3.0 POLICY
3.1 Statutory
Background
3.1.1 Under 10 United States Code (USC)
1079(i)(2), the amount to be paid to hospitals, Skilled Nursing
Facilities (SNFs), and other institutional providers under CHAMPUS
shall, by regulation, be established “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.” Similarly,
under 10 USC 1079(h), the amount to be paid to health care professionals
and other non-institutional health care providers “shall be equal
to an amount determined to be appropriate, to the extent practicable,
in accordance with the same reimbursement rules used by Medicare.”
Based on these statutory provisions, CHAMPUS adopted Medicare’s
Prospective Payment System (PPS) for reimbursement of hospital outpatient services
currently in effect for the Medicare program as required under the
Balanced Budget Act (BBA) of 1997 (Public Law 105-33), which provided
comprehensive provisions for establishment of a hospital Outpatient
Prospective Payment System (OPPS).
3.1.2 Centers for Medicare and Medicaid Services
(CMS) published a proposed rule in the Federal Register (FR)
on September 8, 1998 (63 FR 47552) setting forth the proposed PPS
for hospital outpatient services. On June 30, 1999, a correction
notice was published (64 FR 35258) to correct a number of technical
and typographical errors contained in the September 8, 1998 Proposed
Rule.
3.1.3 Subsequent
to publication of the proposed rule, the Balanced Budget Refinement
Act (BBRA) of 1999, enacted on November 29, 1999, made major changes
that affected the proposed OPPS. The following BBRA 1999 provisions
were implemented in a Final Rule (65 FR 18434) published on April 7,
2000:
3.1.3.1 Made
adjustments for covered services whose costs exceeded a given threshold
(i.e., an outlier payment).
3.1.3.2 Established
transitional pass-through payments for certain medical devices,
drugs, and biologicals.
3.1.3.3 Placed limitations
on judicial review for determining outlier payments and the determination
of additional payments for certain medical devices, drugs, and biologicals.
3.1.3.4 Included as
covered outpatient services implantable prosthetics and Durable
Medical Equipment (DME) and diagnostic x-ray, laboratory, and other
tests associated with those implantable items.
3.1.3.5 Limited the
variation of costs of services within each payment classification
group by providing that the highest median cost for an item or service
within the group cannot be more than two times greater than the
lowest median cost for an item or service within the group (referred
to as the “two times rule”). An exception to this requirement may
be made in unusual cases, such as low volume items and services,
but may not be made in the case of a drug or biological that has
been designated as an orphan drug under Section 526 of the Federal
Food, Drug and Cosmetic Act.
3.1.3.6 Required at
least annual review of the groups, relative payment weights, and
the wage and other adjustments to take into account changes in medical
practice, the addition of new services, new cost data, and other
relevant information or factors.
3.1.3.7 Established
transitional corridors that would limit payment reductions under
the hospital OPPS.
3.1.3.8 Established
hold harmless provisions for rural and cancer hospitals.
3.2 Participation
Requirement
In order to be an authorized provider under
the TRICARE OPPS, an institutional provider must be a participating
provider for all claims in accordance with
32 CFR 199.6(a)(8).
3.3 Unbundling
Provisions
As a prelude to implementation of
the OPPS, Omnibus Budget Reconciliation Act (OBRA) of 1996 prohibited
payment for nonphysician services furnished to hospital patients
(inpatients and outpatients), unless the services were furnished
either directly or under arrangement with the hospital except for
services of Physician Assistants (PAs), Nurse Practitioners (NPs),
and Clinical Nurse Specialists (CNSs). This facilitated the payment
of services included within the scope of each Ambulatory Payment Classification
(APC). The Act provided for the imposition of civil money penalties
not to exceed $2,000, and a possible exclusion from participation
in Medicare, Medicaid and other federal health care programs for
any person who knowingly and willfully presents, or causes to be
presented, a bill or request for payment for a hospital outpatient
service that violates the requirement for billing subject to the
following exceptions:
3.3.1 Payment for clinical diagnostic lab may
be made only to the person or entity that performed or supervised
the performance of the test. In the case of a clinical diagnostic
laboratory test that is provided under arrangement made by a hospital
or Critical Access Hospital (CAH), payment is made to the hospital.
The hospital is not responsible for billing for the diagnostic test
if a hospital patient leaves the hospital and goes elsewhere to
obtain the diagnostic test.
