1.0 PROVIDER
DISCOUNTS
The contractor may negotiate agreements
or contracts with providers which include reductions or discounts
in the TRICARE program reimbursement methodologies, however, the
provider must agree to participate on and file TRICARE
claims on behalf of the beneficiary.
This section provides direction concerning processing of claims
subject to such reductions in reimbursement.
2.0 AGREEMENTS
Agreements
must meet the following conditions:
2.1 The provider must be TRICARE-authorized.
If the provider is not currently certified, the contractor shall
certify the provider through the normal provider certification process.
If the provider is non-certifiable, the contractor shall notify
both the provider and the Military Treatment Facility (MTF)/Enhanced
Multi-Service Market (eMSM) if the MTF/eMSM is involved. Contractors
shall ensure that clinics, Preferred Provider Organizations (PPOs),
and other multi-member groups provide a list of the providers within
the organization, along with their Employer Identification Numbers
(EINs)/Social Security Numbers (SSNs). Contractors shall review
these lists, making sure that each individual provider in the groups
is authorized under TRICARE.
2.2 For all contractor negotiated agreements,
the effective dates shall be the first day of the month following
the month the agreement was signed.
2.3 The agreement shall contain date
parameters (effective and termination dates). For multi-member groups,
the effective date of each member shall be the same unless otherwise
indicated. Groups must identify the rendering physician on the claim.
2.4 The agreement
shall list specific procedure codes and the method and the amount
of discount, for example, a general description such as gynecological
procedures is not acceptable.
2.5 Providers must agree to participate on
all charges, whether the services provided are subject to the negotiated
discount or not.
2.6 Providers cannot balance bill the beneficiary.
2.7 Provider must
agree to bill the patient’s Other Health Insurance (OHI) prior to
billing TRICARE.
2.8 Providers must be able to fluently speak,
read, and write the English language.
3.0 METHODS
At
a minimum, the following negotiated reimbursement reduction methods
are authorized:
3.1 Agreements using a percent reduction
method. Under the percent reduction method, provider reimbursement
is reduced by a percentage rate (e.g., 20%) applied to the allowable
amount for established reimbursement methods in
32 CFR 199.14. If the billed charge minus
the discount amount exceeds the CHAMPUS Maximum Allowable Charge
(CMAC), payment is limited to the CMAC unless an exception is allowed
under demonstration authority. The discount shall be taken from
the applicable reimbursement methodology used for the provider,
i.e., Diagnosis Related Group (DRG), mental health per diem, Residential
Treatment Center (RTC) per diem, Sole Community Hospital (SCH) payment method
for inpatient service, etc. The cost-share is always applied after
calculation of the discounted amount.
3.2 Agreements may include a discount for the
initial 1,000 claims processed (does not include adjustments) during
a stated period of time (e.g., 10%) and a higher discount for claims
exceeding 1,000, (e.g., 15%). In this case the contractor must have
counters to tally the number of claims processed by individual,
provider or group.
3.3 Agreements using negotiated per
diems are authorized for hospitalization and RTC care, but the established
method of payment cannot be altered, i.e., a DRG hospital cannot
revert to using a per diem, unless an exception is allowed under
demonstration authority. The cost-share shall be applied after calculation
of the new allowed amount.
3.4 Agreements on which each procedure code
listed in the agreement could have a different percentage discount
or fee schedule.
3.5 Agreements which have different discounts
for inpatient and outpatient services. This can be for both professional
and institutional providers.
3.6 Agreements with provider groups when
only some of the members of the group will honor the participation/discount
agreement. Groups must identify the rendering physician on the claim.
4.0 CONTRACTOR
RESPONSIBILITIES
4.1 The contractor shall load the name
of the provider and EIN, the applicable negotiated reimbursement,
and the effective date parameters within 45 days of receipt of the
agreement/contract.
4.2 The contractor shall ensure, by
implementing an automated payment mechanism, that claims from affiliated
providers with agreements or contracts which include negotiated
reimbursements are processed using an authorized and correct reimbursement
method.
4.3 The contractor shall report the
discounted amount as the allowed amount.
5.0 SAMPLE NEGOTIATED
REIMBURSEMENT METHODS
5.1 Negotiated per diems or negotiated
percent reduction in the standard mental health or RTC per diem
(e.g., 20% reduction in the per diem). Negotiated per diems are
subject to the adjustments applied to regional per diems (i.e.,
wage index factor, Indirect Medical Education (IDME) costs, etc.).
