4.1 Background
4.1.1 Hospitals
are authorized TRICARE institutional providers under 10 United States
Code (USC) 1079(j)(2) and (4). Under 10 USC 1079(j)(2), the amount
to be paid to hospitals, Skilled Nursing Facilities (SNFs), and
other institutional providers under TRICARE, “shall be determined
to the extent practicable in accordance with the same reimbursement
rules as apply to payments to providers of services of the same
type under [Medicare].”. Under
32 CFR 199.14(a)(1)(ii)(D)(1) through
(9) it specifically lists those hospitals
that are exempt from the Diagnosis Related Group (DRG)-based payment
system. Prior to December 1, 2009, CAHs were not listed as excluded,
thereby making them subject to the DRG-based payment system.
4.1.2 Legislation
enacted as part of the Balanced Budget Act (BBA) of 1997 authorized
states to establish State Medicare Rural Hospital Flexibility Programs
(MRHFPs), under which certain facilities participating in Medicare
could become CAHs. CAHs represent a separate provider type with
their own Medicare conditions of participation as well as a separate
payment method. Since that time, a number of hospitals, acute care
and general, as well as Sole Community Hospitals (SCHs), have taken
the necessary steps to be designated as CAHs. Since the statutory
authority requires TRICARE to apply the same reimbursement rules
as apply to payments to providers of services of the same type under Medicare
to the extent practicable, effective December 1, 2009, TRICARE is
exempting CAHs from the DRG-based payment system and adopting a
reasonable cost method similar to Medicare principles for reimbursing
CAHs. To be eligible as a CAH, a facility must be a currently participating
Medicare hospital, a hospital that ceased operations on or after
November 29, 1989, or a health clinic or health center that previously
operated as a hospital before being downsized to a health clinic
or health center. The facility must be located in a rural area of
a State that has established a MRHFP, or must be located in a Core Based
Statistical Area (CBSA) of such a State and be treated as being
located in a rural area based on a law or regulation of the State,
as described in 42 CFR 412.103. It also must be located more than
a 35-mile drive from any other hospital or CAH unless it is designated
by the State, prior to January 1, 2006, to be a “necessary provider”.
In mountainous terrain or in areas with only secondary roads available,
the mileage criterion is 15 miles. In addition, the facility must
make available 24-hour emergency care services, provide not more
than 25 beds for acute (hospital-level) inpatient care or in the
case of a CAH with a swing bed agreement, swing beds used for SNF-level
care. The CAH maintains a Length-Of-Stay (LOS), as determined on
an annual average basis, of no longer than 96 hours. The facility
is also required to meet the conditions of participation for CAHs
(42 CFR Part 485, Subpart F). Designation by the State is not sufficient
for CAH status. To participate and be paid as a CAH, a facility
must be certified as a CAH by the Centers of Medicare and Medicaid
Services (CMS).
4.2 Scope of Benefits
4.2.1 Inpatient Services
4.2.1.1 For admissions
on or after December 1, 2009, payment for inpatient services of
a CAH other than services of a distinct part unit, shall be reimbursed
101% of reasonable costs. Reference
paragraph 4.3 for information
on the reasonable cost method.
4.2.1.2 Items
and services that a CAH provides to its inpatients shall be covered
if they are items and services of a type that would be covered if
furnished by an acute care hospital to its inpatients. A CAH may
use its inpatient facilities to provide post-hospital SNF care and
be paid for SNF-level services if it meets the following requirements:
• The facility has been certified as a CAH
by CMS;
• The facility
operates up to 25 beds for either acute (CAH) care or SNF swing
bed care; and
• The facility
has been granted swing-bed approval by CMS.
4.2.1.3 Payment
for post-hospital SNF care furnished by a CAH, shall be reimbursed
under the reasonable cost method.
