[Federal Register: August 6, 2003 (Volume 68, Number 151)]
[Proposed Rules]               
[Page 46526-46535]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au03-36]                         

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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

RIN 0720-AA78

 
TRICARE; Individual Case Management Program; Program for Persons 
with Disabilities; Extended Benefits for Disabled Family Members of 
Active Duty Service Members; Custodial Care

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: The Department is publishing this proposed rule to implement 
requirements enacted by Congress in section 701(g) of the National 
Defense Authorization Act for Fiscal Year 2002 (NDAA-02), Pub. L. 107-
107, which terminates the Individual Case Management Program. The 
Department withdraws its proposed rule published at 66 FR 39699-39705, 
August 1, 2001 regarding the Individual Case Management Program. This 
rule also implements section 701(b) of the NDAA-02 which provides 
additional benefits for certain eligible active duty dependents by 
amending the TRICARE regulations at 32 CFR 199.5 governing the Program 
for Persons with Disabilities. The Program for Persons with 
Disabilities will now be called the Extended Care Health Option. Other 
administrative amendments are included to clarify specific policies 
that relate to the Extended Care Health Option, custodial care, and to 
update related definitions.
    Public comments are invited and will be considered for possible 
revisions to the Final Rule.

DATES: Written comments received at the address indicated below by 
October 6, 2003 will be accepted.

ADDRESSES: Because of staff and resource limitation, we cannot accept 
comments by facsimile (FAX) transmission or electronic mail (e-mail). 
Mail written comments to the following address ONLY: TRICARE Management 
Activity, Medical Benefits and Reimbursement Systems, 16401 East 
Centretech Parkway, Aurora, CO 80011. Please allow sufficient time for 
mailed comments to be timely received in the event of delivery delays.

FOR FURTHER INFORMATION CONTACT: Michael Kottyan, Medical Benefits and 
Reimbursement Systems, TRICARE Management Activity, telephone (303) 
676-3520. Questions regarding payment of specific claims should be 
addressed to the appropriate TRICARE contractor.

SUPPLEMENTARY INFORMATION:

I. Background

    The Individual Case Management Program (ICMP). Under the provisions 
of section 704(3) of the NDAA-93 [Pub. L. 102-484], 10 U.S.C. 
1079(a)(17) was enacted which allowed the DoD to establish the ICMP, 
also known as the Individual Case Management Program for Persons with 
Extraordinary Conditions (ICMP-PEC). This allowed a reasonable 
deviation from the restrictive statutory coverage of health services 
for patients who had exceptionally serious, long-range, costly and 
incapacitating conditions. The ICMP was officially implemented in March 
1999 as a waiver program that provided coverage for care and services 
that were normally restricted from coverage under the Basic Program. 
Specifically, when a beneficiary was determined to meet the TRICARE 
definition of custodial care, coverage under the Basic Program was 
limited to one hour of skilled nursing care per day, twelve physician 
visits per year related to the custodial condition, durable medical 
equipment and prescription medications. The Department recognized that 
the exclusion of coverage when a family member is deemed to be a 
custodial care patient is both a financial and emotional burden. 
Consequently, the Department used the ICMP/ICMP-PEC authority to cover 
medically necessary care and to enable TRICARE case managers to 
maximize available resources for these beneficiaries.
    Repeal of the ICMP. Section 701(g) of the NDAA-02 repealed 10 
U.S.C. 1079(a)(17), the statutory authority for the ICMP. However, 
section 701(d) allows the Department to continue to provide payment for 
home health care or custodial care services not otherwise authorized 
under the Basic Program as if the ICMP were still in effect. Payment 
may occur when a determination is made that discontinuation of payment 
would result in the provision of services inadequate to meet the needs 
of the eligible beneficiary and would be unjust to the beneficiary. 
Eligible beneficiaries are defined in section 701(d)(3) as covered 
beneficiaries who were regarded as custodial care patients under the 
ICMP/ICMP-PEC and received medically necessary skilled services for 
which the Secretary provided payment before December 28, 2001.
    Custodial Care. Section 701(c) of the NDAA-02 provides a statutory 
definition of custodial care that is more consistent with other federal 
programs. The change also results in the narrowing of the statutory 
exclusions of custodial care that has the effect of eliminating current 
program restrictions on paying for certain medically necessary care. 
Note: The statutory definition of custodial care under section 701(c) 
became effective on December 28, 2001, the effective date of the NDAA-
02. Public notice of the substitution of the new statutory definition 
for the former custodial care definition in 32 CFR 199.2 was provided 
on June 13, 2002 (67 FR 40597-40606).
    The Program for Persons with Disabilities (PFPWD). This program is 
now renamed the Extended Health Care Option (ECHO). The PFPWD was 
established by Congress in 1966 and

[[Page 46527]]

was originally called the Program for the Handicapped (PFTH). The name 
was changed to PFPWD in 1997 to reflect the national shift away from 
the label of handicapped and in an effort to be more sensitive to our 
beneficiaries with special needs. The program was established to 
provide financial assistance for active duty family members who are 
moderately or severely mentally retarded or have a serious physical 
disability. The purpose of the program was to help defray the cost of 
services not available either through the Basic Program or through 
other public agencies as a result of state residency requirements. 
Section 701(b) of the NDAA-02 strikes 10 U.S.C. 1079(d), (e), and (f), 
which was the statutory authority for the PFPWD, and re-authorizes the 
program with new sub-sections (d), (e), and (f). These new sub-sections 
add an extraordinary physical or psychological condition as a 
qualifying condition and remove the requirement to use public 
facilities to the extent that they are available and adequate in all 
circumstances. They also include discretion to increase the allowable 
monthly Government cost-share for allowable services from a maximum of 
$1,000 per month and expand the benefit to allow for coverage of ECHO 
home health care and services beyond the Basic program. It also 
includes the discretion to allow coverage for custodial care and 
respite care.

