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TRICARE Operations Manual 6010.62-M, April 2021
Clinical Operations
Chapter 7
Section 4
Utilization Management (UM)
Revision:  
1.0  UM
1.1  The contractor shall ensure that all utilization and quality review requirements are applied to all beneficiaries living within the region, to all beneficiaries receiving care in the geographic area of responsibility regardless of their place of residence, and to all providers delivering care within the geographic area of responsibility.
1.2  The contractor shall be considered a multi-function Peer Review Organization (PRO) under this contract.
1.3  The contractor shall ensure that all providers are subject to the same review standards and criteria in accordance with a multi-function PRO and 32 CFR 199.15.
1.4   The contractor, using its authority as a PRO, shall apply its own UM practices to inpatient care received by Market/Military Medical Treatment Facility (MTF) enrollees in a civilian setting consistent with Market/MTF referral instructions.
2.0  NOTIFICATION OF UTILIZATION REVIEW REQUIREMENTS
2.1  The contractor shall provide education and training to providers and beneficiaries on the requirements and benefits of UM standards.
2.2  The contractor shall provide a process and method of notification for all providers, both network and non-network, of all review requirements such as:
•  Prospective review (preadmission/preauthorization)
•  Concurrent review/continued stay review
•  Retrospective review
3.0  REVIEWER QUALIFICATIONS AND PARTICIPATION
3.1  Peer Review By Physicians
3.1.1  Except as provided in paragraph 3.1.2, each person who makes an initial or reconsideration denial determination or standard of care determination about services furnished or proposed to be furnished by a licensed doctor of medicine (MD) or osteopathy (DO) or by a doctor of dentistry must be another licensed doctor of medicine in a like specialty, or osteopathy in a like specialty, or dentistry with an active clinical practice in the PRO area, if the initial, reconsideration, or standard of care determination is based on lack of medical necessity or other reason relative to reasonableness, necessity, or appropriateness. The Government Designated Authority (GDA) reserves the right to approve an appropriate alternate peer reviewer on a case-by-case basis.
3.1.2  If a PRO determines that peers are not available, then a nationally accredited external independent review organization shall be used to make the determinations.
3.2  Peer Review By Health Care Practitioners Other Than Physicians
Health care practitioners other than physicians may review services and/or make standard of care determinations for services furnished by other practitioners in the same professional field and specialty.
3.3  Diagnosis Related Group (DRG) Validation Review
3.3.1  Decisions about procedural and diagnostic information must be made by physicians.
3.3.2  Technical coding issues must be reviewed by individuals with training and experience in International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) coding (for outpatient services with dates of service or inpatient services with dates of discharge provided before the mandated date, as directed by Health and Human Services (HHS), for International Classification of Diseases, 10th Revision (ICD-10) implementation) and in ICD-10-CM coding (for outpatient services with dates of service or inpatient services with dates of discharge provided on or after the mandated date, as directed by HHS, for ICD-10 implementation, or International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) for inpatient services with dates of discharge provided on or after the mandated date, as directed by HHS, for ICD-10 implementation).
3.4  Persons Excluded From Review
3.4.1  A person may not review health care services or make initial denial determinations or changes as a result of DRG validations if he or she, or a member of his or her family:
•  Participated in developing or executing the beneficiary’s treatment plan.
•  Is a member of the beneficiary’s family.
•  Is a governing body member, officer, partner, 5% or more owner, or managing employee in the health care facility where the services were or are to be furnished.
3.4.2  A member of a reviewer’s family is a spouse (other than a spouse who is legally separated under a decree of divorce or separate maintenance), child (including a legally adopted child), grandchild, parent, or grandparent.
3.5  Administrative Requirements
Each review shall be dated and include the signature, legibly printed name, clinical specialty, and credentials of the reviewer. Each reviewer shall include rationale for his or her decision (i.e., a complete statement of the evidence and the reasons for the decision).