4.2.1.4 Payment
to a CAH for inpatient services shall not include any costs of physician
services or other professional services to CAH inpatients. Payment
for professional medical services furnished in a CAH to CAH inpatients
shall be made on a fee schedule, charge, or other fee basis, as
would apply if the services had been furnished in a Hospital Outpatient
Department (HOPD). For purposes of CAH payment, professional medical
services are defined as services provided by a physician or other practitioner,
e.g., a Physician Assistant (PA) or a Nurse Practitioner (NP). These
services are to be billed on the CMS 1500 Claim Form using the appropriate
Healthcare Common Procedure Coding System (HCPCS) code or a UB-04
using the appropriate HCPCS code and professional revenue codes.
4.2.1.5 A CAH
may establish psychiatric and rehabilitation distinct part units
effective for cost reporting periods. The CAH distinct part units
must meet the following requirements:
• The facility distinct part unit has been
certified as a CAH by CMS;
• The distinct part unit meets the conditions
of participation requirements for hospitals;
• The distinct part unit must also meet the
requirements, other than conditions of participation requirements,
that would apply if the unit were established in an acute care hospital;
• Inpatient services provided in psychiatric
distinct part units are subject to the CHAMPUS mental health per
diem system and inpatient services provided in rehabilitation distinct
part units shall be reimbursed based on billed charges or set rates.
• Beds in these distinct part units are excluded
from the 25 bed count limit for CAHs;
• The bed limitations for each distinct part
unit is 10.
• CAHs are not
subject to the lesser of cost or charges principle.
4.2.2 Outpatient
Services
4.2.2.1 Outpatient services including ambulatory
surgery, provided by a CAH shall be reimbursed 101% of reasonable
costs. Reference
paragraph 4.3 for information on the reasonable
cost method.
4.2.2.2 Payment
to a CAH for outpatient services shall not include any costs of
physician services or other professional services to CAH outpatients.
Payment for professional medical services furnished in a CAH to
CAH outpatients shall be made on a fee schedule, charge, or other
fee basis, as would apply if the services had been furnished in
a HOPD. For purposes of CAH payment, professional medical services
are defined as services provided by a physician or other practitioner,
e.g., a PA or a NP. These services are to be billed on a CMS 1500
Claim Form using appropriate HCPCS code or a UB-04 using the appropriate
HCPCS code and professional revenue code.
4.2.2.3 Payment
for clinical diagnostic laboratory tests shall be reimbursed under
the reasonable cost method only if the individuals are outpatients
of the CAH and are physically present in the CAH at the time the
specimens are collected (bill type 85X). A CAH cannot seek reasonable
cost reimbursement for tests provided to individuals in locations
such as rural health clinics, the individual’s home or SNF. Individuals
in these locations are non-patients of a CAH and their lab test
would be categorized as “referenced lab tests” for the non-patients
bill type 14X), and shall be paid under the CHAMPUS Maximum Allowable
Charge (CMAC).
4.2.2.4 Multi-day
supplies of take-home oral anti-cancer drugs, oral anti-emetic drugs,
and immunosuppressive drugs, as well as the associated supplying
fees and all inhalation drugs and the associated dispensing fees
shall be paid under the allowable charge method. The associated
supplying and dispensing fees must be billed on the same claim as
the drug. Hospitals shall submit a separate claim for these services
on a CMS 1500 Claim Form identifying the specific drugs and supplies.
The drugs should be identified by both the appropriate
J code
and National Drug Code (NDC).
Note: When
an outpatient service includes an oral anti-cancer drug, oral anti-emetic
drug or immunosuppressive drug, so long as no more than one day’s
drug supply (i.e., only today’s) is given to the beneficiary, and
the beneficiary receives additional services, the claim shall be
processed and paid under the reasonable cost method. Inhalation
drugs that are an integral part of a hospital procedure (inpatient
or outpatient) shall also be processed and paid under the reasonable
cost method, when billed in conjunction with other services on the
same day.
