3.2.1 Capital
Costs
TRICARE will reimburse hospitals for
their capital costs as reported annually to the contractor (see
below). Payment for capital costs will be made annually. See
Chapter 3, Section 2 for the procedures for
paying capital costs.
3.2.1.1 TRICARE
will reimburse 100% of capital-related costs.
3.2.1.2 Allowable
capital costs are those specified in Medicare Regulation Section
413.130 of Title 42 Code of Federal Regulations (CFR).
3.2.1.3 To
obtain the total allowable capital costs from the Medicare cost
reports for initial and amended requests, the contractor shall add
the figures from Worksheet D, Part I, Column 3, lines 30-33, lines
34 and 35 if the cost report reflects intensive care unit costs,
and line 43, to the figures from Worksheet D, Part II, Column 1,
lines 50-76 and 88-93.
3.2.1.4 Services,
facilities, or supplies provided by supplying organizations. If
services, facilities, or supplies are provided to the hospital by
a supplying organization related to the hospital within the meaning
of Medicare Regulation Section 413.17, then the hospital must include
in its capital-related costs, the capital-related costs of the supplying
organization. However, if the supplying organization is not related
to the provider within the meaning of 413.17, no part of the charge
to the provider may be considered a capital-related cost unless
the services, facilities, or supplies are capital-related in nature and:
3.2.1.4.1 The capital-related
equipment is leased or rented by the provider;
3.2.1.4.2 The capital-related
equipment is located on the provider’s premises; and
3.2.1.4.3 The capital-related
portion of the charge is separately specified in the charge to the provider.
3.2.2 Direct Medical
Education Costs
TRICARE will reimburse hospitals
their actual direct medical education costs as reported annually
to the contractor (see below). Such direct medical education costs
must be for a teaching program approved under Medicare Regulation
Section 413.85. Payment for direct medical education costs will
be made annually and will be calculated using the same steps required
for calculating capital payments below. Allowable direct medical
education costs are those specified in Medicare Regulation Section
413.85. See
Chapter 3, Section 2 for the procedures for
paying direct medical education costs.
3.2.2.1 Direct
medical education costs generally include:
3.2.2.1.1 Formally
organized or planned programs of study usually engaged in by providers
in order to enhance the quality of care in an institution.
3.2.2.1.2 Nursing
schools.
3.2.2.1.3 Medical education of paraprofessionals (e.g.,
radiological technicians).
3.2.2.2 Direct
medical education costs do not include:
3.2.2.2.1 On-the-job
training or other activities which do not involve the actual operation
or support, except through tuition or similar payments, of an approved
education program.
3.2.2.2.2 Patient
education or general health awareness programs offered as a service
to the community at large.
3.2.2.3 To obtain
the total allowable direct medical education costs from the Medicare
cost reports on all initial and amended requests the contractor
shall add the figures from Worksheet B, Part I, Columns 20-23, lines
30-33, lines 34 and 35 if the cost report reflects intensive care
unit costs, 43; and 50-76; and 88-93.
3.2.3 Determining
Amount Of Capital And Direct Medical Education (CAP/DME) Payment
In order to account for payments by Other Health
Insurance (OHI), TRICARE’ payment amounts for CAP/DME will be determined
according to the following steps. Throughout these calculations
claims on which TRICARE made no payment because OHI paid the full
TRICARE-allowable amount are not to be counted.
Step 1: Determine
the ratio of TRICARE inpatient days to total inpatient days using
the data described below. In determining total TRICARE inpatient
days the following are not to be included:
• Any days determined
to be not medically necessary, and
• Days included on claims
for which TRICARE made no payment because OHI paid the full TRICARE-allowable
amount.
Step 2: Multiply
the ratio from Step
1 by total allowable
capital costs.
Step 3: Reduce
the amount from Step
2 by the appropriate
capital reduction percentage(s). This is the total allowable TRICARE
capital payment for DRG discharges.
Step 4: Multiply
the ratio from Step
1 by total allowable
direct medical education costs. This is the total allowable TRICARE
direct medical education payment for DRG discharges.
Step 5: Combine
the amounts from Steps
3 and
4.
This is the amount of TRICARE payment due the hospital for CAP/DME.