4.0  PREADMISSION AND PREAUTHORIZATION
4.1  The contractor shall perform benefit and medical necessity reviews for all TRICARE-eligible beneficiaries for preadmission, preauthorization, and other services requiring special authorization in accordance with Chapter 1, Section 3; Chapter 7, Section 5; TRICARE Policy Manual (TPM), Chapter 1, Section 6.1; 32 CFR 199.4; 32 CFR 199.5; and the other TRICARE Manuals when care occurs in the private sector.
4.1.1  The contractor shall perform benefit and medical necessity reviews for Active Duty Service Members (ADSMs) within the Episode of Care (EOC) for preadmission, preauthorization, and other services requiring special authorization in accordance with Chapter 1, Section 3, Chapter 7, Section 5, Chapter 17, Section 3, 32 CFR 199.4, 32 CFR 199.5, and the other TRICARE Manuals once care is occurring in the private sector.
4.1.2  The contractor shall perform preadmission and preauthorization reviews listed in the table in paragraph 4.2. These admissions and procedures are subject to change over time based upon the Government’s assessment of the efficacy of the review. The changes will include adding or removing admissions or procedures.
4.2  The contractor shall propose additional authorization reviews and coordinate the list to the appropriate GDA. In those instances where a contractor requires authorization of services in addition to those listed below, such authorization must be available to and appealable by all beneficiaries, who reside within its jurisdiction.
PREAUTHORIZED INPATIENT ADMISSIONS INCLUDE:
Any inpatient hospitalization unless emergency.
Non-emergency inpatient Mental Health (MH) and Substance Use Disorder (SUD) services.
Skilled Nursing Facility (SNF) care.
Note:  SNF care received in the United States (US) and US territories must be preauthorized for all TRICARE beneficiaries to include dual eligible beneficiaries. The TRICARE Medicare Eligible Program (TMEP) contractor shall preauthorize SNF care beginning on day 101, when TRICARE becomes primary payer.
Organ and stem cell transplants.
Inpatient care at a rehabilitation facility.
Inpatient care at a Residential Treatment Facility (RTF).
The Following Services shall Be Preauthorized:
Adjunctive Dental
Applied Behavior Analysis (ABA) Services
Extended Care Health Option (ECHO) Services
Home Health Care (HHC)
Hospice
Provisional Coverage for Emerging Services and Supplies, if required (see TPM, Chapter 13, Section 1.1.)
Low Protein Modified Foods (LPMF) for the treatment of Inborn Errors of Metabolism (IEM) (see TPM, Chapter 8, Section 7.2)
Dental Anesthesia and Institutional Benefits
Electroconvulsive Therapy (ECT) (see TPM, Chapter 13, Section 1.1).
Transcranial Magnetic Stimulation (TMS) (see TPM, Chapter 13, Section 1.1)
Psychoanalysis (see TPM, Chapter 13, Section 1.1)
Spravato™ (esketamine) nasal spray shall be preauthorized under the medical benefit (see TPM, Chapter 7, Section 3.8)
4.3  The contractor shall advise beneficiaries, sponsors, providers, and other responsible persons of those benefits requiring preadmission or preauthorization.
4.4  The contractor shall provide criteria to eligible beneficiaries and providers for cases where preauthorization is not required, to enable beneficiaries to confirm a TRICARE benefit.
4.5  When the beneficiary has other insurance that provides primary coverage, exception to the preauthorization requirements shall apply as provided in the TPM, Chapter 1, Section 6.1.
4.6  The contractor shall perform retrospective reviews for medical necessity when the contractor is acting as the secondary payer.
4.7  The contractor shall issue notification of preadmission and preauthorization approval to the beneficiary, parent or guardian of a minor or incompetent adult, the provider, and to its claims processing staff.
