1.0 PROVIDER
DISCOUNTS
The contractor may negotiate agreements
or contracts with providers which include reductions or discounts
in the TRICARE program reimbursement methodologies, however, the
provider must agree to participate on and file TRICARE
claims on behalf of the beneficiary.
This section provides direction concerning processing of claims
subject to such reductions in reimbursement.
2.0 AGREEMENTS
Agreements must meet the following conditions:
2.1 The provider
must be TRICARE-authorized. If the provider is not currently certified,
the contractor shall certify the provider through the normal provider
certification process. If the provider is non-certifiable, the contractor
shall notify both the provider and the Military Treatment Facility
(MTF)/Enhanced Multi-Service Market (eMSM) if the MTF/eMSM is involved.
Contractors shall ensure that clinics, Preferred Provider Organizations
(PPOs), and other multi-member groups provide a list of the providers
within the organization, along with their Employer Identification
Numbers (EINs)/Social Security Numbers (SSNs). Contractors shall
review these lists, making sure that each individual provider in
the groups is authorized under TRICARE.
2.2 For all contractor negotiated
agreements, the effective dates shall be the first day of the month following
the month the agreement was signed.
2.3 The agreement shall contain
date parameters (effective and termination dates). For multi-member
groups, the effective date of each member shall be the same unless
otherwise indicated. Groups must identify the rendering physician
on the claim.
2.4 The agreement shall list specific procedure
codes and the method and the amount of discount, for example, a
general description such as gynecological procedures is not acceptable.
2.5 Providers
must agree to participate on all charges, whether the services provided
are subject to the negotiated discount or not.
2.6 Providers
cannot balance bill the beneficiary.
2.7 Provider must agree to bill
the patient’s Other Health Insurance (OHI) prior to billing TRICARE.
2.8 Providers
must be able to fluently speak, read, and write the English language.
3.0 METHODS
At a minimum, the following negotiated reimbursement
reduction methods are authorized:
3.1 Agreements using a percent
reduction method. Under the percent reduction method, provider reimbursement
is reduced by a percentage rate (e.g., 20%) applied to the allowable
amount for established reimbursement methods in
32 CFR 199.14. If the billed charge minus
the discount amount exceeds the CHAMPUS Maximum Allowable Charge
(CMAC), payment is limited to the CMAC unless an exception is allowed
under demonstration authority. The discount shall be taken from
the applicable reimbursement methodology used for the provider,
i.e., Diagnosis Related Group (DRG), mental health per diem, Residential
Treatment Center (RTC) per diem, Sole Community Hospital (SCH) payment method
for inpatient service, etc. The cost-share is always applied after
calculation of the discounted amount.
3.2 Agreements may include a discount
for the initial 1,000 claims processed (does not include adjustments)
during a stated period of time (e.g., 10%) and a higher discount
for claims exceeding 1,000, (e.g., 15%). In this case the contractor
must have counters to tally the number of claims processed by individual,
provider or group.
3.3 Agreements using negotiated
per diems are authorized for hospitalization and RTC care, but the
established method of payment cannot be altered, i.e., a DRG hospital
cannot revert to using a per diem, unless an exception is allowed
under demonstration authority. The cost-share shall be applied after
calculation of the new allowed amount.
3.4 Agreements on which each procedure
code listed in the agreement could have a different percentage discount
or fee schedule.
3.5 Agreements which have different
discounts for inpatient and outpatient services. This can be for
both professional and institutional providers.
3.6 Agreements
with provider groups when only some of the members of the group
will honor the participation/discount agreement. Groups must identify
the rendering physician on the claim.
4.0 CONTRACTOR
RESPONSIBILITIES
4.1 The contractor shall load the name of the provider
and EIN, the applicable negotiated reimbursement, and the effective
date parameters within 45 days of receipt of the agreement/contract.
4.2 The contractor
shall ensure, by implementing an automated payment mechanism, that
claims from affiliated providers with agreements or contracts which
include negotiated reimbursements are processed using an authorized
and correct reimbursement method.
4.3 The contractor shall report
the discounted amount as the allowed amount.
5.0 SAMPLE
NEGOTIATED REIMBURSEMENT METHODS
5.1 Negotiated per diems or negotiated
percent reduction in the standard mental health or RTC per diem
(e.g., 20% reduction in the per diem). Negotiated per diems are
subject to the adjustments applied to regional per diems (i.e.,
wage index factor, Indirect Medical Education (IDME) costs, etc.).
