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Health Care for Dependents and Survivors of Veterans

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. Health Care for Dependents and Survivors of Veterans Sidath Viranga Panangala Specialist in Veterans Policy February 19, 2015 Congressional Research Service 7-5700 www.crs.gov RS22483 CRS Report for Congress Prepared for Members and Committees of Congress c11173008 . Health Care for Dependents and Survivors of Veterans Summary The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)

Health Care for Dependents and Survivors of Veterans

March 3, 2016 (RS22483) Jump to Main Text of Report

Contents

Summary

The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) was established by the Veterans Health Care Expansion Act of 1973 (P.L. 93-82). CHAMPVA is primarily a health insurance program where certain eligible dependents and survivors of veterans receive care from private sector health care providers. Eligibility The program is administered by the Veterans Health Administration (VHA), Chief Business Office, Purchased Care, which is headquartered in Denver, Colorado.

Eligibility

To be eligible for CHAMPVA benefits, the beneficiary must be the spouse or child of a veteran who has a total and permanent service-connected disability, or the widowed spouse or child of a veteran who (1) died as a result of a service-connected disability; or (2) had a total, permanent disability resulting from a service-connected condition at the time of death; or (3) died while on active duty status and in the line of duty; and does not qualify for health care under the Department of Defense (DOD) TRICARE program. The Caregivers and Veterans Omnibus Health Services Act of 2010 (P.L. 111-163) expanded CHAMPVA benefits for primary caregivers of certain seriously injured veterans if they do not have any other form of health insurance. Under current law a child (other than a helpless child) loses eligibility when (1) the child turns 18, unless enrolled in an accredited school as a full-time student; or (2) the child, who has been a full-time student, turns 23 or loses full-time student status; or (3) the child marries. Benefits Nevertheless, a child between the ages of 18 and 23 may remain eligible for CHAMPVA benefits if the child incurs a disabling illness or injury—while enrolled as full-time student—and is unable to continue studying at his or her educational institution. The child's eligibility will end either (1) six months from the removal date of the disability, (2) two years from the onset of the disability, or (3) on the child's 23rd birthday.

Benefits

The CHAMPVA program covers most health care services and supplies that are determined to be medically necessary, including inpatient and outpatient care, prescription drugs, mental health services, and skilled nursing care. Certain types of care require advance approval, commonly known as preauthorization. Currently, preauthorization is required for durable medical equipment, hospice services, mental health/substance abuse services, organ and bone marrow transplants, and dental procedures that are directly related to covered medical conditions. Payments

Payments

CHAMPVA beneficiaries usually pay 25% of the cost of medical care up to an annual catastrophic cap of $3,000 plus an annual outpatient deductible of $50 per individual or $100 per family. CHAMPVA pays the remaining 75% of the cost of the beneficiaries’' medical care. CHAMPVA is generally a secondary payer to other health insurance coverage and Medicare. CHAMPVA is the primary payer for Medicaid, Indian Health Service, and State Victims of Crime Compensation Programs. c11173008 Congressional Research Service . Health Care for Dependents and Survivors of Veterans Contents Overview.......................................................................................................................................... 1 Questions and Answers .................................................................................................................... 5 Eligibility ......................................................................................................................................... 5 Who Is Eligible to Receive CHAMPVA Benefits?.................................................................... 5 What Happens If a CHAMPVA-Eligible Spouse Divorces or Remarries? ............................... 5 When Does a Child Lose Eligibility? ........................................................................................ 5 Benefits ............................................................................................................................................ 6 Which Medical Benefits Are Available to Eligible Beneficiaries? ............................................ 6 What Is the CHAMPVA Policy on Abortion? ........................................................................... 7 Payments .......................................................................................................................................... 7 What Is the CHAMPVA Payment Structure? ............................................................................ 7 What Happens If the Beneficiary Has Other Health Insurance? ............................................... 7 How Are CHAMPVA Claims Processed? ................................................................................. 8 Other Programs ................................................................................................................................ 8 What Is the Difference Between CHAMPVA and TRICARE? ................................................. 8 What Is the Relationship Between CHAMPVA and Medicare? ................................................ 8 What Is the CHAMPVA In-House Treatment Initiative (CITI)? ............................................... 9 How Does the Affordable Care Act (ACA; P.L. 111-148, as amended) Affect CHAMPVA? ........................................................................................................................... 9 Figures Figure 1. CHAMPVA-Enrolled Beneficiaries, FY2001-FY2014 .................................................... 2 Figure 2. CHAMPVA Unique Users, FY2001-FY2014 .................................................................. 3 Figure 3. CHAMPVA Expenditures, FY2001-FY2014 ................................................................... 4 Tables Table A-1. Major Legislation Affecting the CHAMPVA Program ................................................ 10 Table B-1. CHAMPVA-Enrolled Beneficiaries and Unique Users, by State, FY2014 ................. 11 Appendixes Appendix A. CHAMPVA Legislative History ............................................................................... 10 Appendix B. CHAMPVA Enrollment and Unique Users, by State ............................................... 11 Contacts Author Contact Information........................................................................................................... 13 c11173008 Congressional Research Service . Health Care for Dependents and Survivors of Veterans Acknowledgments ......................................................................................................................... 13 c11173008 Congressional Research Service . Health Care for Dependents and Survivors of Veterans Overview CHAMPVA is the primary payer for Medicaid, Indian Health Service, and State Victims of Crime Compensation Programs.
Health Care for Dependents and Survivors of Veterans