4.7.1  Notification may be made in writing by letter, or on a form developed by the contractor.
4.7.2  These forms and letters are all referred to as TRICARE authorization forms.
4.8  ADSMs who have sustained an amputation shall be considered for transfer or admission to an appropriate Department of Defense (DoD) Advanced Rehabilitation Center (ARC), Center of Excellence (CoE).
5.0  ARC PREAUTHORIZATION
5.1  The contractor shall contact one of the three DoD ARCs for all ADSMs with referrals for amputations to ensure an ARC assessment has been completed with a care plan in place prior to authorizing rehabilitative treatment at a private sector care provider or facility.
5.2  The DoD ARCs: (1) Center for the Intrepid (CFI), San Antonio Military Medical Center (SAMMC), San Antonio, Texas; (2) Military Advanced Training Center (MATC), Walter Reed National Military Medical Center (WRNMMC), Bethesda, Maryland; and (3) the Comprehensive Combat and Complex Casualty Care (C5), Naval Medical Center, San Diego, California. The assigned MTF (or Defense Health Agency-Great Lakes (DHA-GL) for TRICARE Prime Remote (TPR) enrollees) and the ARC will determine appropriateness of the transfer/referral.
5.3  The contractor shall facilitate the transfer or admission of the ADSM based on the patient’s condition if care is available within access standards and appropriate in one of these facilities.
5.4  The contractor shall provide a report of all referrals for amputations to ensure ARC coordination has been completed. For reporting requirements, see DD Form 1423, Contract Data Requirements List (CDRL), located in Section J of the applicable contract.
6.0  MH AND SUD PREADMISSION AND PREAUTHORIZATON
6.1  Inpatient MH and SUD
6.1.1  The contractor shall require preauthorization for all non-emergency inpatient MH services.
•  Acute hospitalization psychiatric care
•  Residential Treatment Center (RTC) care
•  SUD inpatient hospitalization
•  SUD residential
6.1.2  The contractor shall, in the event that non-emergency inpatient MH services were not preauthorized, obtain the necessary information and complete a retrospective review. Penalties for failing to obtain preauthorization apply (see 32 CFR 199.15).
6.1.3  The contractor shall not require referral or authorization for emergent inpatient MH or SUD admissions.
6.1.4  The contractor shall issue an authorization for acute inpatient MH care for no more than seven calendar days at a time.
6.1.5  The contractor shall follow up within two business days of an MH inpatient discharge to ensure the beneficiary has a follow up appointment secured within seven calendar days of discharge.
6.1.6  The contractor shall make at least three outreach attempts on three separate days/times and note the attempts in their system prior to sending an unable to reach letter.
6.1.7  The contractor shall note the follow-up appointment date and time and outreach to the beneficiary within two business days following the appointment to ensure the beneficiary was seen, and if not, assist the beneficiary with securing another appointment.
6.1.8  The contractor shall make at least three outreach attempts on three separate days/times and note the attempts in their system prior to sending an unable to reach letter.
6.2  Outpatient MH and SUD
6.2.1  The contractor shall require a Primary Care Manager (PCM) referral for non-office based, outpatient (e.g., Partial Hospitalization Program (PHP) or Intensive Outpatient Program (IOP) and Opioid Treatment Program (OTP)) MH and SUD services. However, if the non-office based, outpatient MH provider is a network provider, a request for preauthorization from the network provider to the contractor may be accepted in lieu of the PCM referral.
6.2.2  The contractor shall not require referral or preauthorization for office-based outpatient MH treatment, including Medication Assisted Treatment (MAT) and Office Based Opioid Treatment Programs (OBOT).
6.3  The contractor shall comply with the provisions of Chapters 16 and 17 when processing requests for active duty personnel. See Chapter 16, Sections 2 and 6 for referral requirements under the TPR program. ADSMs require referral and preauthorization before receiving any MH and SUD services.
7.0  EFFECTIVE AND EXPIRATION DATES
The contractor shall ensure preadmissions and preauthorizations have an effective date and an expiration date.
