(a)
Hospitals.
The CHAMPUS-determined
allowable cost for reimbursement of a hospital shall be determined
on the basis of one of the following methodologies.
(1) CHAMPUS
Diagnosis Related Group (DRG)-based payment system.
Under the
CHAMPUS DRG-based payment system, payment for the operating costs
of inpatient hospital services furnished by hospitals subject to
the system is made on the basis of prospectively-determined rates
and applied on a per discharge basis using DRGs. Payments under
this system will include a differentiation for urban (using large
urban and other urban areas) and rural hospitals and an adjustment
for area wage differences and indirect medical education costs.
Additional payments will be made for capital costs, direct medical
education costs, and outlier cases.
(i) General--
(A) DRGs used.
The CHAMPUS DRG-based payment system
will use the same DRGs used in the most recently available grouper
for the Medicare Prospective Payment System, except as necessary
to recognize distinct characteristics of CHAMPUS beneficiaries and
as described in instructions issued by the Director, OCHAMPUS.
(B) Assignment of
discharges to DRGs.
(1) The classification
of a particular discharge shall be based on the patient’s age, sex,
principal diagnosis (that is, the diagnosis established, after study,
to be chiefly responsible for causing the patient’s admission to
the hospital), secondary diagnoses, procedures performed and discharge
status. In addition, for neonatal cases (other than normal newborns)
the classification shall also account for birthweight, surgery and
the presence of multiple, major and other neonatal problems, and
shall incorporate annual updates to these classification features.
(2) Each discharge shall be assigned to only
one DRG regardless of the number of conditions treated or services
furnished during the patient’s stay.
(C) Basis of payment--
(1) Hospital billing.
Under the
CHAMPUS DRG-based payment system, hospitals are required to submit
claims (including itemized charges) in accordance with Sec. 199.7(b).
The CHAMPUS fiscal intermediary will assign the appropriate DRG
to the claim based on the information contained in the claim. Any
request from a hospital for reclassification of a claim to a higher
weighted DRG must be submitted, within 60 days from the date of
the initial payment, in a manner prescribed by the Director, OCHAMPUS.
(2) Payment on
a per discharge basis.
Under
the CHAMPUS DRG-based payment system, hospitals are paid a predetermined
amount per discharge for inpatient hospital services furnished to
CHAMPUS beneficiaries.
(3) Pricing of
claims.
All final claims
with discharge dates of September 30, 2014, or earlier that are reimbursed
under the CHAMPUS DRG-based payment system are to be priced as of
the date of admission, regardless of when the claim is submitted.
All final claims with discharge dates of October 1, 2014, or later
that are reimbursed under the CHAMPUS DRG-based payment system are
to be priced as of the date of discharge.
(4) Payment in
full.
The DRG-based
amount paid for inpatient hospital services is the total CHAMPUS payment
for the inpatient operating costs (as described in paragraph (a)(1)(i)(C)(5)
of this section) incurred in furnishing services covered by the
CHAMPUS. The full prospective payment amount is payable for each
stay during which there is at least one covered day of care, except
as provided in paragraph (a)(1)(iii)(E)(1)(i)(A) of
this section.
(5) Inpatient
operating costs.
The
CHAMPUS DRG-based payment system provides a payment amount for inpatient
operating costs, including:
(i) Operating
costs for routine services, such as the costs of room, board, and
routine nursing services;
(ii) Operating
costs for ancillary services, such as hospital radiology and laboratory
services (other than physicians’ services) furnished to hospital
inpatients;
(iii) Special
care unit operating costs; and
(iv) Malpractice
insurance costs related to services furnished to inpatients.
(6) Discharges
and transfers.
(i) Discharges.
A hospital inpatient
is discharged when:
(A) The patient
is formally released from the hospital (release of the patient to
another hospital as described in paragraph (a)(1)(i)(C)(6)(ii) of
this section, or a leave of absence from the hospital, will not be
recognized as a discharge for the purpose of determining payment
under the CHAMPUS DRG-based payment system);
(B) The patient
dies in the hospital; or
(C) The patient is transferred from the care
of a hospital included under the CHAMPUS DRG-based payment system
to a hospital or unit that is excluded from the prospective payment
system.
(ii) Transfers.
Except as provided
under paragraph (a)(1)(i)(C)(6)(i) of this section,
a discharge of a hospital inpatient is not counted for purposes
of the CHAMPUS DRG-based payment system when the patient is transferred:
(A) From one
inpatient area or unit of the hospital to another area or unit of
the same hospital;
(B) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of another hospital
paid under this system;
(C) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of another hospital
that is excluded from the CHAMPUS DRG-based payment system because
of participation in a statewide cost control program which is exempt
from the CHAMPUS DRG-based payment system under paragraph (a)(1)(ii)(A)
of this section; or
(D) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of a uniformed
services treatment facility.
(iii) Payment in
full to the discharging hospital.
The hospital discharging an inpatient
shall be paid in full under the CHAMPUS DRG-based payment system.
(iv) Payment to a
hospital transferring an inpatient to another hospital.
If a
hospital subject to the CHAMPUS DRG-based payment system transfers
an inpatient to another such hospital, the transferring hospital
shall be paid a per diem rate (except that in neonatal cases, other
than normal newborns, the hospital will be paid at 125 percent of
that per diem rate), as determined under instructions issued by TSO,
for each day of the patient’s stay in that hospital, not to exceed
the DRG-based payment that would have been paid if the patient had
been discharged to another setting. For admissions occurring on
or after October 1, 1995, the transferring hospital shall be paid
twice the per diem rate for the first day of any transfer stay,
and the per diem amount for each subsequent day, up to the limit
described in this paragraph.
(v) Additional payments
to transferring hospitals.
A
transferring hospital may qualify for an additional payment for
extraordinary cases that meet the criteria for long-stay or cost
outliers.
(D) DRG system updates.
The CHAMPUS DRG-based payment system
is modeled on the Medicare Prospective Payment System (PPS) and
uses annually updated items and numbers from the Medicare PPS as
provided for in this part and in instructions issued by the Director,
DHA. The effective date of these items and numbers shall not correspond
to that under Medicare PPS but shall be delayed until January 1,
to align with TRICARE’s program year reporting. This allows for
an administrative simplicity that optimizes healthcare delivery
by reducing existing administrative burden and costs.
(ii) Applicability
of the DRG system.
(A) Areas affected.
The CHAMPUS
DRG-based payment system shall apply to hospitals’ services in the
fifty states, the District of Columbia, and Puerto Rico, except
that any state which has implemented a separate DRG-based payment
system or similar payment system in order to control costs and is
exempt from the Medicare Prospective Payment System may be exempt from
the CHAMPUS DRG-based payment system if it requests exemption in
writing, and provided payment under such system does not exceed
payment which would otherwise be made under the CHAMPUS DRG-based
payment system.
(B) Services subject to the DRG-based payment
system.
All normally
covered inpatient hospital services furnished to CHAMPUS beneficiaries
by hospitals are subject to the CHAMPUS DRG-based payment system.
(C) Services
exempt from the DRG-based payment system.
The following hospital services,
even when provided in a hospital subject to the CHAMPUS DRG-based
payment system, are exempt from the CHAMPUS DRG-based payment system.