3.4 Applicability
and Scope of Coverage
Following are the providers and services
for which TRICARE will make payment under the OPPS.
3.4.1 Provider
Categories
3.4.1.1 Providers
Included In OPPS
3.4.1.1.1 All
hospitals participating in the Medicare program, except for those
excluded under
paragraph 3.4.1.2.
3.4.1.1.2 Hospital-based
PHPs do not require separate TRICARE authorization. Authorization
of a hospital by TRICARE is sufficient for its PHP to be an authorized
TRICARE provider.
3.4.1.1.3 Hospitals
or distinct parts of hospitals that are excluded from the inpatient
Diagnosis Related Groups (DRG) to the extent that the hospital or
distinct part furnishes outpatient services.
Note: All
Hospital Outpatient Departments (HOPDs) will be subject to the OPPS
unless specifically excluded under this chapter. The marketing contractor
shall have responsibility for educating providers to bill under
the OPPS even if they are not a Medicare participating/certified
provider (i.e., not subject to the DRG inpatient reimbursement system).
3.4.1.1.4 Small Rural and Sole Community Hospitals
(SCHs) in Rural Areas
TRICARE delayed implementation of its OPPS
for small rural hospitals with 100 or fewer beds and rural SCHs
with 100 or fewer beds until January 1, 2010.
3.4.1.2
Providers
Excluded From OPPS
3.4.1.2.1 Outpatient services provided by hospitals
of the Indian Health Service (IHS) will continue to be paid under
separately established rates.
3.4.1.2.2 Certain hospitals
that qualify for payment under the state’s cost containment waiver, e.g.,
Maryland.
3.4.1.2.4 Hospitals located
outside one of the 50 United States (U.S.), the District of Columbia, and
Puerto Rico.
3.4.1.2.5 Specialty
care providers to include:
• Cancer and children’s
hospitals
• Freestanding
Ambulatory Surgery Centers (ASCs)
• Freestanding PHPs and Intensive Outpatient
Programs ((IOPs) that offer psych and substance use treatments,
Substance Use Disorder Rehabilitation Facilities (SUDRFs), and freestanding
Opioid Treatment Programs (OTPs)
• Comprehensive Outpatient Rehabilitation
Facilities (CORFs)
• Home Health
Agencies (HHAs)
• Hospice programs
• Community Mental Health Centers (CMHCs)
• Other corporate services providers (e.g.,
Freestanding Cardiac Catheterization, Sleep Disorder Diagnostic
Centers, and Freestanding Hyperbaric Oxygen Treatment Centers).
Note: Antigens,
splints, casts and hepatitis B vaccines furnished outside the patient’s
plan of care in CORFs, HHAs and hospice programs will continue to
receive reimbursement under current TRICARE allowable charge methodology.
• Freestanding Birthing Centers
• Department of
Veterans Affairs (DVA)/Veterans Health Administration
(VHA) Hospitals
• Freestanding
End Stage Renal Disease (ESRD) Facilities
• SNFs
• Psychiatric
Residential Treatment Centers (RTCs)
3.4.2 Scope of
Services
3.4.2.1 Services excluded under the hospital
OPPS and paid under the CHAMPUS Maximum Allowable Charge (CMAC)
or other TRICARE recognized allowable charge methodology.
3.4.2.1.1 Physician services.
3.4.2.1.2 Nurse Practitioner
(NP) and Clinical Nurse Specialist (CNS) services.
3.4.2.1.3 Physician Assistant
(PA) services.
3.4.2.1.4 Certified Nurse-Midwife
(CNM) services.
3.4.2.1.5 Services of
qualified psychologists.
3.4.2.1.6 Clinical Social
Worker (CSW) services.
3.4.2.1.7 Services of
an anesthetist.
3.4.2.1.8 Screening and
diagnostic mammographies.
3.4.2.1.9 Influenza
and pneumococcal pneumonia vaccines.
Note: Hospitals,
HHAs, and hospices will continue to receive CMAC payments for influenza
and pneumococcal pneumonia vaccines due to considerable fluctuations
in their availability and cost.
3.4.2.1.10 Clinical
diagnostic laboratory services. Effective January 1, 2014, most
laboratory tests will be packaged under OPPS. See
Section 4, paragraph 3.6.
3.4.2.1.11 Take home surgical
dressings.
3.4.2.1.12 Non-implantable
DME, prosthetics (prosthetic devices), orthotics, and supplies (DMEPOS)
paid under the DMEPOS fee schedule when the hospital is acting as
a supplier of these items.