A negotiated per diem for a provider shall be paid by the contractor
until expiration, renewal, or renegotiation of the contract or agreement.
Percentage reductions shall be applied to allowable charges for
professional services.
5.2 Negotiated professional service
reimbursement reductions shall be applied to either the current
or prior year’s prevailing charge profile based on dates of service.
5.3 Examples
5.3.1 Percentage reduction
applied to the DRG allowable amount (e.g., a 10% reduction). The following
example illustrates calculation of a reduced DRG payment:
10% negotiated
reduction, $265 per diem cost-share for a retiree (assuming the
per diem is less than 10% of the billed charge), four day stay. Current
cost-shares can be found at http://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement.
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DRG allowance
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$9,000.00
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Less negotiated
reduction
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-
900.00
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Negotiated allowed
amount
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$8,100.00
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Less cost-share
($265 x 4 x 0.90)
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-
1,060.00
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Payment to hospital
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$7,040.00
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5.3.2 The following example illustrates application
of a percentage reduction in the standard per diem for a high volume
mental health provider or an RTC:
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10% negotiated
reduction, 25% cost-share for retiree, $375 per diem, 30 day stay.
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Standard allowed
amount ($375 x 30)
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$11,250.00
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Less negotiated
reduction
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-1,125.00
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Negotiated allowed
amount
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$10,125.00
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Less cost-share
(0.25 x $10,125)
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-2,531.25
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Payment to facility
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$7,593.75
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5.3.3 The following example illustrates application
of a percentage reduction in the standard per diem for a low volume
mental health provider:
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10% negotiated
reduction, 25% cost-share for a retiree, $410 regional per diem
(net of adjustments), 30 day stay billed at $500 per day.
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Standard allowed
amount ($410 x 30)
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$12,300.00
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Less negotiated
reduction
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-1,230.00
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Negotiated allowed
amount
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$11,070.00
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Less cost-share
(0.25 x $11,070)
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-2,767.50
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(Note: 25%
of the negotiated allowed amount is less than the daily cost-share
of $126.)
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Payment to facility
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$8,302.50
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5.3.4 The following example illustrates payment
calculation for a negotiated per diem (applicable to high volume
mental health providers, and RTCs):
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$400 standard
per diem, $350 negotiated per diem, 25% cost-share for a retiree,
30 day stay.
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Standard allowed
amount ($400 x 30)
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$12,000.00
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Negotiated allowed
amount ($350 x 30)
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$10,500.00
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Less cost-share
(0.25 x $10,500)
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-
2,625.00
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Payment to facility
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$7,875.00
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5.3.5 Percentage reduction may be applied to
the billed charge (e.g., 20% reduction in the billed charge) for
inpatient or outpatient services delivered by institutional providers
not reimbursed under the DRG-based payment system or the inpatient
mental health per diem system. The following example illustrates
calculation of a payment for inpatient services using the negotiated
percent reduction method:
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10% negotiated
reduction in billed charges, 25% cost-share for a retiree, four
day stay billed at $400 per day.
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Billed charge
($400 x 4)
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$1,600.00
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Less negotiated
reduction
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-160.00
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Negotiated allowed
amount
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$1,440.00
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Less cost-share
(0.25 x $1,440)
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-360.00
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Payment to hospital
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$1,080.00
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5.3.6 The following example illustrates calculation
of a payment for outpatient services delivered by an institutional
provider using the negotiated percent reduction method:
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10% negotiated
reduction in billed charges, 25% cost-share for a retiree, one visit
billed for $70 for care provided in a hospital emergency room.
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Billed charge
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$70.00
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Less negotiated
reduction
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-7.00
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Negotiated allowed
amount
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$63.00
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Less cost-share
(0.25 x $63)
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-15.75
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Payment to hospital
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$47.25
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5.3.7 The following example illustrates application
of a professional service rate reduction:
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10% negotiated
reduction, 25% cost-share for a retiree.
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CMAC
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$80.00
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Less negotiated
reduction
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-8.00
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Negotiated allowed
amount
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$72.00
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Cost-share (0.25
x $72)
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-18.00
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Payment to provider
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$54.00
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