1.0 APPLICABILITY
1.1 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.
1.2 Reimbursement
of surgical procedures performed in an ASC prior to the implementation
of the reasonable cost method for Critical Access Hospitals (CAHs)
and implementation of TRICARE’s Outpatient Prospective Payment System
(OPPS), and thereafter, freestanding ASCs (FASCs), and other providers
who are exempt from the TRICARE OPPS and provide scheduled ambulatory
surgery. For purposes of this section, these facilities are known
as non-OPPS facilities. Non-OPPS facilities include any facility
not subject to the OPPS as outlined in
Chapter 13, Section 1, paragraph 3.4.1.2.
3.0 POLICY
Ambulatory surgery procedures performed
by providers described in
paragraph 2.0 will be reimbursed using prospectively
determined rates. The rates will be: established on a cost-basis,
divided into eleven payment groups representing ranges of costs,
and adjusted for area labor costs based on Metropolitan Statistical
Areas (MSAs). No additional benefits are payable outside the ASC
payment rate; e.g., revenue codes 260, 450, 510, 636, etc.
3.1 The
ambulatory surgery payment system is to be used regardless of where
the ambulatory surgery procedures are provided, that is, in a freestanding
ASC, in a Hospital Outpatient Department (HOPD), or in a hospital
Emergency Room (ER). No additional benefits are payable outside
the ASC payment rate; e.g., revenue codes 260, 450, 510, 636, etc.
3.2 The
payment rates established under this system apply only to the facility
charges for ambulatory surgery. The facility rate is a standard
overhead amount that includes nursing and technician services; use
of the facility; drugs including take-home drugs for less than $40;
biologicals; surgical dressings, splints, casts and equipment directly
related to provision of the surgical procedure; materials for anesthesia;
Intraocular Lenses (IOLs); and administrative, recordkeeping and housekeeping
items and services.
3.3 This
payment rate does not include items such as physicians’ fees (or
fees of other professional providers authorized to render the services
and to bill independently for them); laboratory, X-rays or diagnostic
procedures (other than those directly related to the performance
of the surgical procedure); orphan drugs; prosthetic devices (except
IOLs); ambulance services; leg, arm, and back braces; artificial limbs;
and Durable Medical Equipment (DME) for use in the patient’s home.
Note: A
radiology and diagnostic procedure is considered directly related
to the performance of the surgical procedure only if it is an inherent
part of the surgical procedure, e.g., the Common Procedure Terminology
(CPT) code for the surgical procedure includes the diagnostic or
radiology procedure as part of the code description (i.e., CPT procedure
code 47560).
3.4 Ambulatory Surgery Payment Rates
3.4.1 DHA, or its data contractor, will
calculate the payment rates and will provide them electronically
to the claims processing contractors annually. The electronic media
will include the locally-adjusted payment rate for each payment
group for each MSA and will identify, by procedure code, the procedures
in each group and the effective date for each procedure. The MSAs
and corresponding wage indexes will be those used by Medicare.
3.4.2 In addition to the payment rates,
the contractors will be provided a zip code to MSA crosswalk, so
that they can determine which payment rate to use for each ambulatory
surgery provider. For this purpose the zip code of the facility’s
physical address (as opposed to its billing address) is to be used.
This crosswalk may be updated periodically throughout the year and
sent to the contractors.
3.4.3 In order to calculate payment rates,
only those procedures with at least 25 claims nationwide during
the database period will be used.
3.4.4 The rates were initially calculated
using the following steps.
3.4.4.1 For each ambulatory
surgery procedure, a median standardized cost was calculated on
the basis of all ambulatory surgery charges nationally under TRICARE
during the one-year database period. The steps in this calculation
included:
• Standardizing
for local labor costs by reference to the same wage index and labor/non-labor-related
cost ratio as applies to the facility under Medicare;
• Applying the Cost-to-Charge Ratio (CCR)
using the Medicare CCR for FASCs for TRICARE ASCs.
• Calculating a median cost for each procedure;
and
• Updating to
the year for which the payment rates were in effect by the Consumer
Price Index-Urban (CPI-U).
3.4.4.2 Procedures
were placed into one of 10 groups by their median per procedure
cost, starting with $0 to $299 for Group 1 and ending with $1,000
to $1,299 for Group 9 and $1,300 and above for Group 10. Groups
2 through 8 were set on the basis of $100 fixed intervals.
3.4.4.3 The standard payment amount per group
will be the volume weighted median per procedure cost for the procedures
in that group.