The services in paragraphs (a)(1)(ii)(C)(1) through
(a)(1)(ii)(C)(4) and (a)(1)(ii)(C)(7)
through (a)(1)(ii)(C)(9) of this section shall
be reimbursed under the procedures in paragraph (a)(4) of this section,
and the services in paragraphs (a)(1)(ii)(C)(5)
and (a)(1)(ii)(C)(6) of this section shall be reimbursed
under the procedures in paragraph (j) of this section.
(1) Services
provided by hospitals exempt from the DRG-based payment system.
(2) All services
related to solid organ acquisition for CHAMPUS covered transplants
by CHAMPUS-authorized transplantation centers.
(3) All services
related to heart and liver transplantation for admissions prior
to October 1, 1998, which would otherwise be paid under the respective
DRG.
(4) All services related to CHAMPUS covered
solid organ transplantations for which there is no DRG assignment.
(5) All professional
services provided by hospital-based physicians.
(6) All services provided by nurse anesthetists.
(7) All services
related to discharges involving pediatric bone marrow transplants
(patient under 18 at admission).
(8) All services
related to discharges involving children who have been determined
to be HIV seropositive (patient under 18 at admission).
(9) All services
related to discharges involving pediatric cystic fibrosis (patient
under 18 at admission).
(10) For admissions
occurring on or after October 1, 1990, and before October 1, 1994,
and for discharges occurring on or after October 1, 1997, the costs
of blood clotting factor for hemophilia inpatients. An additional
payment shall be made to a hospital for each unit of blood clotting
factor furnished to a CHAMPUS inpatient who is hemophiliac in accordance
with the amounts established under the Medicare Prospective Payment
System (42 CFR 412.115).
(D) Hospitals
subject to the CHAMPUS DRG-based payment system.
All hospitals within the fifty states, the
District of Columbia, and Puerto Rico which are certified to provide
services to CHAMPUS beneficiaries are subject to the DRG-based payment
system except for the following hospitals or hospital units which
are exempt.
(1) Psychiatric
hospitals.
A psychiatric
hospital which is exempt from the Medicare Prospective Payment System
is also exempt from the CHAMPUS DRG-based payment system. In order
for a psychiatric hospital which does not participate in Medicare
to be exempt from the CHAMPUS DRG-based payment system, it must
meet the same criteria (as determined by the Director, OCHAMPUS,
or a designee) as required for exemption from the Medicare Prospective
Payment System as contained in 42 CFR 412.23.
(2) Inpatient
Rehabilitation Facilities (IRF).
Prior
to implementation of the IRF PPS methodology described in paragraph
(a)(10) of this section, an inpatient rehabilitation facility which
is exempt from the Medicare prospective payment system is also exempt
from the TRICARE DRG-based payment system.
(3) Psychiatric
and rehabilitation units (distinct parts).
Prior to implementation of the IRF PPS methodology
described in paragraph (a)(10) of this section, a rehabilitation
unit which is exempt from the Medicare prospective payment system
is also exempt from the TRICARE DRG-based payment system. A psychiatric
unit which is exempt from the Medicare prospective payment system
is also exempt from the TRICARE DRG-based payment system.
(4) Long Term
Care Hospitals.
Prior
to implementation of the LTCH PPS methodology described in paragraph
(a)(9) of this section, a long-term care hospital which is exempt
from the Medicare prospective payment system is also exempt from
the CHAMPUS DRG-based payment system.
(5) Hospitals
within hospitals.
A
hospital within a hospital which is exempt from the Medicare prospective
payment system is also exempt from the CHAMPUS DRG-based payment
system. In order for a hospital within a hospital which does not
participate in Medicare to be exempt from the CHAMPUS DRG-based
payment system, it must meet the same criteria (as determined by
the Director, TSO, or a designee) as required for exemption from
the Medicare Prospective Payment System as contained in 42 CFR 412.22
and the criteria for one or more of the excluded hospital classifications described
in Sec. 412.23 of Title 42 CFR.
(6) Sole
community hospitals (SCHs).
Prior
to implementation of the SCH reimbursement method described in paragraph
(a)(7) of this section, any hospital that has qualified for special
treatment under the Medicare prospective payment system as an SCH
(see subpart G of 42 CFR part 412) and has not given up that classification
is exempt from the CHAMPUS DRG-based payment system.
(7) Christian
Science sanitoriums.
All
Christian Science sanitoriums (as defined in paragraph (b)(4)(viii)
of Sec. 199.6) are exempt from the CHAMPUS DRG-based payment system.
(8) Cancer hospitals.
Any hospital
which qualifies as a cancer hospital under the Medicare standards and
has elected to be exempt from the Medicare prospective payment system
is exempt from the CHAMPUS DRG-based payment system. (See 42 CFR
412.94.)
(9) Hospitals
outside the 50 states, the District of Columbia, and Puerto Rico.
A hospital is
excluded from the CHAMPUS DRG-based payment system if it is not
located in one of the fifty States, the District of Columbia, or
Puerto Rico.
(10) CAHs.
Effective December
1, 2009, any facility which has been designated and certified as
a CAH as contained in 42 CFR Part 485.606 is exempt from the CHAMPUS
DRG-based payment system.
(E) Hospitals
which do not participate in Medicare.
Any hospital which is subject to the
CHAMPUS DRG-based payment system and which otherwise meets CHAMPUS
requirements but which is not a Medicare-participating provider
(having completed a form HCA-1514, Hospital Request for Certification
in the Medicare/Medicaid Program and a form HCFA-1561, Health Insurance
Benefit Agreement) must complete a participation agreement with
TRICARE. By completing the participation agreement, the hospital
agrees to participate on all CHAMPUS inpatient claims and to accept
the CHAMPUS-determined allowable amount as payment in full for these
claims. Any hospital which does not participate in Medicare and
does not complete a participation agreement with TRICARE will not
be authorized to provide services to TRICARE beneficiaries.
(F) Substance
Use Disorder Rehabilitation facilities.
With admissions on or after July 1, 1995, substance
use disorder rehabilitation facilities, authorized under Sec. 199.6(b)(4)(xiv),
are subject to the DRG-based payment system.
(iii) Determination
of payment amounts.
The
actual payment for an individual claim under the CHAMPUS DRG-based
payment system is calculated by multiplying the appropriate adjusted standardized
amount (adjusted to account for area wage differences using the
wage indexes used in the Medicare program) by a weighting factor
specific to each DRG.
(A) Calculation of DRG weights.
(1) Grouping
of charges.
All discharge
records in the database shall be grouped by DRG.
(2) Remove DRGs.
Those DRGs that
represent discharges with invalid data or diagnoses insufficient for
DRG assignment purposes are removed from the database.
(3) Indirect
medical education standardization.
To standardize the charges for the
cost effects of indirect medical education factors, each teaching
hospital’s charges will be divided by 1.0 plus the following ratio
on a hospital-specific basis:
(4) Wage level
standardization.
To standardize the charge records
for area wage differences, each charge record will be divided into
labor-related and nonlabor-related portions, and the labor-related portion
shall be divided by the most recently available Medicare wage index
for the area. The labor-related and nonlabor-related portions will
then be added together.
(5) Elimination
of statistical outliers.
All unusually high or low charges
shall be removed from the database.