II. The Extended Care Health Option (ECHO)

    The primary purpose of the ECHO is to provide extended benefits to 
eligible beneficiaries that are not available through the Basic Program 
that assist in the reduction of the disabling effects of an ECHO 
qualifying condition. Under 10 U.S.C. 1079(e), ECHO benefits may be 
provided only to the extent such service, supply or equipment is not a 
covered benefit under the Basic Program. This may include comprehensive 
health care services, including services necessary to maintain, or 
minimize or prevent deterioration of, function of an eligible 
beneficiary.
    Eligibility. Participation in the ECHO is voluntary and is 
available only for TRICARE-eligible family members of active duty 
service members who have a qualifying condition. Qualifying conditions 
are limited under 10 U.S.C. 1079(d)(3)(B) to beneficiaries who have:
    (a) moderate or severe mental retardation; or
    (b) a serious physical disability; or
    (c) an extraordinary physical or psychological condition, as 
defined in 32 CFR 199.2.
    ECHO Benefits. Benefits available under ECHO detailed herein 
include diagnostic procedures to establish a qualifying condition, 
treatment through the use of medical, habilitative or rehabilitative 
means, training to allow use of assistive technology, special education 
instruction, institutional care within a State when a residential 
environment is required, transportation under certain circumstances, 
and certain adjunct services such as assistive services of a qualified 
interpreter or translator for deaf or blind beneficiaries in 
conjunction with receipt of other allowed ECHO benefits, equipment 
adaptation and maintenance, and ECHO home health care.
    ECHO Respite Care. Under 10 U.S.C. 1079(e)(6), the Department may 
provide respite care under the ECHO program. Respite care is defined in 
32 CFR 199.2 as short term care for a patient in order to provide rest 
and change for those who have been caring for the patient at home, 
usually the patient's family. DoD recognizes that caring for a special 
needs beneficiary poses special challenges, especially for active duty 
families. DoD proposes an ECHO benefit to provide a maximum of 16 hours 
per month of respite care. The benefit would be available to the 
primary caregiver(s), as defined in 32 CFR 199.2, in any month in which 
the beneficiary is otherwise receiving ECHO benefits. Respite care 
services would be provided by a TRICARE-authorized home health agency 
and would be designed to provide health care services for the covered 
beneficiary, and not baby-sitting or child-care services for other 
members of the family. The benefit would not be cumulative, that is, 
any respite care hours not used in one-month would not be carried over 
or banked for a subsequent month(s). The government's cost-share 
incurred for these services accrue to the proposed maximum monthly 
benefit of $2,500.
    ECHO Home Health Care (EHHC). Under 10 U.S.C. 1079(e), extended 
benefits may be provided to eligible beneficiaries to the extent such 
benefits are not provided under provisions of chapter 55, title 10, 
United States Code, other than under this section. Under 10 U.S.C. 
1079(e)(2), the ECHO may include ``comprehensive home health care 
supplies and services which may include cost effective and medically 
appropriate services other than part-time or intermittent services 
(within the meaning of such terms as used in the second sentence of 
section 1861(m) of the Social Security Act).'' Section 701(a) of the 
NDAA-02 requires home health care services under the Basic Program be 
provided in the manner and under the conditions described in section 
1861(m) of the Social Security Act. Therefore, the Department proposes 
an ECHO Home Health Care (EHHC) benefit for qualifying beneficiaries.
    EHHC Eligibility. To qualify for EHHC, the beneficiary must meet 
all general ECHO program eligibility requirements and must:
    (a) physically reside within the 50 United States or the District 
of Columbia; and
    (b) be homebound, as defined in section 199.2 and as modified in 
this proposed rule;
    (c) require medically necessary skilled services that exceed the 
maximum level of coverage provided under the Basic Program's home 
health care benefit, or
    (d) require frequent interventions, other than skilled medical 
services, by the primary caregiver(s) such that EHHC services are 
necessary to allow primary caregiver(s) the opportunity to rest;
    (e) be case managed, including a periodic assessment of needs, and 
receive services as outlined in a written plan of care, and
    (f) receive home health care services from a TRICARE-authorized 
home health agency as described in section 199.6(b)(4)(xv).
    EHHC Benefit. Covered TRICARE-authorized home health agency 
services are the same as, and provided under the same conditions as, 
those services provided under the TRICARE Basic Program under section 
199.4(e)(21), with the exception that the EHHC benefit is not limited 
to part-time or intermittent home health care. Therefore, DoD proposes 
that beneficiaries who are eligible for the ECHO and require home 
health care services beyond the coverage limits under the Basic Program 
will receive all home health care services under EHHC and no portion 
will be provided under the Basic Program.
    EHHC Plan of Care: The level of ECHO home health care services 
authorized will be based on a written plan of care that supports the 
medical necessity of those services in excess of what can be authorized 
by the Basic Program, or, in the case of a beneficiary who requires 
frequent interventions, the need for EHHC in order to allow the primary 
caregiver(s) the opportunity to rest. The plan of care must include 
identification of the professional qualifications or skill level of the 
person required to provide the care. Reasonable justification for the 
medical necessity of the level of provider must be included

[[Page 46528]]

