3.0 POLICY
3.1 Statutory
Background
3.1.1 Under 10 United States Code (USC) 1079(i)(2),
the amount to be paid to hospitals, Skilled Nursing Facilities (SNFs),
and other institutional providers under CHAMPUS shall, by regulation,
be established “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.” Similarly, under 10 USC 1079(h), the
amount to be paid to health care professionals and other non-institutional
health care providers “shall be equal to an amount determined to
be appropriate, to the extent practicable, in accordance with the
same reimbursement rules used by Medicare.” Based on these statutory
provisions, CHAMPUS adopted Medicare’s Prospective Payment System
(PPS) for reimbursement of hospital outpatient services currently
in effect for the Medicare program as required under the Balanced
Budget Act (BBA) of 1997 (Public Law 105-33), which provided comprehensive
provisions for establishment of a hospital Outpatient Prospective
Payment System (OPPS).
3.1.2 Centers for Medicare and Medicaid
Services (CMS) published a proposed rule in the Federal Register (FR)
on September 8, 1998 (63 FR 47552) setting forth the proposed PPS
for hospital outpatient services. On June 30, 1999, a correction
notice was published (64 FR 35258) to correct a number of technical
and typographical errors contained in the September 8, 1998 Proposed
Rule.
3.1.3 Subsequent to publication of the proposed rule,
the Balanced Budget Refinement Act (BBRA) of 1999, enacted on November
29, 1999, made major changes that affected the proposed OPPS. The
following BBRA 1999 provisions were implemented in a Final Rule
(65 FR 18434) published on April 7, 2000:
3.1.3.1 Made adjustments
for covered services whose costs exceeded a given threshold (i.e.,
an outlier payment).
3.1.3.2 Established
transitional pass-through payments for certain medical devices,
drugs, and biologicals.
3.1.3.3 Placed
limitations on judicial review for determining outlier payments
and the determination of additional payments for certain medical
devices, drugs, and biologicals.
3.1.3.4 Included
as covered outpatient services implantable prosthetics and Durable
Medical Equipment (DME) and diagnostic x-ray, laboratory, and other
tests associated with those implantable items.
3.1.3.5 Limited
the variation of costs of services within each payment classification
group by providing that the highest median cost for an item or service
within the group cannot be more than two times greater than the
lowest median cost for an item or service within the group (referred
to as the “two times rule”). An exception to this requirement may
be made in unusual cases, such as low volume items and services,
but may not be made in the case of a drug or biological that has
been designated as an orphan drug under Section 526 of the Federal
Food, Drug and Cosmetic Act.
3.1.3.6 Required
at least annual review of the groups, relative payment weights,
and the wage and other adjustments to take into account changes
in medical practice, the addition of new services, new cost data,
and other relevant information or factors.
3.1.3.7 Established
transitional corridors that would limit payment reductions under
the hospital OPPS.
3.1.3.8 Established
hold harmless provisions for rural and cancer hospitals.
3.2 Participation
Requirement
In order to be an authorized
provider under the TRICARE OPPS, an institutional provider must be
a participating provider for all claims in accordance with
32 CFR 199.6(a)(8).
3.3 Unbundling
Provisions
As a prelude to implementation
of the OPPS, Omnibus Budget Reconciliation Act (OBRA) of 1996 prohibited
payment for nonphysician services furnished to hospital patients
(inpatients and outpatients), unless the services were furnished
either directly or under arrangement with the hospital except for
services of Physician Assistants (PAs), Nurse Practitioners (NPs),
and Clinical Nurse Specialists (CNSs). This facilitated the payment
of services included within the scope of each Ambulatory Payment Classification
(APC). The Act provided for the imposition of civil money penalties
not to exceed $2,000, and a possible exclusion from participation
in Medicare, Medicaid and other federal health care programs for
any person who knowingly and willfully presents, or causes to be
presented, a bill or request for payment for a hospital outpatient
service that violates the requirement for billing subject to the
following exceptions:
3.3.1 Payment for clinical diagnostic
lab may be made only to the person or entity that performed or supervised
the performance of the test. In the case of a clinical diagnostic
laboratory test that is provided under arrangement made by a hospital
or Critical Access Hospital (CAH), payment is made to the hospital.
The hospital is not responsible for billing for the diagnostic test
if a hospital patient leaves the hospital and goes elsewhere to
obtain the diagnostic test.
