatment 

setting capable of providing an 

interdisciplinary program of medically 

monitored therapeutic services, to 

include management of withdrawal 

symptoms, as medically indicated. 

Services may include day, evening, 

night and weekend treatment programs 

which employ an integrated, 

comprehensive and complementary 

schedule of recognized treatment 

approaches. Partial hospitalization is a 

time-limited, ambulatory, active 

treatment program that offers 

therapeutically intensive, coordinated, 

and structured clinical services within a 

stable therapeutic environment. Partial 

hospitalization is an appropriate setting 

for crisis stabilization, treatment of 

partially stabilized mental disorders, to 

include substance disorders, and a 

transition from an inpatient program 

when medically necessary. 

* * * * * 

Qualified mental health provider. 

Psychiatrists or other physicians; 

clinical psychologists, certified 

psychiatric nurse specialists, certified 

clinical social workers, certified 

marriage and family therapists, 

TRICARE certified mental health 

counselors, pastoral counselors under a 

physician’s supervision, and supervised 

mental health counselors under a 

physician’s supervision. 

* * * * * 

Residential treatment center (RTC). A 

facility (or distinct part of a facility) 

which meets the criteria in 

§ 199.6(b)(4)(vii). 

* * * * * 

Substance use disorder rehabilitation 

facility (SUDRF). A facility or a distinct 

part of a facility that meets the criteria 

in § 199.6(b)(4)(xiv). 

* * * * * 

Treatment plan. A detailed 

description of the medical care being 

rendered or expected to be rendered a 

CHAMPUS beneficiary seeking approval 

for inpatient and other benefits for 

which preauthorization is required as 

set forth in § 199.4(b). Medical care 

described in the plan must meet the 

requirements of medical and 

psychological necessity. A treatment 

plan must include, at a minimum, a 

diagnosis (either International Statistical 

Classification of Diseases and Related 

Health Problems (ICD) or Diagnostic and 

Statistical Manual or Mental Disorders 

(DSM)); detailed reports of prior 

treatment, medical history, family 

history, social history, and physical 

examination; diagnostic test results; 

consultant’s reports (if any); proposed 

treatment by type (such as surgical, 

medical, and psychiatric); a description 


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of who is or will be providing treatment 

(by discipline or specialty); anticipated 

frequency, medications, and specific 

goals of treatment; type of inpatient 

facility required and why (including 

length of time the related inpatient stay 

will be required); and prognosis. If the 

treatment plan involves the transfer of a 

CHAMPUS patient from a hospital or 

another inpatient facility, medical 

records related to that inpatient stay 

also are required as a part of the 

treatment plan documentation. 

* * * * * 

■ 3. Section 199.4 is amended by: 

■ a. Revising paragraphs (a)(1)(i) and the 

paragraph heading of (a)(12); 

■ b. Adding paragraphs (a)(14), 

(b)(1)(vi), (b)(2)(xix) and (xx), and 

(b)(3)(xvi) and (xvii); 

■ c. Removing paragraphs (b)(4)(viii) 

and (ix); 

■ d. Removing and reserving paragraphs 

(b)(6)(iii) and (iv); 

■ e. Revising paragraph (b)(7) 

introductory text; 

■ f. Revising paragraphs (b)(8), (9), and 

(10); 

■ g. Adding paragraph (b)(11); 

■ h. Revising paragraph (c)(3)(ix); 

■ i. Removing and reserving paragraphs 

(e)(4) and (e)(7); 

■ j. Revising paragraph (e)(8)(ii)(A); 

■ k. Adding paragraph (e)(8)(ii)(D); 

■ l. Removing and reserving paragraph 

(e)(8)(iv)(P); 

■ m. Revising paragraphs (e)(8)(iv)(Q) 

and (R); 

■ n. Revising paragraph (e)(11) 

introductory text 

■ o. Revising paragraph (e)(13)(i)(B); 

■ p. Removing paragraph (e)(30)(iii); 

■ q. Revising paragraph (f)(2)(ii) 

introductory text; 

■ r. Removing paragraph (f)(2)(ii)(D); 

■ s. Removing and reserving paragraph 

(f)(2)(v); 

■ t. Revising paragraph (f)(3)(ii); 

■ u. Removing paragraph (f)(3)(iv); 

■ v. Revising paragraphs (g)(1) and 

(g)(29); 

■ w. Removing and reserving paragraph 

(g)(72); and 

■ x. Revising paragraph (g)(73). 

The revisions and additions read as 

follows: 

§ 199.4 Basic program benefits. 

(a) * * * 

(1)(i) Scope of benefits. Subject to all 

applicable definitions, conditions, 

limitations, or exclusions specified in 

this part, the CHAMPUS Basic Program 

will pay for medically or 

psychologically necessary services and 

supplies required in the diagnosis and 

treatment of illness or injury, including 

maternity care and well-baby care. 

Benefits include specified medical 

services and supplies provided to 

eligible beneficiaries from authorized 

civilian sources such as hospitals, other 

authorized institutional providers, 

physicians, other authorized individual 

professional providers, and professional 

ambulance service, prescription drugs, 

authorized medical supplies, and rental 

or purchase of durable medical 

equipment. 

* * * * * 

(12) Utilization review, quality 

assurance, and reauthorization for all 

mental health services provided by 

institutional providers. * * * 

* * * * * 

(14) Confidentiality of substance use 

disorder treatment. Release of any 

patient identifying information, 

including that required to adjudicate a 

claim, must comply with the provisions 

of section 543 of the Public Health 

Service Act, as amended, (42 U.S.C. 

290dd–2), and implementing 

regulations at 42 CFR part 2, which 

governs the release of medical and other 

information from the records of patients 

undergoing treatment of substance use 

disorder. If the patient refuses to 

authorize the release of medical records 

which are, in the opinion of the 

Director, Defense Health Agency, or a 

designee, necessary to determine 

benefits on a claim for treatment of 

substance use disorder, the claim will 

be denied. 

(b) * * * 

(1) * * * 

(vi) Substance use disorder treatment 

exclusions. (A) The programmed use of 

physical measures, such as electric 

shock, alcohol, or other drugs as 

negative reinforcement (aversion 

therapy) is not covered, even if 

recommended by a physician. 

(B) Domiciliary settings. Domiciliary 

facilities generally referred to as halfway 

or quarterway houses are not authorized 

providers and charges for services 

provided by these facilities are not 

covered. 

(2) * * * 

(xix) Medication assisted treatment. 

Covered drugs and medicines for the 

treatment of substance use disorder 

include the substitution of a therapeutic 

drug, with addictive potential, for a 

drug addiction when medically or 

psychologically necessary and 

appropriate medical care for a 

beneficiary undergoing supervised 

treatment for a substance use disorder. 

(xx) Withdrawal management 

(detoxification). For a beneficiary 

undergoing treatment for a substance 

use disorder, this includes management 

of a patient’s withdrawal symptoms 

(detoxification). 

(3) * * * 

(xvi) Medication assisted treatment. 

Covered drugs and medicines for the 

treatment of substance use disorder 

include the substitution of a therapeutic 

drug, with addictive potential, for a 

drug addiction when medically or 

psychologically necessary and 

appropriate medical care for a 

beneficiary undergoing supervised 

treatment for a substance use disorder. 

(xvii) Withdrawal management 

(detoxification). For a beneficiary 

undergoing treatment for a substance 

use disorder, this includes management 

of a patient’s withdrawal symptoms 

(detoxification). 

* * * * * 

(7) Emergency inpatient hospital 

services. In the case of a medical 

emergency, benefits can be extended for 

medically necessary inpatient services 

and supplies provided to a beneficiary 

by a hospital, including hospitals that 

do not meet CHAMPUS standards or 

comply with the nondiscrimination 

requirements under title VI of the Civil 

Rights Act and other nondiscrimination 

laws applicable to recipients of federal 

financial assistance, or satisfy other 

conditions herein set forth. In a medical 

emergency, medically necessary 

inpatient services and supplies are those 

that are necessary to prevent the death 

or serious impairment of the health of 

the patient, and that, because of the 

threat to the life or health of the patient, 

necessitate, the use of the most 

accessible hospital available and 

equipped to furnish such services. 

Emergency services are covered when 

medically necessary for the active 

medical treatment of the acute phases of 

substance withdrawal (detoxification), 

for stabilization and for treatment of 

medical complications for substance use 

disorder. The availability of benefits 

depends upon the following three 

separate findings and continues only as 

long as the emergency exists, as 

determined by medical review. If the 

case qualified as an emergency at the 

time of admission to an unauthorized 

institutional provider and the 

emergency subsequently is determined 

no longer to exist, benefits will be 

extended up through the date of notice 

to the beneficiary and provider that 

CHAMPUS benefits no longer are 

payable in that hospital. 

* * * * * 

(8) Residential treatment for 

substance use disorder—(i) In general. 

Rehabilitative care, to include 

withdrawal management 

(detoxification), in an inpatient 

residential setting of an authorized 

hospital or substance use disorder 


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rehabilitative facility, whether freestanding or hospital-based, is covered 

on a residential basis. The medical 

necessity for the management of 

withdrawal symptoms must be 

documented. Any withdrawal 

management (detoxification) services 

provided by the substance use disorder 

rehabilitation facility must be under 

general medical supervision. 

(ii) Criteria for determining medical or 

psychological necessity of residential 

treatment for substance use disorder. 

Residential treatment for substance use 

disorder will be considered necessary 

only if all of the following conditions 

are present: 

(A) The patient has been diagnosed 

with a substance use disorder. 

(B) The patient is experiencing 

withdrawal symptoms or potential 

symptoms severe enough to require 

inpatient care and physician 

management, or who have less severe 

symptoms that require 24-hour inpatient 

monitoring or the patient’s addictionrelated symptoms, or concomitant 

physical and emotional/behavioral 

problems reflect persistent dysfunction 

in several major life areas. 

(iii) Services and supplies. The 

following services and supplies are 

included in the per diem rate approved 

for an authorized residential treatment 

for substance use disorder. 

(A) Room and board. Includes use of 

the residential treatment program 

facilities such as food service (including 

special diets), laundry services, 

supervised therapeutically constructed 

recreational and social activities, and 

other general services as considered 

appropriate by the Director, or a 

designee. 

(B) Patient assessment. Includes the 

assessment of each individual accepted 

by the facility, and must, at a minimum, 

consist of a physical examination; 

psychiatric examination; psychological 

assessment; assessment of physiological, 

biological and cognitive processes; case 

management assessment; developmental 

assessment; family history and 

assessment; social history and 

assessment; educational or vocational 

history and assessment; environmental 

assessment; and recreational/activities 

assessment. Assessments conducted 

within 30 days prior to admission to a 

residential treatment program for 

substance use disorder (SUD) may be 

used if approved and deemed adequate 

to permit treatment planning by the 

residential treatment program for SUD. 

