1.0 APPLICABILITY
1.1 This policy
is mandatory for reimbursement of services provided by either network
or non-network providers. However, alternative network reimbursement
methodologies are permitted when approved by the Defense Health
Agency (DHA) and specifically included in the network provider agreement.
1.2 Reimbursement
of surgical procedures performed in an ASC prior to the implementation
of the reasonable cost method for Critical Access Hospitals (CAHs)
and implementation of TRICARE’s Outpatient Prospective Payment System
(OPPS), and thereafter, freestanding ASCs (FASCs), and other providers
who are exempt from the TRICARE OPPS and provide scheduled ambulatory
surgery. For purposes of this section, these facilities are known
as non-OPPS facilities. Non-OPPS facilities include any facility
not subject to the OPPS as outlined in
Chapter 13, Section 1, paragraph 3.4.1.2.
3.0 POLICY
Ambulatory surgery procedures performed by
providers described in
paragraph 2.0 will be reimbursed using prospectively
determined rates. The rates will be: established on a cost-basis,
divided into eleven payment groups representing ranges of costs,
and adjusted for area labor costs based on Metropolitan Statistical
Areas (MSAs). No additional benefits are payable outside the ASC
payment rate; e.g., revenue codes 260, 450, 510, 636, etc.
3.1 The ambulatory surgery payment system is to
be used regardless of where the ambulatory surgery procedures are
provided, that is, in a freestanding ASC, in a Hospital Outpatient
Department (HOPD), or in a hospital Emergency Room (ER). No additional
benefits are payable outside the ASC payment rate; e.g., revenue
codes 260, 450, 510, 636, etc.
3.2 The payment rates established under this system
apply only to the facility charges for ambulatory surgery. The facility
rate is a standard overhead amount that includes nursing and technician
services; use of the facility; drugs including take-home drugs for
less than $40; biologicals; surgical dressings, splints, casts and
equipment directly related to provision of the surgical procedure; materials
for anesthesia; Intraocular Lenses (IOLs); and administrative, recordkeeping
and housekeeping items and services.
3.3 This payment rate does not include items such
as physicians’ fees (or fees of other professional providers authorized
to render the services and to bill independently for them); laboratory,
X-rays or diagnostic procedures (other than those directly related
to the performance of the surgical procedure); prosthetic devices
(except IOLs); ambulance services; leg, arm, and back braces; artificial
limbs; and Durable Medical Equipment (DME) for use in the patient’s
home.
Note: A radiology and diagnostic procedure
is considered directly related to the performance of the surgical
procedure only if it is an inherent part of the surgical procedure,
e.g., the Common Procedure Terminology (CPT) code for the surgical
procedure includes the diagnostic or radiology procedure as part
of the code description (i.e., CPT procedure code 47560).
3.4 Ambulatory
Surgery Payment Rates
3.4.1 DHA, or its data contractor,
will calculate the payment rates and will provide them electronically
to the claims processing contractors annually. The electronic media
will include the locally-adjusted payment rate for each payment
group for each MSA and will identify, by procedure code, the procedures
in each group and the effective date for each procedure. The MSAs
and corresponding wage indexes will be those used by Medicare.
3.4.2 In addition to the payment rates, the contractors
will be provided a zip code to MSA crosswalk, so that they can determine
which payment rate to use for each ambulatory surgery provider. For
this purpose the zip code of the facility’s physical address (as
opposed to its billing address) is to be used. This crosswalk may
be updated periodically throughout the year and sent to the contractors.
3.4.3 In order to calculate payment rates, only those
procedures with at least 25 claims nationwide during the database
period will be used.
3.4.4 The rates were initially calculated using the
following steps.
3.4.4.1 For each
ambulatory surgery procedure, a median standardized cost was calculated
on the basis of all ambulatory surgery charges nationally under
TRICARE during the one-year database period. The steps in this calculation
included:
• Standardizing
for local labor costs by reference to the same wage index and labor/non-labor-related
cost ratio as applies to the facility under Medicare;
• Applying the Cost-to-Charge
Ratio (CCR) using the Medicare CCR for FASCs for TRICARE ASCs.
• Calculating a median
cost for each procedure; and
• Updating to the year
for which the payment rates were in effect by the Consumer Price Index-Urban
(CPI-U).
3.4.4.2 Procedures were placed into one of 10 groups
by their median per procedure cost, starting with $0 to $299 for
Group 1 and ending with $1,000 to $1,299 for Group 9 and $1,300
and above for Group 10. Groups 2 through 8 were set on the basis
of $100 fixed intervals.
3.4.4.3 The standard payment amount per group will
be the volume weighted median per procedure cost for the procedures
in that group.