Overview

The Veterans Health Administration (VHA) of the Department of Veterans Affairs (VA) provides health care services to veterans who meet certain eligibility requirements.11 The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans though an integrated health care system. In 1973, Congress enacted the Veteran Health Care Expansion Act of 1973 (P.L. 93-82), which, among other things, established effective September 1, 1973, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) as a means of providing health care services to dependents and survivors of certain veterans. 2 As stated in the House report accompanying P.L. 93-82: : The nation has long recognized that the widow and children of a veteran who dies of serviceconnectedservice-connected disease or injury or of a veteran who has a service-connected total disability are in a special category and deserving of substantial compensation and assistance in return for the sacrifice the family has made. This recognition has been shown in title 38 programs which provide for death compensation benefits, home loans, and educational assistance benefits for wives, widows, and war orphans. Failure to provide for the medical care of such individuals is an oversight which should be corrected.2 3 CHAMPVA is fundamentally a health insurance program where certain eligible dependents and survivors of veterans (veterans rated permanently and totally disabled from a service-connected condition) obtain medical care from private health care providers.34 Beneficiaries usually pay 25% of the cost of medical care up to an annual catastrophic cap of $3,000 plus an annual outpatient deductible of $50 per individual or $100 per family. CHAMPVA pays the remaining 75% of the cost of the beneficiaries’' medical care.45 CHAMPVA was designed to share costs of health services and to provide medical care in a manner similar to the care provided to certain eligible beneficiaries under the Department of Defense (DOD) TRICARE program (described later in this report).5 6 The program is administered by the Veterans Health Administration (VHA), Chief Business Office, Purchased Care, which is headquartered in Denver, CO. The number of beneficiaries enrolled in CHAMPVA has grown over the years. From FY2001 through FY2014, enrollmentFY2015, enrollments grew by 332347%—from 96,500 to 417,300431,736 beneficiaries (see Figure 1Figure 1). The 2001 expansion of CHAMPVA eligibility to certain individuals aged 65 years and older has contributed somewhat to the increase in enrollment.67 Moreover, there has been an increase in enrollment of dependents and spouses of certain Vietnam-era veterans with service-connected disabilities. This increase in Vietnam-era CHAMPVA sponsorship has occurred as aging Vietnam-era veterans 1 For more information on eligibility for VA healthcare, see CRS Report R42747, Health Care for Veterans: Answers to Frequently Asked Questions, by Sidath Viranga Panangala and Erin Bagalman. 2 U.S. Congress, Committee on Veterans’ Affairs, Veterans Health Care Expansion Act of 1973, report to accompany H.R. 9048, 93rd Congress, first session, H.Rept. 93-368 (Washington: GPO, 1973). 3 The term “service-connected” means, with respect to disability, that such disability was incurred or aggravated in the line of duty in the active military, naval, or air service. VA determines whether veterans have service-connected disabilities, and for those with such disabilities, assigns ratings from 0 to 100% based on the severity of the disability. Percentages are assigned in increments of 10%. 4 Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1; and 38 C.F.R. §17.274. 5 P.L. 93-82 authorized VA to furnish medical care similar to that provided to dependents and survivors of retired members of the armed forces in the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). CHAMPUS was later renamed TRICARE Standard in 1995. 6 Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1. c11173008 Congressional Research Service 1 . Health Care for Dependents and Survivors of Veterans This increase in Vietnam-era CHAMPVA sponsorship has occurred as aging Vietnam-era veterans with service-connected disabilities experience a worsening of symptoms and a change in disability status. Once a veteran becomes VA-rated permanently and totally disabled for a serviceconnectedservice-connected disability, the veteran’'s spouse and dependents are then eligible to enroll in CHAMPVA. More recently, with the passage of the Caregivers and Veterans Omnibus Health Services Act of 2010 (P.L. 111-163), Congress has expanded CHAMPVA eligibility to include additional categories of non-veterans, such as caregivers of certain seriously injured veterans. Table A-1 provides a summary of major legislative changes that have affected the CHAMPVA program since 1973 (see Appendix A).

). Figure 1. CHAMPVA-Enrolled Beneficiaries, FY2001-FY2014 FY2015 Source: Chart prepared by Congressional Research Service (CRS), based on data from U.S. Department of Veterans Affairs, Chief Business Office, Health Administration Center. Note:Veterans Health Administration (VHA), Chief Business Office, Purchased Care. Note: Enrollees are those who are eligible for the CHAMPVA program, filled an Application for CHAMPVA Benefits, and have been enrolled in the program. The number of unique CHAMPVA users has also grown by 422%425%, from 61,900 in FY2001 to 323 325,000 in FY2014FY2015 (see Figure 2). Unique users are enrollees who utilize health care at least once in a fiscal year. Appendix B provides a state-by-state breakdown of the number of CHAMPVA enrollees and unique users for FY2014. c11173008 Congressional Research Service 2 . Health Care for Dependents and Survivors of Veterans Figure 2. CHAMPVA Unique Users, FY2001-FY2014 FY2015.

Figure 2. CHAMPVA Unique Users, FY2001-FY2015 Source: Chart prepared by Congressional Research Service (CRS), based on data from the U.S. Department of Veterans Affairs, Veterans Health Administration (VHA), Chief Business Office, Health Administration Center. Purchased Care. Note: Unique users are CHAMPVA enrollees who utilize health care services at least once in a fiscal year. Funding for CHAMPVA is provided through the VHA’'s Medical Services account.7 8 As shown in Figure 3, spending for CHAMPVA (excluding administrative costs) has increased by 857% 862% between FY2001 and FY2014FY2015. The average cost per patient has also increased from approximately $2,349 per patient in FY2001 to an estimated $4,308292 per patient in FY2014.8 A FY2015.9 A demographic shift in CHAMPVA enrollees from less expensive younger beneficiaries to more expensive aging beneficiaries, “"extension of CHAMPVA benefits to beneficiaries over the age of 65,”9 65,"10 and the general inflation of medical costs are potential reasons for this increase in CHAMPVA expenditures. 7 For detailed information on VHA appropriations, CRS Report R43547, Veterans’ Medical Care: FY2015 Appropriations, by Sidath Viranga Panangala. 8 Indicates nominal dollars (also referred to as current dollars). 9 Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1. c11173008 Congressional Research Service 3 . Health Care for Dependents and Survivors of Veterans Figure 3. CHAMPVA Expenditures, FY2001-FY2014 CHAMPVA expenditures.