in the plan of care, otherwise, reimbursement will not be authorized.
    EFFC Respite Care. The DoD proposes to provide respite care within 
the EHHC benefit specifically tailored for families with a beneficiary 
who has a medical conditions(s) that requires frequent interventions by 
the primary caregiver. For the purpose of this respite care, the term 
``frequent'' means ``more than two interventions during the eight-hour 
per day period that the primary caregiver would normally be sleeping. 
The service performed during the interventions may have been taught to 
the primary caregiver by a medical professional, but the services 
performed by the primary caregiver are such that they can be performed 
safely and effectively by the average non-medical person without direct 
supervision of a licensed nurse or other health care provider. DoD 
proposes that when an eligible beneficiary's care plan reflects a need 
for frequent interventions by the primary caregiver, the beneficiary's 
primary caregiver is eligible for EHHC respite services in lieu of the 
ECHO respite care benefit. Primary caregivers in this situation would 
be eligible for eight hours per weekday of respite care by a TRICARE-
authorized home health agency. The services provided would be designed 
to provide health care services for the covered beneficiary so that the 
primary caregiver is relieved of his/her responsibility for providing 
such care for the duration of that period of respite care in order that 
the primary caregiver may rest. The TRICARE-authorized home health 
agency will not provide baby-sitting or child care services for other 
members of the family. The benefit would not be cumulative, that is, 
any respite care hours not used in a given day would not be carried 
over or banked for use on another occasion. The government's cost-share 
incurred for these services accrue to the proposed fiscal year maximum 
ECHO Home Health Care benefit.
    EHHC Government Cost Share. TRICARE-authorized home health agencies 
who provide services under the Basic Program are reimbursed under 
section 199.14(h) using the same methods and rates as used under the 
Medicare TRICARE-authorized home health agency prospective payment 
system under section 1895 of the Social Security Act (42 U.S.C. 
1385fff) and 42 CFR part 484, subpart E, except for children under age 
ten and except as otherwise necessary to recognize distinct 
characteristics of TRICARE beneficiaries and as described in 
instructions issued by the Director, TRICARE Management Activity. 
However, the Medicare home health agency prospective payment system is 
designed to reimburse providers who provide part-time or intermittent 
services; it is not designed to reimburse providers for services that 
exceed those limits. As a result, the Department proposes to pay billed 
charges or negotiated rates for EHHC services up to an annual fiscal 
year cap in an amount no greater than what the highest locally wage-
adjusted maximum Medicare Resource Utilization Grouping (RUG-III) 
category cost to the Government would be if services were provided in a 
TRICARE-authorized skilled nursing facility. (See 67 FR 40597-40606, 
June 13, 2001, concerning the TRICARE Sub-Acute Care Program; Uniform 
Skilled Nursing Facility Benefit; Home Health Care Benefit; Adopting 
Medicare Payment Methods for Skilled Nursing Facilities and Home Health 
Care Providers). Because the highest RUG-III category is used to 
determine the fiscal year cap, the Department will not attempt to 
determine what RUG-III category would apply to the beneficiary if such 
beneficiary were in fact admitted for care into a TRICARE-authorized 
skilled nursing facility.
    The Maximum monthly Government cost-share to be paid to the home 
health agency for ECHO home health care will be the billed charge or 
negotiated rate, but in no case will it exceed one-twelfth of the 
fiscal year cap calculated as above.
    When EHHC beneficiaries move within the 50 United States or the 
District of Columbia, the annual fiscal year cap will be recalculated 
as above to reflect the correct wage-adjusted maximum RUG-III category 
cost for the beneficiary's new location and apply for the remaining 
portion of that fiscal year and subsequent fiscal years.
    EHHC Reimbursement. A TRICARE-authorized home health agency must 
bill for all authorized ECHO home health care services through 
established TRICARE claims mechanisms. No special billing arrangements 
will be authorized in coordination with coverage that may be provided 
by Medicaid (subject to any State Agency Billing Agreements), or other 
federal, state, community or private programs.
    Reimbursement for all EHHC services will be based on the 
professional level of the TRICARE-authorized home health agency 
individual(s) providing the authorized care. Specifically, TRICARE will 
reimburse up to 100% of the CHAMPUS Maximum Allowable Charge (CMAC) 
rate for a physician or registered nurse; up to 80% of the CMAC for a 
licensed practical or vocational nurse; and up to 60% of the CMAC for a 
home health aide.
    Beneficiary Cost-share Liability for ECHO. Under 10 U.S.C. 1079(f), 
members are required to share in the cost of any benefits provided to 
their dependents under ECHO. ECHO benefits are not subject to a 
deductible amount. Regardless of the number of ECHO eligible family 
members, the sponsor's monthly cost-share for allowed ECHO benefits is 
based upon the rank of the uniformed service member. Under 10 US.C. 
1079(f)(1)(A), members with a rank of E-1 are required to pay the first 
$25 incurred per month, and members with a rank of O-10 are required to 
pay the first $250 incurred per month. It is proposed that the cost-
share for members with ranks in-between would be structured so that the 
vast majority would pay less than $100 per month, with the most senior 
enlisted member paying less than $50 per month.
    Sponsor rank-based cost-sharing (refer to Table 1, 32 CFR 199.5) 
applies to benefits covered by the ECHO and these cost-shares do not 
apply toward the Basic Program's catastrophic cap under 10 U.S.C. 
1079(b)(5). The waiver of cost-shares for active duty family members 
enrolled in TRICARE Prime does not apply to ECHO, as there is a 
separate statutory basis for the ECHO program and its cost-shares 
compared to the Basic Program or Prime.
    Government Cost-share Liability for ECHO. The Government's monthly 
cost-share of all benefits provided to a beneficiary in a particular 
month under the PFPWD was statutorily limited to $1,000 by 10 U.S.C. 
1079(e)(2) for all benefits. The Government's monthly cost-share of any 
benefits provided under ECHO is now statutorily limited by section 
701(b) of the NDAA-02 (10 U.S.C. 1079(f)(2)(A)) to $2,500 for benefits 
related to training, rehabilitation, special education, assistive 
technology devices, and institutional care in private, non-profit, 
public, and state institutions and facilities, and if appropriate, 
transportation to and from such institutions and facilities. Because 
the NDAA-02 provided no statutory limitation concerning the amount of 
the Government's monthly cost-share for all other benefits under ECHO, 
the Department has discretion to determine the maximum monthly 
Government cost-share. Therefore, the Department proposes to increase 
the monthly Government cost-share from $1,000 to $2,500 for all 
benefits under ECHO, with the exception of the new ECHO home health 
care benefit as is detailed herein. The primary reason for this 
proposed increase is that the maximum government cost-share has not 
been

[[Page 46529]]

adjusted since 1980. We will continue to review this issue to ensure 
that the government's cost-share reasonably meets the needs of 
beneficiaries.
    Other Requirements. Other ECHO requirements are as follows:
    Registration: Sec 701(b) of the NDAA-02 (10 U.S.C. 1079(d)(1)) 
requires registration to receive ECHO benefits. Sponsors of potentially 
qualifying beneficiaries will seek to register their family member(s) 
for ECHO benefits through the applicable Managed Care Support 
Contractor who will certify eligibility and update the Defense 
Eligibility Enrollment Reporting System (DEERS) to reflect ECHO 
eligibility. No ECHO benefits may be authorized unless the beneficiary 
is registered in DEERS as ECHO-eligible.
    EMFP enrollment: Each of the Services has their own Exceptional 
Family Member Program (EFMP). The programs are a military personnel 
program. The purpose of the program is to have military personnel 
offices evaluate the ability of a military and civilian community to 
provide appropriate medical and/or educational services to service 
members' dependents who have special medical or educational needs 
before the Service re-assigns the member to a new location. Although 
each Service requires its members with special needs to enroll in the 
EFMP, some members do not comply with this requirement. The result is 
that some members arrive at assignment locations that are unable to 
accommodate the special medical and/or educational needs of their 
dependent. Dependents of members required to be enrolled in EFMP are 
similar if not identical to those who qualify for the ECHO program. The 
Services do not routinely provide EFMP enrollments to TRICARE. In 
accordance with 10 U.S.C. 1079(d)(1), a beneficiary must register with 
TRICARE in order to qualify for receipt of benefits through the ECHO. 
We propose that the registration process will be provided by the 
applicable Managed Care Support Contractor. We also propose that 
members will be required to provide evidence they are enrolled in their 
Services' Exceptional Family Member program when registering for ECHO 
benefits. This requirement will enhance the probability that personnel 
are assigned to locations where there are sufficient qualified 
individual or institutional providers to provide the ECHO benefit to 
their dependents.
    Use of Public Facilities: For ECHO benefits related to training, 
rehabilitation, special education, assistive technology devices, and 
institutional care in private, non-profit, public, and state 
institutions and facilities, and if appropriate, transportation to and 
from such institutions and facilitates, the statute expressly requires 
use of public facilities to be the extent such facilities are available 
and adequate as determined under this regulation.

III. Regulatory Procedures

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

Paperwork Reduction Act

    This rule will not impose additional information collection 
requirements on the public under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3511). Existing DoD information systems to include the 
Defense Eligibility Enrollment Reporting System (DEERS) will be 
upgraded to reflect ECHO registration.

List of Subjects in 32 CFR Part 199:

    Case management, Claims, Custodial care, Health insurance, 
Individuals with disabilities, Military Personnel.

    For the reasons set out in the preamble, 32 CFR part 199 is 
proposed to be amended as follows.