(6) Calculation
of DRG average charge.
After the standardization for indirect
medical education, and area wage differences, an average charge
for each DRG shall be computed by summing charges in a DRG and dividing
that sum by the number of records in the DRG.
(7) Calculation
of national average charge per discharge.
A national average charge per discharge shall
be calculated by summing all charges and dividing that sum by the
total number of records from all DRG categories.
(8) DRG relative
weights.
DRG relative
weights shall be calculated for each DRG category by dividing each
DRG average charge by the national average charge.
(B) Empty and low-volume DRGs.
For any DRG with less than ten (10) occurrences
in the CHAMPUS database, the Director, TSO, or designee, has the
authority to consider alternative methods for estimating CHAMPUS
weights in these low-volume DRG categories.
(C) Updating
DRG weights.
The CHAMPUS
DRG weights shall be updated or adjusted as follows:
(1) DRG weights shall be recalculated annually
using CHAMPUS charge data and the methodology described in paragraph
(a)(1)(iii)(A) of this section.
(2) When a new DRG is created, CHAMPUS will,
if practical, calculate a weight for it using an appropriate charge
sample (if available) and the methodology described in paragraph
(a)(1)(iii)(A) of this section.
(3) In the case of any other change under
Medicare to an existing DRG weight (such as in connection with technology
changes), CHAMPUS shall adjust its weight for that DRG in a manner
comparable to the change made by Medicare.
(D) Calculation of
the adjusted standardized amounts.
The following procedures shall be
followed in calculating the CHAMPUS adjusted standardized amounts.
(1) Differentiate
large urban and other area charges.
All charges in the database shall
be sorted into large urban and other area groups (using the same
definitions for these categories used in the Medicare program. The
following procedures will be applied to each group.
(2) Indirect
medical education standardization.
To standardize the charges for the
cost effects of indirect medical education factors, each teaching
hospital’s charges will be divided by 1.0 plus the following ratio
on a hospital-specific basis:
(3) Wage level
standardization.
To standardize the charge records
for area wage differences, each charge record will be divided into
labor-related and nonlabor-related portions, and the labor-related portion
shall be divided by the most recently available Medicare wage index
for the area. The labor-related and nonlabor-related portions will
then be added together.
(4) Apply the
cost to charge ratio.
Each charge is to be reduced to
a representative cost by using the Medicare cost to charge ratio.
This amount shall be increased by 1 percentage point in order to reimburse
hospitals for bad debt expenses attributable to CHAMPUS beneficiaries.
(5) Preliminary
base year standardized amount.
A preliminary base year standardized
amount shall be calculated by summing all costs in the database
applicable to the large urban or other area group and dividing by
the total number of discharges in the respective group.
(6) Update for
inflation.
The preliminary
base year standardized amounts shall be updated using an annual
update factor equal to 1.07 to produce fiscal year 1988 preliminary
standardized amounts. Therefore, any development of a new standardized
amount will use an inflation factor equal to the hospital market
basket index used by the Health Care Financing Administration in
their Prospective Payment System.
(7) The preliminary standardized amounts,
updated for inflation, shall be divided by a system standardization
factor so that total DRG outlays, given the database distribution
across hospitals and diagnosis, are equal to the total charges reduced
to costs.
(8) Labor and
nonlabor portions of the adjusted standardized amounts.
The adjusted
standardized amounts shall be divided into labor and nonlabor portions
in accordance with the Medicare division of labor and nonlabor portions.
(E) Adjustments to
the DRG-based payments amounts.
The following adjustments to the DRG-based amounts
(the weight multiplied by the adjusted standardized amount) will
be made.
(1) Outliers.
The DRG-based
payment to a hospital shall be adjusted for atypical cases. These
outliers are those cases that have either an unusually short length-of-stay
or extremely long length-of-stay or that involve extraordinarily
high costs when compared to most discharges classified in the same
DRG. Cases which qualify as both a length-of-stay outlier and a
cost outlier shall be paid at the rate which results in the greater
payment.
(i) Length-of-stay
outliers.
Length-of-stay
outliers shall be identified and paid by the fiscal intermediary
when the claims are processed.
(A) Short-stay
outliers.
Any discharge
with a length-of-stay (LOS) less than 1.94 standard deviations from
the DRG’s arithmetic LOS shall be classified as a short-stay outlier.
Short-stay outliers shall be reimbursed at 200 percent of the per
diem rate for the DRG for each covered day of the hospital stay, not
to exceed the DRG amount. The per diem rate shall equal the DRG
amount divided by the arithmetic mean length-of-stay for the DRG.
(B) Long-stay
outliers.
Any discharge
(except for neonatal services and services in children’s hospitals)
which has a length-of-stay (LOS) exceeding a threshold established
in accordance with the criteria used for the Medicare Prospective
Payment System as contained in 42 CFR 412.82 shall be classified
as a long-stay outlier. Any discharge for neonatal services or for
services in a children’s hospital which has a LOS exceeding the
lesser of 1.94 standard deviations or 17 days from the DRG’s arithmetic
mean LOS also shall be classified as a long-stay outlier. Long-stay
outliers shall be reimbursed the DRG-based amount plus a percentage
(as established for the Medicare Prospective Payment System) of
the per diem rate for the DRG for each covered day of care beyond
the long-stay outlier threshold. The per diem rate shall equal the
DRG amount divided by the arithmetic mean LOS for the DRG. For admissions
on or after October 1, 1997, the long stay outlier has been eliminated
for all cases except children’s hospitals and neonates. For admissions
on or after October 1, 1998, the long stay outlier has been eliminated
for children’s hospitals and neonates.
(ii) Cost outliers.
Additional
payment for cost outliers shall be made only upon request by the hospital.
(A) Cost outliers
except those in children’s hospitals or for neonatal services.
Any discharge
which has standardized costs that exceed a threshold established
in accordance with the criteria used for the Medicare Prospective
Payment System as contained in 42 CFR 412.84 shall qualify as a
cost outlier. The standardized costs shall be calculated by multiplying
the total charges by the factor described in paragraph (a)(1)(iii)(D)(4) of
this section and adjusting this amount for indirect medical education
costs. Cost outliers shall be reimbursed the DRG-based amount plus
a percentage (as established for the Medicare Prospective Payment
System) of all costs exceeding the threshold. Effective with admissions occurring
on or after October 1, 1997, the standardized costs are no longer
adjusted for indirect medical education costs.
(B) Cost outliers
in children’s hospitals for neonatal services.