Figure 3. CHAMPVA Expenditures, FY2001-FY2015 Source: Chart prepared by Congressional Research Service (CRS), based on data from U.S. Department of Veterans Affairs, Chief Business Office, Health Administration Center. Veterans Health Administration (VHA), Chief Business Office, Purchased Care. Note: Expenditures shown in nominal dollars (also referred to as current dollars). The next section provides answers to frequently asked questions about the program. The questions are presented according to the following topics: eligibility, benefits, payments, and other relevant programs. c11173008 Congressional Research Service 4 . Health Care for Dependents and Survivors of Veterans Questions and Answers10 Eligibility other relevant programs. Questions and Answers11 Eligibility Who Is Eligible to Receive CHAMPVA Benefits? Eligibility for CHAMPVA requires inclusion in one of the following categories:11 • 12the individual is the spouse or child of a veteran who has been rated permanently and totally disabled for a service-connected disability; or • the individual is the surviving spouse or child of a veteran who died from a VAratedVA-rated service-connected disability; or • the individual is the surviving spouse or child of a veteran who was at the time of death rated permanently and totally disabled from a service-connected disability; or • or the individual is the surviving spouse or child of a military member who died on active duty, not due to misconduct (in most cases, these family members are eligible under TRICARE, not CHAMPVA); or • the individual is designated as a “"primary family caregiver”" of a seriously injured veteran and does not have any other form of health insurance.12 13 What Happens If a CHAMPVA-Eligible Spouse Divorces or Remarries? CHAMPVA eligibility is terminated by divorce or annulment of marriage to the qualifying veteran. CHAMPVA has specific eligibility rules for widows. When a CHAMPVA-eligible widow remarries, eligibility is terminated if the marriage occurs before the age of 55. As of February 4, 2003, a CHAMPVA-eligible widow who remarries at age 55 or older remains eligible for CHAMPVA. If a CHAMPVA-eligible widow under the age of 55 remarries, and the remarriage is later terminated, the widow is again eligible for CHAMPVA. When Does a Child Lose Eligibility? A child’'s eligibility, excluding that of a helpless child,1314 for CHAMPVA is terminated under the following conditions: 10 This part was drawn from: Department of Veterans Affairs Health Administration Center, CHAMPVA Handbook, at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/programguides/champva_guide.pdf and http://www.va.gov/ purchasedcare/programs/dependents/champva/index.asp (accessed on January 21, 2015). 11 38 U.S.C. §1781; 38 C.F.R. §17.270-17.278; 38 C.F.R. §71.25. 12 Primary Family Caregiver means an individual who meets the requirements specified in 38 C.F.R. §71.25. 13 A child who, before the age of 18, became permanently incapable of self-support and was rated as a helpless child by the VA, is eligible for CHAMPVA with no age limitation. For more information see Department of Veterans Affairs, (continued...) c11173008 Congressional Research Service 5 . Health Care for Dependents and Survivors of Veterans • if the child is not enrolled in an accredited school as a full-time student, the child loses eligibility at age 18; or • if the child is enrolled in an accredited school as a full-time student, the child loses eligibility at age 2314 or upon losing full-time student status; or • if the child marries; or • if the child is a stepchild, the stepchild loses eligibility upon no longer living in the household of the sponsor. Benefits Which Medical Benefits Are Available to Eligible Beneficiaries? The CHAMPVA program covers most health care services and supplies that are determined to be medically necessary, including inpatient and outpatient care, prescription drugs, mental health services, and skilled nursing care. By law, CHAMPVA is required to provide health care benefits that are similar to the DOD’s TRICARE program. Chiropractic services, routine eye examinations, hearing aids, and most dental benefits are excluded from both the federal CHAMPVA and TRICARE programs.15 In late 2008, benefits were expanded to include any nondental prostheses and remove the exclusion from coverage of enuretic (bed-wetting) devices.16 Certain types of care require advance approval, commonly known as preauthorization. Generally, a CHAMPVA beneficiary determines if a provider will accept a CHAMPVA beneficiary; this is known as “accepting assignment.” This means that the provider will bill the VA directly for covered services, items, and supplies and will be paid the “allowable charge.” Doctors or providers who agree to accept assignment cannot try to collect more than the CHAMPVA deductible and cost share amounts from the beneficiary. If the provider does not accept assignment, the CHAMPVA beneficiary is responsible for paying the annual deductible, the cost share amount (copay), and any provider-billed amount that exceeds the total allowable amount. For care that is not covered by CHAMPVA, the beneficiary has to pay the full bill.17 For example, (...continued) Health Administration Center, CHAMPVA Handbook, p. 4, http://www.va.gov/PURCHASEDCARE/docs/pubfiles/ programguides/champva_guide.pdf (accessed on January 21, 2015). 14 The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) required that a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children to continue to make such coverage available for a dependent child until 26 years of age. This ACA requirement did not apply to CHAMPVA benefits. Congress may need to amend 38 U.S.C. §1781(c) if a policy choice is made to extend eligibility for coverage of children under CHAMPVA until they reach age 26 so that eligibility for coverage of children under CHAMPVA would be consistent with private sector coverage under the ACA. For more information see, CRS Report R41198, TRICARE and VA Health Care: Impact of the Patient Protection and Affordable Care Act (ACA), by Sidath Viranga Panangala and Don J. Jansen. 