1.0 APPLICABILITY
1.1 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.
1.2 Reimbursement of surgical procedures
performed in an ASC prior to the implementation of the reasonable
cost method for Critical Access Hospitals (CAHs) and implementation
of TRICARE’s Outpatient Prospective Payment System (OPPS), and thereafter,
freestanding ASCs (FASCs), and other providers who are exempt from
the TRICARE OPPS and provide scheduled ambulatory surgery. For purposes
of this section, these facilities are known as non-OPPS facilities.
Non-OPPS facilities include any facility not subject to the OPPS
as outlined in
Chapter 13, Section 1, paragraph 3.4.1.2.
3.0 POLICY
Ambulatory surgery procedures
performed by providers described in
paragraph 2.0 will be reimbursed
using prospectively determined rates. The rates will be: established
on a cost-basis, divided into eleven payment groups representing
ranges of costs, and adjusted for area labor costs based on Metropolitan
Statistical Areas (MSAs). No additional benefits are payable outside
the ASC payment rate; e.g., revenue codes 260, 450, 510, 636, etc.
3.1 The ambulatory surgery payment
system is to be used regardless of where the ambulatory surgery
procedures are provided, that is, in a freestanding ASC, in a Hospital
Outpatient Department (HOPD), or in a hospital Emergency Room (ER).
No additional benefits are payable outside the ASC payment rate;
e.g., revenue codes 260, 450, 510, 636, etc.
3.2 The payment rates established
under this system apply only to the facility charges for ambulatory
surgery. The facility rate is a standard overhead amount that includes
nursing and technician services; use of the facility; drugs including
take-home drugs for less than $40; biologicals; surgical dressings,
splints, casts and equipment directly related to provision of the
surgical procedure; materials for anesthesia; Intraocular Lenses
(IOLs); and administrative, recordkeeping and housekeeping items
and services.
3.3 This payment
rate does not include items such as physicians’ fees (or fees of
other professional providers authorized to render the services and
to bill independently for them); laboratory, X-rays or diagnostic
procedures (other than those directly related to the performance
of the surgical procedure); orphan drugs; prosthetic devices (except
IOLs); ambulance services; leg, arm, and back braces; artificial limbs;
and Durable Medical Equipment (DME) for use in the patient’s home.
Note: A radiology and diagnostic
procedure is considered directly related to the performance of the
surgical procedure only if it is an inherent part of the surgical
procedure, e.g., the Common Procedure Terminology (CPT) code for
the surgical procedure includes the diagnostic or radiology procedure
as part of the code description (i.e., CPT procedure code 47560).
3.4 Ambulatory Surgery Payment
Rates
3.4.1 DHA,
or its data contractor, will calculate the payment rates and will
provide them electronically to the claims processing contractors
annually. The electronic media will include the locally-adjusted
payment rate for each payment group for each MSA and will identify,
by procedure code, the procedures in each group and the effective
date for each procedure. The MSAs and corresponding wage indexes
will be those used by Medicare.
3.4.2 In
addition to the payment rates, the contractors will be provided
a zip code to MSA crosswalk, so that they can determine which payment
rate to use for each ambulatory surgery provider. For this purpose
the zip code of the facility’s physical address (as opposed to its
billing address) is to be used. This crosswalk may be updated periodically
throughout the year and sent to the contractors.
3.4.3 In
order to calculate payment rates, only those procedures with at
least 25 claims nationwide during the database period will be used.
3.4.4 The
rates were initially calculated using the following steps.
3.4.4.1 For each ambulatory surgery
procedure, a median standardized cost was calculated on the basis
of all ambulatory surgery charges nationally under TRICARE during
the one-year database period. The steps in this calculation included:
• Standardizing
for local labor costs by reference to the same wage index and labor/non-labor-related
cost ratio as applies to the facility under Medicare;
• Applying
the Cost-to-Charge Ratio (CCR) using the Medicare CCR for FASCs
for TRICARE ASCs.
• Calculating a median cost for
each procedure; and
• Updating
to the year for which the payment rates were in effect by the Consumer
Price Index-Urban (CPI-U).
3.4.4.2 Procedures were placed into
one of 10 groups by their median per procedure cost, starting with
$0 to $299 for Group 1 and ending with $1,000 to $1,299 for Group
9 and $1,300 and above for Group 10. Groups 2 through 8 were set
on the basis of $100 fixed intervals.
3.4.4.3 The
standard payment amount per group will be the volume weighted median
per procedure cost for the procedures in that group.