Any discharge for services in a
children’s hospital or for neonatal services which has standardized
costs that exceed a threshold of the greater of two times the DRG-based
amount or $13,500 shall qualify as a cost outlier. The standardized
costs shall be calculated by multiplying the total charges by the
factor described in paragraph (a)(1)(iii)(D)(4) of this
section (adjusted to include average capital and direct medical
education costs) and adjusting this amount for indirect medical
education costs. Cost outliers for services in children’s hospitals
and for neonatal services shall be reimbursed the DRG-based amount
plus a percentage (as established for the Medicare Prospective Payment
System) of all costs exceeding the threshold. Effective with admissions occurring
on or after October 1, 1998, standardized costs are no longer adjusted
for indirect medical education costs. In addition, CHAMPUS will
calculate the outlier payments that would have occurred at each
of the 59 Children’s hospitals under the FY99 outlier policy for
all cases that would have been outliers under the FY94 policies
using the most accurate data available in September 1998. A ratio
will be calculated which equals the level of outlier payments that
would have been made under the FY94 outlier policies and the outlier
payments that would be made if the FY99 outlier policies had applied
to each of these potential outlier cases for these hospitals. The
ratio will be calculated across all outlier claims for the 59 hospitals
and will not be hospital specific. The ratio will be used to increase
cost outlier payments in FY 1999 and FY 2000, unless the hospital
has a negotiated agreement with a managed care support contractor
which would affect this payment. For hospitals with managed care
support agreements which affect these payments, CHAMPUS will apply
these payments if the increased payments would be consistent with
the agreements. In FY 2000 the ratio of outlier payments (long stay and
cost) that would have occurred under the FY 94 policy and actual
cost outlier payments made under the FY 99 policy will be recalculated.
If the ratio has changed significantly, the ratio will be revised
for use in FY 2001 and thereafter. In FY 2002, the actual cost outlier
cases in FY 2000 and 2001 will be reexamined. The ratio of outlier
payments that would have occurred under the FY94 policy and the
actual cost outlier payments made under the FY 2000 and FY 2001
policies. If the ratio has changed significantly, the ratio will
be revised for use in FY 2003.
(C) Cost outliers
for burn cases.
All cost outliers for DRGs related
to burn cases shall be reimbursed the DRG-based amount plus a percentage
(as established for the Medicare Prospective Payment System) of all
costs exceeding the threshold. The standardized costs and thresholds
for these cases shall be calculated in accordance with Sec. 199.14(a)(1)(iii)(E)(1)(ii)(A)
and Sec. 199.14(a)(1)(iii)(E)(1)(ii)(B).
(2) Wage adjustment.
CHAMPUS
will adjust the labor portion of the standardized amounts according
to the hospital’s area wage index. The wage adjusted DRG payment
will also be multiplied by 1.2 for an individual diagnosed with
COVID-19 and/or Coronavirus discharged during the Secretary of Health
and Human Services’ declared public health emergency (PHE).
(3) Indirect
medical education adjustment.
The wage adjusted DRG payment will
also be multiplied by 1.0 plus the hospital’s indirect medical education
ratio.
(4) Children’s
hospital differential.
With respect to claims from children’s
hospitals, the appropriate adjusted standardized amount shall also
be adjusted by a children’s hospital differential.
(i) Qualifying children’s
hospitals.
Hospitals qualifying
for the children’s hospital differential are hospitals that are
exempt from the Medicare Prospective Payment System, or, in the
case of hospitals that do not participate in Medicare, that meet
the same criteria (as determined by the Director, OCHAMPUS, or a
designee) as required for exemption from the Medicare Prospective
Payment System as contained in 42 CFR 412.23.
(ii) Calculation
of differential.
The differential shall be equal
to the difference between a specially calculated children’s hospital
adjusted standardized amount and the adjusted standardized amount
for fiscal year 1988. The specially calculated children’s hospital
adjusted standardized amount shall be calculated in the same manner
as set forth in Sec. 199.14(a)(1)(iii)(D), except that:
(A) The base period shall be fiscal year 1988
and shall represent total estimated charges for discharges that
occurred during fiscal year 1988.
(B) No cost to charge ratio shall be applied.
(C) Capital costs and direct medical education
costs will be included in the calculation.
(D) The factor used to update the database
for inflation to produce the fiscal year 1988 base period amount
shall be the applicable Medicare inpatient hospital market basket
rate.
(iii) Transition
rule.
Until
March 1, 1992, separate differentials shall be used for each higher
volume children’s hospital (individually) and for all other children’s
hospitals (in the aggregate). For this purpose, a higher volume
hospital is a hospital that had 50 or more CHAMPUS discharges in
fiscal year 1988.
(iv) Hold harmless
provision.
At such
time as the weights initially assigned to neonatal DRGs are recalibrated
based on sufficient volume of CHAMPUS claims records, children’s
hospital differentials shall be recalculated and appropriate retrospective
and prospective adjustments shall be made. To the extent practicable,
the recalculation shall also include reestimated values of other
factors (including but not limited to direct education and capital
costs and indirect education factors) for which more accurate data
became available.
(v) No update for
inflation.
The children’s
hospital differential, calculated (and later recalculated under
the hold harmless provision) for the base period of fiscal year
1988, shall not be updated for subsequent fiscal years.
(vi) Administrative
corrections.
In connection
with determinations pursuant to paragraph (a)(1)(iii)(E)(4)(iii) of
this section, any children’s hospital that believes OCHAMPUS erroneously
failed to classify the hospital as a high volume hospital or incorrectly
calculated (in the case of a high volume hospital) the hospital’s
differential may obtain administrative corrections by submitting
appropriate documentation to the Director, OCHAMPUS (or a designee).
(5) Additional
payment for new medical services and technologies. TRICARE
will, for TRICARE authorized services/supplies, adopt the Medicare
New Technology Add On Payments (NTAPs) adjustment to DRGs for new
medical services and technologies as implemented under 42 CFR 412.87, when
determined by the Assistant Secretary of Defense for Health Affairs
(ASD(HA)), as practicable. The Director, Defense Health Agency (DHA),
shall provide notice of the issuance of policies and guidelines adopting
such adjustments together with any variations deemed necessary to
address unique issues involving the beneficiary population or program
administration.
(6) Hospital
Value Based Purchasing. TRICARE will adopt
the Medicare Hospital Value Based Purchasing (HVBP) Program adjustments
to DRGs to incentivize hospitals as implemented under 42 CFR 412.160,
when determined by the ASD(HA), as practicable. The Director, DHA,
shall provide notice of the issuance of policies and guidelines
adopting such adjustments together with any variations deemed necessary
to address unique issues involving the beneficiary population or
program administration.
(F) Updating
the adjusted standardized amounts.
Beginning in FY 1989, the adjusted
standardized amounts will be updated by the Medicare annual update
factor, unless the adjusted standardized amounts are recalculated.
(G) Annual cost pass-throughs.
(1) Capital costs.
When
requested in writing by a hospital, CHAMPUS shall reimburse the
hospital its share of actual capital costs as reported annually
to the CHAMPUS fiscal intermediary. Payment for capital costs shall
be made annually based on the ratio of CHAMPUS inpatient days for
those beneficiaries subject to the CHAMPUS DRG-based payment system
to total inpatient days applied to the hospital’s total allowable
capital costs. Reductions in payments for capital costs which are
required under Medicare shall also be applied to payments for capital
costs under CHAMPUS.
(i) Costs included
as capital costs.
Allowable
capital costs are those specified in Medicare Regulation Sec. 413.130,
as modified by Sec. 412.72.
(ii) Services, facilities,
or supplies provided by supplying organizations.
If services, facilities, or supplies are
provided to the hospital by a supplying organization related to
the hospital within the meaning of Medicare Regulation Sec. 413.17,
then the hospital must include in its capital-related costs, the
capital-related costs of the supplying organization. However, if
the supplying organization is not related to the provider within
the meaning of Sec. 413.17, no part of the change to the provider
may be considered a capital-related cost unless the services, facilities,
or supplies are capital-related in nature and:
(A) The capital-related
equipment is leased or rented by the provider;
(B) The capital-related
equipment is located on the provider’s premises; and
(C) The capital-related
portion of the charge is separately specified in the charge to the
provider.