15 38 C.F.R. §17.272. 16 Department of Veterans Affairs, “Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA): Expansion of Benefit Coverage for Prostheses and Enuretic Devices; Miscellaneous Provisions,” 73 Federal Register 65552, November 4, 2008. 17 Department of Veterans Affairs Health Administration Center. Fact Sheet 01-16 for Outpatient Providers and Office Managers. available at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/factsheets/FactSheet_01-16.pdf (accessed January 21, 2015). c11173008 Congressional Research Service 6 . Health Care for Dependents and Survivors of Veterans with very few exceptions, dental care is not a covered benefit. Currently, preauthorization is required for • durable medical equipment, • hospice services, • mental health/substance abuse services, • organ and bone marrow transplants, and • dental procedures that are directly related to covered medical conditions. What Is the CHAMPVA Policy on Abortion? The CHAMPVA program does not cover the cost of abortion counseling or abortion procedures unless a physician certifies that the life of the mother would be endangered should the fetus be carried to term.18 CHAMPVA does not cover the cost of abortion in cases of incest or rape. Payments What Is the CHAMPVA Payment Structure? CHAMPVA is a cost-sharing program that reimburses at rates comparable to the Medicare and TRICARE programs. CHAMPVA has an outpatient deductible of $50 per person and $100 per family per calendar year. After the deductible is reached, CHAMPVA pays 75% of the allowable amount, and the beneficiary pays 25% of the total amount.19 The patient typically pays the cost share at the time the service is provided, unless the beneficiary has another health insurance plan. In cases where a beneficiary has another form of health insurance, CHAMPVA is the secondary payer (with the exception of the circumstances outlined in the question “What Happens If the Beneficiary Has Other Health Insurance?”), and pays the lesser of either 75% of the allowable amount after the deductible or the rest of the billed charges. There is a $3,000 cap on cost sharing per CHAMPVA-eligible family. There is also an exception to the payment scheme outlined here for instances in which medical services are rendered through VA facilities participating in the CHAMPVA In-house Treatment Initiative (CITI).20 What Happens If the Beneficiary Has Other Health Insurance? By law, CHAMPVA is generally the secondary payer for beneficiaries having any other form of health insurance. The primary health insurance company is billed first, and then beneficiaries submit an explanation of benefits (EOB) for additional reimbursement by CHAMPVA. Exceptions exist for beneficiaries with Medicaid, beneficiaries receiving care under the State Victims of Crime Compensation Program, beneficiaries receiving care from the Indian Health 18 TRICARE covers the cost of abortion when there is a threat to the life of the mother, or in cases of rape or incest as directed by 10 U.S.C. §1093. 19 An allowable amount is the maximum payment that is authorized by the VA for a covered medial service or supply. 20 38 C.F.R. §17.274. c11173008 Congressional Research Service 7 . Health Care for Dependents and Survivors of Veterans Service, or beneficiaries with a CHAMPVA supplementary insurance policy. In those cases, CHAMPVA is the first payer.21 How Are CHAMPVA Claims Processed? All CHAMPVA claims are processed through the Chief Business Office Purchased Care in Denver, CO. Claims can be submitted by either the provider or the beneficiary, with each case requiring a different set of forms. All claims must be filed within one year after the date of service. For inpatient care, the claim must be filed within one year of the discharge date, and all payments will be made to the hospital regardless of which party submits the billing. Claims submitted after the one-year deadline will be denied. As of 2009, the reimbursement ceiling on durable medical equipment (DME) was raised to $2,000 to facilitate the administrative claims process and to accurately reflect the current costs of medical equipment.22 Other Programs What Is the Difference Between CHAMPVA and TRICARE? TRICARE is a health care program run by the DOD for families of active duty military service members, families of service members who died while on active duty, and retired military service men, women, and their families, regardless of their disability status. CHAMPVA is a comprehensive program run by the VA for eligible family members of veterans rated permanently and totally disabled for a service-connected disability or the family members of veterans who died from a VA-rated service-connected disability, whereas TRICARE has no disability criteria required for eligibility.23 The sponsoring veteran does not receive services through CHAMPVA, as he or she is eligible to receive services through the VA. Dependents of military retirees24 are not eligible for CHAMPVA, and must apply for benefits through TRICARE. What Is the Relationship Between CHAMPVA and Medicare? CHAMPVA is the secondary payer for beneficiaries with Medicare coverage. Under Section 3 of the Veterans’ following conditions:
  • if the child is not enrolled in an accredited school as a full-time student, the child loses eligibility at age 18; or
  • if the child is enrolled in an accredited school as a full-time student, the child loses eligibility at age 2315 or upon losing full-time student status; or
  • if the child marries; or
  • if the child is a stepchild, the stepchild loses eligibility upon no longer living in the household of the sponsor; or
  • if the child is a full-time student at an educational institution, between the ages of 18 and 23, and incurred a disabling injury or illness, the child loses eligibility either (1) six months from the removal date of the disability, (2) two years from the onset of the disability or illness, or (3) on the child's 23rd birthday, whichever occurs first.16