3.2.4 Payment Of
CAP/DME Costs
3.2.4.1 General
All hospitals subject to the TRICARE DRG-based
payment system, except for children’s hospitals (see below), may
be reimbursed for allowed CAP/DME costs by submitting a request
and the applicable pages from the Medicare cost-report to the TRICARE
contractor.
3.2.4.1.1 Initial
requests for payment of CAP/DME shall be filed with the TRICARE
contractor on or before the last day of the 12th month following
the close of the hospitals’ cost-reporting period. The request shall
cover the one year period corresponding to the hospital’s Medicare
cost-reporting period. Thus, for cost-reporting periods, requests
for payment of CAP/DME must be filed no later than 12 months following
the close of the cost-reporting period. For example, if a hospital’s
cost-reporting period ends on June 30, 2016, the request for payment
shall be filed on or before June 30, 2017. Those hospitals that
are not Medicare participating providers are to use an October 1
through September 30 fiscal year for reporting CAP/DME costs.
3.2.4.1.1.1 An extension
of the due date for filing the initial request may only be granted
if an extension has been granted by the Centers for Medicare and
Medicaid Services (CMS) due to a provider’s operations being significantly
adversely affected due to extraordinary circumstances over which
the provider has no control, such as flood or fire, as described
in Section 413.24 of Title 42 CFR.
3.2.4.1.1.2 All costs
reported to the TRICARE contractor must correspond to the costs
reported on the hospital’s Medicare cost report. If the costs change
as a result of a subsequent Medicare desk review, audit or appeal,
the revised costs along with the applicable pages from the amended
Medicare cost report shall be provided to the TRICARE contractor
within 30 days of the date the hospital is notified of the change.
The request must be signed by the hospital official responsible
for verifying the amounts. The Medicare Notice of Program Reimbursement
(NPR) letter should be submitted with the amended cost report.
3.2.4.1.1.3 The 30
day period is a means of encouraging hospitals to report changes
in its CAP/DME costs in a timely manner. If the contractor receives
an amended request beyond the 30 days, it shall process the adjustment
and inform the provider of the importance of submitting timely amendments.
3.2.4.1.1.4 The hospital
official is certifying in the initial submission of the cost report
that any changes resulting from a subsequent Medicare audit will
be promptly reported. Failure to promptly report the changes resulting
from a Medicare audit is considered a misrepresentation of the cost
report information. Such a practice can be considered fraudulent,
which may result in criminal civil penalties or administrative sanctions
of suspension or exclusion as an authorized provider.
3.2.4.2 Information
Necessary For Payment Of CAP/DME Costs
The
following information must be reported to the contractor:
3.2.4.2.1 The hospital’s
name.
3.2.4.2.2 The hospital’s address.
3.2.4.2.3 The hospital’s
TRICARE provider number.
3.2.4.2.4 The hospital’s
Medicare provider number.
3.2.4.2.5 The period
covered--this must correspond to the hospital’s Medicare cost-reporting period.
3.2.4.2.6 Total
inpatient days provided to all patients in units subject to DRG-based
payment.
3.2.4.2.7 Total
TRICARE inpatient days provided in units subject to DRG-based payment.
(This is to be only days which were “allowed” for payment. Therefore,
days which were determined to be not medically necessary are not
to be included.) Total inpatient days provided to active duty members
in units subject to DRG-based payment.
3.2.4.2.8 Total
allowable capital costs. This must correspond with the applicable
pages from the Medicare cost-report.
3.2.4.2.9 Total
allowable direct medical education costs. This must correspond with
the applicable pages from the Medicare cost-report.
3.2.4.2.10 Total
full-time equivalents for:
• Residents.
• Interns (see below).
3.2.4.2.11 Total inpatient
beds (see below).
3.2.4.2.12 Title of
official signing the report.
3.2.4.2.13 Reporting
date.
3.2.4.2.14 The report must contain a certification statement
that any changes to items in
paragraphs 3.2.4.2.6,
3.2.4.2.7,
3.2.4.2.8,
3.2.4.2.9,
and
3.2.4.2.10, which are a result of a review,
audit, or appeal of the provider’s Medicare cost-report, must be
reported to the contractor within 30 days of the date the hospital
is notified of the change.