• An item such
as crutches or a walker that is given to the patient to take home,
but that may also be used while the patient is at the hospital,
would be paid for under the hospital OPPS.
• Payment may not be made for items
furnished by a supplier of medical equipment and supplies unless
the supplier obtains a supplier number. However, since there is no
reason to split a claim for DME payment under TRICARE, a separate
supplier number will not be required for a hospital to receive reimbursement
for DME.
3.4.2.1.13 Hospital outpatient
services furnished to SNF inpatients as part of their resident assessment
or comprehensive care plan that are furnished by the hospital “under
arrangements” but billable only by the SNF.
3.4.2.1.14 Services and
procedures designated as requiring inpatient care.
3.4.2.1.15 Services excluded
by statute (excluded from the definition of “covered Outpatient Department
(OPD) Services”):
• Ambulance services
• Physical Therapy
(PT)
• Occupational
Therapy (OT)
• Speech-Language
Pathology (SLP)
Note: The
above services are subject to the CMAC or other TRICARE recognized
reimbursement methodology (e.g., statewide prevailings).
3.4.2.1.16 Ambulatory
surgery procedures performed in freestanding ASCs will continue
to be reimbursed under the per diem system established in
Chapter 9, Section 1.
3.4.2.2 Costs excluded
under the hospital OPPS:
3.4.2.2.1 Direct cost
of medical education activities.
3.4.2.2.2 Costs of approved
nursing and allied health education programs.
3.4.2.2.3 Costs associated
with interns and residents not in approved teaching programs.
3.4.2.2.4 Costs of teaching
physicians.
3.4.2.2.5 Costs of anesthesia
services furnished to hospital outpatients by qualified non-physician
anesthetists (Certified Registered Nurse Anesthetists (CRNAs) and
Anesthesiologist Assistants (AAs)) employed by the hospital or obtained
under arrangements, for hospitals.
3.4.2.2.6 Bad debts for
uncollectible and coinsurance amounts.
3.4.2.2.7 Organ acquisition
costs.
3.4.2.2.8 Corneal
tissue acquisition costs incurred by hospitals that are paid on
a reasonable cost basis.
3.4.2.2.9 Autologous stem
cell processing and harvesting procedures.
3.4.2.3 Services
included in payment under the OPPS (not an all-inclusive list).
3.4.2.3.1 Hospital-based
PHPs (psych and Substance Use Disorder SUD) which are paid a per diem
OPPS, and for dates of service on or after October 3, 2016, Intensive
Outpatient Programs (IOPs). Partial hospitalization is a distinct
and organized intensive psychiatric outpatient day treatment program,
designed to provide patients who have profound and disabling mental
health and SUD conditions with an individualized, coordinated, comprehensive,
and multidisciplinary treatment program. IOP is a comprehensive
and complementary schedule of recognized treatment approaches that
may include day, evening, night, and weekend services consisting
of individual and group counseling or therapy, and family counseling
or therapy as clinically indicated for children and adolescents,
or adults aged 18 and over, and may include case management to link
patients and their families with community-based support systems.
3.4.2.3.2 OTPs
are organized, ambulatory, addiction treatment services for patients
with an opioid use disorder. Hospital-based Methadone OTPs shall
be reimbursed a weekly all-inclusive per diem rate, including
the cost of the drug and related services (i.e., the costs related
to the initial intake/assessment, drug dispensing and screening,
and integrated psychosocial and medical treatment and support services).
The bundled weekly per diem payments shall be accepted as payment
in full, subject to the outpatient cost-sharing provisions under
32 CFR 199.4(f). When providing other medications which
are more likely to be prescribed and administered in an Office-Based
Opioid Treatment (OBOT) setting, but which are still available for
treatment of SUDs in an outpatient treatment program setting, OTPs
shall be reimbursed on a fee-for-service basis (i.e., separate payments
will be allowed for both the medication and accompanying support
services), subject to the outpatient cost-sharing provisions under
32 CFR 199.4(f).
3.4.2.3.3 All hospital outpatient services,
except those that are identified as excluded. The following are
services that are included in OPPS:
3.4.2.3.3.1 Surgical procedures.
Note: All
hospital based ASC claims that are submitted to be paid under OPPS
must be submitted with a Type Of Bill (TOB) 13X. If a claim is submitted
to be paid with TOB 83X the claim will be denied.
