3.2 Calculation
Of The ASA
The following procedures will
be followed in calculating the TRICARE ASA.
3.2.1 Apply the Cost-to-Charge Ratio
(CCR)
In this step each charge is reduced
to a representative cost by using the Medicare CCR. Effective
FY 2017, the CCR is 0.2541. Effective FY 2018, the CCR is 0.2566. Effective
FY 2019, the CCR is 0.2514.
3.2.2 Increase
for Bad Debts
The base standardized amount
will be increased by 0.01 in order to reimburse hospitals for bad
debt expenses attributable to TRICARE beneficiaries. Effective FY
2013, the base standardized amount will be increased by 0.0065.
3.2.3 Update for
Inflation
Any recalculation of the ASA will
use an inflation factor equal to the hospital market basket index
used by the Centers of Medicare and Medicaid Services (CMS) in their Inpatient Prospective Payment
System (IPPS).
3.2.4 Preliminary
Non-Teaching Standardized Amount
At this
point Indirect Medical Education (IDME) costs have been removed
through standardization in the weight methodology and direct medical
education costs have been removed through the application of the
Medicare CCR which does not include direct medical education costs. Therefore,
a non-teaching standardized amount will be computed by dividing
aggregate costs by the number of discharges in the database.
3.2.5 Preliminary
Teaching Standardized Amounts
A separate
standardized amount will be calculated for each teaching hospital
to reimburse for IDME expenses. This will be done by multiplying
the non-teaching standardized amount by 1.0 plus each hospital’s
IDME factor.
3.2.6 System Standardization
The preliminary standardized amounts will be
further standardized using a factor which equals total DRG payments
using the preliminary standardized amounts divided by the sum of
all costs in the database (updated for inflation). To achieve standardization,
each preliminary standardized amount will be divided by this factor.
This step is necessary so that total DRG system outlays, given the same
distribution among hospitals and diagnoses, are equal whether based
on DRGs or on charges reduced to costs.
3.2.7 Labor-Related
and Nonlabor-Related Portions of the ASA
The
ASA shall be divided into labor-related and nonlabor-related portions
according to the ratio of these amounts in the national ASA under
the Medicare IPPS. Effective October
1, 2013, and subsequent years, for wage index values greater than
1.0, the labor related portion of the ASA shall equal 68.3%,
and the non-labor related portion shall equal 31.7%.
For wage indexes less than or equal to 1.0 the labor-related portion
for the ASA shall equal 62% and the non-labor-related portion shall equal
38%.
3.2.8 Updating
the Standardized Amounts
For years subsequent
to the initial year, the standardized amounts will be updated by
the final published Medicare annual update factor, unless the standardized
amounts are recalculated.