PART 199--[AMENDED]

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

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

    2. Section 199.2 is proposed to be amended by removing the 
definition for the ``Program for Persons with Disabilities (PFPWD)'' 
and ``Extraordinary condition'', by revising the definitions of 
``Durable equipment'', Durable medical equipment'', and ``Homebound'', 
and adding definitions ``Duplicate Equipment ``Extended Care Health 
Option (ECHO)'', ``Extraordinary Physical or Psychological Condition'' 
and placing them in alphabetical order to read as follows:


Sec.  199.2  Definitions.

* * * * *
    (b) * * *
    Duplicate Equipment. An item of durable equipment or durable 
medical equipment, as defined in this section, that serves the same 
purpose that is served by an item of durable equipment or durable 
medical equipment previously cost-shared by TRICARE. For example, 
various models of stationary oxygen concentrators with no primary 
functional differences are considered duplicate equipment, whereas 
stationary and portable oxygen concentrators are not considered 
duplicates of each other because the latter is intended to provide the 
user with mobility not afforded by the former. Also, a manual 
wheelchair and an electric wheelchair, both of which otherwise meet the 
definition of durable equipment or durable medical equipment, would not 
be considered duplicates of each other if each is found to provide an 
appropriate level of mobility. For the purpose of TRICARE cost-sharing, 
durable equipment and durable medical equipment that is essential to 
provide a fail-safe-in-home life support system is not considered 
duplicate equipment.
    Durable equipment.
    (1) A device or apparatus which does not qualify as durable medical 
equipment and which is essential to the efficient arrest or reduction 
of functional loss resulting from a qualifying condition as provided in 
section 199.5; and
    (2) is other than duplicate equipment as defined in this section.
    Durable medical equipment.
* * * * *
    (9) Is other than duplicate equipment as defined in this section.
* * * * *
    Extended Care Health Option (ECHO). The TRICARE special program of 
supplemental benefits for qualifying active duty family members as 
described in Section 199.5
* * * * *
    Extraordinary Physical or Psychological Condition. A complex 
physical or psychological clinical condition of such severity which 
results in the beneficiary being homebound as defined in this section.
* * * * *
    Homebound. A beneficiary's condition is such that there exists a

[[Page 46530]]

normal inability to leave home and, consequently, leaving home would 
require considerable and taxing effort. Any absence of an individual 
from the home attributable to the need to receive health care 
treatment, including regular absences for the purpose of participating 
in therapeutic, psychosocial, or medical treatment or in an adult day-
care program certified by a state, or accredited to furnish adult day-
care services in the state shall not disqualify an individual from 
being considered to be confined to his home. Any other absence of an 
individual from the home shall not disqualify an individual if the 
absence is infrequent or of relatively short duration. For the purposes 
of the preceding sentence, any absence for purpose of attending a 
religious service shall be deemed to be an absence of infrequent or 
short duration. Also, absences from the home for non-medical purposes, 
such as an occasional trip to the barber, a walk around the block or a 
drive, would not necessarily negate the beneficiary's homebound status 
if the absences are undertaken on an infrequent basis and are of 
relatively short duration. In addition to the above, absences, whether 
regular or infrequent, from the beneficiary's primary residence for the 
purpose of attending an educational program in a public or private 
school that is licensed and/or certified by a state, shall not negate 
the beneficiary's homebound status.
* * * * *

Program for Persons with Disabilities [Removed]

* * * * *
    3. Section 199.3 is proposed to be amended by removing the term 
Program for Persons with Disabilities or the acronym PFPWD, and 
replacing the term Extended Care Health Option or the acronym ECHO in 
paragraphs (c)(2)(i)(C), (c)(2)(ii)(B), (c)(2)(iii)(B), (c)(3)(i)(C), 
(c)(4)(i)(B), (c)(4)(ii)(B), (c)(4)(iii)(B), (c)(5)(9i)(C), 
(c)(5)(ii)(B), (c)(5)(iii)(B), (c)(5)(iv)(C)(2),(c)(6)(ii), 
(c)(7)(i)(C), (c)(7)(ii)(B), (c)(8)(ii), (c)(9)(i)(B), and (c)(10)(ii) 
by, wherever they appear.
    4. Section 199.4 is proposed to be amended to revise paragraph 
(e)(12) regarding custodial care; remove and reserve paragraph (e)(2) 
Case management services; revise paragraph (g)(7) of exclusions; and 
remove paragraph (i) Case management program in its entirety; to read 
as follows:


Sec.  199.4  Basic Program Benefits.

* * * * *
    (e) * * *
    (12) Custodial care. Custodial care is statutorily excluded under 
the TRICARE Basic Program. The term custodial care means treatment or 
services, regardless of who recommends such treatment or services or 
where such treatment or services are provided, that
    (i) can be rendered safely and reasonably by a person who is not 
medically skilled; or
    (ii) is or are designed mainly to help the patient with the 
activities of daily living.
* * * * *
    (20) [Removed and Reserved]
* * * * *
    (g) * * *
    (7) Custodial care. Services and supplies related to custodial care 
as defined in section 199.2.
* * * * *
    (i) [Removed]
* * * * *
    5. Section 199.5 is proposed to be revised to read as follows:


Sec.  199.5  TRICARE Extended Care Health Option (ECHO).

