4.0 Policy
4.1 Statutory
Background
Under Title 10, United States
Code (USC), Section 1079(i)(2), the amount to be paid to hospitals, Skilled
Nursing Facilities (SNFs), and other institutional providers under
the TRICARE program, “shall be determined to the extent practicable
in accordance with the same reimbursement rules as apply to payments
to providers of services of the same type under Medicare.” Based
on this statutory provision, DHA has adopted Medicare’s Prospective
Payment System (PPS) for reimbursement of IRFs currently in effect
for the Medicare program as required under Section 4421 of the Balanced
Budget Act (BBA) of 1997 (Public Law (PL) 105-33) by creating Section
1886(j) of the Social Security Act (the Act). Section 1886(j) of
the Act authorized the implementation of a per-discharge PPS for
IRFs. The IRF PPS payment for each patient is based on information
found in the IRF-Patient Assessment Instrument (PAI). The IRF-PAI
contains patient clinical, demographic and other information about
the patient, which classifies the patient into distinct groups based
on clinical characteristic and expected resource needs. Separate payments
are calculated for each group, including the application of case
and facility-level adjustments.
4.2 Applicability And Scope Of
Coverage
All IRFs that meet the classification
criteria for payment under the IRF PPS under Title 42 CFR Part 412,
subpart B, are considered authorized IRFs under the TRICARE program.
4.3 Payment On
A Per Discharge Basis.
Under the PPS, IRFs
receive a pre-determined amount per discharge for inpatient services furnished
to TRICARE beneficiaries.
4.3.1 Payment in full. The payment
made under the IRF PPS represents payment in full (subject to applicable
deductibles, cost-shares, and copayments) for inpatient operating
and capital-related costs associated with furnishing TRICARE covered
services in an IRF, but not for the cost of direct graduate medical
education.
4.3.2 In addition to payments based on prospective
payment rates, IRFs receive payments for the following:
4.3.2.1 Bad debt
expenses, as provided in 42 CFR 412.622(b)(2)(i).
4.3.2.2 A payment
amount per unit for blood clotting factor provided to TRICARE inpatients
who have hemophilia.
4.4 Elements of the TRICARE IRF
PPS
4.4.1 Rates
4.4.1.1 As required
by the Act, the Federal rates reflect all costs of furnishing IRF
services (routine, ancillary, and capital related) other than costs
associated with operating approved education activities as defined
in 42 CFR Parts 413.75 and 413.85, bad debts, and other costs not
covered under the PPS. Federal rates are adjusted to reflect:
4.4.1.1.1 Patient
case-mix, which is the relative resource intensity typically associated
with each patient’s clinical condition as identified through the
patient assessment process:
4.4.1.1.1.1 Cases are
grouped into Rehabilitation Impairment Categories, according to
the primary condition for which the patient was admitted to the
IRF.
4.4.1.1.1.2 Cases are further grouped into case-mix groups
(CMGs), which group similar cases according to their functional
motor and cognitive scores and age.
4.4.1.1.1.3 Finally,
cases are grouped into one of four tiers within each CMG, according
to patients’ comorbidities (conditions that are secondary to the
principal diagnosis or reason for the inpatient stay). Each tier
adds a successively higher payment amount to the case depending
on whether the costs of the comorbidity are significantly higher
than other cases in the same CMG (low, medium, or high).
4.4.1.1.1.4 Additional
adjustments are made for interrupted stays, short stays of less
than three days, short stay transfers, and high-cost outlier cases.
4.4.1.1.2 Facility
Level Adjustment Factors:
4.4.1.1.2.1 Rates are
adjusted to reflect geographic differences in wage rates, using
the hospital wage index.
4.4.1.1.2.2 Rates are
further adjusted to account for a facility’s proportion of low-income
patients, teaching status, and rural area location.
4.4.1.2 Federal
rates are updated annually:
4.4.1.2.1 To reflect
inflation in the cost of goods and services used to produce IRF
services using a market basket index calculated for freestanding
and hospital-based IRFs.
4.4.1.2.2 To reflect
changes in local wage rates, using the hospital wage index.
4.4.2 Classification
Criterion
4.4.2.1 To be excluded from the TRICARE Diagnosis Related
Group (DRG)-based payment system and instead be paid under the IRF
PPS, an inpatient rehabilitation hospital or rehabilitation unit
of an acute care hospital (or CAH) must meet the requirements for
classification as an IRF stipulated in Subpart B of 42 CFR Part
412.