4.2.2.5 Authorized
Partial Hospitalization Programs (PHPs) shall be reimbursed under
the reasonable cost method.
4.2.2.6 CAHs are not
subject to the lesser of cost or charges principle.
4.2.3 Ambulance
Services
4.2.3.1 Ambulance
services furnished by CAHs exempt from the allowable charge methodology, are
paid under the reasonable cost method.
4.2.3.2 Effective for
services provided on or after October 1, 2013, ambulance services
furnished by CAHs exempt from the Medicare Ambulance Fee Schedule
(AFS)/TRICARE CMAC (see
Chapter 1, Section 14),
are paid under the reasonable cost method.
4.2.3.3 To be
exempt, the provider must “self-attest” on each claim by using the
B2 condition code. This self-attestation indicates compliance with
the eligibility criteria included in 42 CFR 413.70(b)(5) and requires
the provider to be the only provider or supplier of ambulance services
located within a 35 mile drive of the CAH. Additionally, if there
is no provider or supplier of ambulance services located within
a 35 mile drive of the CAH, but there is an entity owned and operated
by the CAH located more than a 35 mile drive from the CAH, that
CAH-owned and operated entity can only be paid 101% of reasonable
costs for its ambulance services if it is the closest provider or
supplier of ambulance services to the CAH. Under TRICARE, these
ambulance services shall be reimbursed using the hospital’s outpatient
Cost-to-Charge Ratio (CCR).
4.2.3.4 Reasonable
cost will be determined without regard to any per-trip limits or
fee schedule that would otherwise apply. The distance between the
CAH or entity and the other provider or supplier of ambulance services
will be determined as the shortest distance in miles measured over
improved roads between the CAH or the entity and the site at which
the vehicles of the nearest provider or supplier of ambulance services
are garaged. An improved road is any road that is maintained by
a local, state, or federal Government entity and is available for
use by the general public. An improved road includes the paved surface
up to the front entrance of the CAH and the front entrance of the
garage.
Note: CAHs that are not exempt from the allowable
charge methodology or the Medicare AFS/CMAC (as described in
Chapter 1, Section 14), may not report condition
code B2.
4.3
Reasonable
Cost Methodology
Reasonable cost is based on the actual
cost of providing services and excluding any costs, that are unnecessary
in the efficient delivery of services covered by the program.
4.3.1 DHA shall
calculate an overall inpatient CCR and overall outpatient CCR, obtained
from data on the hospital’s most recently filed Medicare cost report
as of July 1 of each year.
4.3.2 The inpatient and outpatient CCRs are calculated
using Medicare charges, e.g., Medicare costs for outpatient services
are derived by multiplying an overall hospital outpatient CCR (by department
or cost center) by Medicare charges in the same category.
4.3.3 The following
methods are used by DHA to calculate the CCRs for CAHs. The worksheet
and column references are to the CMS Form 2552-96 (Cost Report for
Electronic Filing of Hospitals).
|
Inpatient
CCRs
|
|
Numerator
|
Medicare costs
were defined as Worksheet D-1, Part II, line 49 MINUS (worksheet
D, Part III, Column 8, sum of lines 25-30 PLUS Worksheet D, Part
IV, line 101).
|
|
Denominator
|
Medicare charges
were defined as Worksheet D-4, Column 2, sum of lines 25-30 and 103.
|
|
Outpatient
CCRs
|
|
Numerator
|
Outpatient costs
were taken from Worksheet D, Part V, line 104, the sum of Columns
6, 7, 8, and 9.
|
|
Denominator
|
Total outpatient
charges were taken from the same Worksheet D, Part V, line 104,
sum of Columns 2, 3, 4, and 5 for the same breakdowns.