3.2.4.2.15 All cost
reports must be certified by an officer or administrator of the
provider. The general concept is to notify the certifying official
that misrepresentation or falsification of any of the information
in the cost report is punishable by fine and/or imprisonment. The
signing official must acknowledge this as well as certify that the
cost report filed, together with any supporting documentation, is
true, correct and complete based upon the books and records of the
provider.
3.2.4.3 Contractor Actions
3.2.4.3.1 Initial
requests for CAP/DME payment.
3.2.4.3.1.1 The contractor
may, but is not required, to provide inpatient day verification
reports to hospitals prior to an initial request being submitted.
3.2.4.3.1.2 The
contractor shall verify the number of TRICARE and active duty inpatient
days with its data. If the contractor’s data represents a greater
number of days than submitted on the hospital’s request, payment
shall be based on the contractor’s data. If the hospital’s request
represents a greater number of days than the contractor’s data,
the contractor shall notify the hospital of the discrepancy and
inform them payment will be based on the number of days it has on
file unless they can provide documentation substantiating the additional
days. The notification to the hospital must be made within 10 working
days of identification of the discrepancy and include the inpatient
day verification report.
3.2.4.3.1.3 The contractor
shall wait until the end of the following month to hear from the
hospital. If the hospital does not respond, the contractor shall
make payment based on its totals.
3.2.4.3.1.4 The contractor
shall verify the accuracy of the financial amounts listed for CAP/DME with
the applicable pages of the Medicare cost report. If the financial
amounts do not match, the contractor shall reimburse the hospital
based on the figures in the cost-report and notify the hospital
of the same.
3.2.4.3.1.5 The contractor
must make the CAP/DME payment to the hospital within 30 days of
the initial request unless notification has been sent to the hospital
regarding a discrepancy in the number of days as outlined in
paragraph 3.2.4.3.1.2.
3.2.4.3.2 Amended
Requests for CAP/DME.
3.2.4.3.2.1 The contractor
may, but is not required, to provide inpatient day verification
reports to hospitals prior to an amended request being submitted.
3.2.4.3.2.2 The
contractor shall process amended payment requests based on changes
in the Medicare cost-report as a result of desk reviews, audits
and appeals. An adjustment shall not be processed unless there are
changes to items 6 through 10 on the initial CAP/DME reimbursement request.
The contractor shall not process amended requests for days only.
3.2.4.3.2.3 The contractor
shall verify the number of TRICARE and active duty inpatient days
with its data. If the contractor’s data represents a greater number
of days than submitted on the hospital’s request, payment shall
be based on the contractor’s data. If the hospital’s request represents
a greater number of days than the contractor’s data, the contractor
shall notify the hospital of the discrepancy and inform them payment
will be based on the number of days it has on file unless they can
provide documentation substantiating the additional days. The notification
to the hospital must be made within 10 working days of identification
of the discrepancy and include the inpatient day verification report.
3.2.4.3.2.4 The contractor
shall wait until the end of the following month to hear from the
hospital. If the hospital does not respond, the contractor shall
make payment based on its totals.
3.2.4.3.2.5 The contractor
shall verify the accuracy of the financial amounts listed for CAP/DME with
the applicable pages of the amended Medicare cost report. If the
financial amounts do not match, the contractor shall reimburse the
hospital based on the figures in the cost-report and notify the hospital
of the same.
3.2.4.3.2.6 The contractor
shall make the CAP/DME payment to the hospital within 30 days of
the amended request unless notification has been sent to the hospital
regarding a discrepancy in the number of days as outlined in
paragraph 3.2.4.3.2.2.
3.2.4.3.2.7 The contractor
shall be responsible for proactively researching the Medicare web
site (
https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/index.html)
to identify hospitals in their region that submitted amended Medicare
cost reports, obtaining copies of the amended cost reports from
hospitals that failed to submit them to the TRICARE contractor as
required, recalculating the CAP/DME costs based on the revised cost
report data, and initiating a collection action or notifying the
hospital if an underpayment was identified based on the results
of recalculation. The CMS post the Hospital Cost Report files 30
days after the end of each quarter.
3.2.4.3.2.8 The contractor
shall complete the “Annual Capital and Direct Medical Education Report” and
submit the information to the Contracting Officer (CO) and the Contracting
Officer’s Representative (COR). Details for reporting are identified
in DD Form 1423, Contract Data Requirements List (CDRL), located
in Section J of the applicable contract.