4.4.2.2 One criterion specified at 42 CFR 412.29(b)
that Medicare uses for classifying a hospital or unit of a hospital
as an IRF is that a minimum percentage of a facility’s total inpatient
population must require treatment in an IRF for one or more of 13
medical conditions listed in 42 CFR 412.20(b)(2). This minimum percentage
is known as the compliance threshold, or the 60% rule. RICARE is
adopting Medicare’s 60% requirement for IRFs.
4.4.3 Patient Assessments
4.4.3.1 Admission
Orders
At the time that each patient is admitted,
the IRF shall have physician orders for the patient’s care during
the time the patient is hospitalized.
4.4.3.2 PAI
Payment
for services is contingent on the requirement that IRFs complete
a PAI upon admission and discharge. IRFs shall use the CMS IRF-PAI
as specified in 42 CFR 412.606 that covers a time period that is
in accordance with the assessment schedule in 42 CFR 412.610.
4.4.3.3 Comprehensive
Assessments
A clinician of the IRF shall
perform a comprehensive, accurate, standardized, and reproducible
assessment of each TRICARE inpatient as specified in 42 CFR 412.606(c).
4.4.3.4 Coordination
of the Collection of Patient Assessment Data
A
clinician of an IRF who has participated in performing the patient
assessment shall accept responsibility for the data as specified
in 42 CFR 412.612.
4.4.3.5 Transmission of Patient Assessment
Data
The IRF shall encode, i.e., enter data
items into the fields of the computerized patient assessment software
program, and transmit the patient assessment data for each inpatient
based on the data requirements in 42 CFR 412.614. The IRF shall
transmit the patient assessment data:
4.4.3.5.1 Using the
computerized version of the PAI available from CMS; or
4.4.3.5.2 Using a
computer program(s) that conforms to CMS’ standard electronic record
layout, data specifications, and data dictionary, includes the required
PAI data set, and meets CMS’ other specifications.
4.4.3.6 Data Collection
Software
The Inpatient Rehabilitation Validation
and Entry System (jIRVEN) was developed by CMS. jIRVEN is a free
Java-based software application which provides an option for IRFs
to collect and maintain PAI information. Facilities are able to
enter and subsequently export their data from the application for
submission to the appropriate national data repository.
4.4.3.7 The IRF
shall:
4.4.3.7.1 Electronically encode all required data into
the IRF-PAI software product. Generally, the software product includes
patient classification programming called the Grouper software.
The Grouper software uses specific IRF-PAI data elements to classify
(or group) patients into distinct CMGs and account for the existence
of any relevant comorbidities. The Grouper software produces a five-character
CMG number. The first character is an alphabetic character that
indicates the comorbidity tier. The last 4 characters are numeric
characters that represent the distinct CMG number. Free downloads of
the jIRVEN software product, including the Grouper software, are
available on the CMS web site at
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html.
4.4.3.7.2 Electronically
transmit complete, accurate, and encoded data from the PAI for each TRICARE
patient to the national data repository.
4.4.3.8 Once an
IRF patient is discharged, the IRF submits a HIPAA compliant electronic
claim, or a paper claim (UB-04) using the five-character CMG number
assigned by the jIRVEN Grouper software when submitting claims for
processing.
4.4.3.9 Assessment
Process for Interrupted Stays
The IRF shall
follow the assessment process for interrupted stays as specified
in 42 CFR 412.614.
4.4.4 Reasonable and Necessary Criteria
In order for an IRF claim to be considered
reasonable and necessary, there must be a reasonable expectation
that the patient meets all of the requirements in 42 CFR 412.622(3)(i)
through (iv) at the time of the patient’s admission to the IRF.
4.4.4.1 Documentation.
To document that each patient for whom the
IRF seeks payment is reasonably expected to meet all of the requirements
in
paragraph 4.5.3 at the time of admission,
the patient’s medical record at the IRF must contain the documentation
outlined in 42 CFR 412.622(4)(i) through (iii).
4.4.4.2 Interdisciplinary
Team Approach To Care
In order for an IRF
claim to be considered reasonable and necessary, the patient must require
an interdisciplinary team approach to care, as evidenced by documentation
in the patient’s medical record of weekly interdisciplinary team
meetings that meet the requirements in 42 CFR 412.622 (A) through
(C).
4.5 Basis of Payment
4.5.1 For admissions
prior to October 1, 2018, IRFs shall be reimbursed based on billed
charges or negotiated rates.
4.5.2 For admissions on or after
October 1, 2018, inpatient services provided in IRFs shall be reimbursed
in accordance with Medicare’s IRF PPS as found in Title 42 CFR,
Part 412, Subpart P. IRF PPS payments will be made on the basis
of prospectively determined rates and applied on a per discharge basis.