|
4.3.4 To
reimburse the vast majority of CAHs for all their costs in an administratively
feasible manner, TRICARE will identify CCRs that are outliers using
the method used by Medicare to identify outliers in its Outpatient
Prospective Payment System (OPPS) reimbursement methods. Specifically, Medicare
classifies CCR outliers as values that fall outside of three standard
deviations from the geometric mean. Applying this method to the
CAH data, those limits will be considered the threshold limits on
the CCR for reimbursement purposes. If a hospital’s CCR exceeds
the outlier threshold, the CCR is replaced with the statewide median
CCR. The 101% of reasonable cost is determined by taking the applicable
CCR (hospital specific or statewide median listed in the CAH CCR
file sent to the contractors by DHA) multiplied by billed charges,
which are then multiplied by 101%. The CAH Fiscal Year (FY) is effective
on December 1 of each year.
4.3.5 DHA will provide a list of CAHs
to the contractor with their corresponding inpatient and outpatient
CCRs by November 1 each year. Based on the requirement in
paragraph 4.3.4,
CCRs with outliers have been replaced with the statewide median
CCRs. The CCRs shall be updated on an annual basis using the second
quarter CMS Hospital Cost Report Information System (HCRIS) data.
The updated CCRs shall be effective as of December 1 of each respective
year, with the first update occurring December 1, 2009.
4.3.6 DHA will
also provide the contractor the State median inpatient and outpatient
CAH CCRs to use when a hospital specific CCR is not available.
4.4 General Temporary
Military Contingency Payment Adjustment (GTMCPA)
Payments4.4.1 The
Director, DHA or designee, may approve a GTMCPA
payment based
on
all of the following:
• The hospital serves a disproportionate
share of Service members and Active Duty Dependents (ADDs), i.e.,
10% or more of an CAH’s total admissions are for Service members
and ADDs;
• The hospital
is a TRICARE network hospital;
• The hospital’s actual costs for inpatient
services exceed TRICARE payments or other extraordinary economic
circumstance exists; and
• Without the GTMCPA payment,
Department of Defense’s (DoD’s) ability to meet military contingency
mission requirements will be significantly compromised.
4.4.2 Following
is the GTMCPA
payment process for the
first TRICARE CAH
s.
4.4.2.1 The
hospital may submit a request for a discretionary GTMCPA payment
to their contractor. The request must be made to the contractor
within 12 months of the end of the CAH year (December 1 through
November 30) for which the hospital is requesting a GTMCPA payment.
For example, a hospital must submit a request for a GTMCPA payment
for the CAH year ending November 30, 2016, by November 30, 2017.
Late submissions or requests for extensions will not be considered.
Hospitals will be given a grace period of six months from January
1, 2017, ending June 30, 2017, to submit GTMCPA payment requests
for CAH years ending on or before November 30, 2015.
4.4.2.2 The
hospital shall submit the following information to the contractor
for review and consideration:
• The total number of inpatient admissions
during the previous TRICARE CAH year and the number of Service member
and ADD admissions for this same period. Hospitals shall
not include admissions by non-ADSM or non-ADFM beneficiaries (i.e.,
retiree or retiree dependents), TRICARE for Life (TFL) beneficiaries,
overseas beneficiaries, or beneficiaries with Other Health Insurance
(OHI). Only inpatient admissions should be reported. Uniformed Services
Family Health Plan (USFHP) Service member and ADD inpatient admissions
visits may be included in the hospital’s submission if the visits were
paid utilizing the CAH Reimbursement System, but shall be separately
identified by the hospital.
• A full 12 months of claims
payment data for the previous TRICARE CAH year.
4.4.2.3 The contractor shall
perform a thorough evaluation of the hospital’s request in paragraph 4.4.2.2.
The evaluation shall consist of the following:4.4.2.3.1 The contractor shall
evaluate the hospital’s package for completeness. The contractor shall
verify the hospital has provided all components in paragraph 4.4.2.2.