(2) Direct medical
education costs.
When requested in writing by a hospital,
CHAMPUS shall reimburse the hospital its actual direct medical education
costs as reported annually to the CHAMPUS fiscal intermediary. Such
teaching costs must be for a teaching program approved under Medicare Regulation
Sec. 413.85. Payment for direct medical education costs shall be
made annually based on the ratio of CHAMPUS inpatient days for those
beneficiaries subject to the CHAMPUS DRG-based payment system to
total inpatient days applied to the hospital’s total allowable direct
medical education costs. Allowable direct medical education costs
are those specified in Medicare Regulation Sec. 413.85.
(3) Information
necessary for payment of capital and direct medical education costs.
All hospitals subject
to the CHAMPUS DRG-based payment system, except for children’s hospitals,
may be reimbursed for allowed capital and direct medical education
costs by submitting a request to the CHAMPUS contractor. Beginning
October 1, 1998, such request shall be filed with CHAMPUS on or before
the last day of the twelfth month following the close of the hospitals’
cost reporting period, and shall cover the one-year period corresponding
to the hospital’s Medicare cost-reporting period. The first such
request may cover a period of less than a full year--from the effective
date of the CHAMPUS DRG-based payment system to the end of the hospital’s
Medicare cost-reporting period. All costs reported to the CHAMPUS
contractor must correspond to the costs reported on the hospital’s
Medicare cost report. An extension of the due date for filing the
request may only be granted if an extension has been granted by
HCFA due to a provider’s operations being significantly adversely
affected due to extraordinary circumstances over which the provider
has no control, such as flood or fire. (If these costs change as
a result of a subsequent audit by Medicare, the revised costs are
to be reported to the hospital’s CHAMPUS contractor within 30 days
of the date the hospital is notified of the change). The request
must be signed by the hospital official responsible for verifying
the amounts and shall contain the following information.
(i) The hospital’s
name.
(ii) The hospital’s
address.
(iii) The hospital’s
CHAMPUS provider number.
(iv) The hospital’s
Medicare provider number.
(v) The period covered--this must correspond
to the hospital’s Medicare cost-reporting period.
(vi) Total inpatient
days provided to all patients in units subject to DRG-based payment.
(vii) Total allowed
CHAMPUS inpatient days provided in units subject to DRG-based payment.
(viii) Total
allowable capital costs.
(ix) Total allowable
direct medical education costs.
(x) Total full-time
equivalents for:
(A) Residents.
(B) Interns.
(xi) Total inpatient
beds as of the end of the cost-reporting period. If this has changed
during the reporting period, an explanation of the change must be
provided.
(xii) Title of
official signing the report.
(xiii) Reporting
date.
(xiv) The report
shall contain a certification statement that any changes to the
items in paragraphs (a)(1)(iii)(G)(3)(vi), (vii),
(viii), (ix), or (x),
which are a result of an audit of the hospital’s Medicare cost-report,
shall be reported to CHAMPUS within thirty (30) days of the date
the hospital is notified of the change.
(2) CHAMPUS
mental health per diem payment system.
The CHAMPUS mental health per diem payment
system shall be used to reimburse for inpatient mental health hospital
care in specialty psychiatric hospitals and units. Payment is made
on the basis of prospectively determined rates and paid on a per
diem basis. The system uses two sets of per diems. One set of per
diems applies to hospitals and units that have a relatively higher
number of CHAMPUS discharges. For these hospitals and units, the
system uses hospital-specific per diem rates. The other set of per
diems applies to hospitals and units with a relatively lower number
of CHAMPUS discharges. For these hospitals and units, the system
uses regional per diems, and further provides for adjustments for
area wage differences and indirect medical education costs and additional
pass-through payments for direct medical education costs.
(i) Applicability
of the mental health per diem payment system.
(A) Hospitals
and units covered.
The CHAMPUS
mental health per diem payment system applies to services covered
(see paragraph (a)(2)(i)(B) of this section) that are provided in
Medicare prospective payment system (PPS) exempt psychiatric specialty
hospitals and all Medicare PPS exempt psychiatric specialty units
of other hospitals. In addition, any psychiatric hospital that does
not participate in Medicare, or any other hospital that has a psychiatric
specialty unit that has not been so designated for exemption from
the Medicare prospective payment system because the hospital does
not participate in Medicare, may be designated as a psychiatric
hospital or psychiatric specialty unit for purposes of the CHAMPUS
mental health per diem payment system upon demonstrating that it
meets the same criteria (as determined by the Director, OCHAMPUS)
as required for the Medicare exemption. The CHAMPUS mental health
per diem payment system does not apply to mental health services
provided in other hospitals.
(B) Services covered.
Unless specifically exempted, all
covered hospitals’ and units’ inpatient claims which are classified
into a mental health DRG (DRG categories 425-432, but not DRG 424)
or an alcohol/drug abuse DRG (DRG categories 433-437) shall be subject
to the mental health per diem payment system.
(ii) Hospital-specific
per diems for higher volume hospitals and units.
This paragraph describes the per diem payment
amounts for hospitals and units with a higher volume of CHAMPUS
discharges.
(A)
(1) Per diem
amount.
A hospital-specific
per diem amount shall be calculated for each hospital and unit with
a higher volume of CHAMPUS discharges. The base period per diem
amount shall be equal to the hospital’s average daily charge in
the base period. The base period amount, however, may not exceed
the cap described in paragraph (a)(2)(ii)(B) of this section. The
base period amount shall be updated in accordance with paragraph
(a)(2)(iv) of this section.
(2) In states
that have implemented a payment system in connection with which
hospitals in that state have been exempted from the CHAMPUS DRG-based
payment system pursuant to paragraph (a)(1)(ii)(A) of this section,
psychiatric hospitals and units may have per diem amounts established based
on the payment system applicable to such hospitals and units in
the state. The per diem amount, however, may not exceed the cap
amount applicable to other higher volume hospitals.
(B) Cap--
(1) As it affects
payment for care provided to patients prior to April 6, 1995, the
base period per diem amount may not exceed the 80th percentile of
the average daily charge weighted for all discharges throughout
the United States from all higher volume hospitals.
(2) Applicable to payments for care provided
to patients on or after April 6, 1996, the base period per diem
amount may not exceed the 70th percentile of the average daily charge
weighted for all discharges throughout the United States from all
higher volume hospitals. For this purpose, base year charges shall
be deemed to be charges during the period of July 1, 1991 to June
30, 1992, adjusted to correspond to base year (FY 1988) charges
by the percentage change in average daily charges for all higher
volume hospitals and units between the period of July 1, 1991 to
June 30, 1992 and the base year.
(C) Review of
per diem.
Any hospital
or unit which believes OCHAMPUS calculated a hospital-specific per
diem which differs by more than $5.00 from that calculated by the
hospital or unit may apply to the Director, OCHAMPUS, or a designee,
for a recalculation. The burden of proof shall be on the hospital.
(iii) Regional
per diems for lower volume hospitals and units.