4.5.3 To the extent practicable, in accordance with
10 USC 1079(i)(2), TRICARE will adopt Medicare’s IRF PPS methodology,
to include Medicare’s relative weights, payment rates, adjustments
for the 60% compliance threshold, and high cost-outlier payments.
4.5.4 TRICARE
is adopting Medicare’s IRF adjustments for interrupted stays, short
stays of less than three days, short-stay transfers, teaching adjustments,
rural adjustments, and the Low Income Payment (LIP) adjustment.
4.5.5 TRICARE
is also adopting Medicare’s IRF Quality Reporting Program (IRFQRP)
payment adjustments for TRICARE-authorized IRFs that reflect Medicare’s
annual payment update for that facility. TRICARE is not establishing
a separate reporting requirement for hospitals, but will utilize Medicare’s
payment adjustments resulting from their IRFQRP.
4.5.6 IRF PPS
Pricer Software. CMS has developed an IRF Pricer Program that calculates
the IRF payment rate. The Pricer software uses the CMG number, along
with other specific claim data elements and provider-specific data,
to adjust the IRF’s prospective payment for interrupted stays, transfers,
short stays, and deaths, and then applies the applicable adjustments
to account for the IRF’s wage index, percentage of low-income patients,
rural location, outlier payments, and the teaching status adjustment.
4.6 QRP
TRICARE will apply the same QRP reductions
as Medicare.
4.7 Transition Period
In the Final Rule (FR) published in the Federal
Register on December 29, 2017, DHA created a multi-year transition
period to buffer the impact from any potential decrease in revenue
that rehabilitation facilities may experience during the implementation
of a revised IRF inpatient payment system. This transition period
provides IRFs with sufficient time to adjust and budget for potential revenue
reductions. The transition is as follows:
4.7.1 For the first 12 months following
implementation, the TRICARE IRF PPS allowable cost will be 135%
of Medicare IRF PPS amounts.
4.7.2 For the second 12 months following
implementation, the TRICARE IRF PPS allowable cost will be 115%
of the Medicare IRF PPS amounts.
4.7.3 For the third 12 months following
implementation, and subsequent years, the TRICARE IRF PPS allowable
cost will be 100% of the Medicare IRF PPS amounts.
4.8 General Temporary
Military Contingency Payment Adjustment (GTMCPA) Payments
The Director, DHA, or designee, may approve
a GTMCPA payment based on all of the following criteria:
4.8.1 The IRF
serves a disproportionate share of Active Duty Service Members (ADSMs)
and Active Duty Family Members (ADFMs), i.e., 10% or more of an
IRF’s total admissions are for ADSMs and ADFMs.
4.8.2 The IRF
is a TRICARE network hospital.
4.8.3 The IRF’s actual costs for
inpatient services exceed TRICARE payments or other extraordinary
economic circumstance exists; and
4.8.4 Without the GTMCPA, the Department
of Defense’s (DoD’s) ability to meet military contingency mission
requirements will be significantly compromised.
4.9 Billing and
Coding Requirements
4.9.1 Once an IRF patient is discharged, the IRF
shall submit a Healthcare Insurance Portability and Accountability
Act (HIPAA) compliant electronic claim, or a paper claim (UB-04)
using the five-character CMG number when submitting claims for processing.
In addition to all entries previously required on a claim, the following
additional instructions must be followed to accurately price and
pay a claim under the IRF PPS.
4.9.2 The IRF shall bill using Bill
Type 11X along with Revenue Code 0024.
4.9.3 Contractors
shall process the claim using Type Of Institution 46 for
IRFs.
4.9.4 The contractors shall use Pricing Rate Code
(PRC) CI for CAH IRF reimbursement and RF for all
other IRF reimbursement.
4.10 Direct Medical EducationDHA will reimburse IRFs who file
a request for their direct medical education costs in a timely manner,
as outlined in Chapter 6, Section 8. Although the procedures
listed in Chapter 6, Section 8 pertain to DRGs, those
same procedures are to be used to reimburse IRFs for direct medical
education costs.
5.0 Exclusions
5.1 The TRICARE
IRF PPS methodology does not apply to hospitals in States that are
reimbursed by Medicare and TRICARE under a waiver that exempts them
from Medicare’s Inpatient Prospective Payment System (IPPS) or the
TRICARE DRG-based payment system.
5.2 Children’s hospitals are excluded
from the TRICARE IRF PPS methodology.
5.3 Department of Veterans Affairs
(VA) hospitals are excluded from the TRICARE IRF PPS methodology.
5.4 The IRF
PPS reimbursement method does not apply to any costs of physician
services or other professional services provided to IRF patients.