.

Why Aren't CHAMPVA-Eligible Children Getting Coverage Until They Reach Age 26?

The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) required that a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children continue to make such coverage available for a dependent child until 26 years of age.17 This ACA requirement did not apply to the CHAMPVA program.

Since the 111th Congress, several bills have been introduced in Congress to extend coverage of children eligible under the CHAMPVA program until they reach age 26, so that it will be consistent with private sector coverage under the Affordable Care Act (ACA).18 However, none of the bills have been enacted into law.

Benefits Which Medical Benefits Are Available to Eligible Beneficiaries?

The CHAMPVA program covers most health care services and supplies that are determined to be medically necessary, including inpatient and outpatient care, prescription drugs, mental health services, and skilled nursing care. By law, CHAMPVA is required to provide health care benefits that are similar to the DOD's TRICARE program. Chiropractic services, routine eye examinations, hearing aids, and most dental benefits are excluded from both the federal CHAMPVA and TRICARE programs.19 In late 2008, benefits were expanded to include any non-dental prostheses and remove the exclusion from coverage of enuretic (bed-wetting) devices.20

Certain types of care require advance approval, commonly known as preauthorization. Generally, a CHAMPVA beneficiary determines if a provider will accept a CHAMPVA beneficiary; this is known as "accepting assignment." This means that the provider will bill the VA directly for covered services, items, and supplies and will be paid the "allowable charge." Doctors or providers who agree to accept assignment cannot try to collect more than the CHAMPVA deductible and cost share amounts from the beneficiary. If the provider does not accept assignment, the CHAMPVA beneficiary is responsible for paying the annual deductible, the cost share amount (copay), and any provider-billed amount that exceeds the total allowable amount. For care that is not covered by CHAMPVA, the beneficiary has to pay the full bill.21 For example, with very few exceptions, dental care and services deemed not medically necessary, cosmetic in nature, investigational, and experimental are not covered benefits. Currently, preauthorization is required for

  • durable medical equipment,
  • hospice services,
  • mental health/substance abuse services,
  • organ and bone marrow transplants, and
  • dental procedures that are directly related to covered medical conditions.
What Is the CHAMPVA Policy on Abortion?

The CHAMPVA program does not cover the cost of abortion counseling or abortion procedures unless a physician certifies that the life of the mother would be endangered should the fetus be carried to term.22 CHAMPVA will not cover any abortion related to incest or rape.23 Specifically, CHAMPVA will provide coverage for (1) spontaneous, missed, or threatened abortions and abortions related to ectopic pregnancies,24 or (2) fetal death due to natural causes.25 Dilation and evacuation (D&E) and dilation and curettage (D&C) procedures may be covered when done surgically for a gynecological diagnosis or covered abortions.26

Payments What Is the CHAMPVA Payment Structure?

CHAMPVA is a cost-sharing program that reimburses at rates comparable to the Medicare and TRICARE programs. CHAMPVA has an outpatient deductible of $50 per person and $100 per family per calendar year. After the deductible is reached, CHAMPVA pays 75% of the allowable amount, and the beneficiary pays 25% of the total amount.27 The patient typically pays the cost share at the time the service is provided, unless the beneficiary has another health insurance plan. In cases where a beneficiary has another form of health insurance, CHAMPVA is the secondary payer (with the exception of the circumstances outlined in the question "What Happens If the Beneficiary Has Other Health Insurance?"), and pays the lesser of either 75% of the allowable amount after the deductible or the rest of the billed charges. There is a $3,000 cap on cost sharing per CHAMPVA-eligible family. There is also an exception to the payment scheme outlined here for instances in which medical services are rendered through VA facilities participating in the CHAMPVA In-house Treatment Initiative (CITI).28

What Happens If the Beneficiary Has Other Health Insurance?

By law, CHAMPVA is generally the secondary payer for beneficiaries having any other form of health insurance. The primary health insurance company is billed first, and then beneficiaries submit an explanation of benefits (EOB) for additional reimbursement by CHAMPVA. Exceptions exist for beneficiaries with Medicaid, beneficiaries receiving care under the State Victims of Crime Compensation Program, beneficiaries receiving care from the Indian Health Service, or beneficiaries with a CHAMPVA supplementary insurance policy. In those cases, CHAMPVA is the first payer.29

How Are CHAMPVA Claims Processed?

All CHAMPVA claims are processed through the Chief Business Office Purchased Care in Denver, CO. Claims can be submitted by either the provider or the beneficiary, with each case requiring a different set of forms. All claims must be filed within one year after the date of service. For inpatient care, the claim must be filed within one year of the discharge date, and all payments will be made to the hospital regardless of which party submits the billing. Claims submitted after the one-year deadline will be denied. However, an appeal or reconsideration request must be submitted within one year from the initial determination date. As of 2009, the reimbursement ceiling on durable medical equipment (DME) was raised to $2,000 to facilitate the administrative claims process and to accurately reflect the current costs of medical equipment.30

Other Programs What Is the Difference Between CHAMPVA and TRICARE?

TRICARE is a health care program run by the DOD for families of active duty military servicemembers, families of servicemembers who died while on active duty, and retired military service men, women, and their families, regardless of their disability status. CHAMPVA is a comprehensive program run by the VA for eligible family members of veterans rated permanently and totally disabled for a service-connected disability or the family members of veterans who died from a VA-rated service-connected disability, whereas TRICARE has no disability criteria required for eligibility.31 The sponsoring veteran does not receive services through CHAMPVA, as he or she is eligible to receive services through the VA. Dependents of military retirees32 are not eligible for CHAMPVA, and must apply for benefits through TRICARE.