3.2.4.3.2.9 For a period
of one year following the report period, the “Quarterly Capital
and Direct Medical Education Over and Under Payment Report”, shall
be updated on a calendar quarterly basis to reflect collections
that are received, or underpayments refunded at the hospital’s request,
after the end of the previous calendar year report. The quarterly
reports shall pertain only to cases initiated in the calendar year
being reported. Details for reporting are identified in DD Form
1423, CDRL located in Section J of the applicable contract.
3.2.4.4 Negotiated
Rates. If a contract between the prime contractor and a subcontractor
or institutional network provider does not specifically state the
negotiated rate including all costs that would otherwise be eligible
for additional payment, such as CAP/DME, the prime contractor shall reimburse
these costs to the subcontractors and institutional network providers
if a request for reimbursement is made.
3.2.4.5 CAP/DME
costs for children’s hospitals. Amounts for CAP/DME are included
in both the hospital-specific and the national children’s hospital
differentials (see below). The amounts are based on national average
costs. No separate or additional payment is allowed.
3.2.4.6 CAP/DME
costs under TRICARE for Life (TFL). TRICARE will make no payments
for CAP/DME costs for any claims on which Medicare makes payment.
These costs are included in the Medicare payment. TRICARE CAP/DME
cost payments will be made only on claims on which TRICARE is the primary
payer (e.g., claims for stays beyond 150 days), and in those cases
payment will be made following the procedures described above.
3.2.5 Children’s
Hospital Differential
3.2.5.1 General
All DRG-based payments to children’s hospitals
are to be increased by adding the applicable children’s hospital
differential to the appropriate ASA prior to multiplying by the
DRG weight.
3.2.5.2 Qualifying for the Children’s
Hospital Differential
In order to qualify
for a children’s hospital differential adjustment, the hospital
must be exempt from the Medicare Prospective Payment System (PPS)
as a children’s hospital. If the hospital is not Medicare-participating,
it must meet the criteria in
32 CFR 199.6(b)(4)(i). In addition, more than
half of its inpatients must be individuals under the age of 18.
3.2.5.3
Calculation
of the Children’s Hospital Differentials
Differentials
will be calculated so that they are “revenue neutral” for children’s
hospitals. When calculating ASAs, DHA subtracts the appropriate
ASA from the children’s hospital ASAs, and these amounts are the
children’s hospital differentials. The differentials will not be
subject to annual inflation updates nor will they be recalculated
except as provided below.
3.2.5.4 Differential Amounts
3.2.5.4.1 Calculation
of the national children’s hospital differentials. These differentials
are calculated using the procedures described in
paragraph 3.2.5.3, but based
on a database of only low-volume children’s hospitals.
3.2.5.4.2 Claims
are reimbursed using a single set of differentials which do not
distinguish high-volume and low-volume children’s hospitals. The
differentials are:
|
|
Large
Urban Areas
|
|
|
|
Labor portion
|
$1,945.99
|
|
|
|
Non-labor portion
|
+ 689.42
|
|
|
|
|
$2,635.41
|
3.2.6
Outliers
3.2.6.1
General
TRICARE will adjust the DRG-based payment to
a hospital for atypical cases. These outliers are those cases that
have either an unusually short Length-Of-Stay (LOS) or involve extraordinarily
high costs when compared to most discharges classified in the same
DRG. Recognition of these outliers is particularly important, since
the number of TRICARE cases in many hospitals is relatively small,
and there may not be an opportunity to “average out” DRG-based payments
over a number of claims. Contractors will not be required to document
or verify the medical necessity of outliers prior to payment, since
outlier review will be part of the admission and quality review
system. However, in determining additional cost outlier payments
on all claims qualifying as a cost outlier, the contractor must
identify and reduce the billed charge for any non-covered items
such as comfort and convenience items (line N), as well as any duplicate
charges (line X) and services which can be separately billed (line 7)
such as professional fees, outpatient services, and solid organ
transplant acquisition costs. Comfort and convenience items are
defined as those optional items which the patient may elect at an
additional charge (i.e., television, guest trays, beautician services,
etc.), but are not medically necessary in the treatment of a patient’s
condition.