4.4.2.3.2 The contractor shall
perform a validation that the hospital meets the disproportionate share
criteria. The contractor shall independently calculate the number
of ADD/Service member inpatient admissions, utilizing the contractor’s
data systems, and divide it by the total CAH inpatient admissions
reported by the hospital in paragraph 4.4.2.2. The contractor shall compare
this result to the hospital’s submission in paragraph 4.4.2.2 to ensure
the hospital met the disproportionate share criteria in paragraph 4.4.1.
The contractor shall work with the hospital to resolve discrepancies
in the reported data prior to submission of the request to DHA if
the hospital’s data show that they qualify, but the contractor’s
data show that they do not.
4.4.2.3.3 The
contractor shall perform an evaluation to determine if the hospital
is essential for continued network adequacy and is necessary to
support military contingency mission requirements. The contractor
shall report the following data elements for the prior CAH year,
as well as provide a brief narrative with supporting rationale,
describing why the hospital is essential for continued network adequacy
and why a GTMCPA payment is necessary to maintain this continued
network adequacy.
• Number of acute care hospitals and beds
in the network locality;
• Efforts that have been
made to create an adequate network;
• Availability and types of services of military
acute care services in the locations or nearby; and
• Other cost effective alternatives and other
relevant factors.
4.4.2.3.4 If the contractor’s
independent analysis shows that: (1) the hospital met the disproportionate
share criteria; and (2) the hospital is essential for continued
network adequacy, the contractor shall submit all documentation
in paragraphs 4.4.2.2 and 4.4.2.3.3 to
the Director, TRICARE Regional Office (DTRO). If the hospital fails
to meet the disproportionate share criteria or is not essential for
continued network adequacy, the contractor shall notify the DTRO
of their findings, but will not submit the full request for a GTMCPA
payment to the DTRO unless requested by the DTRO.
4.4.3 The DTRO shall perform
a thorough review and analysis of the hospital’s submission and the
contractor’s review, utilizing any DHA data the DTRO deems necessary,
to determine if the hospital meets the four criteria listed in paragraph 4.4.1 and
qualifies for a GTMCPA payment. If the hospital qualifies, the GTMCPA
payment will be set, utilizing DHA data, so the hospital’s Payment-to-Cost
Ratio (PCR) for TRICARE inpatient hospital services does not exceed
a ratio of 1.15. A hospital shall not be approved for a GTMCPA if
the payment would result in the hospital’s PCR exceeding 1.15. The
DTRO shall forward their recommendation for approval of the GTMCPA
payment and the recommended percentage adjustment to the Director,
DHA. Disapprovals by the DTRO will not be forwarded to the Director,
DHA, for review and approval. The PCR shall be calculated as follows:4.4.3.1 Step 1. Determine
actual TRICARE CAH payments, excluding OHI and USFHP claims. The CAH
GTMCPA payment is specific to the CAH reimbursement system and there
is no authority to include non-CAH paid amounts in the PCR calculation.
Claims for beneficiaries with OHI, claims for beneficiaries with
USFHP, claims for ineligible beneficiaries, duplicate claims, and
denied claims shall not be included in the calculation.
4.4.3.2 Step 2. Determine
the hospital’s costs, by identifying the billed charges for all
non-OHI, non-USFHP CAH inpatient claims. There is no authority to
include non-CAH amounts in the PCR calculation. Claims for beneficiaries
with OHI, claims for beneficiaries with USFHP, claims for ineligible beneficiaries,
duplicate claims, and denied claims shall not be included in the
calculation.
4.4.3.3 Step
3. Divide Step 1 by Step 2.
4.4.3.4 Step
4. If the amount in Step 3 is lower than 1.15 the hospital may receive
a payment so that total TRICARE payments are equal to or less than
115% of their costs. The percentage used is at the discretion of
the Director, DHA.
4.4.4 CAH payments
for the qualifying hospital will be increased by the Director, DHA,
or designee, at his/her discretion by
way of an additional GTMCPA payment
after the end of the TRICARE CAH year (December 1
through November 30). Subsequent adjustments to
the GTMCPA payment will be issued to the qualifying
hospital for the prior CAH year, when requested by
the hospital, to ensure claims that were paid-to-completion
(PTC) the previous year are adjusted. These adjustments separate from
the applicable GTMCPA payment approved
for the current CAH year.