3.4.4.4 Procedures for which there
was no or insufficient (less than 25 claims) data were assigned to
groups by:
• Calculating
a volume-weighted ratio of TRICARE payment rates to Medicare payment rates
for those procedures with sufficient data;
• Applying
the ratio to the Medicare payment rate for each procedure; and
• Assigning
the procedure to the appropriate payment group.
3.4.5 The
amount paid for any ambulatory surgery service under these procedures
cannot exceed the amount that would be allowed if the services were
provided on an inpatient basis. The allowable inpatient amount equals
the applicable Diagnosis Related Group (DRG) relative weight multiplied
by the national large urban adjusted standardized amount. This amount
will be adjusted by the applicable hospital wage index.
3.4.6 As
of November 1, 1998, an eleventh payment group is added to this
payment system. This group will include extracorporeal shock wave
lithotripsy.
3.4.7 Grouping
and Additions to the ASC Procedure List for Dates of Service On
or After March 1, 2017
3.4.7.1 Effective
March 1, 2017, only those procedures listed on DHA’s ambulatory
surgery web site shall be cost-shared in FASCs. Upon evaluation,
TRICARE may add additional procedures to the list. Groupings shall
be accomplished in accordance with the following procedures:
3.4.7.1.1 Prior
to March 1, 2017, DHA shall:
• Step 1: Review all allowed
ASC charges in the ASC Calendar Years (CYs) 2014 and 2015 for procedures
not included on TRICARE’s ASC list, and identify those procedures
with at least 25 claims in either calendar year.
• Step 2: Deflate the billed
charges to the base period, and shall then update the base year
charges forward to the current ASC fiscal year using the ASC annual
update factors. Then the most recent Medicare ASC CCR (1994, 0.483)
shall be used to convert the charges to costs. The procedure shall
then be placed in one of the eleven TRICARE payment groups.
• Step 3: For codes with less
than 25 claims in CY 2014 or 2015, the surgery codes shall be evaluated
to determine if there is a similar code within a group on the current
TRICARE ASC list. If so, the code shall be assigned to the similar
group. Information about the code’s grouping under Medicare’s current
ASC fee schedule shall be utilized to support the grouping.
• Step 4: Shall compare all procedures
assigned to a group under this methodology with the current Medicare
ASC payment. If assignment using these methods results in an amount
less than would be paid under the current Medicare payment, TRICARE
shall raise the rates for that procedure to equal the amount paid
by Medicare. This step shall only occur for newly-added procedures
to the ASC list.
3.4.7.1.2 Contractors
may bring additional procedures that are not on the ASC list to
the attention of DHA, for evaluation by DHA for inclusion on the
ASC list, which shall be updated on an annual basis.
3.4.7.1.3 Newly-added
procedure rates developed through the procedures established in
paragraph 3.4.7.1 apply
only to FASCs. Other non-OPPS providers (i.e., those listed in
Chapter 13, Section 1, paragraph 3.4.1.2 except
FASCs), are not subject to the newly-added rates for surgical procedures
and shall continue to be paid in accordance with the
Chapter 1, Section 24. Effective January 1,
2018, newly-added procedure rates shall be updated annually on January
1. DHA shall notate those procedures that are newly-added within
the listing posted to the DHA web site.
3.4.7.2 Newly-added
procedures will be added to the ASC list on the effective date of
each ASC update year (November 1 for dates prior to January 1, 2017,
and thereafter January 1 of each following calendar year). The first
group of newly-added procedures (described in
paragraph 3.4.7.1.1) will
be added to the list before March 1, 2017, and will be effective
for a partial year, i.e., March 1 through October 31, 2017. The
second group of newly-added procedures shall be effective November
1, 2017, to December 31, 2017. The list of newly-added procedures
shall then be updated and revised on a quarterly basis (January
1, April 1, July 1, and October 1).
3.5 Payments
3.5.1 General
The payment for a procedure
will be the standard payment amount for the group which covers that
procedure, adjusted for local labor costs by reference to the same
labor/non-labor-related cost ratio and hospital wage index as used
for ASCs by Medicare. This calculation will be done by DHA, or its
data contractor. For participating claims, the ambulatory surgery
payment rate will be reimbursed regardless of the actual charges
made by the facility--that is, regardless of whether the actual
charges are greater or smaller than the payment rate. For nonparticipating
claims, reimbursement (TRICARE payment plus beneficiary cost-share
plus any double coverage payments, if applicable) cannot exceed the
lower of the billed charge or the group payment rate.