8.0  BENEFIT POLICY DECISIONS
8.1  TRICARE versus local policy. TRICARE policies have precedence over any local or internal policy of the contractor or the medical community of the region.
8.2  The contractor shall notify DHA within one business day of any conflicts between TRICARE policy and local policy. Variations from policy, which expand, reduce, or adjust benefit coverage shall be referred to DHA for approval before being implemented.
8.3  The contractor shall provide details on how notification will occur in the Medical Management (MM) Program plan.
9.0  DOCUMENTATION
9.1  The contractor shall establish a process for providing beneficiaries and providers with the written results of all preadmission and preauthorization activities affecting benefit determinations.
9.2  The contractor shall complete and mail denial notifications to beneficiaries and providers within the time limits established in accordance with Chapter 12.
9.3  The contractor shall issue notification of preadmission and preauthorization approval or denial to the beneficiary or parent or guardian of a minor or incompetent adult, and the provider.
9.4  The contractor’s response to referrals and authorizations shall identify any requested provider and services that are excluded from coverage and the reason(s) therefore, and will either not be paid by TRICARE, or paid under the Point of Service (POS) option, if applicable.
9.5  A preauthorization based on a contractor’s medical necessity or UM determination is not required when a network PCM or network specialty care provider makes a referral to a network specialty care provider except as required under Section 2. For additional information on access standards for enrollees, see 32 CFR 199.17(p)(5).
9.6  The contractor shall ensure that mailed notifications of denials include:
•  Patient’s name.
•  Sponsor’s name.
•  Last four digits of the sponsor’s Social Security Number (SSN).
•  The clinical rationale for denial of specific services (form letters are unacceptable as the clinical rationale shall provide a complete explanation, referencing any and all appropriate documentation, for the cause of the denial).
•  All applicable appeal and grievance procedures.
•  The name and telephone number of an individual from whom additional information may be obtained.
10.0  CONCURRENT REVIEW REQUIREMENTS
10.1  The contractor shall conduct a concurrent review for continuation of stay for all inpatient and institutional services, no less frequently than every 30 calendar days, both medical and MH, and authorize, as appropriate, additional days.
10.2  The contractor shall ensure the frequency of the reviews for continuation of stay is based on the severity or complexity of the patient’s condition or on necessary treatment and discharge planning activity.
10.3  The contractor shall ensure the criteria utilized in the context of the concurrent review places special emphasis on evaluating the progress being made in the active individualized clinical treatment being provided and on developing appropriate discharge plans.
10.4  For reporting requirements, see DD Form 1423, CDRL, located in Section J of the applicable contract.
10.5  INPATIENT MH AND SUD CONCURRENT REVIEW
Medical and psychological necessity will determine the Length-of-Stay (LOS) for treatment in an acute inpatient MH care facility.
10.5.1  The contractor shall conduct concurrent reviews determination for continuation of inpatient MH services and SUD within one business day of notification of emergency admissions and authorize, as appropriate, additional days.
10.5.2  The contractor shall conduct initial concurrent reviews of all other non-emergent acute inpatient MH, RTC care, and SUD admissions within three business days of admission or the in the case of an emergency admissions three business days following the initial concurrent review.
10.5.3  The contractors shall conduct subsequent concurrent reviews no less frequently than every seven calendar days.
10.5.4  The contractor shall conduct concurrent review for continuation of RTC services no less frequently than every 30 calendar days. The criteria for concurrent review shall be those set forth in TPM, Chapter 7, Section 3.2.
10.5.4.1  The contractor shall notify the RTC regarding the decision of concurrent review within three business days of the review, and shall be followed with written confirmation to the provider and the beneficiary.
10.5.4.2  The contractor shall ensure the RTC concurrent review takes into account the provision of family therapy pursuant to TPM, Chapter 7, Section 3.12.