What Is the Relationship Between CHAMPVA and Medicare? CHAMPVA is the secondary payer for beneficiaries with Medicare coverage. Under Section 3 of the Veterans' Survivors Benefits Improvement Act of 2001 (P.L. 107-14), referred to as CHAMPVA for Life, CHAMPVA benefits were expanded to those over the age of 65 in the following circumstances. 21 38 C.F.R. §17.275. Department of Veterans Affairs, “(CHAMPVA): Preauthorization of Durable Medical Equipment,” 74 Federal Register 31373, July 1, 2009. 23 For further information on TRICARE, see CRS Report RL33537, Military Medical Care: Questions and Answers, by Don J. Jansen; also http://www.tricare.mil/; relevant regulations are at 32 C.F.R. §199. 24 It should be noted that there is a distinction between a veteran and a military retiree. Title 38 of the United States Code defines a “veteran” as a person who has been discharged under conditions other than dishonorable from active military, naval, or air service, (38 U.S.C. §101). All military retirees, by definition, are veterans. However, to be considered a “military retiree,” an individual generally must have spent at least 20 years on active duty in the armed services. 22 c11173008 Congressional Research Service 8 . Health Care for Dependents and Survivors of Veterans • following circumstances. If a beneficiary turns 65 before June 5, 2001, and only receives Medicare Part A, the beneficiary is eligible for CHAMPVA without having to purchase Medicare Part B coverage. • If a beneficiary turns 65 before June 5, 2001, and receives both Medicare Part A and Part B, the beneficiary must retain both parts to be eligible for continued CHAMPVA as secondary coverage. • If a beneficiary turns 65 on or after June 5, 2001, the beneficiary must be enrolled in Medicare Parts A and B to be eligible for CHAMPVA. • Enrollment in Medicare Part D is not required to become or remain eligible for CHAMPVA. • Individuals aged 65 or older who are not entitled to Medicare Part A retain CHAMPVA eligibility. What Is the CHAMPVA In-House Treatment Initiative (CITI)? The CITI is a voluntary program for CHAMPVA beneficiaries that provides medical care through local VA facilities on a space-available basis. Beneficiaries receiving care at the VA through the CITI program are not required to pay a deductible or participate in cost sharing. No extra enrollment is necessary to participate in the CITI program; the beneficiary simply has to determine if the local VA is a participating facility. The majority of VA facilities are CITI participants. It is important to emphasize that care is delivered based on the availability of space. Beneficiaries on Medicare or who have an HMO plan as their primary insurance are not eligible for the CITI program. How Does the Affordable Care Act (ACA; P.L. 111-148, as amended) Affect CHAMPVA? Under the ACA, individuals are required to maintain minimum essential coverage for themselves and their dependents.2533 Beginning in 2014, the ACA requires most individuals who do not maintain minimum essential insurance coverage—and do not qualify for an exemption—to potentially pay a penalty for noncompliance. Those enrolled in the CHAMPVA program meet the “ "minimum essential coverage”" standard required by the ACA and are not be required to pay a penalty fee when filing their taxes.2634 Furthermore, if a CHAMPVA enrollee wishes to purchase additional health care insurance from the health insurance marketplace (exchanges),2735 he or she would not qualify for premium credits and subsidies.2836 However, he or she may still purchase private health insurance to complement CHAMPVA coverage. 25 For more information, see CRS Report R41331, Individual Mandate Under ACA, by Annie L. Mach. See, Department of the Treasury, Internal Revenue Service, “Health Insurance Premium Tax Credit,” 77 Federal Register 30388, May 23, 2012. 27 ACA exchanges are marketplaces in which individuals and small businesses can shop for and purchase private health insurance coverage. For more information, see CRS Report R43854, Overview of Private Health Insurance Provisions in the Patient Protection and Affordable Care Act (ACA), by Annie L. Mach and Namrata K. Uberoi. 28 For more information, see CRS Report R41137, Health Insurance Premium Credits in the Patient Protection and Affordable Care Act (ACA), by Bernadette Fernandez. 26 c11173008 Congressional Research Service 9 . Health Care for Dependents and Survivors of Veterans Appendix A. private health insurance to complement CHAMPVA coverage. Appendix A. CHAMPVA Legislative History Table A-1. Major Legislation Affecting the CHAMPVA Program Year Summary Public Law 1973 The CHAMPVA program was established. P.L. 93-82 1976

Year

Summary

Public Law

1973

The CHAMPVA program was established.

P.L. 93-82

1976

Expanded the criteria under which surviving spouses and children would receive benefits following the death of the veteran. P.L. 94-581 1979

P.L. 94-581

1979

Authorized CHAMPVA coverage for dependents in the case of death of active duty service memberservicemember when not covered by TRICARE. Authorized CHAMPVA coverage for unmarried children until the age of 23 if enrolled in a full-time course of education. P.L. 96-151 1982

P.L. 96-151

1982

Authorized CHAMPVA beneficiaries who lose their CHAMPVA health care eligibility by virtue of becoming eligible for Medicare benefits to regain their CHAMPVA eligibility once any of their Medicare benefits have been exhausted. P.L. 97-251 2001

P.L. 97-251

2001

Authorized the extension of CHAMPVA benefits to beneficiaries over the age of 65. Prior to 2001, beneficiaries over the age of 65 were not eligible for CHAMPVA because they were eligible for Medicare. P.L. 107-14 2002

P.L. 107-14

2002

Authorized a CHAMPVA-eligible widow who remarries at age 55 or older to remain eligible for CHAMPVA benefits. P.L. 107-330 2010

P.L. 107-330

2010

Authorized primary family caregivers of seriously injured veterans to enroll in CHAMPVA. P.L. 111-163

P.L. 111-163

Source: Table prepared by the Congressional Research Service. c11173008 Congressional Research Service 10 . Health Care for Dependents and Survivors of Veterans Appendix B. CHAMPVA Enrollment and Unique Users, by State Table B-1. CHAMPVA-Enrolled Beneficiaries and Unique Users, by State, FY2014 State Alaska Unique Users 613 432 Alabama 9,572 7,608 Arkansas 8,960 7,571 Arizona 9,716 7,450 California 28,353 18,882 Colorado 6,148 4,773 Connecticut 2,080 1,588 District of Columbia 207 109 Delaware 819 645 Florida 33,167 26,139 Georgia 14,140 11,137 Hawaii 1,624 1,023 Iowa 3,359 2,703 Idaho 2,471 1,996 Illinois 8,566 6,471 Indiana 6,656 5,401 Kansas 3,070 2,500 Kentucky 9,099 7,750 Louisiana 7,360 5,852 Massachusetts 5,684 4,237 Maryland 3,551 2,570 Maine 4,442 3,715 12,173 9,187 Minnesota 8,480 6,722 Missouri 9,537 7,797 Mississippi 4,922 4,121 Montana 2,401 1,902 19,412 15,922 969 779 Nebraska 3,669 3,032 New Hampshire 1,840 1,503 New Jersey 6,160 4,480 Michigan North Carolina North Dakota c11173008 Enrolled Congressional Research Service 11 . Health Care for Dependents and Survivors of Veterans State Enrolled Unique Users New Mexico 5,835 4,411 Nevada 3,706 2,756 New York 13,459 9,431 Ohio 12,298 9,677 Oklahoma 13,672 11,202 9,036 7,135 Pennsylvania 12,595 9,586 Rhode Island 1,235 965 South Carolina 10,398 8,399 South Dakota 1,605 1,325 Tennessee 11,924 9,902 Texas 37,787 29,161 Utah 2,171 1,678 Virginia 9,665 7,831 794 638 Washington 9,069 6,986 Wisconsin 8,718 6,946 West Virginia 7,023 5,842 Wyoming 741 591 American Samoa 142 56 Guam 369 195 4,918 2,146 27 14 854 116 417,261 322,986 Oregon Vermont Puerto Rico Virgin Islands Overseasa Total Source: Table prepared by Congressional Research Service (CRS), based on data from U.S. Department of Veterans Affairs, Chief Business Office Purchased Care Notes: Enrollees are those who are eligible for the CHAMPVA program, filled an Application for CHAMPVA Benefits, and have been enrolled in the program. Unique users are CHAMPVA enrollees who utilize health care services at least once in a fiscal year. a. c11173008 CHAMPVA beneficiary lives in a foreign country. Congressional Research Service 12 . Health Care for Dependents and Survivors of Veterans Author Contact Information Sidath Viranga Panangala Specialist in Veterans Policy spanangala@crs.loc.gov, 7-0623 Acknowledgments Austin Frerick, a Research Assistant in the Domestic Social Policy Division, provided research assistance for this report. c11173008 Congressional Research Service 13 Table B-1. CHAMPVA-Enrolled Beneficiaries and Unique Users, by State, FY2015