3.2.6.2 Provider Reporting of Outliers
The provider is to identify outliers on the
CMS 1450 UB-04, Form Locator (FL) 24 - 30. Code 60 is to be used
to report LOS outliers, and code 66 is to be used to signify that
a cost outlier is not being requested. If a claim qualifies as a
cost outlier and code 66 is not entered in the appropriate FL (i.e.,
it is blank or code 61), the contractor is to accept this as a request
for cost outlier payment by the hospital.
3.2.6.3 Short-Stay
Outliers
The TRICARE DRG-based payment system
uses short-stay outliers and are reimbursed using a per diem amount.
All short-stay outliers must be identified by the contractor when
the claims are processed, and necessary adjustments to the payment
amounts must be made automatically.
• Any discharge which
has a LOS less than or equal to the greater of 1 or 1.94 standard deviations
below the arithmetic mean LOS for that DRG shall be classified as
a short-stay outlier. In determining the actual short-stay threshold,
the calculation will be rounded down to the nearest whole number,
and any stay equal to or less than the short-stay threshold will
be considered a short-stay outlier.
• Short-stay outliers
will be reimbursed at 200% of the per diem rate for the DRG for
each covered day of the hospital stay, not to exceed the DRG amount.
The per diem rate shall equal the wage-adjusted DRG amount divided
by the arithmetic mean LOS for the DRG. The per diem rate is to
be calculated before the DRG-based amount is adjusted for IDME.
Cost outlier payments shall be paid on short stay outlier cases
that qualify as a cost outlier.
• Any stay which qualifies
as a short-stay outlier (a transfer cannot qualify as a short-stay outlier),
even if payment is limited to the normal DRG amount, is to be considered
and reported on the payment records as a short-stay outlier. This
will ensure that outlier data is accurate and will prevent the beneficiary
from paying an excessive cost-share in certain circumstances.
3.2.6.4 Cost Outliers
3.2.6.4.1 The following
steps shall be followed when calculating cost outlier payments for
all cases other than neonates and children’s hospitals:
Standard Cost = (Billed Charges x CCR)
Outlier Payment = 80% of (Standard Cost
- Threshold)
Total
Payments = Outlier Payments + (DRG Base Rate x (1 + (IDME))
Note: Noncovered charges should continue to be subtracted
from the billed charges prior to multiplying the billed charges
by the CCR.
3.2.6.4.1.1 The CCR
for admissions occurring on or after October 1, 2017, is 0.2566.
The CCR for admissions occurring on or after October 1, 2018, is
0.2514. The CCR for admissions occurring on or after January 1,
2020, is 0.2567.
3.2.6.4.1.2 The National
Operating Standard Cost as a Share of Total Costs (NOSCASTC) for calculating
the cost-outlier threshold for FY 2018 is 0.923, for FY 2019 is
0.925, and for CY 2020 is 0.939.
3.2.6.4.2 For FY 2018, a TRICARE fixed loss cost-outlier
threshold is set at $24,494. Effective October 1, 2017, the cost-outlier
threshold shall be the DRG-based amount (wage-adjusted) plus the IDME
payment, plus the flat rate of $24,494 (also wage-adjusted).
3.2.6.4.3 For FY 2019, a TRICARE fixed loss cost-outlier
threshold is set at $23,812. Effective October 1, 2018, the cost-outlier
threshold shall be the DRG-based amount (wage-adjusted) plus the IDME
payment, plus the flat rate of $23,812 (also wage-adjusted).
3.2.6.4.4 For CY 2020, a TRICARE fixed loss cost-outlier
threshold is set at $24,932. Effective January 1, 2020, the cost-outlier
threshold shall be the DRG-based amount (wage-adjusted) plus the IDME
payment, plus the flat rate of $24,932 (also wage-adjusted).
3.2.6.4.5 3.2.6.4.5 The cost-outlier
threshold shall be calculated as follows:
{[Fixed Loss Threshold x ((Labor-Related
Share x Applicable wage index) + Non-labor-related share) x NOSCASTC]
+ (DRG Base Payment (wage-adjusted) x (1 + IDME))}
Example: Using
FY 1999 figures {[10,129 x ((0.7110 x Applicable wage index) + 0.2890)
x 0.913] + (DRG Based Payment (wage-adjusted) x (1 + IDME))}
3.2.6.5 Burn Outliers
3.2.6.5.2 Burn cases
which qualify as short-stay outliers, regardless of the date of
admission, will be reimbursed according to the procedures for short-stay
outliers.