3.4 Applicability
and Scope of Coverage
Following are the providers
and services for which TRICARE will make payment under the OPPS.
3.4.1 Provider
Categories
3.4.1.1 Providers
Included In OPPS
3.4.1.1.1 All hospitals participating in the Medicare
program, except for those excluded under
paragraph 3.4.1.2.
3.4.1.1.2 Hospital-based
PHPs do not require separate TRICARE authorization. Authorization
of a hospital by TRICARE is sufficient for its PHP to be an authorized
TRICARE provider.
3.4.1.1.3 Hospitals
or distinct parts of hospitals that are excluded from the inpatient
Diagnosis Related Groups (DRG) to the extent that the hospital or
distinct part furnishes outpatient services.
Note: All Hospital Outpatient Departments (HOPDs) will
be subject to the OPPS unless specifically excluded under this chapter.
The marketing contractor shall have responsibility for educating
providers to bill under the OPPS even if they are not a Medicare
participating/certified provider (i.e., not subject to the DRG inpatient
reimbursement system).
3.4.1.1.4 Small
Rural and Sole Community Hospitals (SCHs) in Rural Areas
TRICARE delayed implementation of its OPPS
for small rural hospitals with 100 or fewer beds and rural SCHs
with 100 or fewer beds until January 1, 2010.
3.4.1.2
Providers
Excluded From OPPS
3.4.1.2.1 Outpatient services provided by hospitals of
the Indian Health Service (IHS) will continue to be paid under separately
established rates.
3.4.1.2.2 Certain
hospitals that qualify for payment under the state’s cost containment
waiver, e.g., Maryland.
3.4.1.2.4 Hospitals
located outside one of the 50 United States (U.S.), the District
of Columbia, and Puerto Rico.
3.4.1.2.5 Specialty
care providers to include:
• Cancer and children’s
hospitals
• Freestanding
Ambulatory Surgery Centers (ASCs)
• Freestanding PHPs and
Intensive Outpatient Programs ((IOPs) that offer psych and substance
use treatments, Substance Use Disorder Rehabilitation Facilities (SUDRFs),
and freestanding Opioid Treatment Programs (OTPs)
• Comprehensive Outpatient
Rehabilitation Facilities (CORFs)
• Home Health Agencies
(HHAs)
• Hospice
programs
• Community
Mental Health Centers (CMHCs)
• Other corporate services
providers (e.g., Freestanding Cardiac Catheterization, Sleep Disorder
Diagnostic Centers, and Freestanding Hyperbaric Oxygen Treatment Centers).
Note: Antigens, splints, casts and hepatitis B vaccines
furnished outside the patient’s plan of care in CORFs, HHAs and
hospice programs will continue to receive reimbursement under current
TRICARE allowable charge methodology.
• Freestanding Birthing
Centers
• Department
of Veterans Affairs (DVA)/Veterans Health Administration
(VHA) Hospitals
• Freestanding End
Stage Renal Disease (ESRD) Facilities
• SNFs
• Psychiatric Residential
Treatment Centers (RTCs)
3.4.2 Scope of
Services
3.4.2.1 Services excluded under the hospital OPPS and
paid under the CHAMPUS Maximum Allowable Charge (CMAC) or other
TRICARE recognized allowable charge methodology.
3.4.2.1.1 Physician
services.
3.4.2.1.2 Nurse Practitioner
(NP) and Clinical Nurse Specialist (CNS) services.
3.4.2.1.3 Physician
Assistant (PA) services.
3.4.2.1.4 Certified
Nurse-Midwife (CNM) services.
3.4.2.1.5 Services
of qualified psychologists.
3.4.2.1.6 Clinical
Social Worker (CSW) services.
3.4.2.1.7 Services
of an anesthetist.
3.4.2.1.8 Screening
and diagnostic mammographies.
3.4.2.1.9 Influenza
and pneumococcal pneumonia vaccines.
Note: Hospitals, HHAs,
and hospices will continue to receive CMAC payments for influenza
and pneumococcal pneumonia vaccines due to considerable fluctuations
in their availability and cost.
3.4.2.1.10 Clinical
diagnostic laboratory services. Effective January 1, 2014, most
laboratory tests will be packaged under OPPS. See
Section 4, paragraph 3.6.
3.4.2.1.11 Take home
surgical dressings.
3.4.2.1.12 Non-implantable
DME, prosthetics (prosthetic devices), orthotics, and supplies (DMEPOS)
paid under the DMEPOS fee schedule when the hospital is acting as
a supplier of these items.
