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
2018, the CCR is 0.2566. Effective FY 2019, the CCR is 0.2514. Effective
CY 2020, the CCR is 0.2567.
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.