(C) Psychological testing. 

Psychological testing is provided based 

on medical and psychological necessity. 

(D) Treatment services. All services, 

supplies, equipment and space 

necessary to fulfill the requirements of 

each patient’s individualized diagnosis 

and treatment plan. All mental health 

services must be provided by a 

TRICARE authorized individual 

professional provider of mental health 

services. [Exception: Residential 

treatment programs that employ 

individuals with master’s or doctoral 

level degrees in a mental health 

discipline who do not meet the 

licensure, certification, and experience 

requirements for a qualified mental 

health provider but are actively working 

toward licensure or certification may 

provide services within the all-inclusive 

per diem rate, but such individuals 

must work under the clinical 

supervision of a fully qualified mental 

health provider employed by the 

facility.] 

(iv) Case management required. The 

facility must provide case management 

that helps to assure arrangement of 

community based support services, 

referral of suspected child or elder 

abuse or domestic violence to the 

appropriate state agencies, and effective 

after care arrangements, at a minimum. 

(v) Professional mental health 

benefits. Professional mental health 

benefits are billed separately from the 

residential treatment program per diem 

rate only when rendered by an 

attending, TRICARE authorized mental 

health professional who is not an 

employee of, or under contract with, the 

program for purposes of providing 

clinical patient care. 

(vi) Non-mental health related 

medical services. Separate billing will 

be allowed for otherwise covered nonmental health related services. 

(9) Psychiatric and substance use 

disorder partial hospitalization 

services—(i) In general. Partial 

hospitalization services are those 

services furnished by a TRICARE 

authorized partial hospitalization 

program and authorized mental health 

providers for the active treatment of a 

mental disorder. All services must 

follow a medical model and vest patient 

care under the general direction of a 

licensed TRICARE authorized physician 

employed by the partial hospitalization 

program to ensure medication and 

physical needs of all the patients are 

considered. The primary or attending 

provider must be a TRICARE authorized 

mental health provider (see paragraph 

(c)(3)(ix) of this section), operating 

within the scope of his/her license. 

These categories include physicians, 

clinical psychologists, certified 

psychiatric nurse specialists, clinical 

social workers, marriage and family 

counselors, TRICARE certified mental 

health counselors, pastoral counselors, 

and supervised mental health 

counselors. All categories practice 

independently except pastoral 

counselors and supervised mental 

health counselors who must practice 

under the supervision of TRICARE 

authorized physicians. Partial 

hospitalization services and 

interventions are provided at a high 

degree of intensity and restrictiveness of 

care, with medical supervision and 

medication management. Partial 

hospitalization services are covered as a 

basic program benefit only if they are 

provided in accordance with paragraph 

(b)(9) of this section. Such programs 

must enter into a participation 

agreement with TRICARE; and be 

accredited and in substantial 

compliance with the specified standards 

of an accreditation organization 

approved by the Director. 

(ii) Criteria for determining medical or 

psychological necessity of psychiatric 

and SUD partial hospitalization 

services. Partial hospitalization services 

will be considered necessary only if all 

of the following conditions are present: 

(A) The patient is suffering significant 

impairment from a mental disorder (as 

defined in § 199.2) which interferes 

with age appropriate functioning or the 

patient is in need of rehabilitative 

services for the management of 

withdrawal symptoms from alcohol, 

sedative-hypnotics, opioids, or 

stimulants that require medicallymonitored ambulatory detoxification, 

with direct access to medical services 

and clinically intensive programming of 

rehabilitative care based on individual 

treatment plans. 

(B) The patient is unable to maintain 

himself or herself in the community, 

with appropriate support, at a sufficient 

level of functioning to permit an 

adequate course of therapy exclusively 

on an outpatient basis, to include 

outpatient treatment program, 

outpatient office visits, or intensive 

outpatient services (but is able, with 

appropriate support, to maintain a basic 

level of functioning to permit partial 

hospitalization services and presents no 

substantial imminent risk of harm to self 

or others). These patients require 

medical support; however, they do not 

require a 24-hour medical environment. 

(C) The patient is in need of crisis 

stabilization, acute symptom reduction, 

treatment of partially stabilized mental 

health disorders, or services as a 

transition from an inpatient program. 

(D) The admission into the partial 

hospitalization program is based on the 

development of an individualized 

diagnosis and treatment plan expected 

to be effective for that patient and 


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permit treatment at a less intensive 

level. 

(iii) Services and supplies. The 

following services and supplies are 

included in the per diem rate approved 

for an authorized partial hospitalization 

program: 

(A) Board. Includes use of the partial 

hospital facilities such as food service, 

supervised therapeutically constructed 

recreational and social activities, and 

other general services as considered 

appropriate by the Director, or a 

designee. 

(B) Patient assessment. Includes the 

assessment of each individual accepted 

by the facility, and must, at a minimum, 

consist of a physical examination; 

psychiatric examination; psychological 

assessment; assessment of physiological, 

biological and cognitive processes; case 

management assessment; developmental 

assessment; family history and 

assessment; social history and 

assessment; educational or vocational 

history and assessment; environmental 

assessment; and recreational/activities 

assessment. Assessments conducted 

within 30 days prior to admission to a 

partial program may be used if approved 

and deemed adequate to permit 

treatment planning by the partial 

hospital program. 

(C) Psychological testing. 

(D) Treatment services. All services, 

supplies, equipment and space 

necessary to fulfill the requirements of 

each patient’s individualized diagnosis 

and treatment plan. All mental health 

services must be provided by a 

TRICARE authorized individual 

professional provider of mental health 

services. [Exception: Partial 

hospitalization programs that employ 

individuals with master’s or doctoral 

level degrees in a mental health 

discipline who do not meet the 

licensure, certification, and experience 

requirements for a qualified mental 

health provider but are actively working 

toward licensure or certification, may 

provide services within the all-inclusive 

per diem rate, but such individuals 

must work under the clinical 

supervision of a fully qualified mental 

health provider employed by the partial 

hospitalization program.] 

(iv) Case management required. The 

facility must provide case management 

that helps to assure the patient 

appropriate living arrangements after 

treatment hours, transportation to and 

from the facility, arrangement of 

community based support services, 

referral of suspected child or elder 

abuse or domestic violence to the 

appropriate state agencies, and effective 

after care arrangements, at a minimum. 

(v) Educational services required. 

Programs treating children and 

adolescents must ensure the provision 

of a state certified educational 

component which assures that patients 

do not fall behind in educational 

placement while receiving partial 

hospital treatment. CHAMPUS will not 

fund the cost of educational services 

separately from the per diem rate. The 

hours devoted to education do not count 

toward the therapeutic intensive 

outpatient program or full day program. 

(vi) Family therapy required. The 

facility must ensure the provision of an 

active family therapy treatment 

component, which assures that each 

patient and family participate at least 

weekly in family therapy provided by 

the institution and rendered by a 

TRICARE authorized individual 

professional provider of mental health 

services. There is no acceptable 

substitute for family therapy. An 

exception to this requirement may be 

granted on a case-by-case basis by the 

Director, or designee, only if family 

therapy is clinically contraindicated. 

(vii) Professional mental health 

benefits. Professional mental health 

benefits are billed separately from the 

partial hospitalization per diem rate 

only when rendered by an attending, 

TRICARE authorized mental health 

professional who is not an employee of, 

or under contract with, the partial 

hospitalization program for purposes of 

providing clinical patient care. 

(viii) Non-mental health related 

medical services. Separate billing will 

be allowed for otherwise covered, nonmental health related medical services. 

(10) Intensive psychiatric and 

substance use disorder outpatient 

services—(i) In general. Intensive 

outpatient services are those services 

furnished by a TRICARE authorized 

intensive outpatient program and 

qualified mental health provider(s) for 

the active treatment of a mental 

disorder, to include substance use 

disorder. 

(ii) Criteria for determining medical or 

psychological necessity of intensive 

outpatient services. In determining the 

medical or psychological necessity of 

intensive outpatient services, the 

evaluation conducted by the Director, or 

designee, shall consider the appropriate 

level of care, based on the patient’s 

clinical needs and characteristics 

matched to a service’s structure and 

intensity. In addition to the criteria set 

for this paragraph (b)(10) of this section, 

additional evaluation standards, 

consistent with such criteria, may be 

adopted by the Director, or designee. 

Treatment in an intensive outpatient 

setting shall not be considered 

necessary unless the patient requires 

care that is more intensive than an 

outpatient treatment program or 

outpatient office visits and less 

intensive than inpatient psychiatric care 

or a partial hospital program. Intensive 

outpatient services will be considered 

necessary only if the following 

conditions are present: 

(A) The patient is suffering significant 

impairment from a mental disorder, to 

include a substance use disorder (as 

defined in § 199.2), which interferes 

with age appropriate functioning. 

Patients receiving a higher intensity of 

treatment may be experiencing 

moderate to severe instability, 

exacerbation of severe/persistent 

disorder, or dangerousness with some 

risk of confinement. Patients receiving a 

lower intensity of treatment may be 

experiencing mild instability with 

limited dangerousness and low risk for 

confinement. 

(B) The patient is unable to maintain 

himself or herself in the community, 

with appropriate support, at a sufficient 

level of functioning to permit an 

adequate course of therapy exclusively 

in an outpatient treatment program or 

an outpatient office basis (but is able, 

with appropriate support, to maintain a 

basic level of functioning to permit a 

level of intensive outpatient treatment 

and presents no substantial imminent 

risk of harm to self or others). 

(C) The patient is in need of 

stabilization, symptom reduction, and 

prevention of relapse for chronic mental 

illness. The goal of maintenance of his 

or her functioning within the 

community cannot be met by outpatient 

office visits, but requires active 

treatment in a stable, staff-supported 

environment; 

(D) The admission into the intensive 

outpatient program is based on the 

development of an individualized 

diagnosis and treatment plan expected 

to be effective for that patient and 

permit treatment at a less intensive 

level. 

(iii) Services and supplies. The 

following services and supplies are 

included in the per diem rate approved 

for an authorized intensive outpatient 

program. 

(A) Patient assessment. Includes the 

assessment of each individual accepted 

by the facility. 

(B) Treatment services. All services, 

supplies, equipment, and space 

necessary to fulfill the requirements of 

each patient’s individualized diagnosis 

and treatment plan. All mental health 

services must be provided by a 

TRICARE authorized individual 

qualified mental health provider. 

[Exception: Intensive outpatient 


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5076 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

programs that employ individuals with 

master’s or doctoral level degrees in a 

mental health discipline who do not 

meet the licensure, certification, and 

experience requirements for a qualified 

mental health provider but are actively 

working toward licensure or 

certification, may provide services 

within the all-inclusive per diem rate 

but such individuals must work under 

the clinical supervision of a fully 

qualified mental health provider 

employed by the facility.] 