3.4.2.3.3.2 Radiology, including
radiation therapy.
3.4.2.3.3.3 Clinic
visits.
3.4.2.3.3.4 Emergency Department
(ED) visits.
3.4.2.3.3.5 Diagnostic services
and other diagnostic tests.
3.4.2.3.3.6 Surgical
pathology.
3.4.2.3.3.7 Cancer chemotherapy.
3.4.2.3.3.8 Implantable
medical items.
• Prosthetic implants
(other than dental) that replace all or part of an internal body organ
(including colostomy bags and supplies directly related to colostomy
care and including replacement of these devices);
• Implantable DME (e.g., pacemakers, defibrillators,
drug pumps, and neurostimulators);
• Implantable items used in performing diagnostic
x-rays, diagnostic laboratory tests, and other diagnostic tests.
Note: Because
implantable items are now packaged into the APC payment rate for
the service or procedure with which they are associated, certain
items may be candidates for the transitional pass-through payment.
3.4.2.3.3.9 Specific hospital
outpatient services furnished to a beneficiary who is admitted to
a Medicare-participating SNF for those services that are beyond
the scope of SNF comprehensive care plans. See
Chapter 8, Section 1, paragraph 4.2.14.5.10 for
outpatient services provided to SNF patients.
3.4.2.3.3.10 Certain preventive
services furnished to healthy persons, such as colorectal cancer screening.
3.4.2.3.3.11 Acute dialysis
(e.g., dialysis for poisoning).
3.4.2.3.3.12 ESRD
Services. Since TRICARE does not have an ESRD composite rate, ESRD
services are included in TRICARE’s OPPS.
3.4.2.3.3.13 Acquisition
costs for allogenic stem cell transportation.
3.4.2.3.3.14 Autologous
stem cell processing and harvesting procedures.
3.5 Description
of APC Groups
3.5.1 Group
services identified by Healthcare Common Procedure Coding System
(HCPCS) codes and descriptors within APC groups are the basis for
setting payment rates under the hospital OPPS.
3.5.2 The APC system
establishes groups of covered services so that the services within
each group are comparable clinically and with respect to the use
of resources. The fundamental criteria for grouping procedures/services
are: resource homogeneity; clinical homogeneity; provider concentration;
and frequency of service. See the TRICARE OPPS Final Rule for descriptions
(73 FR 74945).
3.6 Basic Reimbursement Methodology
3.6.1 Under the OPPS,
hospital outpatient services are paid on a rate-per-service basis
that varies according to the APC group to which the service is assigned.
3.6.2 The APC classification
system is composed of groups of services that are comparable clinically
and with respect to the use of resources. Level I and Level II HCPCS
codes and descriptors are used to identify and group the services
within each APC. Costs associated with items or services that are
directly related and integral to performing a procedure or furnishing
a service have been packaged into each procedure or service within
an APC group with the exception of:
• New temporary technology APCs for certain
approved services that are structured based on cost rather than
clinical homogeneity.
• Separate APCs for certain medical devices,
drugs, biologicals, radiopharmaceuticals and devices of brachytherapy
under transitional pass-through provisions.
3.6.3 Each APC weight
represents the median hospital cost of the services included in
the APC relative to the median hospital cost of services included
in the hospital clinic visits APC. APC weights are scaled to the
hospital clinic visits APC because it is one of the most frequently
performed services in the outpatient setting.
3.6.4 The items and
services within an APC group cannot be considered comparable with respect
to the use of resources if the highest median cost for an item or
service in the group is more than two times greater than the lowest
median cost for an item or service within the same group. However,
exceptions may be made to the two times rule “in unusual cases,
such as low volume items and services.”
3.6.5 The prospective payment rate for each APC
is calculated by multiplying the APC’s relative weight by the conversion
factor.
3.6.6 A wage adjustment factor will be used
to adjust the portion of the payment rate that is attributable to
labor-related costs for relative differences in labor and non-labor-related
costs across geographical regions.
3.6.7 Applicable deductible and/or cost-sharing/copayment
amounts will be subtracted from the adjusted APC payment rate based
on the eligibility status of the beneficiary at the time outpatient services
were rendered (e.g., Prime or Select). See
Chapter 2.
Note: The
ASC cost-sharing provision (i.e., assessment of a single copayment
for both the professional and facility charge for a Prime or Select
enrollee) will be adopted as long as it is administratively feasible.