This paragraph describes the per diem amounts
for hospitals and units with a lower volume of CHAMPUS discharges.
(A) Per diem amounts.
Hospitals
and units with a lower volume of CHAMPUS patients shall be paid on
the basis of a regional per diem amount, adjusted for area wages
and indirect medical education. Base period regional per diems shall
be calculated based upon all CHAMPUS lower volume hospitals’ claims
paid during the base period. Each regional per diem amount shall
be the quotient of all covered charges divided by all covered days
of care, reported on all CHAMPUS claims from lower volume hospitals
in the region paid during the base period, after having standardized
for indirect medical education costs and area wage indexes and subtracted
direct medical education costs. Regional per diem amounts are adjusted
in accordance with paragraph (a)(2)(iii)(C) of this section. Additional
pass-through payments to lower volume hospitals are made in accordance
with paragraph (a)(2)(iii)(D) of this section. The regions shall
be the same as the Federal census regions.
(B) Review of per
diem amount.
Any hospital
that believes the regional per diem amount applicable to that hospital
has been erroneously calculated by OCHAMPUS by more than $5.00 may
submit to the Director, OCHAMPUS, or a designee, evidence supporting
a different regional per diem. The burden of proof shall be on the
hospital.
(C) Adjustments
to regional per diems.
Two adjustments shall be made to
the regional per diem rates.
(1) Area wage
index.
The same
area wage indexes used for the CHAMPUS DRG-based payment system
(see paragraph (a)(1)(iii)(E)(2) of this section)
shall be applied to the wage portion of the applicable regional
per diem rate for each day of the admission. The wage portion shall
be the same as that used for the CHAMPUS DRG-based payment system.
(2) Indirect
medical education.
The indirect medical education adjustment
factors shall be calculated for teaching hospitals in the same manner
as is used in the CHAMPUS DRG-based payment system (see paragraph
(a)(1)(iii)(E)(3) of this section) and applied
to the applicable regional per diem rate for each day of the admission.
(D) Annual cost pass-through
for direct medical education.
In addition to payments made to
lower volume hospitals under paragraph (a)(2)(iii) of this section,
CHAMPUS shall annually reimburse hospitals for actual direct medical
education costs associated with services to CHAMPUS beneficiaries. This
reimbursement shall be done pursuant to the same procedures as are
applicable to the CHAMPUS DRG-based payment system (see paragraph
(a)(1)(iii)(G) of this section).
(iv) Base
period and update factors.
(A) Base period.
The base period for calculating
the hospital-specific and regional per diems, as described in paragraphs
(a)(2)(ii) and (a)(2)(iii) of this section, is Federal fiscal year
1988. Base period calculations shall be based on actual claims paid
during the period July 1, 1987 through May 31, 1988, trended forward
to represent the 12-month period ending September 30, 1988 on the
basis of the Medicare inpatient hospital market basket rate.
(B) Alternative hospital-specific data base.
Upon application
of a higher volume hospital or unit to the Director, OCHAMPUS, or
a designee, the hospital or unit may have its hospital-specific
base period calculations based on claims with a date of discharge
(rather than date of payment) between July 1, 1987 through May 31,
1988 if it has generally experienced unusual delays in claims payments
and if the use of such an alternative data base would result in
a difference in the per diem amount of at least $5.00. For this
purpose, the unusual delays means that the hospital’s or unit’s
average time period between date of discharge and date of payment
is more than two standard deviations longer than the national average.
(C) Update factors--
(1) The hospital-specific per diems and the
regional per diems calculated for the base period pursuant to paragraphs
(a)(2)(ii) of this section shall remain in effect for federal fiscal
year 1989; there will be no additional update for fiscal year 1989.
(2) Except as provided in paragraph (a)(2)(iv)(C)(3)
of this section, for subsequent federal fiscal years, each per diem
shall be updated by the Medicare Inpatient Prospective Payment System
update factor.
(3) As an exception
to the update required by paragraph (a)(2)(iv)(C)(2) of
this section, all per diems in effect at the end of fiscal year
1995 shall remain in effect, with no additional update, throughout fiscal
years 1996 and 1997. For fiscal year 1998 and thereafter, the per
diems in effect at the end of fiscal year 1997 will be updated in
accordance with paragraph (a)(2)(iv)(C)(2).
(4) Hospitals and units with hospital-specific
rates will be notified of their respective rates prior to the beginning
of each Federal fiscal year. New hospitals shall be notified at
such time as the hospital rate is determined. The actual amount
of each regional per diem that will apply in any Federal fiscal year
shall be posted to the Agency’s official Web site at the start of
that fiscal year.
(v) Higher volume hospitals.
This paragraph describes the classification
of and other provisions pertinent to hospitals with a higher volume
of CHAMPUS patients.
(A) In general.
Any hospital
or unit that had an annual rate of 25 or more CHAMPUS discharges
of CHAMPUS patients during the period July 1, 1987 through May 31,
1988 shall be considered a higher volume hospital has 25 or more
CHAMPUS discharges, that hospital shall be considered to be a higher volume
hospital during Federal fiscal year 1989 and all subsequent fiscal
years. All other hospitals and units covered by the CHAMPUS mental
health per diem payment system shall be considered lower volume
hospitals.
(B) Hospitals that subsequently become higher
volume hospitals.
In any Federal fiscal year in which
a hospital, including a new hospital (see paragraph (a)(2)(v)(C)
of this section), not previously classified as a higher volume hospital
has 25 or more CHAMPUS discharges, that hospital shall be considered
to be a higher volume hospital during the next Federal fiscal year
and all subsequent fiscal years. The hospital specific per diem
amount shall be calculated in accordance with the provisions of
paragraph (a)(2)(ii) of this section, except that the base period
average daily charge shall be deemed to be the hospital’s average
daily charge in the year in which the hospital had 25 or more discharges,
adjusted by the percentage change in average daily charges for all
higher volume hospitals and units between the year in which the
hospital had 25 or more CHAMPUS discharges and the base period.
The base period amount, however, may not exceed the cap described
in paragraph (a)(2)(ii)(B) of this section.
(C) Special
retrospective payment provision for new hospitals.
For purposes
of this paragraph, a new hospital is a hospital that qualifies for
the Medicare exemption from the rate of increase ceiling applicable
to new hospitals which are PPS-exempt psychiatric hospitals. Any
new hospital that becomes a higher volume hospital, in addition
to qualifying prospectively as a higher volume hospital for purposes
of paragraph (a)(2)(v)(B) of this section, may additionally, upon
application to the Director, OCHAMPUS, receive a retrospective adjustment.
The retrospective adjustment shall be calculated so that the hospital
receives the same government share payments it would have received
had it been designated a higher volume hospital for the federal
fiscal year in which it first had 25 or more CHAMPUS discharges
and the preceding fiscal year (if it had any CHAMPUS patients during
the preceding fiscal year). Such new hospitals must agree not to
bill CHAMPUS beneficiaries for any additional costs beyond that
determined initially.
(D) Review of classification.
Any hospital or unit which OCHAMPUS
erroneously fails to classify as a higher volume hospital may apply
to the Director, OCHAMPUS, or a designee, for such a classification. The
hospital shall have the burden of proof.
(vi) Payment
for hospital based professional services.