3.4.4.4 Procedures
for which there was no or insufficient (less than 25 claims) data
were assigned to groups by:
• Calculating a volume-weighted
ratio of TRICARE payment rates to Medicare payment rates for those
procedures with sufficient data;
• Applying the ratio
to the Medicare payment rate for each procedure; and
• Assigning the procedure
to the appropriate payment group.
3.4.5 The amount paid for any ambulatory surgery
service under these procedures cannot exceed the amount that would
be allowed if the services were provided on an inpatient basis.
The allowable inpatient amount equals the applicable Diagnosis Related
Group (DRG) relative weight multiplied by the national large urban
adjusted standardized amount. This amount will be adjusted by the
applicable hospital wage index.
3.4.6 As of November 1, 1998, an eleventh payment
group is added to this payment system. This group will include extracorporeal
shock wave lithotripsy.
3.4.7 Grouping and Additions to
the ASC Procedure List for Dates of Service On or After March 1,
2017
3.4.7.1 Effective
March 1, 2017, only those procedures listed on DHA’s ambulatory
surgery web site shall be cost-shared in FASCs. Upon evaluation,
TRICARE may add additional procedures to the list. Groupings shall
be accomplished in accordance with the following procedures:
3.4.7.1.1 Prior
to March 1, 2017, DHA shall:
• Step
1: Review all allowed ASC charges in the ASC Calendar Years (CYs)
2014 and 2015 for procedures not included on TRICARE’s ASC list,
and identify those procedures with at least 25 claims in either
calendar year.
• Step 2: Deflate the
billed charges to the base period, and shall then update the base year
charges forward to the current ASC fiscal year using the ASC annual
update factors. Then the most recent Medicare ASC CCR (1994, 0.483)
shall be used to convert the charges to costs. The procedure shall
then be placed in one of the eleven TRICARE payment groups.
• Step
3: For codes with less than 25 claims in CY 2014 or 2015, the surgery
codes shall be evaluated to determine if there is a similar code
within a group on the current TRICARE ASC list. If so, the code
shall be assigned to the similar group. Information about the code’s
grouping under Medicare’s current ASC fee schedule shall be utilized
to support the grouping.
• Step
4: Shall compare all procedures assigned to a group under this methodology with
the current Medicare ASC payment. If assignment using these methods
results in an amount less than would be paid under the current Medicare
payment, TRICARE shall raise the rates for that procedure to equal
the amount paid by Medicare. This step shall only occur for newly-added
procedures to the ASC list.
3.4.7.1.2 Contractors may bring additional procedures
that are not on the ASC list to the attention of DHA, for evaluation
by DHA for inclusion on the ASC list, which shall be updated on
an annual basis.
3.4.7.1.3 Newly-added
procedure rates developed through the procedures established in
paragraph 3.4.7.1 apply
only to FASCs. Other non-OPPS providers (i.e., those listed in
Chapter 13, Section 1, paragraph 3.4.1.2 except
FASCs), are not subject to the newly-added rates for surgical procedures
and shall continue to be paid in accordance with the
Chapter 1, Section 24.
Effective January
1, 2018, newly-added procedure rates shall be updated annually on
January 1. DHA shall notate those procedures that
are newly-added within the listing posted to the DHA web site.
3.4.7.2 Newly-added procedures will be added to the
ASC list on the effective date of each ASC update year (November
1
for dates prior to January 1, 2017, and thereafter
January 1 of each following calendar year). The first
group of newly-added procedures (described in
paragraph 3.4.7.1.1)
will be added
to the list before March 1, 2017, and will be effective for a partial
year, i.e., March 1 through October 31, 2017.
The
second group of newly-added procedures shall be effective November
1, 2017, to December 31, 2017. The list of newly-added procedures
shall then be updated and revised on a quarterly basis (January
1, April 1, July 1, and October 1).
3.5 Payments
3.5.1 General
The payment for a procedure will be the standard
payment amount for the group which covers that procedure, adjusted
for local labor costs by reference to the same labor/non-labor-related cost
ratio and hospital wage index as used for ASCs by Medicare. This
calculation will be done by DHA, or its data contractor. For participating
claims, the ambulatory surgery payment rate will be reimbursed regardless
of the actual charges made by the facility--that is, regardless
of whether the actual charges are greater or smaller than the payment
rate. For nonparticipating claims, reimbursement (TRICARE payment
plus beneficiary cost-share plus any double coverage payments, if
applicable) cannot exceed the lower of the billed charge or the
group payment rate.