3.4.4.4 Procedures for
which there was no or insufficient (less than 25 claims) data were
assigned to groups by:
• Calculating
a volume-weighted ratio of TRICARE payment rates to Medicare payment rates
for those procedures with sufficient data;
• Applying the ratio to the Medicare payment
rate for each procedure; and
• Assigning the procedure to the appropriate
payment group.
3.4.5 The amount paid for any ambulatory
surgery service under these procedures cannot exceed the amount
that would be allowed if the services were provided on an inpatient
basis. The allowable inpatient amount equals the applicable Diagnosis
Related Group (DRG) relative weight multiplied by the national large
urban adjusted standardized amount. This amount will be adjusted
by the applicable hospital wage index.
3.4.6 As of November 1, 1998, an eleventh
payment group is added to this payment system. This group will include
extracorporeal shock wave lithotripsy.
3.4.7 Grouping
and Additions to the ASC Procedure List for Dates of Service On
or After March 1, 2017
3.4.7.1 Effective
March 1, 2017, only those procedures listed on DHA’s ambulatory
surgery web site shall be cost-shared in FASCs. Upon evaluation,
TRICARE may add additional procedures to the list. Groupings shall
be accomplished in accordance with the following procedures:
3.4.7.1.1 Prior
to March 1, 2017, DHA shall:
• Step 1: Review
all allowed ASC charges in the ASC Calendar Years (CYs) 2014 and 2015
for procedures not included on TRICARE’s ASC list, and identify
those procedures with at least 25 claims in either calendar year.
• Step
2: Deflate the billed charges to the base period, and shall then
update the base year charges forward to the current ASC fiscal year
using the ASC annual update factors. Then the most recent Medicare
ASC CCR (1994, 0.483) shall be used to convert the charges to costs.
The procedure shall then be placed in one of the eleven TRICARE
payment groups.
• Step 3: For codes with less than
25 claims in CY 2014 or 2015, the surgery codes shall be evaluated
to determine if there is a similar code within a group on the current
TRICARE ASC list. If so, the code shall be assigned to the similar
group. Information about the code’s grouping under Medicare’s current
ASC fee schedule shall be utilized to support the grouping.
• Step
4: Shall compare all procedures assigned to a group under this methodology with
the current Medicare ASC payment. If assignment using these methods
results in an amount less than would be paid under the current Medicare
payment, TRICARE shall raise the rates for that procedure to equal
the amount paid by Medicare. This step shall only occur for newly-added
procedures to the ASC list.
3.4.7.1.2 Contractors may bring additional
procedures that are not on the ASC list to the attention of DHA,
for evaluation by DHA for inclusion on the ASC list, which shall
be updated on an annual basis.
3.4.7.1.3 Newly-added procedure rates developed
through the procedures established in
paragraph 3.4.7.1 apply only
to FASCs. Other non-OPPS providers (i.e., those listed in
Chapter 13, Section 1, paragraph 3.4.1.2 except
FASCs), are not subject to the newly-added rates for surgical procedures
and shall continue to be paid in accordance with the
Chapter 1, Section 24. Effective January 1,
2018, newly-added procedure rates shall be updated annually on January
1. DHA shall notate those procedures that are newly-added within
the listing posted to the DHA web site.
3.4.7.2 Newly-added procedures will be added
to the ASC list on the effective date of each ASC update year (November
1 for dates prior to January 1, 2017, and thereafter January 1 of
each following calendar year). The first group of newly-added procedures
(described in
paragraph 3.4.7.1.1) will be added to the
list before March 1, 2017, and will be effective for a partial year,
i.e., March 1 through October 31, 2017. The second group of newly-added
procedures shall be effective November 1, 2017, to December 31,
2017. The list of newly-added procedures shall then be updated and
revised on a quarterly basis (January 1, April 1, July 1, and October
1).
3.5 Payments
3.5.1 General
The payment for a procedure will be
the standard payment amount for the group which covers that procedure,
adjusted for local labor costs by reference to the same labor/non-labor-related cost
ratio and hospital wage index as used for ASCs by Medicare. This
calculation will be done by DHA, or its data contractor. For participating
claims, the ambulatory surgery payment rate will be reimbursed regardless
of the actual charges made by the facility--that is, regardless
of whether the actual charges are greater or smaller than the payment
rate. For nonparticipating claims, reimbursement (TRICARE payment
plus beneficiary cost-share plus any double coverage payments, if
applicable) cannot exceed the lower of the billed charge or the
group payment rate.