(iv) Case management. When 

appropriate, and with the consent of the 

person served, the facility should 

coordinate the care, treatment, or 

services, including providing 

coordinated treatment with other 

services. 

(v) Professional mental health 

benefits. Professional mental health 

benefits are billed separately from the 

intensive outpatient per diem rate only 

when rendered by an attending, 

TRICARE authorized qualified mental 

health provider who is not an employee 

of, or under contract with, the program 

for purposes of providing clinical 

patient care. 

(vi) Non-mental health related 

medical services. Separate billing will 

be allowed for otherwise covered, nonmental health related medical services. 

(11) Opioid treatment programs—(i) 

In general. Outpatient treatment and 

management of withdrawal symptoms 

for substance use disorder provided at a 

TRICARE authorized opioid treatment 

program are covered. If the patient is 

medically in need of management of 

withdrawal symptoms, but does not 

require the personnel or facilities of a 

general hospital setting, services for 

management of withdrawal symptoms 

are covered. The medical necessity for 

the management of withdrawal 

symptoms must be documented. Any 

services to manage withdrawal 

symptoms provided by the opioid 

treatment program must be under 

general medical supervision. 

(ii) Criteria for determining medical or 

psychological necessity of an opioid 

treatment program are set forth in 42 

CFR part 8. 

(iii) Services and supplies. The 

following services and supplies are 

included in the reimbursement 

approved for an authorized opioid 

treatment program. 

(A) Patient assessment. Includes the 

assessment of each individual accepted 

by the facility. 

(B) Treatment services. All services, 

supplies, equipment, and space 

necessary to fulfill the requirements of 

each patient’s individualized diagnosis 

and treatment plan. All mental health 

services must be provided by a 

TRICARE authorized individual 

professional provider of mental health 

services. [Exception: opioid treatment 

programs that employ individuals with 

degrees in a mental health discipline 

who do not meet the licensure, 

certification, and experience 

requirements for a qualified mental 

health provider but work under the 

clinical supervision of a fully qualified 

mental health provider employed by the 

facility.] 

(iv) Case management. Care, 

treatment, or services should be 

coordinated among providers and 

between settings, independent of 

whether they are provided directly by 

the organization or by an organization or 

by an outside source, so that the 

individual’s needs are addressed in a 

seamless, synchronized, and timely 

manner. 

(c) * * * 

(3) * * * 

(ix) Treatment of mental disorders, to 

include substance use disorder. In order 

to qualify for CHAMPUS mental health 

benefits, the patient must be diagnosed 

by a TRICARE authorized qualified 

mental health professional practicing 

within the scope of his or her license to 

be suffering from a mental disorder, as 

defined in § 199.2 

(A) Covered diagnostic and 

therapeutic services. CHAMPUS 

benefits are payable for the following 

services when rendered in the diagnosis 

or treatment of a covered mental 

disorder by a TRICARE authorized 

qualified mental health provider 

practicing within the scope of his or her 

license. Qualified mental health 

providers are: Psychiatrists or other 

physicians; clinical psychologists, 

certified psychiatric nurse specialists, 

certified clinical social workers, 

certified marriage and family therapists, 

TRICARE certified mental health 

counselors, pastoral counselors under a 

physician’s supervision, and supervised 

mental health counselors under a 

physician’s supervision. 

(1) Individual psychotherapy, adult or 

child. A covered individual 

psychotherapy session is no more than 

60 minutes in length. An individual 

psychotherapy session of up to 120 

minutes in length is payable for crisis 

intervention. 

(2) Group psychotherapy. A covered 

group psychotherapy session is no more 

than 90 minutes in length. 

(3) Family or conjoint psychotherapy. 

A covered family or conjoint 

psychotherapy session is no more than 

90 minutes in length. A family or 

conjoint psychotherapy session of up to 

180 minutes in length is payable for 

crisis intervention. 

(4) Psychoanalysis. Psychoanalysis is 

covered when provided by a graduate or 

candidate of a psychoanalytic training 

institution recognized by the American 

Psychoanalytic Association and when 

preauthorized by the Director, or a 

designee. 

(5) Psychological testing and 

assessment. Psychological testing and 

assessment is covered when medically 

or psychologically necessary. 

Psychological testing and assessment 

performed as part of an assessment for 

academic placement are not covered. 

(6) Administration of psychotropic 

drugs. When prescribed by an 

authorized provider qualified by 

licensure to prescribe drugs. 

(7) Electroconvulsive treatment. When 

provided in accordance with guidelines 

issued by the Director. 

(8) Collateral visits. Covered collateral 

visits are those that are medically or 

psychologically necessary for the 

treatment of the patient. 

(9) Medication assisted treatment. 

Medication assisted treatment, 

combining pharmacotherapy and 

holistic care, to include provision in 

office-based opioid treatment by an 

authorized TRICARE provider, is 

covered. The practice of an individual 

physician in office-based treatment is, 

as regulated by the Department of 

Health and Human Services’ 42 CFR 

8.12, the Center for Substance Abuse 

Treatment (CSAT), and the Drug 

Enforcement Administration (DEA), 

along with individual state and local 

regulations. 

(B) Therapeutic settings—(1) 

Outpatient psychotherapy. Outpatient 

psychotherapy generally is covered for 

individual, family, conjoint, collateral, 

and/or group sessions. 

(2) Inpatient psychotherapy. Coverage 

of inpatient psychotherapy is based on 

medical or psychological necessity for 

the services identified in the patient’s 

treatment plan. 

(C) Covered ancillary therapies. 

Includes art, music, dance, 

occupational, and other ancillary 

therapies, when included by the 

attending provider in an approved 

inpatient, SUDRF, residential treatment, 

partial hospital, or intensive outpatient 

program treatment plan and under the 

clinical supervision of a qualified 

mental health professional. These 

ancillary therapies are not separately 

reimbursed professional services but are 

included within the institutional 

reimbursement. 

(D) Review of claims for treatment of 

mental disorder. The Director shall 

establish and maintain procedures for 


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Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5077 

review, including professional review, 

of the services provided for the 

treatment of mental disorders. 

* * * * * 

(e) * * * 

* * * * * 

(8) * * * 

(ii) * * * 

(A) For purposes of CHAMPUS, 

dental congenital anomalies such as 

absent tooth buds or malocclusion 

specifically are excluded. 

* * * * * 

(D) Any procedures related to sex 

gender changes, except as provided in 

paragraph (g)(29) of this section, are 

excluded. 

* * * * * 

(iv) * * * 

(Q) Penile implant procedure for 

psychological impotency or as related to 

sex gender changes, as prohibited by 

section 1079 of title 10, United States 

Code. 

(R) Insertion of prosthetic testicles as 

related to sex gender changes, as 

prohibited by section 1079 of title 10, 

United States Code. 

* * * * * 

(11) Drug abuse. Under the Basic 

Program, benefits may be extended for 

medically necessary prescription drugs 

required in the treatment of an illness or 

injury or in connection with maternity 

care (refer to paragraph (d) of this 

section). However, TRICARE benefits 

cannot be authorized to support or 

maintain an existing or potential drug 

abuse situation whether or not the drugs 

(under other circumstances) are eligible 

for benefit consideration and whether or 

not obtained by legal means. Drugs, 

including the substitution of a 

therapeutic drug with addictive 

potential for a drug of addiction, 

prescribed to beneficiaries undergoing 

medically supervised treatment for a 

substance use disorder as authorized 

under paragraphs (b) and (c) of this 

section are not considered to be in 

support of, or to maintain, an existing or 

potential drug abuse situation and are 

allowed. The Director may prescribe 

appropriate policies to implement this 

prescription drug benefit for those 

undergoing medically supervised 

treatment for a substance use disorder. 

* * * * * 

(13) * * * 

(i) * * * 

(B) Home care is not suitable. 

Institutionalization of a child because a 

parent (or parents) is unable to provide 

a safe and nurturing environment due to 

a mental or substance use disorder, or 

because someone in the home has a 

contagious disease, are examples of why 

domiciliary care is being provided 

because the home setting is unsuitable. 

* * * * * 

(f) * * * 

(2) * * * 

(ii) Inpatient cost-sharing. Dependents 

of members of the Uniformed Services 

are responsible for the payment of the 

first $25 of the allowable institutional 

costs incurred with each covered 

inpatient admission to a hospital or 

other authorized institutional provider 

(refer to § 199.6, including inpatient 

admission to a residential treatment 

center, substance use disorder 

rehabilitation facility residential 

treatment program, or skilled nursing 

facility), or the amount the beneficiary 

or sponsor would have been charged 

had the inpatient care been provided in 

a Uniformed Service hospital, 

whichever is greater. 

Note: The Secretary of Defense (after 

consulting with the Secretary of Health 

and Human Services and the Secretary 

of Transportation) prescribes the fair 

charges for inpatient hospital care 

provided through Uniformed Services 

medical facilities. This determination is 

made each fiscal year. 

* * * * * 

(3) * * * 

(ii) Inpatient cost-sharing. Inpatient 

admissions to a hospital or other 

authorized institutional provider (refer 

to § 199.6, including inpatient 

admission to a residential treatment 

center, substance use disorder 

rehabilitation facility residential 

treatment program, or skilled nursing 

facility) shall be cost-shared on an 

inpatient basis. The cost-sharing for 

inpatient services subject to the 

TRICARE DRG-based payment system 

and the TRICARE per diem system shall 

be the lesser of the respective per diem 

copayment amount multiplied by the 

total number of days in the hospital 

(except for the day of discharge under 

the DRG payment system), or 25 percent 

of the hospital’s billed charges. For 

other inpatient services, the cost-share 

shall be 25% of the CHAMPUSdetermined allowable charges. 

* * * * * 

(g) * * * 

(1) Not medically or psychologically 

necessary. Services and supplies that 

are not medically or psychologically 

necessary for the diagnosis or treatment 

of a covered illness (including mental 

disorder, to include substance use 

disorder) or injury, for the diagnosis and 

treatment of pregnancy or well-baby 

care except as provided in the following 

paragraph. 

* * * * * 

(29) Intersex surgery and sex gender 

changes. Services and supplies related 

to intersex surgery and sex gender 

change, also referred to as sex 

reassignment surgery, as prohibited by 

section 1079 of title 10, United States 

Code. This exclusion does not apply to 

surgery and related medically necessary 

services performed to correct sex gender 

confusion (that is, ambiguous genitalia) 

which has been documented to be 

present at birth. 

* * * * * 

(73) Economic interest in connection 

with mental health admissions. 

Inpatient mental health services 

(including both acute care and RTC 

services) are excluded for care received 

when a patient is referred to a provider 

of such services by a physician (or other 

health care professional with authority 

to admit) who has an economic interest 

in the facility to which the patient is 

referred, unless a waiver is granted. 