• An item such as crutches
or a walker that is given to the patient to take home, but that
may also be used while the patient is at the hospital, would be
paid for under the hospital OPPS.
• Payment may not be
made for items furnished by a supplier of medical equipment and
supplies unless the supplier obtains a supplier number. However,
since there is no reason to split a claim for DME payment under
TRICARE, a separate supplier number will not be required for a hospital
to receive reimbursement for DME.
3.4.2.1.13 Hospital
outpatient services furnished to SNF inpatients as part of their resident assessment
or comprehensive care plan that are furnished by the hospital “under
arrangements” but billable only by the SNF.
3.4.2.1.14 Services
and procedures designated as requiring inpatient care.
3.4.2.1.15 Services
excluded by statute (excluded from the definition of “covered Outpatient Department
(OPD) Services”):
• Ambulance services
• Physical Therapy
(PT)
• Occupational
Therapy (OT)
• Speech-Language
Pathology (SLP)
Note: The above services are subject to the CMAC or
other TRICARE recognized reimbursement methodology (e.g., statewide
prevailings).
3.4.2.1.16 Ambulatory
surgery procedures performed in freestanding ASCs will continue
to be reimbursed under the per diem system established in
Chapter 9, Section 1.
3.4.2.2 Costs excluded
under the hospital OPPS:
3.4.2.2.1 Direct
cost of medical education activities.
3.4.2.2.2 Costs of
approved nursing and allied health education programs.
3.4.2.2.3 Costs associated
with interns and residents not in approved teaching programs.
3.4.2.2.4 Costs of
teaching physicians.
3.4.2.2.5 Costs of
anesthesia services furnished to hospital outpatients by qualified
non-physician anesthetists (Certified Registered Nurse Anesthetists
(CRNAs) and Anesthesiologist Assistants (AAs)) employed by the hospital
or obtained under arrangements, for hospitals.
3.4.2.2.6 Bad debts
for uncollectible and coinsurance amounts.
3.4.2.2.7 Organ acquisition
costs.
3.4.2.2.8 Corneal tissue acquisition costs incurred by
hospitals that are paid on a reasonable cost basis.
3.4.2.2.9 Autologous
stem cell processing and harvesting procedures.
3.4.2.3 Services
included in payment under the OPPS (not an all-inclusive list).
3.4.2.3.1 Hospital-based
PHPs (psych and Substance Use Disorder SUD) which are paid a per diem
OPPS, and for dates of service on or after October 3, 2016, Intensive
Outpatient Programs (IOPs). Partial hospitalization is a distinct
and organized intensive psychiatric outpatient day treatment program,
designed to provide patients who have profound and disabling mental
health and SUD conditions with an individualized, coordinated, comprehensive,
and multidisciplinary treatment program. IOP is a comprehensive
and complementary schedule of recognized treatment approaches that
may include day, evening, night, and weekend services consisting
of individual and group counseling or therapy, and family counseling
or therapy as clinically indicated for children and adolescents,
or adults aged 18 and over, and may include case management to link
patients and their families with community-based support systems.
3.4.2.3.2 OTPs are
organized, ambulatory, addiction treatment services for patients
with an opioid use disorder. Hospital-based Methadone OTPs shall
be reimbursed a weekly all-inclusive per diem rate, including
the cost of the drug and related services (i.e., the costs related
to the initial intake/assessment, drug dispensing and screening,
and integrated psychosocial and medical treatment and support services).
The bundled weekly per diem payments shall be accepted as payment
in full, subject to the outpatient cost-sharing provisions under
32 CFR 199.4(f). When providing other medications which
are more likely to be prescribed and administered in an Office-Based
Opioid Treatment (OBOT) setting, but which are still available for
treatment of SUDs in an outpatient treatment program setting, OTPs
shall be reimbursed on a fee-for-service basis (i.e., separate payments
will be allowed for both the medication and accompanying support
services), subject to the outpatient cost-sharing provisions under
32 CFR 199.4(f).
3.4.2.3.3 All hospital outpatient services, except those
that are identified as excluded. The following are services that
are included in OPPS:
3.4.2.3.3.1 Surgical
procedures.
Note: All hospital based ASC claims that
are submitted to be paid under OPPS must be submitted with a Type
Of Bill (TOB) 13X. If a claim is submitted to be paid with TOB 83X
the claim will be denied.