3.2.6.5.3 Burn cases
which qualify as cost outliers will be reimbursed using a marginal
cost factor of 90%.
3.2.6.5.4 For a burn
outlier in a children’s hospital, the appropriate children’s hospital
outlier threshold is to be used (see below), but the marginal cost
factor is to be either 60% or 90% according to the criteria above.
3.2.6.6 Children’s
Hospital Outliers
The following special provisions
apply to cost outliers.
3.2.6.6.1 The threshold
shall be the same as that applied to other hospitals.
3.2.6.6.2 Effective October
1, 2017, the standardized costs are calculated using a CCR of 0.2781. Effective
October 1, 2018, the standardized costs are calculated using a CCR
of 0.2719. Effective January 1, 2020, the standardized costs are
calculated using a CCR of 0.2774. (This is equivalent to the Medicare CCR
increased to account for CAP/DME costs.)
3.2.6.6.3 The marginal
cost factor shall be 80%.
3.2.6.6.5 The NOSCASTC
for calculating the cost-outlier threshold for FY 2018 is 0.923.
The NOSCASTC for calculating the cost-outlier threshold for FY 2019
is 0.925. The NOSCASTC for calculating the cost-outlier threshold
for CY 2020 is 0.939.
3.2.6.6.6 The following
calculation shall be used in determining cost outlier payments for children’s
hospitals and neonates:
Step 1: Computation of Standardized
Costs:
Billed Charges
x CCR
(Non-covered
charges shall be subtracted from the billed charges prior to multiplying
the charges by the CCR.)
Step 2: Determination
of Cost-Outlier Threshold:
{[Fixed
Loss Threshold x ((Labor-Related Share x Applicable wage index) +
Non-labor-related share) x NOSCASTC] + [DRG Based Payment (wage-adjusted)
x (1 + IDME)]}
Step 3: Determination of Cost Outlier
Payment
[{(Standardized
costs - Cost-Outlier Threshold) x Marginal Cost Factor} x Adjustment
Factor]
Step 4: Total Payments = Outlier
Payments + [DRG Base Rate x (1 + IDME)]
3.2.6.7 Neonatal
Outliers
Neonatal outliers in hospitals subject
to the TRICARE DRG-based payment system (other than children’s hospitals)
shall be determined under the same rules applicable to children’s
hospitals, except that the standardized costs for cost outliers
shall be calculated using the CCR of 0.64. The CCR used to calculate
cost outliers for neonates in acute care hospitals shall be reduced
to the same CCR used for all other acute care hospitals.
3.2.7 IDME adjustment
3.2.7.1 General
The DRG-based payments for any hospital which
has a teaching program approved under Medicare Regulation Section
413.85, Title 42 CFR shall be adjusted to account for IDME costs.
The adjustment factor used shall be the one in effect on the date
of discharge (see below). The adjustment will be made by multiplying
the total DRG-based amount by 1.0 plus a hospital-specific factor
equal to:
• For
admissions occurring during FYs 2008 and subsequent years, the same
formula shall be used except the first number shall be 1.02.
3.2.7.2 Number of
Interns and Residents
TRICARE will use the
number of interns and residents from CMS most recently available Provider
Specific File.
3.2.7.3 Number of Beds
TRICARE will use the number of beds from CMS’
most recently available Provider Specific File.
3.2.7.4 Updates of
IDME Factors
3.2.7.4.1 TRICARE will use the ratio of interns and residents
to beds from CMS’ most recently available Provider Specific File
to update the IDME adjustment factors. The ratio will be provided
to the contractors to update each hospital’s IDME adjustment factor
at the same time as the annual DRG update. The updated factors provided
with the annual DRG update shall be applied to claims with a date
of discharge on or after January 1
of each year.