3.5.2
Procedures
Which Do Not Have An Ambulatory Surgery Rate and Are Provided by
an FASC
3.5.2.2 Non-surgical
services, such as evaluation and management visits, laboratory,
and radiology services are to be paid in accordance with TRICARE’s
allowable charge methodology (see
Chapter 5).
3.5.3 Multiple
and Terminated Procedures
3.5.3.1 Discounting for Multiple Surgical
Procedures
3.5.3.1.2 Discounting of multiple surgical procedures
is subject to the provisions in
Chapter 13, Section 3.
3.5.3.1.3 Effective March 1, 2017, FASCs shall be reimbursed
for only those surgical services on TRICARE’s ASC list (see
paragraph 3.5.2).
3.5.3.2 Discounting
for Bilateral Procedures
3.5.3.2.2 Modifiers
for Discounting Terminated Surgical Procedures
3.5.3.2.2.1 Industry standard modifiers may be billed on
outpatient hospital or individual professional claims to further
define the procedure code or indicate that certain reimbursement situations
may apply to the billing. Recognition and utilization of modifiers
are essential for ensuring accurate processing and payment of these
claim types.
3.5.3.2.2.2 Industry
standard modifiers are used to identify surgical procedures which
have been terminated prior to and after the delivery of anesthesia.
• Modifiers
52 and 73 are used to identify a surgical procedure that is terminated prior
to the delivery of anesthesia and is reimbursed at 50% of the allowable;
i.e., the ASC tier rate, the Ambulatory Payment Classification (APC)
allowable amount for OPPS claims, or the CHAMPUS Maximum Allowable
Charge (CMAC) for individual professional providers.
• Modifiers 53 and 74
are used for terminated surgical procedures after delivery of anesthesia
which are reimbursed at 100% of the appropriated allowable amounts referenced
above.
3.5.3.3 Unbundling
of Procedures
Contractors shall ensure that
reimbursement for claims involving multiple procedures conforms
to the unbundling guidelines as outlined in
Chapter 1, Section 3.
3.5.3.4 Incidental
Procedures
The rules for reimbursing incidental
procedures as contained in
Chapter 1, Section 3,
are to be applied to ambulatory surgery procedures reimbursed under
the rules set forth in this section. That is, no reimbursement is
to be made for incidental procedures performed in conjunction with
other procedures which are not classified as incidental. This limitation
applies to payments for facility claims as well as to professional
services.
3.6 Updating
Payment Rates
The rates will be updated annually
by DHA by the same update factor as is used in the Medicare annual
updates for ASC payments.
• The rates were updated
by 1.2% effective November 1, 2015.
• The rates were
updated by 1.2% effective November 1, 2016.
• The
rates were updated by 1.9% effective November 1, 2017.
3.7 Claims
for Ambulatory Surgery
3.7.1 Claim Forms
Claims
for facility charges must be submitted on a Centers for Medicare
and Medicaid Services (CMS) 1450 UB-04. Claims for professional
charges may be submitted on either a CMS 1450 UB-04 or a CMS 1500
Claim Form. The preferred form is the CMS 1500 Claim Form. When
professional services are billed on a CMS 1450 UB-04, the information
on the CMS 1450 UB-04 should indicate that these services are professional
in nature and be identified by the appropriate CPT-4 code and revenue code.
3.7.2 Billing Data
The claim must identify all procedures which
were performed (by CPT-4 or HCPCS code). The facility claim shall
be submitted on the CMS 1450 UB-04, the procedure code will be shown
in Form Locator (FL) 44.
Note: Claims from ASCs
must be submitted on the CMS 1450 UB-04 claim form. Claims not submitted
on the appropriate claim form will be denied.
3.8 Wage
Index Changes
If, during the year, Medicare
revises any of the wage indexes used for ambulatory surgery reimbursement,
such changes will not be incorporated into the TRICARE payment rates
until the next routine update. These changes will not be incorporated
regardless of the reason Medicare revised the wage index.
3.9 Subsequent
Hospital Admissions
If a beneficiary is admitted
to a hospital subject to the DRG-based payment system as a result
of complications, etc. of ambulatory surgery, the ambulatory surgery
procedures are to be billed and reimbursed separately from the hospital
inpatient services. The same rules applicable to ER services are to
be followed.
3.10 Cost-Shares For Ambulatory
Surgery Procedures
All surgical procedures
performed in an outpatient setting shall be cost-shared at the ASC
cost-sharing levels. Refer to
Chapter 2, Section 1, paragraph 1.3.3.7.
3.11 Exclusions
Surgical procedures that do not have an ambulatory
surgery rate listed on DHA’s ambulatory surgery web site are excluded
from cost-sharing in freestanding ASCs.