    (a) General. The ECHO provides financial assistance for certain 
TRICARE/CHAMPUS beneficiaries to cover an integrated set of services 
and supplies designed to care for those who have a qualifying 
condition. The ECHO is not intended to be a stand-alone benefit for 
those who need only financial assistance but is used to provide 
benefits not available through the TRICARE Basic Program. The primary 
purpose is to provide coverage for services that assist in the 
reduction of the disabling effects of an ECHO qualifying condition, 
which may include services necessary to maintain, or minimize or 
prevent deterioration of, function of an ECHO-eligible beneficiary.
    (b) Eligibility.
    (1) The following categories of TRICARE/CHAMPUS beneficiaries with 
a qualifying condition are eligible for ECHO benefits:
    (i) A child or spouse (as described in 10 U.S.C. 1072(a)(A), (D), 
of (I)) of an active duty member of one of the Uniformed Services on 
active duty for a period of more than 30 days; or
    (ii) An abused dependent, as described in section 
199.3((b)(2)(iii); or
    (iii) A child or spouse (as described in 10 U.S.C. 1072(2)(A), (D), 
or (I)) of an active duty member of one of the Uniformed Services on 
active duty for a period of more than 30 days who dies while on active 
duty, remains eligible for benefits under the ECHO for a period of 
three years from the date the active duty sponsor dies; or
    (iv) A child or spouse (as described in 10 U.S.C. 1072(2)(A), (D), 
or (I)) of a deceased active duty member of one of the Uniformed 
Services who at the time of the member's death was receiving benefits 
under ECHO, and the member at the time was eligible for receipt of 
hostile-fire pay, or died as a result of a disease or injury incurred 
while eligible for such pay. In such circumstances, the dependent shall 
be eligible through midnight of the beneficiary's twenty-first 
birthday.
    (2) Qualifying condition. The eligible dependent must have one of 
the following qualifying conditions:
    (i) Mental retardation. A diagnosis of moderate or severe mental 
retardation made in accordance with the criteria of the current edition 
of the ``Diagnostic and Statistical Manual of Mental Disorders'' 
published by the American Psychiatric Association.
    (ii) Serious physical disability. A serious physicial disability as 
defined in section 199.2.
    (iii) Extraordinary physical or psychological condition. An 
extraordinary physical or psychological condition as defined in section 
199.2.
    (iv) Infant/toddler. TRICARE/CHAMPUS beneficiaries under the age of 
three years who are diagnosed with a neuromuscular developmental 
condition or other condition that can be reasonably expected to precede 
a diagnosis of moderate or severe mental retardation or be considered 
as a serious physical disability shall be demed to have a qualifying 
condition for the ECHO. The Director, TRICARE Management Activity or 
designee shall establish criteria for ECHO eligibility in lieu of the 
requirements of paragraphs (b)(2)(i), (ii) or (iii) of this section.
    (v) Multiple disabilities. The cumulative effect of multiple 
disabilities as determined by the Director, TRICARE Management Activity 
or designee shall be used in the determination of a qualifying 
condition when the beneficiary has two or more disabilities involving 
separate body systems.
    (3) Loss of ECHO eligibility. Eligibility for ECHO benefits ceases 
as of 12:01 a.m. of the day following the day that:
    (i) the sponsor ceases to be an active duty member for any reason 
other than death; or
    (ii) eligibility based upon the abused dependent provisions of 
paragraph (b)(1) of this section expires; or
    (iii) eligibility based upon the deceased sponsor provisions of 
paragraph (b)(1) of this section expires; or
    (iv) eligibility based upon a beneficiary's participation in the 
Transitional Assistance Management Program ends; or

[[Page 46531]]

    (v) the Director, TRICARE Management Activity or designee 
determines that the beneficiary no longer has a qualifying condition.
    (4) Continuity of eligibility. A TRICARE beneficiary who has an 
outstanding Program for Persons with Disabilities (PFPWD) benefit 
authorization prior to the effective date of the ECHO program shall be 
deemed to have an ECHO qualifying condition for the duration of the 
authorization period during which the beneficiary is otherwise eligible 
for ECHO and the beneficiary continues to meet the applicable 
qualifying condition criteria. Upon termination of such an existing 
authorization for services the beneficiary shall re-establish 
eligibility for the ECHO in accordance with this section.
    (c) ECHO Benefit. Items or services which the Director, TRICARE 
Management Activity or designee has determined to be intrinsic to the 
following benefit categories and which are determined to be capable of 
confirming, arresting, or reducing the severity of the effects of a 
qualifying condition, and that are not otherwise available through the 
TRICARE Basic Program or excluded by the ECHO, may be allowed.
    (1) Diagnostic procedures to establish a qualifying condition 
diagnosis or to measure the extent of functional loss.
    (2) Treatment through the use of such medical, habilitative, or 
rehabilitative methods, techniques, therapies, and durable equipment 
and durable medical equipment which otherwise meet the requirements of 
the ECHO. Allowable treatment may be rendered in-home, or as inpatient 
or outpatient care, or other environment as appropriate.
    (3) Training which allows the use of an assistive technology device 
or to acquire skills which are expected to reduce the effects of a 
qualifying condition and for parents or guardians and siblings of an 
ECHO beneficiary when required as an integral part of the management of 
the qualifying condition. Vocational training, in the beneficiary's 
home or a facility providing such, is also allowed.
    (4) Special education as provided by the Individuals with 
Disabilities Education Act and defined at 34 CFR 300.26 and which is 
specifically designed to accommodate the disabling effects of 
qualifying condition.
    (5) Institutional care within a state, as defined in section 199.2, 
when the severity of the qualifying condition requires protective 
custody or training in a residential environment.
    (6) Transportation when required to convey an ECHO beneficiary to 
or from a facility or institution to receive allowable ECHO services or 
items. Transportation for a medical attendant may be approved when 
medically necessary for the safe transport of the ECHO beneficiary to 
receive an authorized ECHO benefit.
    (7) Adjunct services.
    (i) Assistive services. Services of a qualified interpreter or 
translator for ECHO beneficiaries who are deaf and readers for ECHO 
beneficiaries who are blind, and personal assistants for ECHO 
beneficiaries with other types of qualifying conditions, when such 
services are necessary in order for the ECHO beneficiary to receive 
authorized ECHO benefits.
    (ii) Equipment adaptation. The allowable equipment purchase shall 
include such services and modifications to the equipment as necessary 
to make the equipment useable for a particular ECHO beneficiary.
    (iii) Equipment maintenance. Reasonable repairs and maintenance of 
beneficiary owned or rented durable equipment or durable medical 
equipment otherwise allowable by this section shall be allowable while 
a beneficiary is registered in the ECHO.
    (8) Respite Care. The primary caregiver is eligible for respite 
care, as defined in section 199.2, of 16 hours per month in any month 
in which the qualified beneficiary otherwise receives an ECHO benefits. 
Respite care services will be provided by a TRICARE-authorized home 
health agency and will be designed to provide health care services for 
the covered beneficiary, and not baby-sitting or child-care services 
for other members of the family. The benefit will not be cumulative, 
that is, any respite care hours not used in one month will not be 
carried over or banked for use on another occasion. The government's 
cost-share incurred for these services accrue to the maximum monthly 
benefit of $2,500.
    (d) ECHO Benefit Exclusions.
    (1) Benefits allowed under the TRICARE Basic Program will not be 
provided through the ECHO.
    (2) Inpatient care. Inpatient acute care for medical or surgical 
treatment of an acute illness, or of an acute exacerbation of the 
qualifying condition, is excluded.
    (3) Structural alterations. Alterations to living space and 
permanent fixtures attached thereto, including alterations necessary to 
accommodate installation of equipment or to facilitate entrance or 
exit, are excluded.
    (4) Homemaker services. Services that predominantly provide 
assistance with household chores are excluded.
    (5) Dental care or orthodontic treatment. Both are excluded.
    (6) Non-domestic travel. Travel that originates or terminates 
outside of a state is excluded.
    (7) Deluxe travel accommodation. The difference between the price 
for a type of accommodation which provides services or features which 
exceed the requirements of the beneficiary's condition for safe 
transport and the price for a type of accommodation without those 
services or features, is excluded.
    (8) Equipment. Exclusions for durable medical equipment at section 
199.4(d)(3)(ii)(D) apply to all ECHO allowable equipment. Except as 
otherwise provided in this part, duplicate items of durable equipment 
and durable medical equipment shall not be authorized. Reasonable 
repairs and maintenance shall be allowable for equipment otherwise 
allowable by this section, however, maintenance agreements are 
excluded.
    (9) No obligation to pay. Services or items for which the 
beneficiary or sponsor has no legal obligation to pay, or for which no 
charge would be made if the beneficiary was not eligible for TRICARE, 
are excluded.
    (10) Public facility or Federal government. Services or items paid 
for, or eligible for payment, directly or indirectly by a public 
facility, as defined in section 199.2, or by the Federal government, 
other than the Department of Defense, are excluded for training, 
rehabilitation, special education, assistive technology, and 
institutional care in private nonprofit, public, and state institutions 
and facilities, and if appropriate, transportation to and from such 
institutions and facilities except when such services or items are 
eligible for payment under a state plan for medical assistance under 
Title XIX of the Social Security Act (Medicaid). Rehabilitation and 
assistive technology services or supplies may be available under the 
TRICARE Basic Program.
    (11) Study, grant, or research programs. Services and items 
provided as a part of a scientific clinical study, grant, or research 
program are excluded.
    (12) Unproven drugs, devices, and medical treatments or therapeutic 
or diagnostic procedures. Services and items whose safety and efficacy 
have not been established in accordance with section 199.4 are 
excluded.
    (13) Immediate family or household. Services or items provided or 
prescribed by a member of the beneficiary's immediate family, or a 
person living in the beneficiary's or sponsor's household, are 
excluded.
    (14) Court or agency ordered care. Services or items ordered by a 
court or other government agency, which are not