3.2.7.4.2 Other updates
of IDME factors. It is the contractor’s responsibility to update
the IDME factor if a hospital provides information (for the same
base periods) which indicates that the IDME factor provided by TRICARE
with the DRG update is incorrect or needs to be updated. An IDME
factor is updated based on the hospital submitting CMS Worksheet
showing the number of interns, residents, and beds. The effective
date of these other updates shall be the date payment is made to
the hospital (check issued) for its CAP/DME costs, but in no case
can it be later than 30 days after the hospital submits the appropriate
worksheet or information. The contractor shall notify DHA of such
IDME updates.
3.2.7.4.3 This alternative
updating method shall only apply to those hospitals subject to the Medicare Inpatient
Prospective Payment System (IPPS) as they are the only ones included
in the Provider Specific File.
3.2.7.5 Adjustment for Children’s
Hospitals
An IDME adjustment factor will
be applied to each payment to qualifying children’s hospitals. The
factors for children’s hospitals will be calculated using the same
formula as for other hospitals. The initial factor will be based
on the number of interns and residents and hospital bed size as
reported by the hospital to the contractor. If the hospital provides
the data to the contractor after payments have been made, the contractor
will not make any retroactive adjustments to previously paid claims,
but the amounts will be reconciled during the “hold harmless” process.
At the end of its fiscal year, a children’s hospital may request
that its adjustment factor be updated by providing the contractor
with the necessary information regarding its number of interns and
residents and beds. The number of interns, residents, and beds must
conform to the requirements above. The contractor is required to
update the factor within 30 days of receipt of the request from
the hospital, and the effective date shall conform to the policy
contained above.
3.2.7.5.1 Each year,
the contractor shall send a notice
, as identified
by DD Form 1423, CDRL, located in Section J of the applicable contract, to
each children’s hospital in its Region,
requesting updated
information on its number of interns, residents and beds
,
from the most recent cost report submitted to CMS for July 1 through
June 30, and advise them
by July 1
of that same year to provide the updated information
to
the contractor so the requirement in paragraph 3.2.7.5.2 shall
be met.
3.2.7.5.2 The contractor
shall send the number of interns, residents, and beds and the updated ratios
for children’s hospitals, as identified by DD Form
1423, CDRL, located in Section J of the applicable contract, to
DHA, Medical Benefits and Reimbursement Section (MB&RS), or
designee, by September 1 of each year
to be used in DHA’s annual DRG update calculations. These updated
amounts will be included in the files for the calendar
year DRG update.
3.2.7.6 TRICARE for Life (TFL)
No adjustment for IDME costs is to be made
on any TFL claim on which Medicare has made any payment. If TRICARE
is the primary payer (e.g., claims for stays beyond 150 days) payments
are to be adjusted for IDME in accordance with the provisions of
this section.
3.2.8 Present On Admission (POA)
Indicators and Hospital Acquired Conditions (HACs)
3.2.8.1 For services
provided on or after ICD-10 implementation:
3.2.8.1.1 Those inpatient
acute care hospitals that are paid under the TRICARE/CHAMPUS DRG-based
payment system shall report a POA indicator for both primary and
secondary diagnoses on inpatient acute care hospital claims. Providers
shall report POA indicators to TRICARE in the same manner they report
to the CMS, and in accordance with the UB-04 Data Specifications
Manual, and ICD-10-CM Official Guidelines for Coding and Reporting.
See the complete instructions in the UB-04 Data Specifications Manual
for specific instructions and examples. Specific instructions on
how to select the correct POA indicator for each diagnosis code
are included in the ICD-10-CM Official Guidelines for Coding and
Reporting.
3.2.8.1.2 There are
five POA indicator reporting options, as defined by the ICD-10-CM
Official Coding Guidelines for Coding and Reporting:
|
|
Y
|
=
|
Indicates that
the condition was present on admission.
|
|
|
W
|
=
|
Affirms that the
provider has determined based on data and clinical judgment that
it is not possible to document when the onset of the condition occurred.
|
|
|
N
|
=
|
Indicates that
the condition was not present on admission.
|
|
|
U
|
=
|
Indicates that
the documentation is insufficient to determine if the condition was
present at the time of admission.
|
|
|
1
|
=
|
(Definition prior
to FY 2011.) Signifies exemption from POA reporting. CMS established
this code as a workaround to blank reporting on the electronic 4010A1.