Requests for waiver shall be considered 

under the same procedure and based on 

the same criteria as used for obtaining 

preadmission authorization (or 

continued stay authorization for 

emergency admissions), with the only 

additional requirement being that the 

economic interest be disclosed as part of 

the request. This exclusion does not 

apply to services under the Extended 

Care Health Option (ECHO) in § 199.5 or 

provided as partial hospital care. If a 

situation arises where a decision is 

made to exclude CHAMPUS payment 

solely on the basis of the provider’s 

economic interest, the normal 

CHAMPUS appeals process will be 

available. 

* * * * * 

■ 4. Section 199.6 is amended by 

revising paragraphs (b)(4)(iv)(B) and (D), 

(b)(4)(vii), (b)(4)(xii), (b)(4)(xiv), 

(b)(4)(xviii), and (b)(4)(xix) to read as 

follows: 

§ 199.6 TRICARE-authorized providers. 

(b) * * * 

(4) * * * 

(iv) * * * 

(B) In order for the services of a 

psychiatric hospital to be covered, the 

hospital shall comply with the 

provisions outlined in paragraph 

(b)(4)(i) of this section. All psychiatric 

hospitals shall be accredited under an 

accrediting organization approved by 

the Director, in order for their services 

to be cost-shared under CHAMPUS. In 

the case of those psychiatric hospitals 

that are not accredited because they 

have not been in operation a sufficient 

period of time to be eligible to request 

an accreditation survey, the Director, or 

a designee, may grant temporary 


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5078 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

approval if the hospital is certified and 

participating under Title XVIII of the 

Social Security Act (Medicare, Part A). 

This temporary approval expires 12 

months from the date on which the 

psychiatric hospital first becomes 

eligible to request an accreditation 

survey by an accrediting organization 

approved by the Director. 

* * * * * 

(D) Although psychiatric hospitals are 

accredited under an accrediting 

organization approved by Director, their 

medical records must be maintained in 

accordance with accrediting 

organization’s current standards 

manual, along with the requirements set 

forth in § 199.7(b)(3). The hospital is 

responsible for assuring that patient 

services and all treatment are accurately 

documented and completed in a timely 

manner. 

* * * * * 

(vii) Residential treatment centers. 

This paragraph (b)(4)(vii) establishes the 

definition of and eligibility standards 

and requirements for residential 

treatment centers (RTCs). 

(A) Organization and 

administration—(1) Definition. A 

Residential Treatment Center (RTC) is a 

facility or a distinct part of a facility that 

provides to beneficiaries under 21 years 

of age a medically supervised, 

interdisciplinary program of mental 

health treatment. An RTC is appropriate 

for patients whose predominant 

symptom presentation is essentially 

stabilized, although not resolved, and 

who have persistent dysfunction in 

major life areas. Residential treatment 

may be complemented by family 

therapy and case management for 

community based resources. Discharge 

planning should support transitional 

care for the patient and family, to 

include resources available in the 

geographic area where the patient will 

be residing. The extent and 

pervasiveness of the patient’s problems 

require a protected and highly 

structured therapeutic environment. 

Residential treatment is differentiated 

from: 

(i) Acute psychiatric care, which 

requires medical treatment and 24-hour 

availability of a full range of diagnostic 

and therapeutic services to establish and 

implement an effective plan of care 

which will reverse life-threatening and/ 

or severely incapacitating symptoms; 

(ii) Partial hospitalization, which 

provides a less than 24-hour-per-day, 

seven-day-per-week treatment program 

for patients who continue to exhibit 

psychiatric problems but can function 

with support in some of the major life 

areas; 

(iii) A group home, which is a 

professionally directed living 

arrangement with the availability of 

psychiatric consultation and treatment 

for patients with significant family 

dysfunction and/or chronic but stable 

psychiatric disturbances; 

(iv) Therapeutic school, which is an 

educational program supplemented by 

psychological and psychiatric services; 

(v) Facilities that treat patients with a 

primary diagnosis of substance use 

disorder; and 

(vi) Facilities providing care for 

patients with a primary diagnosis of 

mental retardation or developmental 

disability. 

(2) Eligibility. (i) In order to qualify as 

a TRICARE authorized provider, every 

RTC must meet the minimum basic 

standards set forth in paragraphs 

(b)(4)(vii)(A) through (C) of this section, 

and as well as such additional 

elaborative criteria and standards as the 

Director determines are necessary to 

implement the basic standards. 

(ii) To qualify as a TRICARE 

authorized provider, the facility is 

required to be licensed and fully 

operational for six months (with a 

minimum average daily census of 30 

percent of total bed capacity) and 

operate in substantial compliance with 

state and federal regulations. 

(iii) The facility is currently 

accredited by an accrediting 

organization approved by the Director. 

(iv) The facility has a written 

participation agreement with 

OCHAMPUS. The RTC is not a 

CHAMPUS-authorized provider and 

CHAMPUS benefits are not paid for 

services provided until the date upon 

which a participation agreement is 

signed by the Director. 

(B) Participation agreement 

requirements. In addition to other 

requirements set forth in paragraph 

(b)(4)(vii), of this section in order for the 

services of an RTC to be authorized, the 

RTC shall have entered into a 

Participation Agreement with 

OCHAMPUS. The period of a 

participation agreement shall be 

specified in the agreement, and will 

generally be for not more than five 

years. In addition to review of a 

facility’s application and supporting 

documentation, an on-site inspection by 

OCHAMPUS authorized personnel may 

be required prior to signing a 

Participation Agreement. Retroactive 

approval is not given. In addition, the 

Participation Agreement shall include 

provisions that the RTC shall, at a 

minimum: 

(1) Render residential treatment 

center inpatient services to eligible 

CHAMPUS beneficiaries in need of such 

services, in accordance with the 

participation agreement and CHAMPUS 

regulation; 

(2) Accept payment for its services 

based upon the methodology provided 

in § 199.14(f) or such other method as 

determined by the Director; 

(3) Accept the CHAMPUS allinclusive per diem rate as payment in 

full and collect from the CHAMPUS 

beneficiary or the family of the 

CHAMPUS beneficiary only those 

amounts that represent the beneficiary’s 

liability, as defined in § 199.4, and 

charges for services and supplies that 

are not a benefit of CHAMPUS; 

(4) Make all reasonable efforts 

acceptable to the Director, to collect 

those amounts, which represents the 

beneficiary’s liability, as defined in 

§ 199.4; 

(5) Comply with the provisions of 

§ 199.8, and submit claims first to all 

health insurance coverage to which the 

beneficiary is entitled that is primary to 

CHAMPUS; 

(6) Submit claims for services 

provided to CHAMPUS beneficiaries at 

least every 30 days (except to the extent 

a delay is necessitated by efforts to first 

collect from other health insurance). If 

claims are not submitted at least every 

30 days, the RTC agrees not to bill the 

beneficiary or the beneficiary’s family 

for any amounts disallowed by 

CHAMPUS; 

(7) Certify that: 

(i) It is and will remain in compliance 

with the TRICARE standards and 

provisions of paragraph (b)(4)(vii) of this 

section establishing standards for 

Residential Treatment Centers; and 

(ii) It will maintain compliance with 

the CHAMPUS Standards for 

Residential Treatment Centers Serving 

Children and Adolescents with Mental 

Disorders, as issued by the Director, 

except for any such standards regarding 

which the facility notifies the Director 

that it is not in compliance. 

(8) Designate an individual who will 

act as liaison for CHAMPUS inquiries. 

The RTC shall inform OCHAMPUS in 

writing of the designated individual; 

(9) Furnish OCHAMPUS, as requested 

by OCHAMPUS, with cost data certified 

by an independent accounting firm or 

other agency as authorized by the 

Director, OCHAMPUS; 

(10) Comply with all requirements of 

this section applicable to institutional 

providers generally concerning 

accreditation requirements, 

preauthorization, concurrent care 

review, claims processing, beneficiary 

liability, double coverage, utilization 

and quality review, and other matters; 

(11) Grant the Director, or designee, 

the right to conduct quality assurance 


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audits or accounting audits with full 

access to patients and records 

(including records relating to patients 

who are not CHAMPUS beneficiaries) to 

determine the quality and costeffectiveness of care rendered. The 

audits may be conducted on a 

scheduled or unscheduled 

(unannounced) basis. This right to 

audit/review includes, but is not limited 

to: 

(i) Examination of fiscal and all other 

records of the RTC which would 

confirm compliance with the 

participation agreement and designation 

as a TRICARE authorized RTC; 

(ii) Conducting such audits of RTC 

records including clinical, financial, 

and census records, as may be necessary 

to determine the nature of the services 

being provided, and the basis for 

charges and claims against the United 

States for services provided CHAMPUS 

beneficiaries; 

(iii) Examining reports of evaluations 

and inspections conducted by federal, 

state and local government, and private 

agencies and organizations; 

(iv) Conducting on-site inspections of 

the facilities of the RTC and 

interviewing employees, members of the 

staff, contractors, board members, 

volunteers, and patients, as required; 

(v) Audits conducted by the United 

States Government Accountability 

Office. 

(C) Other requirements applicable to 

RTCs. (1) Even though an RTC may 

qualify as a TRICARE authorized 

provider and may have entered into a 

participation agreement with 

CHAMPUS, payment by CHAMPUS for 

particular services provided is 

contingent upon the RTC also meeting 

all conditions set forth in § 199.4 

especially all requirements of 

§ 199.4(b)(4). 

(2) The RTC shall provide inpatient 

services to CHAMPUS beneficiaries in 

the same manner it provides inpatient 

services to all other patients. The RTC 

may not discriminate against 

CHAMPUS beneficiaries in any manner, 

including admission practices, 

placement in special or separate wings 

or rooms, or provisions of special or 

limited treatment. 

(3) The RTC shall assure that all 

certifications and information provided 

to the Director, incident to the process 

of obtaining and retaining authorized 

provider status is accurate and that it 

has no material errors or omissions. In 

the case of any misrepresentations, 

whether by inaccurate information 

being provided or material facts 

withheld, authorized status will be 

denied or terminated, and the RTC will 

be ineligible for consideration for 

authorized provider status for a two year 

period. 

* * * * * 

(xii) Psychiatric and substance use 

disorder partial hospitalization 

programs. This paragraph (b)(4)(xii) 

establishes the definition of and 

eligibility standards and requirements 

for psychiatric and substance use 

disorder partial hospitalization 

programs. 

