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.