3.5.2
Procedures
Which Do Not Have An Ambulatory Surgery Rate and Are Provided by
an FASC
3.5.2.2 Non-surgical services, such
as evaluation and management visits, laboratory, and radiology services
are to be paid in accordance with TRICARE’s allowable charge methodology
(see
Chapter 5).
3.5.3 Multiple and Terminated Procedures
3.5.3.1 Discounting for Multiple Surgical
Procedures
3.5.3.1.2 Discounting of multiple surgical
procedures is subject to the provisions in
Chapter 13, Section 3.
3.5.3.1.3 Effective
March 1, 2017, FASCs shall be reimbursed for only those surgical
services on TRICARE’s ASC list (see
paragraph 3.5.2).
3.5.3.2 Discounting for Bilateral Procedures
3.5.3.2.2 Modifiers for Discounting Terminated
Surgical Procedures
3.5.3.2.2.1 Industry standard modifiers
may be billed on outpatient hospital or individual professional
claims to further define the procedure code or indicate that certain
reimbursement situations may apply to the billing. Recognition and
utilization of modifiers are essential for ensuring accurate processing
and payment of these claim types.
3.5.3.2.2.2 Industry standard modifiers
are used to identify surgical procedures which have been terminated
prior to and after the delivery of anesthesia.
• Modifiers
52 and 73 are used to identify a surgical procedure that is terminated prior
to the delivery of anesthesia and is reimbursed at 50% of the allowable;
i.e., the ASC tier rate, the Ambulatory Payment Classification (APC)
allowable amount for OPPS claims, or the CHAMPUS Maximum Allowable
Charge (CMAC) for individual professional providers.
• Modifiers
53 and 74 are used for terminated surgical procedures after delivery
of anesthesia which are reimbursed at 100% of the appropriated allowable
amounts referenced above.
3.5.3.3 Unbundling of Procedures
Contractors
shall ensure that reimbursement for claims involving multiple procedures conforms
to the unbundling guidelines as outlined in
Chapter 1, Section 3.
3.5.3.4 Incidental Procedures
The rules for reimbursing incidental
procedures as contained in
Chapter 1, Section 3,
are to be applied to ambulatory surgery procedures reimbursed under
the rules set forth in this section. That is, no reimbursement is
to be made for incidental procedures performed in conjunction with
other procedures which are not classified as incidental. This limitation
applies to payments for facility claims as well as to professional
services.
3.6 Updating Payment Rates
The
rates will be updated annually by DHA by the same update factor
as is used in the Medicare annual updates for ASC payments.
• The
rates were updated by 2.1% effective January 1, 2019.
• The rates were updated by 2.6%
effective January 1, 2020.
• The rates were
updated by 2.4% effective January 1, 2021.
3.7 Claims for Ambulatory Surgery
3.7.1 Claim Forms
Claims for facility charges
must be submitted on a Centers for Medicare and Medicaid Services
(CMS) 1450 UB-04. Claims for professional charges may be submitted
on either a CMS 1450 UB-04 or a CMS 1500 Claim Form. The preferred
form is the CMS 1500 Claim Form. When professional services are
billed on a CMS 1450 UB-04, the information on the CMS 1450 UB-04
should indicate that these services are professional in nature and
be identified by the appropriate CPT-4 code and revenue code.
3.7.2 Billing Data
The claim must identify all
procedures which were performed (by CPT-4 or HCPCS code). The facility
claim shall be submitted on the CMS 1450 UB-04, the procedure code
will be shown in Form Locator (FL) 44.
Note: Claims from ASCs must be submitted
on the CMS 1450 UB-04 claim form. Claims not submitted on the appropriate
claim form will be denied.
3.8 Wage Index Changes
If,
during the year, Medicare revises any of the wage indexes used for
ambulatory surgery reimbursement, such changes will not be incorporated
into the TRICARE payment rates until the next routine update. These
changes will not be incorporated regardless of the reason Medicare
revised the wage index.
3.9 Subsequent Hospital Admissions
If a beneficiary is admitted
to a hospital subject to the DRG-based payment system as a result
of complications, etc. of ambulatory surgery, the ambulatory surgery
procedures are to be billed and reimbursed separately from the hospital
inpatient services. The same rules applicable to ER services are to
be followed.
3.11 Exclusions
Surgical procedures that do
not have an ambulatory surgery rate listed on DHA’s ambulatory surgery
web site are excluded from cost-sharing in freestanding ASCs.