(A) Organization and 

administration—(1) Definition. Partial 

hospitalization is defined as a timelimited, ambulatory, active treatment 

program that offers therapeutically 

intensive, coordinated, and structured 

clinical services within a stable 

therapeutic milieu. Partial 

hospitalization programs serve patients 

who exhibit psychiatric symptoms, 

disturbances of conduct, and 

decompensating conditions affecting 

mental health. Partial hospitalization is 

appropriate for those whose psychiatric 

and addiction-related symptoms or 

concomitant physical and emotional/

behavioral problems can be managed 

outside the hospital for defined periods 

of time with support in one or more of 

the major life areas. A partial 

hospitalization program for the 

treatment of substance use disorders is 

an addiction-focused service that 

provides active treatment to adolescents 

between the ages of 13 and 18 or adults 

aged 18 and over. 

(2) Eligibility. (i) To qualify as a 

TRICARE authorized provider, every 

partial hospitalization program must 

meet minimum basic standards set forth 

in paragraphs (b)(4)(xii)(A) through (D) 

of this section, as well as such 

additional elaborative criteria and 

standards as the Director determines are 

necessary to implement the basic 

standards. Each partial hospitalization 

program must be either a distinct part of 

an otherwise-authorized institutional 

provider or a free-standing program. 

Approval of a hospital by TRICARE is 

sufficient for its partial hospitalization 

program to be an authorized TRICARE 

provider. Such hospital-based partial 

hospitalization programs are not 

required to be separately authorized by 

TRICARE. 

(ii) To be approved as a TRICARE 

authorized provider, the facility is 

required to be licensed and fully 

operational for a period of at least six 

months (with a minimum patient census 

of at least 30 percent of bed capacity) 

and operate in substantial compliance 

with state and federal regulations. 

(iii) The facility is required to be 

currently accredited by an accrediting 

organization approved by the Director. 

Each PHP authorized to treat substance 

use disorder must be accredited to 

provide the level of required treatment 

by an accreditation body approved by 

the Director. 

(iv) The facility is required to have a 

written participation agreement with 

OCHAMPUS. The PHP is not a 

CHAMPUS-authorized provider and 

CHAMPUS benefits are not paid for 

services provided until the date upon 

which a participation agreement is 

signed by the Director. 

(B) Participation agreement 

requirements. In addition to other 

requirements set forth in paragraph 

(b)(4)(xii) of this section, in order for the 

services of a PHP to be authorized, the 

PHP shall have entered into a 

Participation Agreement with 

OCHAMPUS. A single consolidated 

participation agreement is acceptable for 

all units of the TRICARE authorized 

facility granted that all programs meet 

the requirements of this part. The period 

of a Participation Agreement shall be 

specified in the agreement, and will 

generally be for not more than five 

years. The PHP shall not be considered 

to be a CHAMPUS authorized provider 

and CHAMPUS payments shall not be 

made for services provided by the PHP 

until the date the participation 

agreement is signed by the Director. In 

addition to review of a facility’s 

application and supporting 

documentation, an on-site inspection by 

OCHAMPUS authorized personnel may 

be required prior to signing a 

participation agreement. The 

Participation Agreement shall include at 

least the following requirements: 

(1) Render partial hospitalization 

program services to eligible CHAMPUS 

beneficiaries in need of such services, in 

accordance with the participation 

agreement and CHAMPUS regulation. 

(2) Accept payment for its services 

based upon the methodology provided 

in § 199.14, or such other method as 

determined by the Director; 

(3) Accept the CHAMPUS allinclusive per diem rate as payment in 

full and collect from the CHAMPUS 

beneficiary or the family of the 

CHAMPUS beneficiary only those 

amounts that represent the beneficiary’s 

liability, as defined in § 199.4, and 

charges for services and supplies that 

are not a benefit of CHAMPUS; 

(4) Make all reasonable efforts 

acceptable to the Director to collect 

those amounts, which represent the 

beneficiary’s liability, as defined in 

§ 199.4; 

(5) Comply with the provisions of 

§ 199.8, and submit claims first to all 

health insurance coverage to which the 


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beneficiary is entitled that is primary to 

CHAMPUS; 

(6) Submit claims for services 

provided to CHAMPUS beneficiaries at 

least every 30 days (except to the extent 

a delay is necessitated by efforts to first 

collect from other health insurance). If 

claims are not submitted at least every 

30 days, the PHP agrees not to bill the 

beneficiary or the beneficiary’s family 

for any amounts disallowed by 

CHAMPUS; 

(7) Certify that: 

(i) It is and will remain in compliance 

with the TRICARE standards and 

provisions of paragraph (b)(4)(xii) of this 

section establishing standards for 

psychiatric and substance use disorder 

partial hospitalization programs; and 

(ii) It will maintain compliance with 

the CHAMPUS Standards for 

Psychiatric Substance Use Disorder 

Partial Hospitalization Programs, as 

issued by the Director, except for any 

such standards regarding which the 

facility notifies the Director, or 

designee, that it is not in compliance. 

(8) Designate an individual who will 

act as liaison for CHAMPUS inquiries. 

The PHP shall inform the Director, or 

designee, in writing of the designated 

individual; 

(9) Furnish OCHAMPUS, as requested 

by OCHAMPUS, with cost data certified 

by an independent accounting firm or 

other agency as authorized by the 

Director; 

(10) Comply with all requirements of 

this section applicable to institutional 

providers generally concerning 

accreditation requirements, 

preauthorization, concurrent care 

review, claims processing, beneficiary 

liability, double coverage, utilization 

and quality review, and other matters; 

(11) Grant the Director, or designee, 

the right to conduct quality assurance 

audits or accounting audits with full 

access to patients and records 

(including records relating to patients 

who are not CHAMPUS beneficiaries) to 

determine the quality and costeffectiveness of care rendered. The 

audits may be conducted on a 

scheduled or unscheduled 

(unannounced) basis. This right to 

audit/review includes, but is not limited 

to: 

(i) Examination of fiscal and all other 

records of the PHP which would 

confirm compliance with the 

participation agreement and designation 

as a TRICARE authorized PHP provider; 

(ii) Conducting such audits of PHP 

records including clinical, financial, 

and census records, as may be necessary 

to determine the nature of the services 

being provided, and the basis for 

charges and claims against the United 

States for services provided CHAMPUS 

beneficiaries; 

(iii) Examining reports of evaluations 

and inspections conducted by federal, 

state and local government, and private 

agencies and organizations; 

(iv) Conducting on-site inspections of 

the facilities of the PHP and 

interviewing employees, members of the 

staff, contractors, board members, 

volunteers, and patients, as required; 

(v) Audits conducted by the United 

States General Account Office. 

(C) Other requirements applicable to 

PHPs. (1) Even though a PHP may 

qualify as a TRICARE authorized 

provider and may have entered into a 

participation agreement with 

CHAMPUS, payment by CHAMPUS for 

particular services provided is 

contingent upon the PHP also meeting 

all conditions set forth in § 199.4. 

(2) The PHP may not discriminate 

against CHAMPUS beneficiaries in any 

manner, including admission practices, 

placement in special or separate wings 

or rooms, or provisions of special or 

limited treatment. 

(3) The PHP shall assure that all 

certifications and information provided 

to the Director incident to the process of 

obtaining and retaining authorized 

provider status is accurate and that is 

has no material errors or omissions. In 

the case of any misrepresentations, 

whether by inaccurate information 

being provided or material facts 

withheld, authorized provider status 

will be denied or terminated, and the 

PHP will be ineligible for consideration 

for authorized provider status for a two 

year period. 

* * * * * 

(xiv) Substance use disorder 

rehabilitation facilities. This paragraph 

(b)(4)(xiv) establishes the definition of 

eligibility standards and requirements 

for residential substance use disorder 

rehabilitation facilities (SUDRF). 

(A) Organization and 

administration—(1) Definition. A 

SUDRF is a residential or rehabilitation 

facility, or distinct part of a facility, that 

provides medically monitored, 

interdisciplinary addiction-focused 

treatment to beneficiaries who have 

psychoactive substance use disorders. 

Qualified health care professionals 

provide 24-hour, seven-day-per-week, 

assessment, treatment, and evaluation. 

A SUDRF is appropriate for patients 

whose addiction-related symptoms, or 

concomitant physical and emotional/

behavioral problems reflect persistent 

dysfunction in several major life areas. 

Residential or inpatient rehabilitation is 

differentiated from: 

(i) Acute psychoactive substance use 

treatment and from treatment of acute 

biomedical/emotional/behavioral 

problems; which problems are either 

life-threatening and/or severely 

incapacitating and often occur within 

the context of a discrete episode of 

addiction-related biomedical or 

psychiatric dysfunction; 

(ii) A partial hospitalization center, 

which serves patients who exhibit 

emotional/behavioral dysfunction but 

who can function in the community for 

defined periods of time with support in 

one or more of the major life areas; 

(iii) A group home, sober-living 

environment, halfway house, or threequarter way house; 

(iv) Therapeutic schools, which are 

educational programs supplemented by 

addiction-focused services; 

(v) Facilities that treat patients with 

primary psychiatric diagnoses other 

than psychoactive substance use or 

dependence; and 

(vi) Facilities that care for patients 

with the primary diagnosis of mental 

retardation or developmental disability. 

(2) Eligibility. (i) In order to become 

a TRICARE authorized provider, every 

SUDRF must meet minimum basic 

standards set forth in paragraphs 

(b)(4)(xiv)(A) through (C) of this section, 

as well as such additional elaborative 

criteria and standards as the Director 

determines are necessary to implement 

the basic standards. 

(ii) To be approved as a TRICARE 

authorized provider, the SUDRF is 

required to be licensed and fully 

operational (with a minimum patient 

census of the lesser of: six patients or 30 

percent of bed capacity) for a period of 

at least six months and operate in 

substantial compliance with state and 

federal regulations. 

(iii) The SUDRF is currently 

accredited by an accrediting 

organization approved by the Director. 

Each SUDRF must be accredited to 

provide the level of required treatment 

by an accreditation body approved by 

the Director. 

(iv) The SUDRF has a written 

participation agreement with 

OCHAMPUS. The SUDRF is not 

considered a TRICARE authorized 

provider, and CHAMPUS benefits are 

not paid for services provided until the 

date upon which a participation 

agreement is signed by the Director. 