A list of exempt ICD-10-CM diagnosis codes is available in the ICD-10-CM
Official Coding Guidelines.
|
|
|
1
|
=
|
(Definition for
FY 2011 and subsequent years.) Unreported/not used. Exempt from
POA reporting. (This code is equivalent to a blank on the CMS 1450
UB-04; however, it was determined that blanks are undesirable when
submitting this data via 4010A.)
|
3.2.8.2 HACs. TRICARE
shall adopt those HACs adopted by CMS. The HACs, and their respective diagnosis
codes, are posted at
http://www.health.mil/rates.
3.2.8.3 Provider
responsibilities and reporting requirements. For non-exempt providers,
issues related to inconsistent, missing, conflicting, or unclear
documentation must be resolved by the provider. POA is defined as
present at the time the order for inpatient admission occurs. Conditions
that develop during an outpatient encounter, including emergency
department, observation, or outpatient surgery, are considered as
present on admission.
3.2.8.4 The contractor
shall accept, validate, retain, pass, and store the POA indicator.
3.2.8.5 Exempt
providers.
3.2.8.5.1 The following hospitals are exempt from POA
reports for TRICARE:
• Critical Access Hospitals
(CAHs)
• Long-Term
Care (LTC) Hospitals
• State Waiver Hospitals,
e.g., Maryland
• Cancer Hospitals
• Children’s Inpatient
Hospitals
• Inpatient
Rehabilitation Hospitals
• Psychiatric Hospitals
and Psychiatric Units
• Department of Veterans
Affairs (DVA)/Veterans Health Administration (VHA) Hospitals
3.2.8.5.2 The contractor
shall identify claims from those hospitals that are exempt from
POA reporting, and shall take the actions necessary to be sure that
the TRICARE grouper software does not apply HAC logic to the claim.
3.2.8.6 The DRG
payment is considered payment in full, and the hospital cannot bill
the beneficiary for any charges associated with the hospital-acquired
complications or charges because the DRG was demoted to a lesser-severity
level.
3.2.8.7 Claims will be denied if a non-exempt hospital
does not report a valid POA indicator for each diagnosis on the
claim.
3.2.8.8 Replacement
Devices
3.2.8.8.1 TRICARE is not responsible for the full cost
of a replaced device if a hospital receives a partial or full credit,
either due to a recall or service during the warranty period. Reimbursement
in cases in which an implanted device is replaced shall be made:
• At
reduced or no cost to the hospital; or
• With partial or
full credit for the removed device.
3.2.8.8.2 The following
condition codes 49 and 50 allow TRICARE to identify and track claims billed
for replacement devices:
• Condition Code 49.
Product replacement within product lifecycle. Condition code 49
is used to describe replacement of a product earlier than the anticipated lifecycle
due to an indication that the product is not functioning properly
- warranty.
• Condition
Code 50. Replacement of a product earlier than the anticipated lifecycle due
to an indication that the product is not functioning properly. Condition
code 50 is used to describe that the manufacturer or the U.S. Food
and Drug Administration (FDA) has identified the product for recall
and, therefore, replacement.
3.2.8.8.3 When a
hospital receives a credit for a replaced device that is 50% or
greater than the cost of the device, hospitals are required to bill
the amount of the credit in the amount portion for value code FD.
3.2.8.8.4 The contractor
shall reduce hospital reimbursement for those DRGs subject to the replacement
device policy, by the full or partial credit a provider received
for a replaced device. The specific DRGs subject to the replacement
device policy will be posted on TRICARE’s DRG web page at
http://www.health.mil/rates.
As necessary, the DRGs subject to the replacement device policy
will be updated as part of the annual DRG update.
3.2.8.8.5 Hospitals
must use the combination of condition code 49 or 50, along with
value code FD to correctly bill for a replacement device
that was provided with a credit or no cost. The condition code 49
or 50 will identify a replacement device while value code FD will
communicate to TRICARE the amount of the credit, or cost reduction,
received by the hospital for the replaced device.
3.2.8.8.6 The contractor
shall deduct the partial/full credit amount, reported in the amount
for value code FD from the final DRG reimbursement
when the assigned DRG is one of the DRGs subject to the replacement
device policy.
3.2.8.8.7 Once a
DRG rate is determined, any full/partial credit amount is deducted
from the DRG reimbursement rate. The beneficiary copayment/cost-share
is then determined based on the reduced rate.