Lower volume hospitals and units
may not bill separately for hospital based professional mental health
services; payment for those services is included in the per diems.
Higher volume hospitals and units, whether they billed CHAMPUS separately for
hospital based professional mental health services or included those
services in the hospital’s billing to CHAMPUS, shall continue the
practice in effect during the period July 1, 1987 to May 31, 1988
(or other data base period used for calculating the hospital’s or
unit’s per diem), except that any such hospital or unit may change
its prior practice (and obtain an appropriate revision in its per
diem) by providing to OCHAMPUS notice in accordance with procedures
established by the Director, OCHAMPUS, or a designee.
(vii) Leave days.
CHAMPUS
shall not pay for days where the patient is absent on leave from
the specialty psychiatric hospital or unit. The hospital must identify
these days when claiming reimbursement. CHAMPUS shall not count
a patients’s leave of absence as a discharge in determining whether
a facility should be classified as a higher volume hospital pursuant
to paragraph (a)(2)(v) of this section.
(viii) Exemptions
from the CHAMPUS mental health per diem payment system.
The following
providers and procedures are exempt from the CHAMPUS mental health
per diem payment system.
(A) Non-specialty providers.
Providers of inpatient care which are not
either psychiatric hospitals or psychiatric specialty units as described
in paragraph (a)(2)(i)(A) of this section are exempt from the CHAMPUS
mental health per diem payment system. Such providers should refer
to paragraph (a)(1) of this section for provisions pertinent to
the CHAMPUS DRG-based payment system.
(B) DRG 424.
Admissions
for operating room procedures involving a principal diagnosis of
mental illness (services which group into DRG 424) are exempt from
the per diem payment system. They will be reimbursed pursuant to
the provisions of paragraph (a)(3) of this section.
(C) Non-mental
health services.
Admissions for non-mental health procedures
in specialty psychiatric hospitals and units are exempt from the
per diem payment system. They will be reimbursed pursuant to the
provisions of paragraph (a)(3) of this section.
(D) Sole community hospitals (SCHs).
Prior to implementation
of the SCH reimbursement method described in paragraph (a)(7) of
this section, any hospital that has qualified for special treatment
under the Medicare prospective payment system as an SCH and has
not given up that classification is exempt.
(E) Hospitals outside the U.S.
A hospital is exempt if it is not located
in one of the 50 states, the District of Columbia or Puerto Rico.
(ix) Payment
for psychiatric and substance use disorder rehabilitation partial
hospitalization services, intensive outpatient psychiatric and substance
use disorder services and opioid treatment services--
(A) Per diem payments.
Psychiatric
and substance use disorder partial hospitalization services, intensive outpatient
psychiatric and substance use disorder services and opioid treatment
services authorized by Sec. 199.4(b)(9), (b)(10), and (b)(11), respectively,
and provided by institutional providers authorized under Sec. 199.6(b)(4)(xii),
(b)(4)(xviii) and (b)(4)(xix), respectively, are reimbursed on the
basis of prospectively determined, all-inclusive per diem rates
pursuant to the provisions of paragraphs (a)(2)(ix)(A)(1) through
(3) of this section, with the exception of hospital-based psychiatric
and substance use disorder and opioid services which are reimbursed
in accordance with provisions of paragraph (a)(6)(ii) of this section
and freestanding opioid treatment programs when reimbursed on a fee-for-service
basis as specified in paragraph (a)(2)(ix)(A)(3)(ii) of this section.
The per diem payment amount must be accepted as payment in full,
subject to the outpatient cost-sharing provisions under Sec. 199.4(f),
for institutional services provided, including board, routine nursing
services, group therapy, ancillary services (e.g., music, dance,
and occupational and other such therapies), psychological testing
and assessment, overhead and any other services for which the customary practice
among similar providers is included in the institutional charges,
except for those services which may be billed separately under paragraph
(a)(2)(ix)(B) of this section. Per diem payment will not be allowed
for leave days during which treatment is not provided.
(1) Partial hospitalization
programs.
For any
full-day partial hospitalization program (minimum of 6 hours), the
maximum per diem payment amount is 40 percent of the average inpatient
per diem amount per case established under the TRICARE mental health
per diem reimbursement system during the fiscal year for both high
and low volume psychiatric hospitals and units [as defined in paragraph (a)(2)
of this section]. Intensive outpatient services provided in a PHP
setting lasting less than 6 hours, with a minimum of 2 hours, will
be paid as provided in paragraph (a)(2)(ix)(A)(2) of this section.
PHP per diem rates will be updated annually by the Medicare update
factor used for their Inpatient Prospective Payment System.
(2) Intensive
outpatient programs.
For intensive outpatient programs
(IOPs) (minimum of 2 hours), the maximum per diem amount is 75 percent
of the rate for a full-day partial hospitalization program as established
in paragraph (a)(2)(ix)(A)(1) of this section. IOP per diem rates
will be updated annually by the Medicare update factor used for
their Inpatient Prospective Payment System.
(3) Opioid treatment
programs.
Opioid
treatment programs (OTPs) authorized by Sec. 199.4(b)(11) and provided
by providers authorized under Sec. 199.6(b)(4)(xix) will be reimbursed
based on the variability in the dosage and frequency of the drug
being administered and in related supportive services.
(i) Weekly
all-inclusive per diem rate.
Methadone OTPs will be reimbursed
the lower of the billed charge or the weekly all-inclusive per diem
rate (the weekly national all-inclusive rate adjusted for locality),
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 will be accepted as payment
in full, subject to the outpatient cost-sharing provisions under
Sec. 199.4(f). The methadone per diem rate for OTPs will be updated
annually by the Medicare update factor used for their Inpatient
Prospective Payment System.
(ii) Exceptions to
per diem reimbursement.
When providing other medications which
are more likely to be prescribed and administered in an office-based
opioid treatment setting, but which are still available for treatment
of substance use disorders in an outpatient treatment program setting,
OTPs will 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
Sec. 199.4(f). OTPs’ rates will be updated annually by the Medicare
update factor used for their Inpatient Prospective Payment System.
(iii) Discretionary
authority.
The Director,
TRICARE, will have discretionary authority in establishing the reimbursement
methodologies for new drugs and biologicals that may become available
for the treatment of substance use disorders in OTPs. The type of
reimbursement (e.g., fee-for-service versus bundled per diem payments)
will be dependent on the variability of the dosage and frequency
of the medication being administered, as well as the support services.
(B) Services which may be billed separately.
Psychotherapy
sessions and non-mental health related medical services not normally
included in the evaluation and assessment of PHP, IOP or OTPs, provided by
authorized independent professional providers who are not employed
by, or under contract with, PHP, IOP or OTPs for the purposes of
providing clinical patient care are not included in the per diem
rate and may be billed separately. This includes ambulance services
when medically necessary for emergency transport.
(3) Reimbursement
for inpatient services provided by a CAH.