(B) Participation agreement 

requirements. In addition to other 

requirements set forth in paragraph 

(b)(4)(xiv) of this section, in order for 

the services of an inpatient 

rehabilitation center for the treatment of 

substance use disorders to be 

authorized, the center shall have 

entered into a Participation Agreement 

with OCHAMPUS. A single 


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consolidated participation agreement is 

acceptable for all units of the TRICARE 

authorized facility. The period of a 

Participation Agreement shall be 

specified in the agreement, and will 

generally be for not more than five 

years. The SUDRF shall not be 

considered to be a CHAMPUS 

authorized provider and CHAMPUS 

payments shall not be made for services 

provided by the SUDRF until the date 

the participation agreement is signed by 

the Director. In addition to review of the 

SUDRF’s application and supporting 

documentation, an on-site visit by 

OCHAMPUS representatives may be 

part of the authorization process. In 

addition, such a Participation 

Agreement may not be signed until an 

SUDRF has been licensed and 

operational for at least six months. The 

Participation Agreement shall include at 

least the following requirements: 

(1) Render applicable services to 

eligible CHAMPUS beneficiaries in need 

of such services, in accordance with the 

participation agreement and CHAMPUS 

regulation; 

(2) Accept payment for its services 

based upon the methodology provided 

in § 199.14, or such other method as 

determined by the Director; 

(3) Accept the CHAMPUS-determined 

rate as payment in full and collect from 

the CHAMPUS beneficiary or the family 

of the CHAMPUS beneficiary only those 

amounts that represent the beneficiary’s 

liability, as defined in § 199.4, and 

charges for services and supplies that 

are not a benefit of CHAMPUS; 

(4) Make all reasonable efforts 

acceptable to the Director to collect 

those amounts which represent the 

beneficiary’s liability, as defined in 

§ 199.4; 

(5) Comply with the provisions of 

§ 199.8, and submit claims first to all 

health insurance coverage to which the 

beneficiary is entitled that is primary to 

CHAMPUS; 

(6) Furnish OCHAMPUS with cost 

data, as requested by OCHAMPUS, 

certified to by an independent 

accounting firm or other agency as 

authorized by the Director; 

(7) Certify that: 

(i) It is and will remain in compliance 

with the provisions of paragraph 

(b)(4)(xiv) of the section establishing 

standards for substance use disorder 

rehabilitation facilities; and 

(ii) It has conducted a self-assessment 

of the facility’s compliance with the 

CHAMPUS Standards for Substance Use 

Disorder Rehabilitation Facilities, as 

issued by the Director and notified the 

Director of any matter regarding which 

the facility is not in compliance with 

such standards; and 

(iii) It will maintain compliance with 

the CHAMPUS Standards for Substance 

Use Disorder Rehabilitation Facilities, 

as issued by the Director, except for any 

such standards regarding which the 

facility notifies the Director that it is not 

in compliance. 

(8) Designate an individual who will 

act as liaison for CHAMPUS inquiries. 

The SUDRF shall inform OCHAMPUS 

in writing of the designated individual; 

(9) Furnish OCHAMPUS, as requested 

by OCHAMPUS, with cost data certified 

by an independent accounting firm or 

other agency as authorized by the 

Director; 

(10) Comply with all requirements of 

this section applicable to institutional 

providers generally concerning 

accreditation requirements, 

preauthorization, concurrent care 

review, claims processing, beneficiary 

liability, double coverage, utilization 

and quality review, and other matters; 

(11) Grant the Director, or designee, 

the right to conduct quality assurance 

audits or accounting audits with full 

access to patients and records 

(including records relating to patients 

who are not CHAMPUS beneficiaries) to 

determine the quality and cost 

effectiveness of care rendered. The 

audits may be conducted on a 

scheduled or unscheduled 

(unannounced) basis. This right to 

audit/review included, but is not 

limited to: 

(i) Examination of fiscal and all other 

records of the center which would 

confirm compliance with the 

participation agreement and designation 

as an authorized TRICARE provider; 

(ii) Conducting such audits of center 

records including clinical, financial, 

and census records, as may be necessary 

to determine the nature of the services 

being provided, and the basis for 

charges and claims against the United 

States for services provided CHAMPUS 

beneficiaries; 

(iii) Examining reports of evaluations 

and inspection conducted by federal, 

state and local government, and private 

agencies and organizations; 

(iv) Conducting on-site inspections of 

the facilities of the SUDRF and 

interviewing employees, members of the 

staff, contractors, board members, 

volunteers, and patients, as required. 

(v) Audits conducted by the United 

States Government Accountability 

Office. 

(C) Other requirements applicable to 

substance use disorder rehabilitation 

facilities. 

(1) Even though a SUDRF may qualify 

as a TRICARE authorized provider and 

may have entered into a participation 

agreement with CHAMPUS, payment by 

CHAMPUS for particular services 

provided is contingent upon the SUDRF 

also meeting all conditions set forth in 

§ 199.4. 

(2) The center shall provide inpatient 

services to CHAMPUS beneficiaries in 

the same manner it provides services to 

all other patients. The center may not 

discriminate against CHAMPUS 

beneficiaries in any manner, including 

admission practices, placement in 

special or separate wings or rooms, or 

provisions of special or limited 

treatment. 

(3) The substance use disorder facility 

shall assure that all certifications and 

information provided to the Director, 

incident to the process of obtaining and 

retaining authorized provider status, is 

accurate and that it has no material 

errors or omissions. In the case of any 

misrepresentations, whether by 

inaccurate information being provided 

or material facts withheld, authorized 

provider status will be denied or 

terminated, and the facility will be 

ineligible for consideration for 

authorized provider status for a two year 

period. 

* * * * * 

(xviii) Intensive outpatient programs. 

This paragraph (b)(4)(xviii) establishes 

standards and requirements for 

intensive outpatient treatment programs 

for psychiatric and substance use 

disorder. 

(A) Organization and 

administration—(1) Definition. 

Intensive outpatient treatment (IOP) 

programs are defined in § 199.2. IOP 

services consist of a comprehensive and 

complimentary schedule of recognized 

treatment approaches that may include 

day, evening, night, and weekend 

services consisting of individual and 

group counseling or therapy, and family 

counseling or therapy as clinically 

indicated for adolescents between the 

ages of 13 and 18 or adults aged 18 and 

may include case management to link 

patients and their families with 

community based support systems. 

(2) Eligibility. (i) In order to qualify as 

a TRICARE authorized provider, every 

intensive outpatient program must meet 

the minimum basic standards set forth 

in paragraphs (b)(4)(xviii)(A) through 

(C) of this section, as well as additional 

elaborative criteria and standards as the 

Director determines are necessary to 

implement the basic standards. Each 

intensive outpatient program must be 

either a distinct part of an otherwiseauthorized institutional provider or a 

free-standing psychiatric or substance 

use disorder intensive outpatient 

program. Approval of a hospital by 

TRICARE is sufficient for its IOP to be 


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5082 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

an authorized TRICARE provider. Such 

hospital-based intensive outpatient 

programs are not required to be 

separately authorized by TRICARE. 

(ii) To qualify as a TRICARE 

authorized provider, the IOP is required 

to be licensed and fully operational for 

a period of at least six months (with a 

minimum patient census of at least 30 

percent of capacity) and operate in 

substantial compliance with state and 

federal regulations. 

(iii) The IOP is currently accredited by 

an accrediting organization approved by 

the Director. Each IOP authorized to 

treat substance use disorder must be 

accredited to provide the level of 

required treatment by an accreditation 

body approved by the Director. 

(iv) The facility has a written 

participation agreement with TRICARE. 

The IOP is not considered a TRICARE 

authorized provider and TRICARE 

benefits are not paid for services 

provided until the date upon which a 

participation agreement is signed by the 

Director. 

(B) Participation agreement 

requirements. In addition to other 

requirements set forth in paragraph 

(b)(4)(xii) of this section, in order for the 

services of an IOP to be authorized, the 

IOP shall have entered into a 

Participation Agreement with TRICARE. 

A single consolidated participation 

agreement is acceptable for all units of 

the TRICARE authorized facility granted 

that all programs meet the requirements 

of this part. The period of a 

Participation Agreement shall be 

specified in the agreement, and will 

generally be for not more than five 

years. In addition to review of a 

facility’s application and supporting 

documentation, an on-site inspection by 

DHA authorized personnel may be 

required prior to signing a participation 

agreement. The Participation Agreement 

shall include at least the following 

requirements: 

(1) Render intensive outpatient 

program services to eligible TRICARE 

beneficiaries in need of such services, in 

accordance with the participation 

agreement and TRICARE regulation. 

(2) Accept payment for its services 

based upon the methodology provided 

in § 199.14, or such other method as 

determined by the Director; 

(3) Collect from the TRICARE 

beneficiary or the family of the 

TRICARE beneficiary only those 

amounts that represent the beneficiary’s 

liability, as defined in § 199.4, and 

charges for services and supplies that 

are not a benefit of TRICARE; 

(4) Make all reasonable efforts 

acceptable to the Director to collect 

those amounts, which represent the 

beneficiary’s liability, as defined in 

§ 199.4; 

(5) Comply with the provisions of 

§ 199.8, and submit claims first to all 

health insurance coverage to which the 

beneficiary is entitled that is primary to 

TRICARE; 

(6) Submit claims for services 

provided to TRICARE beneficiaries at 

least every 30 days (except to the extent 

a delay is necessitated by efforts to first 

collect from other health insurance). If 

claims are not submitted at least every 

30 days, the IOP agrees not to bill the 

beneficiary or the beneficiary’s family 

for any amounts disallowed by 

TRICARE; 

(7) Free-standing intensive outpatient 

programs shall certify that: 

(i) It is and will remain in compliance 

with the provisions of paragraph 

(b)(4)(xii) of this section establishing 

standards for psychiatric and SUD IOPs; 

(ii) It has conducted a self-assessment 

of the facility’s compliance with the 

CHAMPUS Standards for Intensive 

Outpatient Programs, as issued by the 

Director, and notified the Director of 

any matter regarding which the facility 

is not in compliance with such 

standards; and 

(iii) It will maintain compliance with 

the TRICARE standards for IOPs, as 

issued by the Director, except for any 

such standards regarding which the 

facility notifies the Director, or a 

designee that it is not in compliance. 

(8) Designate an individual who will 

act as liaison for TRICARE inquiries. 

The IOP shall inform TRICARE, or a 

designee in writing of the designated 

individual; 

(9) Furnish OCHAMPUS with cost 

data, as requested by OCHAMPUS, 

certified by an independent accounting 

firm or other agency as authorized by 

the Director. 

(10) Comply with all requirements of 

this section applicable to institutional 

providers generally concerning 

accreditation requirements, 

preauthorization, concurrent care 

review, claims processing, beneficiary 

liability, double coverage, utilization 

and quality review, and other matters; 

(11) Grant the Director, or designee, 

the right to conduct quality assurance 

audits or accounting audits with full 

access to patients and records 

(including records relating to patients 

who are not CHAMPUS beneficiaries) to 

determine the quality and cost 

effectiveness of care rendered. The 

audits may be conducted on a 

scheduled or unscheduled 

(unannounced) basis. This right to 

audit/review included, but is not 

limited to: 

(i) Examination of fiscal and all other 

records of the center which would 

confirm compliance with the 

participation agreement and designation 

as an authorized TRICARE provider; 

(ii) Conducting such audits of center 

records including clinical, financial, 

and census records, as may be necessary 

to determine the nature of the services 

being provided, and the basis for 

charges and claims against the United 

States for services provided CHAMPUS 

beneficiaries; 

(iii) Examining reports of evaluations 

and inspection conducted by federal, 

state and local government, and private 

agencies and organizations; 

(iv) Conducting on-site inspections of 

the facilities of the IOP and interviewing 

employees, members of the staff, 

contractors, board members, volunteers, 

and patients, as required. 