3.4.2.3.3.2 Radiology, including radiation therapy.
3.4.2.3.3.3 Clinic
visits.
3.4.2.3.3.4 Emergency
Department (ED) visits.
3.4.2.3.3.5 Diagnostic services and other diagnostic tests.
3.4.2.3.3.6 Surgical
pathology.
3.4.2.3.3.7 Cancer
chemotherapy.
3.4.2.3.3.8 Implantable
medical items.
• Prosthetic implants
(other than dental) that replace all or part of an internal body organ
(including colostomy bags and supplies directly related to colostomy
care and including replacement of these devices);
• Implantable DME (e.g.,
pacemakers, defibrillators, drug pumps, and neurostimulators);
• Implantable items
used in performing diagnostic x-rays, diagnostic laboratory tests, and
other diagnostic tests.
Note: Because implantable items are now packaged into
the APC payment rate for the service or procedure with which they
are associated, certain items may be candidates for the transitional
pass-through payment.
3.4.2.3.3.9 Specific hospital outpatient services furnished
to a beneficiary who is admitted to a Medicare-participating SNF
for those services that are beyond the scope of SNF comprehensive
care plans. See
Chapter 8, Section 1, paragraph 4.2.14.5.10 for
outpatient services provided to SNF patients.
3.4.2.3.3.10 Certain
preventive services furnished to healthy persons, such as colorectal
cancer screening.
3.4.2.3.3.11 Acute dialysis
(e.g., dialysis for poisoning).
3.4.2.3.3.12 ESRD Services. Since TRICARE does not have
an ESRD composite rate, ESRD services are included in TRICARE’s
OPPS.
3.4.2.3.3.13 Acquisition
costs for allogenic stem cell transportation.
3.4.2.3.3.14 Autologous stem cell processing and harvesting
procedures.
3.5 Description
of APC Groups
3.5.1 Group services identified by Healthcare Common
Procedure Coding System (HCPCS) codes and descriptors within APC
groups are the basis for setting payment rates under the hospital
OPPS.
3.5.2 The APC system establishes groups of covered
services so that the services within each group are comparable clinically
and with respect to the use of resources. The fundamental criteria
for grouping procedures/services are: resource homogeneity; clinical
homogeneity; provider concentration; and frequency of service. See
the TRICARE OPPS Final Rule for descriptions (73 FR 74945).
3.6 Basic Reimbursement
Methodology
3.6.1 Under the OPPS, hospital outpatient services
are paid on a rate-per-service basis that varies according to the
APC group to which the service is assigned.
3.6.2 The APC
classification system is composed of groups of services that are
comparable clinically and with respect to the use of resources.
Level I and Level II HCPCS codes and descriptors are used to identify
and group the services within each APC. Costs associated with items
or services that are directly related and integral to performing
a procedure or furnishing a service have been packaged into each
procedure or service within an APC group with the exception of:
• New
temporary technology APCs for certain approved services that are
structured based on cost rather than clinical homogeneity.
• Separate APCs for
certain medical devices, drugs, biologicals, radiopharmaceuticals and
devices of brachytherapy under transitional pass-through provisions.
3.6.3 Each APC
weight represents the median hospital cost of the services included
in the APC relative to the median hospital cost of services included
in the hospital clinic visits APC. APC weights are scaled to the
hospital clinic visits APC because it is one of the most frequently
performed services in the outpatient setting.
3.6.4 The items
and services within an APC group cannot be considered comparable
with respect to the use of resources if the highest median cost
for an item or service in the group is more than two times greater
than the lowest median cost for an item or service within the same
group. However, exceptions may be made to the two times rule “in
unusual cases, such as low volume items and services.”
3.6.5 The prospective
payment rate for each APC is calculated by multiplying the APC’s
relative weight by the conversion factor.
3.6.6 A wage adjustment factor will
be used to adjust the portion of the payment rate that is attributable
to labor-related costs for relative differences in labor and non-labor-related
costs across geographical regions.
3.6.7 Applicable deductible and/or
cost-sharing/copayment amounts will be subtracted from the adjusted
APC payment rate based on the eligibility status of the beneficiary
at the time outpatient services were rendered (e.g., Prime or Select). See
Chapter 2.