10.5.4.3  If family therapy is inappropriate due to the particular circumstances of the case, supporting documentation and rationale must be provided in the treatment plan. An example of such circumstances might include not returning to the family unit following treatment.
10.5.4.4  The contractor shall notify the DHA within one business day if the contractor finds that a facility’s treatment planning demonstrates a pattern of failure to provide for family therapy, as this constitutes a violation of the standards and may reflect domiciliary care.
10.5.5  The contractor shall conduct concurrent review for continuation of inpatient and rehabilitation SUD services no less frequently than every 30 calendar days. The criteria for concurrent review shall be those set forth in TPM, Chapter 7, Section 3.3.
10.5.6  The contractor shall notify the treating provider regarding the decision of concurrent review within one business day of the review, and shall be followed with written confirmation to the provider and the beneficiary.
11.0  AMBULATORY CARE FOCUSED REVIEWS
11.1  The contractor shall conduct quarterly comprehensive ambulatory care focused reviews of a statistically valid sample or 50 records, whichever is greater, of medical records per option period focused on ambulatory medical necessity and quality of care provided in high risk settings such as, but not limited to, emergency room, Ambulatory Surgical Centers (ASC) and Urgent Care Centers (UCCs), MH and SUD PHPs, IOPs and OTPs.
11.2  The Government will provide the contractor with specific review topics, criteria for selection and time frame from which the sample is to be drawn for the focused reviews 60 calendar days prior to each option period.
11.3  For reporting requirements, see DD Form 1423, CDRL, located in Section J of the applicable contract.
12.0  RETROSPECTIVE REVIEWS RELATED TO DRG VALIDATION
12.1  The contractor shall conduct quarterly focused reviews of a 1% sample of medical records to assure that reimbursed services are supported by documentation in the patient’s medical record. This review must determine if the diagnostic and procedural information and discharge status of the patient as reported by the hospital matches the attending physician’s description of care and services documented in the patient’s record. In order to accomplish this, the contractor shall conduct the following review activities:
12.1.1  Review of claim adjustments submitted by hospitals which result in the assignment of a higher weighted DRG (seeAddendum C).
12.1.2  Review for physician certification as to the major diagnosis and procedures and the physician’s acknowledgment of a penalty statement on file.
12.1.3  When the claim is submitted, the hospital must have on file a signed and dated acknowledgment from the attending physician that the physician has received the following notice:
“Notice to Physicians: TRICARE payment to hospitals is based in part on each patient’s principal and secondary diagnoses and the major procedures performed on the patient, as attested to by the patient’s attending physician by virtue of his or her signature in the medical record. Anyone who misrepresents, falsifies, or conceals essential information required for payment of Federal funds may be subject to fine, imprisonment, or civil penalty under applicable Federal laws.”
12.1.4  The acknowledgment must be completed by the physician either before or at the time that the physician is granted admitting privileges at the hospital, or before, or at the time the physician admits his or her first patient. Existing acknowledgments signed by physicians already on staff remain in effect as long as the physician has admitting privileges at the hospital.
12.1.5  Outlier Review
Claims that qualify for additional payment as a cost-outlier shall be subject to review to ensure that the costs were medically necessary and appropriate and met all other requirements for payment. In addition, claims that qualify as short-stay outliers shall be reviewed to ensure that the admission was medically necessary and appropriate and that the discharge was not premature.
12.2  Procedures Regarding Certain Services Not Covered By The DRG-Based Payment System
In implementing the quality and utilization review for services not covered by the DRG-based payment system, the requirements of this section shall pertain, with the exception that the ICD-10-CM and ICD-10-PCS codes will be used to provide basis of correct information for dates of discharge beginning on or after the mandated date, as directed by HHS, for ICD-10 implementation.