4.4.5 Upon approval of the GTMCPA payment request
by the Director, DHA, the DTRO will
notify the Contracting Officer (CO) who shall send a letter to the
contractor notifying them of the GTMCPA payment approval.
4.4.6 The contractors shall process the GTMCPA payments
per the instructions in Section G of their contracts under Invoice
and Payment Non-Underwritten - Non-TEDs, Demonstrations. No GTMCPA payments
shall be sent out without approval from DHA-Aurora (DHA-A), Contract
Resource Management (CRM),
Budget.
4.4.7 DHA will
send an approval to the contractors to issue GTMCPA payments out
of the non-financially underwritten bank account based on fund availability.
4.4.8 GTMCPA payments shall
be reviewed and approved on an annual basis; i.e., they will have to
be evaluated on a yearly basis by the Director, TROs in order to
determine if the hospital continues to serve a disproportionate
share of Service members and ADDs and whether there are any other
special circumstances significantly affecting military contingency
capabilities.
4.4.9 The Director,
DHA or designee is the final approval authority
for
GTMCPA payments. A decision by the Director, DHA,
or designee to
approve, reject, adopt,
modify, or extend GTMCPA
payments is
not subject to the appeal and hearing procedures in
32 CFR 199.10.
4.4.10 DHA, upon request, will
provide the detailed claims data used to calculate the hospital’s PCR
and maximum GTMCPA payment, if any, to the requesting hospital through
the contractor.
4.4.11 GTMCPAs may be extended
to CAH facilities that have changed their status during the CAH GTMCPA
year. If an CAH network facility changes their status during the
CAH year, and the facility was and remained a network facility that
is essential for military readiness, contingency operations, and network
adequacy and the facility served a disproportionate share of Service
members and ADDs during the period of the year it was subject to
CAH reimbursement, then a prorated CAH GTMCPA may be authorized.
Any CAH adjustment will only apply to CAH payments.
4.5 CAH Listing
4.5.1 CAHs are reimbursed
under the reasonable cost method.
4.5.2 The effective date on the CAH list
is the date supplied by the CMS upon which the facility began receiving
reimbursement from Medicare as a CAH. If a CAH is added or dropped
off of the list from the previous update, the quarterly revision
date of the current listing shall be listed as the facility’s effective
or termination date, respectively.
4.5.3 DHA will no longer update and maintain
the CAH listing on DHA’s web site. It is the contractor’s responsibility
to determine whether a hospital has been designated as an CAH under
CMS and to reimburse them in accordance with the provisions of this
policy. The contractors shall maintain accurate network status of
their regional CAHs.
4.5.4 The contractor shall take the steps
necessary to ensure they are identifying and reimbursing CAHs appropriately.
This may include referencing CMS’ list of CAH’s on the Flex Monitoring web
site at
http://www.flexmonitoring.org,
contacting hospitals in their region to verify hospital status, or
some other action to meet this requirement. On the Flex Monitoring
web site, the CAH list is located under the Data tab and includes
effective dates. CAHs are identified by the number 13 in the third
and fourth digits of a six-digit Medicare provider number.
4.6 Billing and
Coding Requirements
4.6.1 The contractors shall use type of
institution 93 for CAHs.
4.6.2 CAHs shall utilize bill type 11X
for inpatient services.
4.6.3 CAHs shall utilize bill type 85X
for all outpatient services including services approved as Ambulatory
Surgery Center (ASC) services.
4.6.4 CAHs shall utilize bill type 12X
for ancillary/ambulance services.
4.6.5 CAHs shall utilize bill type 14X
for non-patient diagnostic services.
4.6.6 CAHs shall use bill type 18X for
swing bed services.