Allowable Charges
Chapter 5
Section 2
Locality-Based Reimbursement
Rate Waiver
Issue Date: September 27, 2001
Revision:
1.0 APPLICABILITY
This policy is mandatory for reimbursement
of services provided by either network or non-network providers.
However, alternative network reimbursement methodologies are permitted
when approved by the Defense Health Agency (DHA) and specifically
included in the network provider agreement.
2.0 ISSUE
What is the process of the locality-based reimbursement
rate waivers?
3.0 POLICY
3.1 Under the
locality-based reimbursement rate waiver, two access locations may
be considered for provider reimbursement rates above the CHAMPUS
Maximum Allowable Charge (CMAC). These are:
3.1.1 Network Waivers: If it is
determined that the availability of an adequate number and mix of qualified
health care providers in a network in a specific locality is not
found, higher rates may be necessary. The amount of reimbursement
would be limited to the lesser of:
• An amount equal to
the local fee for service charge; or
• Up to 115% of the
CMAC. The first attempt should be to get the provider to join the network
at the prevailing CMAC rate.
3.1.2 Locality
Waivers: If it is determined that access to specific health care
services is severely impaired, higher payment rates could be applied
to all similar services performed in a locality, or a new locality
could be defined for application of the higher payment rates. Payment
rates could be established through addition of a percentage factor
to an otherwise applicable payment amount, or by calculating a prevailing
charge, or by using another Government payment rate. Higher payments
will be paid on a claim by claim basis.
3.2 Coordination
of the request for a locality-based reimbursement rate waiver shall
be submitted to the DHA, Team Chief, Medical Benefits and Reimbursement
Section (MB&RS) by the TRICARE Regional Offices (TROs). The
TRO shall work with the contractor to ensure that both are in agreement with
the waiver request.
3.3 The procedures that are to
be followed when submitting a waiver are as follows:
3.3.1 Identify the waiver that is
being requested.
• Network waivers. Needed
to ensure availability of an adequate number and mix of qualified
network providers.
• Locality
waivers. Needed to ensure access to services in a locality defined
by a current TRICARE locality or a new one established by zip code.
3.3.2 Who can
apply:
• TROs
• Providers through
the TROs
• Beneficiaries
through the TROs
• Contractor
through the TROs
• Military
Treatment Facility (MTF)/Enhanced Multi-Service Market (eMSM) through
the TROs.
3.3.3 How to apply:
3.3.3.1 Applicant
must submit a written waiver request to the TRO. The request must
justify that access to health care services is severely impaired
due to low reimbursement levels (CMAC payment rates).
3.3.3.2 Justification
for the waiver must include at the minimum:
• Number of providers
in a locality.
• Mix
of primary/specialty providers needed to meet patient access standards.
• Number of providers
who are TRICARE participating.
• Number of eligible
beneficiaries in the locality.
• Availability of MTF/eMSM
providers.
• Geographic
characteristics.
• Efforts
that have attempted to create an adequate network, including any
additional non-health care payments above the CMAC rates made by
the contractor.
• Letters
of intent.
• Cost
effectiveness.
• Other
relevant factors that warrant the higher payment to resolve the
access to care issue.
3.4 The TRO
shall conduct a thorough analysis and forward recommendations with
a cost estimate for approval to DHA or designee through the Contracting
Officer (CO) for coordination. Disapprovals by the TROs will not
be forwarded to DHA. DHA is the final approval authority. A decision
by DHA to authorize, not authorize, terminate, or modify the authorization
of higher payment amounts is not subject to appeal.
• Network waivers: If
DHA approves an increase of up to 15% above the CMAC, the contractor shall
have the authority to offer specified providers up to 15% above
CMAC for joining the network.
• Locality waivers:
If DHA approves a higher payment rate for certain services in a
locality, reimbursement rates for those procedure codes in that
locality shall be adjusted by the contractor in order to improve
the access to services.
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