A negotiated per diem for a provider shall be paid by the contractor
until expiration, renewal, or renegotiation of the contract or agreement.
Percentage reductions shall be applied to allowable charges for
professional services.
5.2 Negotiated professional service
reimbursement reductions shall be applied to either the current
or prior year’s prevailing charge profile based on dates of service.
5.3 Examples
5.3.1 Percentage
reduction applied to the DRG allowable amount (e.g., a 10% reduction).
The following example illustrates calculation of a reduced DRG payment:
10%
negotiated reduction, $265 per diem cost-share for a retiree (assuming
the per diem is less than 10% of the billed charge), four day stay. Current
cost-shares can be found at http://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement.
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DRG allowance
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$9,000.00
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Less negotiated
reduction
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- 900.00
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Negotiated allowed
amount
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$8,100.00
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Less cost-share
($265 x 4 x 0.90)
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- 1,060.00
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Payment to hospital
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$7,040.00
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5.3.2 The following example illustrates
application of a percentage reduction in the standard per diem for
a high volume mental health provider or an RTC:
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10%
negotiated reduction, 25% cost-share for retiree, $375 per diem,
30 day stay.
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Standard allowed
amount ($375 x 30)
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$11,250.00
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Less negotiated
reduction
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-1,125.00
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Negotiated allowed
amount
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$10,125.00
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Less cost-share
(0.25 x $10,125)
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-2,531.25
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Payment to facility
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$7,593.75
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5.3.3 The following example illustrates
application of a percentage reduction in the standard per diem for
a low volume mental health provider:
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10%
negotiated reduction, 25% cost-share for a retiree, $410 regional
per diem (net of adjustments), 30 day stay billed at $500 per day.
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Standard allowed
amount ($410 x 30)
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$12,300.00
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Less negotiated
reduction
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-1,230.00
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Negotiated allowed
amount
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$11,070.00
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Less cost-share
(0.25 x $11,070)
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-2,767.50
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(Note: 25%
of the negotiated allowed amount is less than the daily cost-share
of $126.)
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Payment to facility
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$8,302.50
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5.3.4 The following example illustrates
payment calculation for a negotiated per diem (applicable to high
volume mental health providers, and RTCs):
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$400
standard per diem, $350 negotiated per diem, 25% cost-share for
a retiree, 30 day stay.
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Standard allowed
amount ($400 x 30)
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$12,000.00
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Negotiated allowed
amount ($350 x 30)
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$10,500.00
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Less cost-share
(0.25 x $10,500)
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- 2,625.00
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Payment to facility
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$7,875.00
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5.3.5 Percentage reduction may be
applied to the billed charge (e.g., 20% reduction in the billed charge)
for inpatient or outpatient services delivered by institutional
providers not reimbursed under the DRG-based payment system or the
inpatient mental health per diem system. The following example illustrates
calculation of a payment for inpatient services using the negotiated
percent reduction method:
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10%
negotiated reduction in billed charges, 25% cost-share for a retiree,
four day stay billed at $400 per day.
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Billed charge
($400 x 4)
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$1,600.00
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Less negotiated
reduction
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-160.00
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Negotiated allowed
amount
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$1,440.00
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Less cost-share
(0.25 x $1,440)
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-360.00
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Payment to hospital
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$1,080.00
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5.3.6 The following example illustrates
calculation of a payment for outpatient services delivered by an
institutional provider using the negotiated percent reduction method:
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10%
negotiated reduction in billed charges, 25% cost-share for a retiree,
one visit billed for $70 for care provided in a hospital emergency
room.
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Billed charge
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$70.00
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Less negotiated
reduction
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-7.00
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Negotiated allowed
amount
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$63.00
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Less cost-share
(0.25 x $63)
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-15.75
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Payment to hospital
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$47.25
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5.3.7 The following example illustrates
application of a professional service rate reduction:
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10%
negotiated reduction, 25% cost-share for a retiree.
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CMAC
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$80.00
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Less negotiated
reduction
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-8.00
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Negotiated allowed
amount
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$72.00
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Cost-share (0.25
x $72)
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-18.00
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Payment to provider
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$54.00
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