[[Page 46532]]

otherwise an allowable ECHO benefit, are excluded.
    (15) Excursions. Additional or special charges for excursions, 
other than otherwise allowable transportation, are excluded even though 
part of a program offered by a TRICARE-authorized provider.
    (16) Drugs and medicines. Drugs and medicines that do not meet the 
benefit requirements of section 199.4 or 199.21 are excluded.
    (17) Therapeutic absences. Therapeutic absences from an inpatient 
facility or from home for a homebound beneficiary are excluded.
    (e) ECHO Home Health Care (EHHC). Home health care services and 
supplies are authorized for those beneficiaries who meet all applicable 
ECHO eligibility requirements and who also:
    (1) physically reside within the 50 United States or the District 
of Columbia; and
    (2) are homebound, as defined in section 199.2; and
    (3) require medically necessary skilled services that exceed the 
level of coverage provided under the Basic Program's home health care 
benefit, or
    (4) require frequent interventions (other than skilled medical 
services), usually provided by the primary caregiver(s), as defined in 
section 199.2, such that EHHC services are necessary to allow the 
primary caregiver(s) the opportunity to rest.
    (5) are case managed to include a reassessment at least every 
ninety (90) days, and receive services as outlined in a written plan of 
care; and
    (6) receive all home health care services from a TRICARE-authorized 
home health agency as described in section 199.6(b)(4)(xv) in the 
beneficiary's primary residence.
    (f) EHHC Benefit. Covered home health services are the same as, and 
provided under the same conditions as, those services described in 
section 199.4(e)(21)(i), except that they are not limited to part-time 
or intermittent services. Custodial care services, as defined in 
section 199.2, may be provided to the extent such services are provided 
in conjunction with authorized ECHO home health care services. 
Beneficiaries who are authorized EHHC will receive all home health care 
services under EHHC and no portion will be provided under the Basic 
Program. TRICARE-authorized home health agencies are not required to 
use the Outcome and Assessment Information Set (OASIS) to assess 
beneficiaries who are authorized EHHC.
    (1) Plan of Care. A written plan of care is required prior to 
authorizing ECHO home health care. The plan must include the type, 
frequency, scope and duration of the care to be provided and support 
the professional level of provider. Reimbursement will not be 
authorized for a level of provider not identified in the plan of care.
    (2) Respite Care for Beneficiaries Receiving ECHO Home Health Care 
(EHHC). Beneficiaries who are receiving EHHC services and whose plan of 
care includes frequent interventions by the primary caregiver are 
eligible for respite care services for the primary caregiver in lieu of 
the ECHO general respite care benefit. For the purpose of this section, 
the term ``frequent'' means ``more than two interventions during the 
eight-hour period per day that the primary caregiver would normally be 
sleeping.'' The services performed by the primary caregiver are those 
that can be performed safely and effectively by the average non-medical 
person without direct supervision of a health care provider after the 
primary caregiver has been trained by appropriate medical personnel. 
Primary caregivers in this situation are eligible for a maximum of 
eight hours per day of respite care by a TRICARE-authorized home health 
agency. The home health agency will provide the health care 
interventions or services for the covered beneficiary so that the 
primary caregiver is relieved of the responsibility to provide such 
interventions or services for the duration of that period of respite 
care. The health care agency will not provide baby-sitting or child 
care services for other members of the family. The benefit is not 
cumulative in that any hours not used in a given day may not be carried 
over or banked for use on another occasion. The Government's cost-share 
incurred for these services accrue to the maximum yearly ECHO Home 
Health Care benefit.
    (3) EHHC Government Cost-Share. The maximum annual Government cost-
share, using a billed charges or negotiated rate payment methodology, 
for ECHO home health care services may not exceed the local wage-
adjusted highest Medicare Resource Utilization Group (RUG-III) 
category.
    (i) The maximum monthly Government cost-share for EHHC will be 
based on the actual number of hours of ECHO home health care services 
rendered in the month, but in no case will it exceed one-twelfth of the 
annual maximum Government cost-share as determined in this section.
    (ii) When a beneficiary moves to a different locality within the 50 
United States or the District of Columbia, the annual fiscal year cap 
will be recalculated to reflect the wage-adjusted highest Medicare RUG-
III category cost for the beneficiary's new location and will apply to 
the EHHC benefit for the remaining portion of that and subsequent 
fiscal years.
    (4) EHHC Reimbursement. TRICARE-authorized home health agencies 
must provide and bill for all authorized home health care services 
through established TRICARE claims mechanisms. No special billing 
arrangements will be authorized in conjunction with coverage that may 
be provided by Medicaid or other federal, state, community or private 
programs. Reimbursement will be based on the professional level of the 
person providing the authorized care as indicated in the beneficiary's 
plan of care. Specifically, TRICARE will reimburse up to 100% of the 
CHAMPUS Maximum Allowable Charge (CMAC) or negotiated rate for a 
physician or registered nurse; up to 80% of the CMAC for a licensed 
practical or vocational nurse; and up to 60% of the CMAC for a home 
health aide.
    (5) EHHC Exclusions.
    (i) Respite care. Respite care for the purpose of covering primary 
caregiver absences due to deployment, employment, seeking of employment 
or for pursuit of education is excluded. Authorized respite care covers 
only the ECHO beneficiary, not siblings or others who may reside in or 
be visiting in the beneficiary's residence.
    (ii) ECHO home health care for former Individual Case Management 
Program for Persons with Extraordinary Conditions (ICMP-PEC) or Case 
Management Demonstration Participants. ECHO home health care services 
and supplies are excluded for those beneficiaries being provided 
continuing coverage for home health care as participants of the 
previous case management demonstrations or the ICMP-PEC.
    (g) Cost-share liability--
    (1) No deductible. ECHO benefits are not subject to a deductible 
amount.
    (2) Sponsor cost-share liability.
    (i) Regardless of the number of ECHO eligible family members, the 
sponsor's cost-share for ECHO benefits, including ECHO Home Health 
Care, in a given month is according to the following table:

           Table 1.--Monthly Cost-Share by Member's Pay Grade
------------------------------------------------------------------------

------------------------------------------------------------------------
E-1 through E-5............................................          $25
E-6........................................................           30
E-7 and O-1................................................           35
E-8 and O-2................................................           40
E-9, W-1, W-2 and O-3......................................           45
W-3, W-4 and O-4...........................................           50
W-5 and O-5................................................           65
O-6........................................................           75

[[Page 46533]]


O-7........................................................          100
O-8........................................................          150
O-9........................................................          200
O-10.......................................................          250
------------------------------------------------------------------------

    (ii) The sponsor's cost-share shown in Table 1 in paragraph 
(g)(2)(i) will be applied to the first allowed ECHO charges in any 
given month. The Government's share will be paid, up to the maximum 
amount specified in paragraph (g)(3) of this section, for allowed 
charges after the sponsor's cost-share has been applied.
    (iii) The provisions of 32 CFR 199.18(d)(1) and (e)(1) regarding 
elimination of copayments for active duty family members enrolled in 
TRICARE Prime do not eliminate, reduce, or otherwise affect the 
sponsor's cost-share shown in Table 1 in paragraph (g)(2)(i).
    (iv) The sponsor's cost-share shown in Table 1 in paragraph 
(g)(2)(i) does not accrue to the Basic Program's Catastrophic Loss 
Protection under 10 U.S.C. 1079(b)(5) as shown at 32 CFR 199.4(f)(10) 
and 199.18(f).
    (3) Government cost-share liability.
    (i) The total government share of the cost of all ECHO benefits, 
except for ECHO home health care, provided in a given month to a 
beneficiary may not exceed $2,500 after application of the allowable 
payment methodology.
    (ii) The total government share of the cost of authorized ECHO home 
health care provided in a month to a beneficiary may not exceed one-
twelfth of the annual maximum Government cost-share as determined in 
this section.
    (h) Benefit payment.
    (1) Transportation. The allowable amount for transportation of an 
ECHO beneficiary is limited to the actual cost of the standard 
published fare plus any standard surcharge made to accommodate any 
person with a similar disability or to the actual cost of specialized 
medical transportation when non-specialized transport cannot 
accommodate the beneficiary's qualifying condition related needs, or 
when specialized transport is more economical than non-specialized 
transport. When transport is by private vehicle, the allowable amount 
is limited to the Federal government employee mileage reimbursement 
rate in effect on the date the transportation is provided.
    (2) Equipment.
    (i) The TRICARE allowable amount for durable equipment and durable 
medical equipment shall be calculated in the same manner as durable 
medical equipment allowable through section 199.4.
    (ii) Allocating equipment expense. The ECHO beneficiary (or sponsor 
or guardian acting on the beneficiary's behalf) may, only at the time 
of the request for authorization of equipment, specify how the 
allowable cost of the equipment is to be allocated as an ECHO benefit. 
The entire allowable cost of the authorized equipment may be allocated 
in the month of purchase provided the allowable cost does not exceed 
the ECHO maximum monthly benefit of $2,500, or it may be prorated 
regardless of the allowable cost. Prorating permits the allowable cost 
of ECHO-authorized equipment to be allocated such that the amount 
allocated each month does not exceed the maximum monthly benefit.
    (A) Maximum period. The maximum number of consecutive months during 
which the allowable cost may be prorated is the lesser of:
    (1) The number of months calculated by dividing the allowable cost 
for the item by 2,500 and then doubling the resulting quotient, rounded 
off to the nearest whole number; or
    (2) The number of months of expected useful life of the equipment 
for the requesting beneficiary, as determined by the Director, TRICARE 
Management Activity or designee.
    (B) Alternative allocation period. The allowable equipment cost may 
be allocated monthly in any amount such that the maximum allowable 
monthly ECHO benefit of $2,500, or the maximum period under (i), is not 
exceeded.
    (C) Authorization.
    (1) The amount allocated each month under (i) or (ii) will be 
separately authorized as an ECHO benefit.
    (2) An item of durable equipment or durable medical equipment shall 
not be authorized when such authorization would allow concurrent ECHO 
cost-sharing of duplicate equipment, as defined in section 199.2, for 
the same beneficiary.
    (D) Cost-share. A cost-share, as provided by (g) of this section, 
is required for each month in which a prorated amount is authorized.
    (E) Termination. Prorated payments shall be terminated as of the 
first day of the month following the death of a beneficiary or as of 
the effective date of a beneficiary's loss of ECHO eligibility for any 
other reason.
    (3) For-profit institutional care provider. Institutional care 
provided by a for-profit entity may be allowed only when the care for a 
specific ECHO beneficiary.
    (i) is contracted for by a public facility as a part of a publicly 
funded long-term inpatient care program; and
    (ii) is provided based upon the ECHO beneficiary's being eligible 
for the publicly funded program which has contracted for the care; and
    (iii) is authorized by the public facility as a part of a publicly 
funded program;
    (iv) would cause a cost-share liability in the absence of TRICARE 
eligibility; and
    (v) produces an ECHO beneficiary cost-share liability that does not 
exceed the maximum charge by the provider to the public facility for 
the contracted level of care.
    (i) Other ECHO Requirements.
    (1) All provisions of this part, except the provisions of section 
199.4 unless otherwise provided by this section, apply to the ECHO.
    (2) Registration. Active duty sponsors must register potential ECHO 
eligible beneficiaries through the Director, TRICARE Management 
Activity or designee prior to receiving ECHO benefits. The Director, 
TRICARE Management Activity or designee will determine ECHO eligibility 
and update the Defense Eligibility Enrollment Reporting System (DEERS) 
accordingly. Sponsors must provide evidence of enrollment in their 
respective branch of services Exceptional Family Member Program at the 
time they register their family member(s) for the ECHO.
    (3) Benefit authorization. All ECHO benefits require authorization 
by the Director, TRICARE Management Activity or designee prior to 
receipt of such benefits.
    (i) Documentation. The sponsor shall provide such documentation as 
the Director, TRICARE Management Activity or designee requires as a 
prerequisite to authorizing ECHO benefits. Such documentation shall 
describe how the requested benefit will contribute to confirming, 
arresting, or reducing the disabling effects of the qualifying 
condition, including maintenance of function or prevention of further 
deterioration of function, of the beneficiary.
    (ii) Format. An authorization issued by the Director, TRICARE 
Management Activity or designee shall specify such description, dates, 
amounts, requirements, limitations or information as necessary for 
exact identification of approved benefits and efficient adjudication of 
resulting claims.
    (iii) Valid period. An authorization for ECHO benefits shall be 
valid until such time as the Director, TRICARE Management Activity or 
designee determines that the authorized services are no longer 
appropriate or required.
    (iv) Authorization waiver. The Director, TRICARE Management