13.0  RETROSPECTIVE REVIEW REQUIREMENTS FOR OTHER THAN DRGs VALIDATION
13.1  The contractor shall conduct and report semi-annual focused reviews of a statistically valid sample or 50 records, whichever is greater, of medical records to determine the medical necessity and quality of care provided, validate the review determinations made by review staff, and determine if the diagnostic and procedural information and discharge status of the patient as reported on the hospital or professional provider’s claim matches the attending physician’s description of care and services documented in the medical record.
13.2  The Government will provide to the contractor specific review topics, criteria for selection and time frame from which the sample is to be drawn for these focused reviews 60 calendar days prior to each option period.
13.3  This information shall be included in the annual Clinical Quality Report. For reporting requirements, see DD Form 1423, CDRL, located in Section J of the applicable contract.
13.4  For all cases selected for retrospective review, the following review activities shall occur:
13.4.1  Admission Review
The medical record must indicate that inpatient hospital care was medically or psychologically necessary and provided at the appropriate level of care.
13.4.2  Invasive Procedure Review
The performance of unnecessary procedures may represent a quality or utilization problem. In addition, the presence of codes of procedures often affects DRG classification. Therefore, for every case under review, the medical record must support the medical necessity of the procedure performed. For this purpose, invasive procedures are defined as all surgical and any other procedures which affect DRG assignment.
13.4.3  Discharge Review
The contractor shall use nationally recognized clinical decision support tools when reviewing discharge, discharge planning, follow up care, questionable discharges or other potential quality problems for questionable discharges or other potential quality problems.
13.4.4  For reporting requirements, see DD Form 1423, CDRL, located in Section J of the applicable contract.
14.0  WRITTEN AGREEMENTS WITH INSTITUTIONAL PROVIDERS
The contractor shall establish written agreements with each institutional provider as noted in Chapter 2, Section 3.
15.0  CONFIDENTIALITY APPLICABLE TO ALL CLINICAL ACTIVITIES, INCLUDING RECOMMENDATIONS AND FINDINGS
The contractor shall develop and implement procedures, processes, and policies that meet the confidentiality and disclosure requirements set forth in Title 10, United States Code (USC), Chapter 55, Section 1102; the Social Security Act, Section 1160, and implementing regulations at 42 CFR 476, the Alcohol, Drug Abuse and Mental Health Administration (ADAMHA) Reorganization Act (42 USC 290dd-2), the Privacy Act (5 USC 552a), 32 CFR 199.15(j) and (l). Additionally, the contractor shall display the following message on all Quality Assurance (QA) documents:
15.1  QA Document under 10 USC 1102
Copies of this document, enclosures and information will not be further released under penalties of law. Unauthorized disclosure carries a possible $3,000 fine.
15.2  Release of Information
15.2.1  The contractor shall provide a detailed description that includes identification process information that will be communicated. If an inquiry is made by the beneficiary, including an eligible family member (child) regardless of age, the reply should be addressed to the beneficiary, not the beneficiary’s parent or guardian. The only exceptions are when a parent writes on behalf of a minor child or a guardian writes on behalf of a physically or mentally incompetent (as declared by a competent legal authority) beneficiary.
15.2.2  The contractor shall not provide information to parents or guardians of minors or incompetents when the services are related to the following diagnoses:
•  Abortion/reproductive services, including contraception
•  SUD
•  Sexually Transmitted Disease (STD)
•  Gender Dysphoria
•  Human Immunodeficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS)
15.2.3  The term “minor” means any person who has not attained the age of 18 years. Generally, the parent of a minor beneficiary and the legally appointed guardian of an incompetent beneficiary shall be presumed to have been appointed the representative without specific designation by the beneficiary. Therefore, for beneficiaries who are under the age of 18 years or who are incompetent, a notice issued to the parent or guardian, under established TRICARE procedures, constitutes notice to the beneficiary.
15.2.4  If a beneficiary has been legally declared an emancipated minor, they are to be considered as an adult. If the beneficiary is under 18 years of age and is (or was) a spouse of an ADSM or retiree, they are considered to be an emancipated minor.
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