(v) Audits conducted by the United 

States Government Accountability 

Office. 

(C) Other requirements applicable to 

Intensive Outpatient Programs (IOP). 

(1) Even though an IOP may qualify 

as a TRICARE authorized provider and 

may have entered into a participation 

agreement with CHAMPUS, payment by 

CHAMPUS for particular services 

provided its contingent upon the IOP 

also meeting all conditions set forth in 

§ 199.4. 

(2) The IOP may not discriminate 

against CHAMPUS beneficiaries in any 

manner, including admission practices, 

placement in special or separate wings 

or rooms, or provisions of special or 

limited treatment. 

(3) The IOP shall assure that all 

certifications and information provided 

to the Director incident to the process of 

obtaining and retaining authorized 

provider status is accurate and that is 

has no material errors or omissions. In 

the case of any misrepresentations, 

whether by inaccurate information 

being provided or material facts 

withheld, authorized provider status 

will be denied or terminated, and the 

IOP will be ineligible for consideration 

for authorized provider status for a two 

year period. 

(xix) Opioid Treatment Programs 

(OTP). This paragraph (b)(4)(xix) 

establishes standards and requirements 

for Opioid Treatment Programs. 

(A) Organization and administration. 

(1) Definition. Opioid Treatment 

Programs (OTP) are defined in § 199.2. 

Opioid Treatment Programs (OTP) are 

organized, ambulatory, addiction 

treatment services for patients with an 

opioid use disorder. OTPs have the 

capacity to provide daily direct 

administration of medications without 

the prescribing of medications. 


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Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5083 

Medication supplies for patients to take 

outside of the OTP originate from 

within the OTP. OTP services offer 

medication assisted treatment, patientcentered, recovery-oriented 

individualized treatment through 

addiction counseling, mental health 

therapy, case management, and health 

education. 

(2) Eligibility. (i) Every free-standing 

Opioid Treatment Program must be 

accredited by an accrediting 

organization recognized by Director, 

under the current standards of an 

accrediting organization, as well as meet 

additional elaborative criteria and 

standards as the Director determines are 

necessary to implement the basic 

standards. OTPs adhere to requirements 

of the Department of Health and Human 

Services’ 42 CFR part 8, the Substance 

Abuse and Mental Health Services 

Administration’s Center for Substance 

Abuse Treatment, and the Drug 

Enforcement Agency. Each OTP must be 

either a distinct part of an otherwise 

authorized institutional provider or a 

free-standing program. Approval of a 

hospital by TRICARE is sufficient for its 

OTP to be an authorized TRICARE 

provider. Such hospital-based OTPs, if 

certified under 42 CFR 8, are not 

required to be separately authorized by 

TRICARE. 

(ii) To qualify as a TRICARE 

authorized provider, the OTP is 

required to be licensed and fully 

operational for a period of at least six 

months (with a minimum patient census 

of at least 30 percent of capacity) and 

operate in substantial compliance with 

state and federal regulations. 

(iii) The OTP has a written 

participation agreement with 

OCHAMPUS. The OTP is not 

considered a TRICARE authorized 

provider, and CHAMPUS benefits are 

not paid for services provided until the 

date upon which a participation 

agreement is signed by the Director. 

(B) Participation agreement 

requirements. In addition to other 

requirements set forth in paragraph 

(b)(4)(xix) of this section, in order for 

the services of an OTP to be authorized, 

the OTP shall have entered into a 

Participation Agreement with TRICARE. 

A single consolidated participation 

agreement is acceptable for all units of 

a TRICARE authorized facility. The 

period of a Participation Agreement 

shall be specified in the agreement, and 

will generally be for not more than five 

years. In addition to review of a 

facility’s application and supporting 

documentation, an on-site inspection by 

DHA authorized personnel may be 

required prior to signing a participation 

agreement. The Participation Agreement 

shall include at least the following 

requirements: 

(1) Render OTP services to eligible 

TRICARE beneficiaries in need of such 

services, in accordance with the 

participation agreement and TRICARE 

regulation. 

(2) Accept payment for its services 

based upon the methodology provided 

in § 199.14, or such other method as 

determined by the Director; 

(3) Collect from the TRICARE 

beneficiary or the family of the 

TRICARE beneficiary only those 

amounts that represent the beneficiary’s 

liability, as defined in § 199.4, and 

charges for services and supplies that 

are not a benefit of TRICARE; 

(4) Make all reasonable efforts 

acceptable to the Director to collect 

those amounts, which represent the 

beneficiary’s liability, as defined in 

§ 199.4; 

(5) Comply with the provisions of 

§ 199.8, and submit claims first to all 

health insurance coverage to which the 

beneficiary is entitled that is primary to 

TRICARE; 

(6) Submit claims for services 

provided to TRICARE beneficiaries at 

least every 30 days (except to the extent 

a delay is necessitated by efforts to first 

collect from other health insurance). If 

claims are not submitted at least every 

30 days, the OTP agrees not to bill the 

beneficiary or the beneficiary’s family 

for any amounts disallowed by 

TRICARE; 

(7) Free-standing opioid treatment 

programs shall certify that: 

(i) It is and will remain in compliance 

with the provisions of paragraph 

(b)(4)(xii) of this section establishing 

standards for opioid treatment 

programs; 

(ii) It will maintain compliance with 

the TRICARE standards for OTPs, as 

issued by the Director, except for any 

such standards regarding which the 

facility notifies the Director, or a 

designee, that it is not in compliance. 

(8) Designate an individual who will 

act as liaison for TRICARE inquiries. 

The OTP shall inform TRICARE, or a 

designee, in writing of the designated 

individual; 

(9) Furnish TRICARE, or a designee, 

with cost data, as requested by 

TRICARE, certified by an independent 

accounting firm or other agency as 

authorized by the Director; 

(10) Comply with all requirements of 

this section applicable to institutional 

providers generally concerning 

accreditation requirements, claims 

processing, beneficiary liability, double 

coverage, utilization and quality review, 

and other matters; 

(11) Grant the Director, or designee, 

the right to conduct quality assurance 

audits or accounting audits with full 

access to patients and records 

(including records relating to patients 

who are not TRICARE beneficiaries) to 

determine the quality and cost 

effectiveness of care rendered. The 

audits may be conducted on a 

scheduled or unscheduled 

(unannounced) basis. This right to 

audit/review includes, but is not limited 

to: 

(i) Examination of fiscal and all other 

records of the OTP which would 

confirm compliance with the 

participation agreement and designation 

as an authorized TRICARE provider; 

(ii) Conducting such audits of OTP 

records including clinical, financial, 

and census records, as may be necessary 

to determine the nature of the services 

being provided, and the basis for 

charges and claims against the United 

States for services provided TRICARE 

beneficiaries; 

(iii) Examining reports of evaluations 

and inspections conducted by federal, 

state and local government, and private 

agencies and organizations. 

(C) Other requirements applicable to 

OTPs. (1) Even though an OTP may 

qualify as a TRICARE authorized 

provider and may have entered into a 

participation agreement with 

CHAMPUS, payment by CHAMPUS for 

particular services provided is 

contingent upon the OTP also meeting 

all conditions set forth in § 199.4. 

(2) The OTP may not discriminate 

against CHAMPUS beneficiaries in any 

manner, including admission practices 

or provisions of special or limited 

treatment. 

(3) The OTP shall assure that all 

certifications and information provided 

to the Director incident to the process of 

obtaining and retaining authorized 

provider status is accurate and that is 

has no material errors or omissions. In 

the case of any misrepresentations, 

whether by inaccurate information 

being provided or material facts 

withheld, authorized provider status 

will be denied or terminated, and the 

OTP will be ineligible for consideration 

for authorized provider status for a two 

year period. 

* * * * * 

§ 199.7 [Amended] 

■ 5. Section 199.7 is amended by 

removing and reserving paragraph (e)(2). 

■ 6. Section 199.14 is amended by 

revising paragraphs (a)(2)(iv)(C)(2) and 

(4) and (a)(2)(ix) to read as follows: 


rmajette on DSK2TPTVN1PROD with PROPOSALS
5084 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 

§ 199.14 Provider reimbursement 

methods. 

(a) * * * 

(2) * * * 

(iv) * * * 

(C) * * * 

(2) Except as provided in paragraph 

(a)(2)(iv)(C)(3) of this section, for 

subsequent federal fiscal years, each per 

diem shall be updated by the Medicare 

Inpatient Prospective Payment System 

update factor. 

* * * * * 

(4) Hospitals and units with hospitalspecific rates will be notified of their 

respective rates prior to the beginning of 

each Federal fiscal year. New hospitals 

shall be notified at such time as the 

hospital rate is determined. The actual 

amount of each regional per diem that 

will apply in any Federal fiscal year 

shall be posted to the Agency’s official 

Web site at the start of that fiscal year. 

* * * * * 

(ix) Payment for psychiatric and 

substance use disorder rehabilitation 

partial hospitalization services, 

intensive outpatient psychiatric and 

substance use disorder services and 

opioid treatment services—(A) Per diem 

payments. Psychiatric and substance 

use disorder partial hospitalization 

services, intensive outpatient 

psychiatric and substance use disorder 

services and opioid treatment services 

authorized by § 199.4(b)(9), (b)(10), and 

(b)(11), respectively, and provided by 

institutional providers authorized under 

§ 199.6(b)(4)(xii), (b)(4)(xviii) and 

(b)(4)(xix), respectively, are reimbursed 

on the basis of prospectively 

determined, all-inclusive per diem rates 

pursuant to the provisions of paragraphs 

(a)(2)(ix)(A)(1) through (3) of this 

section, with the exception of hospitalbased psychiatric and substance use 

disorder and opioid services which are 

reimbursed in accordance with 

provisions of paragraph (a)(6)(ii) of this 

section and freestanding opioid 

treatment programs when reimbursed 

on a fee-for-service basis as specified in 

paragraph (a)(2)(ix)(A)(3)(ii) of this 

section. The per diem payment amount 

must be accepted as payment in full, 

subject to the outpatient cost-sharing 

provisions under § 199.4(f), for 

institutional services provided, 

including board, routine nursing 

services, group therapy, ancillary 

services (e.g., music, dance, and 

occupational and other such therapies), 

psychological testing and assessment, 

overhead and any other services for 

which the customary practice among 

similar providers is included in the 

institutional charges, except for those 

services which may be billed separately 

under paragraph (a)(2)(ix)(B) of this 

section. Per diem payment will not be 

allowed for leave days during which 

treatment is not provided. 