State

Enrolled

Unique Users

Alaska

630

412

Alabama

9,887

7,677

Arkansas

9,070

7,512

Arizona

9,960

7,593

California

29,503

18,877

Colorado

6,358

4,827

Connecticut

2,108

1,603

District of Columbia

204

108

Delaware

865

665

Florida

34,098

26,197

Georgia

14,873

11,305

Hawaii

1,629

1,007

Iowa

3,460

2,707

Idaho

2,517

1,980

Illinois

8,887

6,566

Indiana

6,827

5,406

Kansas

3,093

2,468

Kentucky

9,092

7,615

Louisiana

7,624

5,892

Massachusetts

5,788

4,242

Maryland

3,651

2,505

Maine

4,517

3,705

Michigan

12,790

9,483

Minnesota

8,638

6,682

Missouri

10,036

7,958

Mississippi

5,022

4,022

Montana

2,390

1,883

North Carolina

20,706

16,353

North Dakota

1,007

781

Nebraska

3,732

3,023

New Hampshire

1,882

1,501

New Jersey

6,265

4,533

New Mexico

5,835

4,355

Nevada

3,935

2,823

New York

13,738

9,461

Ohio

12,812

9,868

Oklahoma

14,157

11,271

Oregon

9,294

7,138

Pennsylvania

13,048

9,719

Rhode Island

1,249

927

South Carolina

11,110

8,666

South Dakota

1,615

1,304

Tennessee

12,255

9,977

Texas

39,731

29,683

Utah

2,335

1,769

Virginia

10,082

7,893

Vermont

776

604

Washington

9,411

6,964

Wisconsin

8,947

7,017

West Virginia

7,221

5,824

Wyoming

762

580

American Samoa

122

44

Guam

378

183

N. Marian Isle

11

7

Puerto Rico

5,035

2,110

Virgin Islands

23

14
Overseasa

745

83

Total

431,736

325,372

Source: Table prepared by Congressional Research Service (CRS), based on data from U.S. Department of Veterans Affairs, Veterans Health Administration (VHA), Chief Business Office, Purchased Care.

Notes: Enrollees are those who are eligible for the CHAMPVA program, filled an Application for CHAMPVA Benefits, and have been enrolled in the program. Unique users are CHAMPVA enrollees who utilize health care services at least once in a fiscal year.

a. CHAMPVA beneficiary lives in a foreign country.

Author Contact Information

[author name scrubbed], Specialist in Veterans Policy ([email address scrubbed], [phone number scrubbed])

Acknowledgments

[author name scrubbed], a Presidential Management Fellow in the Domestic Social Policy Division, provided research assistance for this report.

Footnotes

1.

For more information on eligibility for VA healthcare, see CRS Report R42747, Health Care for Veterans: Answers to Frequently Asked Questions, by [author name scrubbed].

2.

Codified at 38 U.S.C. §1781. The current controlling regulations codified at 38.C.F.R. §§17.270-17.278.

3.

U.S. Congress, Committee on Veterans' Affairs, Veterans Health Care Expansion Act of 1973, report to accompany H.R. 9048, 93rd Congress, first session, H.Rept. 93-368 (Washington: GPO, 1973).

4.

The term "service-connected" means, with respect to disability, that such disability was incurred or aggravated in the line of duty in the active military, naval, or air service. VA determines whether veterans have service-connected disabilities, and for those with such disabilities, assigns ratings from 0 to 100% based on the severity of the disability. Percentages are assigned in increments of 10%.

5.

Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1; and 38 C.F.R. §17.274.

6.

P.L. 93-82 authorized VA to furnish medical care similar to that provided to dependents and survivors of retired members of the armed forces in the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). CHAMPUS was later renamed TRICARE Standard in 1995.

7.

Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1.

8.

For detailed information on VHA appropriations,CRS CRS Report R44301, Veterans' Medical Care: FY2016 Appropriations, by [author name scrubbed].

9.

Indicates nominal dollars (also referred to as current dollars).

10.

Department of Veterans Affairs, Office of Inspector General, Audit of the Civilian Health and Medical Program of the Department of Veterans Affairs, Report No. 06-03541-219, September 28, 2007, p. 1.

11.

This part was drawn from: Department of Veterans Affairs Health Administration Center, CHAMPVA Handbook, at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/programguides/champva_guide.pdf and CHAMPVA Policy Manual at http://www.va.gov/PURCHASEDCARE/pubs/champva_policy.asp (accessed on February 22, 2016).