Note: The ASC cost-sharing
provision (i.e., assessment of a single copayment for both the professional
and facility charge for a Prime or Select enrollee) will be adopted
as long as it is administratively feasible. For beneficiary categories
where cost-sharing is based on a percentage of the maximum allowable
amount, the ASC cost-sharing provision does not apply. The copayment
is based on site of service, except for venipuncture and fetal monitoring.
Reference
Chapter 2, Section 1, paragraphs 1.2.4.5 and
1.2.4.7.
3.6.9 Composite
APCs provide a single payment for a comprehensive diagnostic and/or treatment
service defined as a service typically reported with multiple HCPCS
codes. See
Section 2 for additional information.
3.6.10 Comprehensive
APCs provide a single payment for a primary service, and payment
for all adjunctive services reported on the same claim are packaged
into the payment for the primary service. See
Section 2 for
additional information.
3.7 Outpatient Code Editor (OCE)
3.7.1 The OCE
with APC program edits patient data to help identify possible errors
in coding and assigns APC numbers based on HCPCS codes for payment
under the OPPS. The OPPS is an outpatient equivalent of the inpatient,
DRG-based PPS. Like the inpatient system based on DRGs, each APC
has a pre-established prospective payment amount associated with
it. However, unlike the inpatient system that assigns a patient
to a single DRG, multiple APCs can be assigned to one outpatient
record. If a patient has multiple outpatient services during a single
visit, the total payment for the visit is computed as the sum of
the individual payments for each service. Updated versions of the
OCE and data files, along with installation and user manuals, will
be delivered electronically to the contractors. The contractors
will be required to replace the existing OCE with the updated OCE
within 21 calendar days of receipt. See
Addendum A,
for quarterly review/update process.
3.7.2 The OCE incorporates the National
Correct Coding Initiatives (NCCI) edits used by the CMS. Claims
reimbursed under the OPPS methodology are exempt from the claims
auditing software referenced in
Chapter 1, Section 3.
3.7.3 Under certain
circumstances (e.g., active duty claims), the contractor may override
claims that are normally not payable.
3.7.4 CMS has agreed to the use
of 900 series numbers (900-999) within the OCE for TRICARE specific
edits.
3.8 PRICER
Program
3.8.1 The APC PRICER will be straightforward in that
the site-of-service wage index will be used to wage adjust the payment
rate for the particular APC HCPCS Level I and II code (e.g., a HCPCS
code with a designated Status Indicator (SI) of
J1,
S,
T,
V,
or
X)
reported off of the hospital outpatient claim. The PRICER will also
apply discounting for multiple surgical procedures performed during
a single operative session and outlier payments for extraordinarily
expensive cases. DHA will provide the contractor’s with a common
TRICARE PRICER and will provide quarterly updates. The contractors
shall replace the existing PRICER with the updated PRICER within
21 days of receipt.
Note: Claims received
with service dates on or after the OPPS quarterly effective dates
(i.e., January 1, April 1, July 1, and October 1 of each calendar
year) but prior to 21 days from receipt of either the OPPS OCE or
PRICER update cartridge may be considered excluded claims as defined
by the TRICARE Operations Manual (TOM),
Chapter 1, Section 3, paragraph 1.4.2.
3.8.2 The contractors
shall provide 3M with those pricing files to maintain and update
the TRICARE OPPS Pricer within five weeks prior to the quarterly
update. For example, statewide prevailings for services that do
not have a CMAC and state specific non-professional component birthing
center rates. Appropriate deductible, cost-sharing/copayment amounts
and catastrophic caps limitations will be applied outside the PRICER
based on the eligibility status of the TRICARE beneficiary at the
time the outpatient services were rendered.
3.10 Provider-Based
Status for Payment Under OPPS
The CMS will
retain sole responsibility for determining provider-based status
under the OPPS.
3.11 Implementing Instructions
Since this issuance only deals with a general
overview of the OPPS reimbursement methodology, the following cross-reference
is provided to facilitate access to specific implementing instructions
within Chapter 13:
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Implementing
Instructions/Services
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Policies
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General
Overview
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Billing
and Coding of Services under APC Groups
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Reimbursement
Methodology
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Claims Submission
and Processing Requirements
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Medical
Review Under the Hospital OPPS
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Addenda
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Development
Schedule for TRICARE OCE/APC - Quarterly Update
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OPPS OCE
Notification Process for Quarterly Updates
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Approval
Of OPPS - OCE/APC And NGPL Quarterly Update Process
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3.12 OPPS Data Elements Available
On DHA’s Web Site