3.5.2
Procedures
Which Do Not Have An Ambulatory Surgery Rate and Are Provided by
an FASC
3.5.2.2 Non-surgical
services, such as evaluation and management visits, laboratory,
and radiology services are to be paid in accordance with TRICARE’s
allowable charge methodology (see
Chapter 5).
3.5.3 Multiple
and Terminated Procedures
3.5.3.1 Discounting for Multiple Surgical Procedures
3.5.3.1.2 Discounting
of multiple surgical procedures is subject to the provisions in
Chapter 13, Section 3.
3.5.3.1.3 Effective March 1, 2017, FASCs shall
be reimbursed for only those surgical services on TRICARE’s ASC
list (see
paragraph 3.5.2).
3.5.3.2 Discounting
for Bilateral Procedures
3.5.3.2.2 Modifiers
for Discounting Terminated Surgical Procedures
3.5.3.2.2.1 Industry
standard modifiers may be billed on outpatient hospital or individual professional
claims to further define the procedure code or indicate that certain
reimbursement situations may apply to the billing. Recognition and
utilization of modifiers are essential for ensuring accurate processing
and payment of these claim types.
3.5.3.2.2.2 Industry
standard modifiers are used to identify surgical procedures which
have been terminated prior to and after the delivery of anesthesia.
• Modifiers 52 and 73 are used to identify
a surgical procedure that is terminated prior to the delivery of
anesthesia and is reimbursed at 50% of the allowable; i.e., the
ASC tier rate, the Ambulatory Payment Classification (APC) allowable
amount for OPPS claims, or the CHAMPUS Maximum Allowable Charge
(CMAC) for individual professional providers.
• Modifiers 53 and 74 are used for terminated
surgical procedures after delivery of anesthesia which are reimbursed
at 100% of the appropriated allowable amounts referenced above.
3.5.3.3 Unbundling
of Procedures
Contractors shall ensure that reimbursement
for claims involving multiple procedures conforms to the unbundling
guidelines as outlined in
Chapter 1, Section 3.
3.5.3.4 Incidental
Procedures
The rules for reimbursing incidental procedures
as contained in
Chapter 1, Section 3,
are to be applied to ambulatory surgery procedures reimbursed under
the rules set forth in this section. That is, no reimbursement is
to be made for incidental procedures performed in conjunction with
other procedures which are not classified as incidental. This limitation
applies to payments for facility claims as well as to professional
services.
3.6 Updating
Payment Rates
The rates will be updated annually
by DHA by the same update factor as is used in the Medicare annual
updates for ASC payments.
• The
rates were updated by 1.9% effective November 1, 2017.
• The rates were
updated by 2.1% effective January 1, 2019.
• The
rates were updated by 2.6% effective January 1, 2020.
3.7 Claims for
Ambulatory Surgery
3.7.1 Claim Forms
Claims for facility
charges must be submitted on a Centers for Medicare and Medicaid Services
(CMS) 1450 UB-04. Claims for professional charges may be submitted
on either a CMS 1450 UB-04 or a CMS 1500 Claim Form. The preferred
form is the CMS 1500 Claim Form. When professional services are
billed on a CMS 1450 UB-04, the information on the CMS 1450 UB-04
should indicate that these services are professional in nature and
be identified by the appropriate CPT-4 code and revenue code.
3.7.2 Billing Data
The claim must identify all procedures
which were performed (by CPT-4 or HCPCS code). The facility claim
shall be submitted on the CMS 1450 UB-04, the procedure code will
be shown in Form Locator (FL) 44.
Note: Claims
from ASCs must be submitted on the CMS 1450 UB-04 claim form. Claims
not submitted on the appropriate claim form will be denied.
3.8 Wage Index
Changes
If, during the year, Medicare revises
any of the wage indexes used for ambulatory surgery reimbursement,
such changes will not be incorporated into the TRICARE payment rates
until the next routine update. These changes will not be incorporated
regardless of the reason Medicare revised the wage index.
3.9 Subsequent
Hospital Admissions
If a beneficiary is admitted to a hospital
subject to the DRG-based payment system as a result of complications,
etc. of ambulatory surgery, the ambulatory surgery procedures are
to be billed and reimbursed separately from the hospital inpatient
services. The same rules applicable to ER services are to be followed.
3.11 Exclusions
Surgical
procedures that do not have an ambulatory surgery rate listed on
DHA’s ambulatory surgery web site are excluded from cost-sharing
in freestanding ASCs.