(1) Partial hospitalization programs. 

For any full-day partial hospitalization 

program (minimum of 6 hours), the 

maximum per diem payment amount is 

40 percent of the average inpatient per 

diem amount per case established under 

the TRICARE mental health per diem 

reimbursement system during the fiscal 

year for both high and low volume 

psychiatric hospitals and units [as 

defined in paragraph (a)(2) of this 

section]. Intensive outpatient services 

provided in a PHP setting lasting less 

than 6 hours, with a minimum of 2 

hours, will be paid as provided in 

paragraph (a)(2)(ix)(A)(2) of this section. 

PHP per diem rates will be updated 

annually by the Medicare update factor 

used for their Inpatient Prospective 

Payment System. 

(2) Intensive outpatient programs. For 

intensive outpatient programs (IOPs) 

(minimum of 2 hours), the maximum 

per diem amount is 75 percent of the 

rate for a full-day partial hospitalization 

program as established in paragraph 

(a)(2)(ix)(A)(1) of this section. IOP per 

diem rates will be updated annually by 

the Medicare update factor used for 

their Inpatient Prospective Payment 

System. 

(3) Opioid treatment programs. 

Opioid treatment programs (OTPs) 

authorized by § 199.4(b)(11) and 

provided by providers authorized under 

§ 199.6(b)(4)(xix) will be reimbursed 

based on the variability in the dosage 

and frequency of the drug being 

administered and in related supportive 

services. 

(i) Weekly all-inclusive per diem rate. 

Methadone OTPs will be reimbursed a 

weekly all-inclusive per diem rate, 

including the cost of the drug and 

related services (i.e., the costs related to 

the initial intake/assessment, drug 

dispensing and screening and integrated 

psychosocial and medical treatment and 

support services). The bundled weekly 

per diem payments will be accepted as 

payment in full, subject to the 

outpatient cost-sharing provisions under 

§ 199.4(f). The methadone OTP per diem 

rate will be updated annually by the 

Medicare update factor used for their 

Inpatient Prospective Payment System. 

(ii) Exceptions to per diem 

reimbursement. When providing other 

medications which are more likely to be 

prescribed and administered in an 

office-based opioid treatment setting, 

but which are still available for 

treatment of substance use disorders in 

an outpatient treatment program setting, 

OTPs will be reimbursed on a fee-forservice basis (i.e., separate payments 

will be allowed for both the medication 

and accompanying support services), 

subject to the outpatient cost-sharing 

provisions under § 199.4(f). OTP rates 

will be updated annually by the 

Medicare update factor used for their 

Inpatient Prospective Payment System. 

(iii) Discretionary authority. The 

Director, TRICARE, will have 

discretionary authority in establishing 

the reimbursement methodologies for 

new drugs and biologicals that may 

become available for the treatment of 

substance use disorders in OTPs. The 

type of reimbursement (e.g., fee-forservice versus bundled per diem 

payments) will be dependent on the 

variability of the dosage and frequency 

of the medication being administered, as 

well as the support services. 

(B) Services which may be billed 

separately. Psychotherapy sessions and 

non-mental health related medical 

services not normally included in the 

evaluation and assessment of a PHP, 

IOP or OTP, provided by authorized 

independent professional providers who 

are not employed by, or under contract 

with, a PHP, IOP or OTP for the 

purposes of providing clinical patient 

care are not included in the per diem 

rate and may be billed separately. This 

includes ambulance services when 

medically necessary for emergency 

transport. 

* * * * * 

§ 199.15 [Amended] 

■ 7. Section 199.15 is amended by 

revising paragraph (a)(6) to delete ‘‘, 

such as inpatient mental health services 

in excess of 30 days in any year’’ in the 

last sentence. 

■ 8. Section 199.18 is amended by: 

■ a. Revising paragraph (d)(2)(ii); 

■ b. Removing and reserving paragraph 

(d)(3)(ii); and 

■ c. Revising paragraphs (e)(2) and 

(e)(3). 

The revisions read as follows: 

§ 199.18 Uniform HMO Benefit. 

* * * * * 

(d) * * * 

(2) * * * 

(ii) The per visit fee provided in 

paragraph (d)(2)(i) of this section shall 

also apply to partial hospitalization 

services, intensive outpatient treatment, 

and opioid treatment program services. 

The per visit fee shall be applied on a 

per day basis on days services are 

received, with the exception of opioid 

treatment program services reimbursed 

in accordance with 

§ 199.14(a)(2)(ix)(A)(3)(i) which per visit 

fee will apply on a weekly basis. 

* * * * * 


rmajette on DSK2TPTVN1PROD with PROPOSALS
Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Proposed Rules 5085 

1 Docket No. R2013–10R, Order Resolving Issues 

on Remand, January 22, 2016 (Order No. 3047). 

(e) * * * 

(2) Structure of cost-sharing. For 

inpatient admissions, there is a nominal 

copayment for retired members, 

dependents of retired members, and 

survivors. This nominal copayment 

shall apply to an inpatient admission to 

any hospital or other authorized 

institutional provider, including 

inpatient admission to a residential 

treatment center, substance use disorder 

rehabilitation facility residential 

treatment program, or skilled nursing 

facility. 

(3) Amount of inpatient cost-sharing 

requirements. In fiscal year 2001, the 

inpatient cost-sharing requirements for 

retirees and their dependents for acute 

care admissions and other inpatient 

admissions is a per diem charge of $11, 

with a minimum charge of $25 per 

admission. 

* * * * * 

Dated: January 26, 2016. 

Morgan E. Park, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense. 

[FR Doc. 2016–01703 Filed 1–29–16; 8:45 am] 

BILLING CODE 5001–06–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3001 

[Docket No. RM2016–6; Order No. 3048] 

Procedures Related to Motions 

AGENCY: Postal Regulatory Commission. 

ACTION: Proposed rulemaking. 

SUMMARY: The Commission is proposing 

rules which standardize the procedure 

and timeframe by which interested 

parties file motions with the 

Commission as they relate to mail 

preparation changes and their 

compliance with the price cap rules. 

The Commission invites public 

comment on the proposed rules. 

DATES: Comments are due: March 2, 

2016. Reply comments are due: March 

17, 2016. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Background 

III. Proposed Rule 

IV. Comments Requested 

V. Ordering Paragraphs 

I. Introduction 

The Commission initiates this 

proposed rulemaking to request 

comments on a procedural rule for 

motions concerning mail preparation 

changes that require compliance with 

the price cap rules. 

The primary purpose of the 

rulemaking is to ensure that the Postal 

Service properly accounts for the rate 

effects of mail preparation changes 

under § 3010.23(d)(2) of this chapter in 

accordance with the Commission’s 

standard articulated in Order No. 3047.1

The proposed rule is intended to 

standardize the procedure and 

timeframe by which interested parties 

must file a motion with the Commission 

when they contend that a mail 

preparation change has a rate effect 

requiring compliance with the price cap 

rules. 

II. Background 

In Docket No. R2013–10R, the 

Commission issued Order No. 3047 and 

articulated a clear standard to determine 

when mail preparation changes require 

compliance with § 3010.23(d)(2). Id. 

Under § 3010.23(d)(2), a mail 

preparation change has a rate effect 

when the change results in the deletion 

and/or redefinition of a rate cell. Id. at 

15. The Postal Service is required to 

comply with § 3010.23(d)(2) where the 

mail preparation change results in either 

the deletion of a previously available 

rate or significantly changes the basic 

characteristic of the mailing so that the 

rate cell is effectively ‘‘redefined.’’ Id. at 

16. The Commission determined that 

the Postal Service has an affirmative 

burden to decide whether a mail 

preparation change requires compliance 

with the price cap rules as set forth 

under the Commission’s standard. Id. at 

20. Where the Postal Service determines 

that a mail preparation change has a rate 

effect, it must comply with the existing 

rules and procedures governing rate 

adjustments prior to implementing the 

change. 

However, despite this affirmative 

burden, the possibility exists that the 

Postal Service may not recognize or 

account for all mail preparation changes 

that have rate effects. In that case, the 

current regulations do not provide a 

specific mechanism or timeframe by 

which interested parties can alert the 

Commission to mail preparation 

changes that they conclude have rate 

effects requiring compliance with 

§ 3010.23(d)(2). Although the 

Commission’s general motion rules 

would provide an avenue for motions 

concerning mail preparation changes, 

the rules do not set a timeframe by 

which motions must be made and the 

Commission believes the proposed rule 

is better suited to handle the specific 

issue at hand. In light of the complexity 

of administering the price cap, the 

timeframe set forth in the proposed rule 

is intended to promote certainty for the 

Postal Service and users of the mail 

when making operational changes. 

In Order No. 3047 setting forth the 

standard, the Commission indicated that 

it would propose procedures whereby 

interested parties could submit motions 

concerning mail preparation changes 

that have rate effects. As a result, the 

proposed rule is intended to clarify and 

streamline the process by which mail 

preparation changes that have rate 

effects may be reviewed by the 

Commission for compliance with the 

price cap rules. 

III. Proposed Rule 

The rule proposed in this notice of 

proposed rulemaking adds to the 

current § 3001.21. Proposed § 3001.21(d) 

requires interested parties to file a 

motion with the Commission upon 

actual or constructive notice of a mail 

preparation change that has a rate effect 

requiring compliance with 

§ 3010.23(d)(2). This proposed section 

establishes a 30-day timeframe within 

which interested parties may file a 

motion concerning a mail preparation 

change, after which the Commission 

will either institute a proceeding or 

consider the motion within an ongoing 

matter. 

The Commission proposes permitting 

interested parties to file a motion 

concerning a mail preparation change if 

the parties, in good faith, demonstrate 

that the change has a rate effect and 

requires compliance with the price cap 

rules. The proposed procedure is 

triggered by actual or constructive 

notice of the mail preparation change. 

Actual or constructive notice will occur 

when an interested party becomes aware 

of or should have reasonably become 

aware of the mail preparation change. 

The Commission intends for actual or 

constructive notice to occur when the 

Postal Service publishes written notice 

of the implementation of the mail 

preparation change. For example, the 

Postal Service commonly publishes 

notice of mail preparation changes in 

the Federal Register, Postal Bulletin, 

and on the RIBBS Web site. 

The proposed procedure also ties 

notice to the ‘‘implementation date of 

the change.’’ The Commission intends 

this provision to cover changes where 

the Postal Service either immediately 

implements a mail preparation change 

or provides published notice that it 

intends to implement a mail preparation 

change on a date certain. For example, 


rmajette on DSK2TPTVN1PROD with PROPOSALS