12.

38 U.S.C. §1781; 38 C.F.R. §17.270-17.278; 38 C.F.R. §71.25.

13.

Primary Family Caregiver means an individual who meets the requirements specified in 38 C.F.R. §71.25.

14.

A child who, before the age of 18, became permanently incapable of self-support and was rated as a helpless child by the VA, is eligible for CHAMPVA with no age limitation. For more information see Department of Veterans Affairs, Health Administration Center, CHAMPVA Handbook, p. 4, http://www.va.gov/PURCHASEDCARE/docs/pubfiles/programguides/champva_guide.pdf (accessed on February 16, 2016).

15.

The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) required that a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children to continue to make such coverage available for a dependent child until 26 years of age. This ACA requirement did not apply to CHAMPVA benefits. Congress may need to amend 38 U.S.C. §1781(c) if a policy choice is made to extend eligibility for coverage of children under CHAMPVA until they reach age 26 so that eligibility for coverage of children under CHAMPVA would be consistent with private sector coverage under the ACA.

16.

Department of Veterans Affairs, Veterans Health Administration, Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), VHA Handbook 1601D.05, November 2, 2015.

17.

For more information, see archived CRS Report R41664, ACA: A Brief Overview of the Law, Implementation, and Legal Challenges, coordinated by [author name scrubbed].

18.

During the 111th Congress, the House-passed version of the National Defense Authorization Act (NDAA) for FY2011 (H.R. 5136) included a provision that would have extended dependent coverage under CHAMPVA until age 26 (H.Rept. 111-491). However, the final version of the FY2011 NDAA (H.R. 6523) did not include any provision to extend CHAMPVA coverage to eligible dependent children up to age 26. In the 112th Congress S. 490 and H.R. 115 were introduced. In the 113th Congress, the CHAMPVA Children's Protection Act of 2013 (H.R. 288) and a similar measure (S. 325) were introduced. In the 114th Congress, the CHAMPVA Children's Protection Act of 2015 was introduced in the House (H.R. 218) and Senate (S. 170). Both bills sought to extend health insurance coverage to CHAMPVA-eligible dependent children up to age 26. In addition, the Senate bill sought to expand coverage to married dependent children.

19.

38 C.F.R. §17.272.

20.

Department of Veterans Affairs, "Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA): Expansion of Benefit Coverage for Prostheses and Enuretic Devices; Miscellaneous Provisions," 73 Federal Register 65552, November 4, 2008.

21.

Department of Veterans Affairs, Chief Business Office, Purchased Care. Fact Sheet 01-16 for Outpatient Providers and Office Managers, available at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/factsheets/FactSheet_01-16.pdf (accessed February 26, 2016).

22.

Department of Veterans Affairs, Chief Business Office, Purchased Care, CHAMPVA Policy Manual, Chapter: 2 Section: 14.2 Title: Abortions, available at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/policymanuals/champva/default.htm#chapter2/1c2s14-2.htm (accessed February 26, 2016).

23.

TRICARE covers the cost of abortion when there is a threat to the life of the mother, or in cases of rape or incest, as directed by 10 U.S.C. §1093.

24.

A spontaneous abortion is also called a miscarriage, or pregnancy loss, which is "the unexpected loss of a fetus before the 20th week of pregnancy, or gestation." Source: https://www.nlm.nih.gov/medlineplus/miscarriage.html. For clinical purposes, "spontaneous abortion often is subdivided into threatened abortion, inevitable abortion, incomplete abortion, missed abortion, septic abortion, recurrent spontaneous abortion, and complete abortion." Source: Craig P. Griebel et al., "Management of Spontaneous Abortion," American Family Physician, vol. 72, no. 7 (October 1, 2005), pp. 1243-1250.

25.

38 C.F.R. §17.270(a). 38 C.F.R. §17.272(a).

26.

Department of Veterans Affairs, Chief Business Office, Purchased Care, CHAMPVA Policy Manual, Chapter: 2 Section: 14.2 Title: Abortions, available at http://www.va.gov/PURCHASEDCARE/docs/pubfiles/policymanuals/champva/default.htm#chapter2/1c2s14-2.htm (accessed February 26, 2016).

27.

An allowable amount is the maximum payment that is authorized by the VA for a covered medial service or supply.

28.

38 C.F.R. §17.274.

29.

38 C.F.R. §17.275.

30.

Department of Veterans Affairs, "(CHAMPVA): Preauthorization of Durable Medical Equipment," 74 Federal Register 31373, July 1, 2009.

31. For further information on TRICARE, see CRS Report RL33537, Military Medical Care: Questions and Answers, by [author name scrubbed]; also http://www.tricare.mil/; relevant regulations are at 32 C.F.R. §199. 32.

It should be noted that there is a distinction between a veteran and a military retiree. Title 38 of the United States Code defines a "veteran" as a person who has been discharged under conditions other than dishonorable from active military, naval, or air service, (38 U.S.C. §101). All military retirees, by definition, are veterans. However, to be considered a "military retiree," an individual generally must have spent at least 20 years on active duty in the armed services.

33.

For more information, see CRS Report R41331, Individual Mandate Under the ACA, by [author name scrubbed].

34.

See, Department of the Treasury, Internal Revenue Service, "Health Insurance Premium Tax Credit," 77 Federal Register 30388, May 23, 2012.

35.

ACA exchanges are marketplaces in which individuals and small businesses can shop for and purchase private health insurance coverage. For more information, see CRS Report R43854, Overview of Private Health Insurance Provisions in the Patient Protection and Affordable Care Act (ACA), by [author name scrubbed] and [author name scrubbed].

36.

For more information, see CRS Report R41137, Health Insurance Premium Credits in the Patient Protection and Affordable Care Act (ACA) in 2014, by [author name scrubbed].