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 2019, the
CCR is 0.2514. Effective CY 2020, the CCR is 0.2567. Effective
CY 2021, the CCR is 0.2495.
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.