Allowable Charges
Chapter 5
Section 2
Locality-Based Reimbursement Rate Waiver
Issue Date: September
27, 2001
Revision:
1.0 APPLICABILITY
This
policy is mandatory for reimbursement of services provided by either
network or non-network providers. However, alternative network reimbursement
methodologies are permitted when approved by the Defense Health
Agency (DHA) and specifically included in the network provider agreement.
2.0 ISSUE
What
is the process of the locality-based reimbursement rate waivers?
3.0 POLICY
3.1 Under the
locality-based reimbursement rate waiver, two access locations may
be considered for provider reimbursement rates above the CHAMPUS
Maximum Allowable Charge (CMAC). These are:
3.1.1 Network Waivers: If it is determined that
the availability of an adequate number and mix of qualified health
care providers in a network in a specific locality is not found,
higher rates may be necessary. The amount of reimbursement would
be limited to the lesser of:
• An amount equal to the local fee for service
charge; or
• Up to 115% of
the CMAC. The first attempt should be to get the provider to join
the network at the prevailing CMAC rate.
3.1.2 Locality
Waivers: If it is determined that access to specific health care
services is severely impaired, higher payment rates could be applied
to all similar services performed in a locality, or a new locality
could be defined for application of the higher payment rates. Payment
rates could be established through addition of a percentage factor
to an otherwise applicable payment amount, or by calculating a prevailing
charge, or by using another Government payment rate. Higher payments
will be paid on a claim by claim basis.
3.2 Coordination
of the request for a locality-based reimbursement rate waiver shall
be submitted to the DHA, Team Chief, Medical Benefits and Reimbursement
Section (MB&RS) by the TRICARE Regional Offices (TROs). The
TRO shall work with the contractor to ensure that both are in agreement with
the waiver request.
3.3 The procedures that are to be followed
when submitting a waiver are as follows:
3.3.1 Identify the waiver that is being requested.
• Network waivers. Needed to ensure availability
of an adequate number and mix of qualified network providers.
• Locality waivers. Needed to ensure access
to services in a locality defined by a current TRICARE locality
or a new one established by zip code.
3.3.2 Who can apply:
• TROs
• Providers through the TROs
• Beneficiaries through the TROs
• Contractor through the TROs
• Military Treatment Facility (MTF)/Enhanced
Multi-Service Market (eMSM) through the TROs.
3.3.3 How to apply:
3.3.3.1 Applicant must
submit a written waiver request to the TRO. The request must justify
that access to health care services is severely impaired due to
low reimbursement levels (CMAC payment rates).
3.3.3.2 Justification
for the waiver must include at the minimum:
• Number of providers in a locality.
• Mix of primary/specialty providers needed
to meet patient access standards.
• Number of providers who are TRICARE participating.
• Number of eligible beneficiaries in the
locality.
• Availability
of MTF/eMSM providers.
• Geographic characteristics.
• Efforts that have attempted to create an
adequate network, including any additional non-health care payments
above the CMAC rates made by the contractor.
• Letters of intent.
• Cost effectiveness.
• Other relevant factors that warrant the
higher payment to resolve the access to care issue.
3.4 The TRO
shall conduct a thorough analysis and forward recommendations with
a cost estimate for approval to DHA or designee through the Contracting
Officer (CO) for coordination. Disapprovals by the TROs will not
be forwarded to DHA. DHA is the final approval authority. A decision
by DHA to authorize, not authorize, terminate, or modify the authorization
of higher payment amounts is not subject to appeal.
• Network waivers: If DHA approves
an increase of up to 15% above the CMAC, the contractor shall have
the authority to offer specified providers up to 15% above CMAC
for joining the network.
• Locality waivers: If DHA approves
a higher payment rate for certain services in a locality, reimbursement
rates for those procedure codes in that locality shall be adjusted
by the contractor in order to improve the access to services.
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