[[Page 46534]]

Activity or designee may waive the requirement for a written 
authorization for rendered ECHO benefits that, except for the absence 
of the written authorization, would be allowable as an ECHO benefit.
    (v) Public facility use.
    (A) An ECHO beneficiary residing within a state must demonstrate 
that a public facility is not available and adequate to meet the needs 
of their qualifying condition. Such requirement shall apply for 
beneficiaries who request authorization for training, rehabilitation, 
special education, assistive technology, and institutional care in 
private nonprofit, public, and state institutions and facilities, and 
if appropriate, transportation to and from such institutions and 
facilities. The maximum Government cost-share for services that require 
demonstration of pubic facility non-availability or inadequacy is 
limited to $2,500 per month per beneficiary. State-administered plans 
for medical assistance under Title XIX of the Social Security Act 
(Medicaid) are not considered available and adequate facilities for the 
purpose of this section.
    (B) The domicile of the beneficiary shall be the basis for the 
determination of public facility availability when the sponsor and 
beneficiary are separately domiciled due to the sponsor's move to a new 
permanent duty station or due to legal custody requirements.
    (C) Written certification, in accordance with information 
requirements, formats, and procedures established by the Director, 
TRICARE Management Activity or designee that requested ECHO services or 
items cannot be obtained from public facilities because the services or 
items are not available and adequate, is a prerequisite for ECHO 
benefit payment for training, rehabilitation, special education, 
assistive technology, and institutional care in private nonprofit, 
public, and state institutions and facilities, and if appropriate, 
transportation to and from such institutions and facilities.
    (1) An administrator or designee of a public facility may make such 
certification for a beneficiary residing within the service are of that 
public facility.
    (2) The Director, TRICARE Management Activity or designee may 
determine, on a case-by-case basis, that apparent public facility 
availability for a requested type of service or item cannot be 
substantiated for a specific beneficiary's request for ECHO benefits 
and therefore is not available.
    (i) A case-specific determination shall be based upon a written 
statement by the beneficiary (or sponsor or guardian acting on behalf 
of the beneficiary) which details the circumstances wherein a specific 
individual representing a specific public facility refused to provide a 
public facility use certification, and such other information as the 
Director, TRICARE Management Activity or designee determines to be 
material to the determination.
    (ii) A case-specific determination of public facility availability 
by the Director, TRICARE Management Activity or designee is conclusive 
and is not appealable under section 199.10
    (4) Repair or maintenance of beneficiary owned durable equipment 
and durable medical equipment is exempt from the public facility use 
requirements.
    (5) The requirements of this paragraph (i)(4)(v) notwithstanding, 
no public facility use certification is required for medical services 
and items that are provided under Part C of the Individuals with 
Disabilities Education Act in accordance with the Individual Family 
Services Plan and that are otherwise allowable under the ECHO.
    (j) Implementing instructions. The Director, TRICARE Management 
Activity or designee shall issue TRICARE policies, instructions, 
procedures, guidelines, standards, and criteria as may be necessary to 
implement the intent of this section.
* * * * *
    5. Section 199.6 is proposed to be amended by revising paragraphs 
(e)(1)(ii), (e)(2) and (e)(3) to read as follows:


Sec.  199.6  TRICARE--authorized providers.

* * * * *
    (e) Extended Care Health Option Providers--
    (1) General. * * *
    (ii) A Program for Persons with Disabilities (PFPWD) provider with 
TRICARE-authorized status on the effective date for the Extended Care 
Health Option (ECHO) Program shall be deemed to be a TRICARE-authorized 
provider until the expiration of all outstanding PFPWD benefit 
authorizations for services or items being rendered by the provider.
    (2) ECHO provider categories--
    (i) ECHO inpatient care provider. A provider of residential 
institutional care, which is otherwise an ECHO benefit shall be:
    (A) A not-for-profit entity or a public facility and
    (B) Located within a state; and
    (C) Be certified as eligible for Medicaid payment in accordance 
with a state plan for medical assistance under Title XIX of the Social 
Security Act (Medicaid) as a Medicaid Nursing Facility, or Intermediate 
Care Facility for the Mentally Retarded, or be a TRICARE-authorized 
institutional provider as defined in paragraph (b) of this section, or 
be approved by a state educational agency as a training institution.
    (ii) ECHO outpatient care provider. A provider of ECHO outpatient, 
ambulatory, or in-home services shall be:
    (A) A TRICARE-authorized provider of services as defined in this 
section; or
    (B) An individual, corporation, foundation, or public entity that 
predominantly renders services of a type uniquely allowable as an ECHO 
benefit and not otherwise allowable as a benefit of section 199.4, that 
meets all applicable licensing or other regulatory requirements of the 
state, county, municipality, or other political jurisdiction in which 
the ECHO service is rendered.
    (iii) ECHO vendor. A provider of an allowable ECHO item, such as 
supplies or equipment, shall be deemed to be a TRICARE-authorized 
vendor for the provision of the specific item, supply or equipment when 
the vendor supplies such information as the Director, TRICARE 
Management Activity or designee determines necessary to adjudicate a 
specific claim.
    (3) ECHO provider exclusion or suspension. A provider of ECHO 
services or items may be excluded or suspended for a pattern of 
discrimination on the basis of disability. Such exclusion or suspension 
shall be accomplished according to the provisions of section 199.9.
* * * * *
    6. Section 199.7 is proposed to be amended by revising paragraph 
(a)(2), to read as follows:


Sec.  199.7  Claims submission, review, and payment.

    (a) General * * *
    (2) Claim required. No benefit may be extended under the Basic 
Program or Extended Care Health Option (ECHO) Program without 
submission of an appropriate, complete and properly executed claim 
form.
* * * * *
    7. Section 199.8 is proposed to be amended by revising paragraph 
(d)(4), to read as follows:


Sec.  199.8  Double coverage.

* * * * *
    (d) Special considerations--(4) Extended Care Health Option (ECHO). 
For those services or supplies that require use of public facilities, 
an ECHO eligible beneficiary (or sponsor or guardian acting on behalf 
of the

[[Page 46535]]

beneficiary) does not have the option of waiving the full use of public 
facilities which are determined by the Director, TRICARE Management 
Activity or designee to be available and adequate to meet a disability 
related need for which an ECHO benefit was requested. Benefits eligible 
for payment under a state plan for medical assistance under Title XIX 
of the Social Security Act (Medicaid) are never considered to be 
available in the adjudication of ECHO benefits.
* * * * *

    Dated: July 29, 2003.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-19822 Filed 8-5-03; 8:45 am]

BILLING CODE 5001-08-M