For beneficiary categories where cost-sharing is based on a percentage
of the maximum allowable amount, the ASC cost-sharing provision
does not apply. The copayment is based on site of service, except
for venipuncture and fetal monitoring. Reference
Chapter 2, Section 1, paragraphs 1.2.4.5 and
1.2.4.7.
3.6.9 Composite APCs
provide a single payment for a comprehensive diagnostic and/or treatment
service defined as a service typically reported with multiple HCPCS
codes. See
Section 2 for additional information.
3.6.10 Comprehensive
APCs provide a single payment for a primary service, and payment
for all adjunctive services reported on the same claim are packaged
into the payment for the primary service. See
Section 2 for
additional information.
3.7 Outpatient Code Editor (OCE)
3.7.1 The OCE
with APC program edits patient data to help identify possible errors
in coding and assigns APC numbers based on HCPCS codes for payment
under the OPPS. The OPPS is an outpatient equivalent of the inpatient,
DRG-based PPS. Like the inpatient system based on DRGs, each APC
has a pre-established prospective payment amount associated with
it. However, unlike the inpatient system that assigns a patient
to a single DRG, multiple APCs can be assigned to one outpatient
record. If a patient has multiple outpatient services during a single
visit, the total payment for the visit is computed as the sum of
the individual payments for each service. Updated versions of the
OCE and data files, along with installation and user manuals, will
be delivered electronically to the contractors. The contractors
will be required to replace the existing OCE with the updated OCE
within 21 calendar days of receipt. See
Addendum A,
for quarterly review/update process.
3.7.2 The OCE incorporates the National Correct
Coding Initiatives (NCCI) edits used by the CMS. Claims reimbursed
under the OPPS methodology are exempt from the claims auditing software referenced
in
Chapter 1, Section 3.
3.7.3 Under certain
circumstances (e.g., active duty claims), the contractor may override
claims that are normally not payable.
3.7.4 CMS has agreed to the use of 900 series
numbers (900-999) within the OCE for TRICARE specific edits.
3.8 PRICER Program
3.8.1 The APC
PRICER will be straightforward in that the site-of-service wage
index will be used to wage adjust the payment rate for the particular
APC HCPCS Level I and II code (e.g., a HCPCS code with a designated
Status Indicator (SI) of
J1,
S,
T,
V,
or
X) reported off of the
hospital outpatient claim. The PRICER will also apply discounting
for multiple surgical procedures performed during a single operative
session and outlier payments for extraordinarily expensive cases.
DHA will provide the contractor’s with a common TRICARE PRICER and
will provide quarterly updates. The contractors shall replace the
existing PRICER with the updated PRICER within 21 days of receipt.
Note: Claims
received with service dates on or after the OPPS quarterly effective
dates (i.e., January 1, April 1, July 1, and October 1 of each calendar
year) but prior to 21 days from receipt of either the OPPS OCE or
PRICER update cartridge may be considered excluded claims as defined
by the TRICARE Operations Manual (TOM),
Chapter 1, Section 3, paragraph 1.4.2.
3.8.2 The contractors
shall provide 3M with those pricing files to maintain and update
the TRICARE OPPS Pricer within five weeks prior to the quarterly
update. For example, statewide prevailings for services that do
not have a CMAC and state specific non-professional component birthing
center rates. Appropriate deductible, cost-sharing/copayment amounts
and catastrophic caps limitations will be applied outside the PRICER
based on the eligibility status of the TRICARE beneficiary at the
time the outpatient services were rendered.
3.10 Provider-Based
Status for Payment Under OPPS
The CMS
will retain sole responsibility for determining provider-based status
under the OPPS.
3.11 Implementing Instructions
Since
this issuance only deals with a general overview of the OPPS reimbursement methodology,
the following cross-reference is provided to facilitate access to
specific implementing instructions within Chapter 13:
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Implementing
Instructions/Services
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Policies
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General Overview
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Billing and
Coding of Services under APC Groups
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Reimbursement
Methodology
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Claims Submission
and Processing Requirements
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Medical Review
Under the Hospital OPPS
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Addenda
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Development
Schedule for TRICARE OCE/APC - Quarterly Update
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OPPS OCE Notification
Process for Quarterly Updates
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Approval Of
OPPS - OCE/APC And NGPL Quarterly Update Process
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3.12 OPPS Data Elements Available On DHA’s
Web Site