(i) For
admissions on or after December 1, 2009, inpatient services provided
by a CAH, other than services provided in psychiatric and rehabilitation
distinct part units, shall be reimbursed at allowable cost (i.e.,
101 percent of reasonable cost) under procedures, guidelines, and
instructions issued by the Director, DHA, or designee. This does not
include any costs of physicians’ services or other professional
services provided to CAH inpatients. Inpatient services provided
in psychiatric distinct part units would be subject to the TRICARE
mental health payment system. Inpatient services provided in rehabilitation
distinct part units would be subject to billed charges. Upon implementation
of TRICARE’s IRF PPS, inpatient services provided in rehabilitation
distinct part units would be subject to the TRICARE IRF PPS methodology
in paragraph (a)(10) of this section.
(ii) The percentage
amount stated in paragraph (a)(3)(i) of this section is subject
to possible upward adjustment based on a inpatient GTMCPA for TRICARE
network hospitals deemed essential for military readiness and support
during contingency operations under paragraph (a)(8) of this section.
(4) Billed
charges and set rates.
The allowable cost for authorized
care in all hospitals not subject to the TRICARE DRG-based payment
system, the TRICARE mental health per-diem system, the TRICARE reasonable
cost method for CAHs, the TRICARE reimbursement rules for SCHs,
the TRICARE LTCH-PPS, or the TRICARE IRF PPS shall be determined
on the basis of billed charges or set rates.
(i) The actual charge
for such service made to the general public; or
(ii) The allowed charge
applicable to the policyholders or subscribers of the CHAMPUS fiscal intermediary
for comparable services under comparable circumstances, when extended
to CHAMPUS beneficiaries by consent or agreement; or
(iii) The
allowed charge applicable to the citizens of the community or state
as established by local or state regulatory authority, excluding
title XIX of the Social Security Act or other welfare program, when extended
to CHAMPUS beneficiaries by consent or agreement.
(5) CHAMPUS discount rates.
The CHAMPUS-determined allowable cost for
authorized care in any hospital may be based on discount rates established
under paragraph (l) of this section.
(6) Hospital
outpatient services.
This
paragraph (a)(6) identifies and clarifies payment methods for certain
outpatient services, including emergency services, provided by hospitals.
(i) Outpatient Services
Not Subject to Hospital Outpatient Prospective Payment System (OPPS).
The following
are payment methods for outpatient services that are either provided
in an OPPS exempt hospital or paid outside the OPPS payment methodology
under existing fee schedules or other prospectively determined rates
in a hospital subject to OPPS reimbursement.
(A) Laboratory
services.
TRICARE payments
for hospital outpatient laboratory services including clinical laboratory
services are based on the allowable charge method under paragraph
(j)(1) of the section. In the case of laboratory services for which
the CMAC rates are established under that paragraph, a payment rate
for the technical component of the laboratory services is provided.
Hospital charges for an outpatient laboratory service are reimbursed
using the CMAC technical component rate.
(B) Rehabilitation therapy services.
Rehabilitation
therapy services provided on an outpatient basis by hospitals are
paid on the same basis as rehabilitation therapy services covered
by the allowable charge method under paragraph (j)(1) of this section.
(C) Venipuncture.
Routine venipuncture
services provided on an outpatient basis by hospitals are paid on
the same basis as such services covered by the allowable charge
method under paragraph (j)(1) of this section. Routine venipuncture
services provided on an outpatient basis by institutional providers
other than hospitals are also paid on this basis.
(D) Radiology services.
TRICARE payments for hospital outpatient
radiology services are based on the allowable charge method under
paragraph (j)(1) of the section. In the case of radiology services
for which the CMAC rates are established under that paragraph, a
payment rate for the technical component of the radiology services
is provided. Hospital charges for an outpatient radiology service are
reimbursed using the CMAC technical component rate.
(E) Diagnostic services.
TRICARE payments for hospital outpatient
diagnostic services are based on the allowable charge method under
paragraph (j)(1) of the section. In the case of diagnostic services
for which the CMAC rates are established under that paragraph, a
payment rate for the technical component of the diagnostic services
is provided. Hospital charges for an outpatient diagnostic service are
reimbursed using the CMAC technical component rate.
(F) Ambulance services.
Ambulance services provided on an outpatient
basis by hospitals are paid on the same basis as ambulance services
covered by the allowable charge method under paragraph (j)(1) of
this section.
(G) Durable medical equipment (DME) and supplies.
Durable medical
equipment and supplies provided on an outpatient basis by hospitals
are paid on the same basis as durable medical equipment and supplies
covered by the allowable charge method under paragraph (j)(1) of
this section.
(H) Oxygen and related supplies.
Oxygen and related
supplies provided on an outpatient basis by hospitals are paid on
the same basis as oxygen and related supplies covered by the allowable
charge method under paragraph (j)(1) of this section.
(I) Drugs
administered other than by oral method.
Drugs administered other than by oral method provided
on an outpatient basis by hospitals are paid on the same basis as
drugs administered other than by oral method covered by the allowable
charge method under paragraph (j)(1) of this section.
(J) Professional
provider services.
TRICARE payments for hospital outpatient
professional provider services rendered in an emergency room, clinic,
or hospital outpatient department, etc., are based on the allowable
charge method under paragraph (j)(1) of the section. In the case
of professional services for which the CMAC rates are established
under that paragraph, a payment rate for the professional component
of the services is provided. Hospital charges for an outpatient
professional service are reimbursed using the CMAC professional
component rate. If the professional outpatient hospital services
are billed by a professional provider group, not by the hospital,
no payment shall be made to the hospital for these services.
(K) Facility charges.
TRICARE payments for hospital outpatient
facility charges that would include the overhead costs of providing
the outpatient service would be paid as billed. For the definition
of facility charge, see Sec. 199.2(b).
(L) Ambulatory
surgery services.
Hospital outpatient ambulatory surgery
services shall be paid in accordance with Sec. 199.14(d).
(ii) Outpatient
services subject to OPPS--
(A) General.
Outpatient
services provided in hospitals subject to Medicare OPPS as specified
in 42 CFR 413.65 and 42 CFR 419.20 will be paid in accordance with
the provisions outlined in sections 1833t of the Social Security
Act and its implementing Medicare regulation (42 CFR part 419) subject
to exceptions as authorized by this paragraph (a)(6)(ii).
(B) Under the above
governing provisions, TRICARE will recognize to the extent practicable,
in accordance with 10 U.S.C. 1089(j)(2), Medicare’s OPPS reimbursement
methodology to include specific coding requirements, ambulatory
payment classifications (APCs), nationally established APC amounts and
associated adjustments (e.g., discounting across geographical regions
and outlier calculations).
(C) While
TRICARE intends to remain as true as possible to Medicare’s basic
OPPS methodology, there will be some deviations required to accommodate
TRICARE’s unique benefit structure and beneficiary population as
authorized under the provisions of 10 U.S.C. 1079(j)(2).
(D) TRICARE is also authorized to deviate from Medicare’s
basic OPPS methodology to establish special reimbursement methods,
amounts, and procedures to encourage use of high-value products and
discourage use of low-value products with respect to pharmaceutical
agents provided as part of medical services from authorized providers.
Therefore, drugs administered other than oral method provided on
an outpatient basis by hospitals are paid on the same basis as drugs
administered other than oral method covered by the allowable charge
method under paragraph (j)(1) of this section.
(E) Temporary transitional
payment adjustments (TTPAs).
Temporary transitional payment adjustments
will be in place for all hospitals, both network and non-network,
in order to buffer the initial decline in payments upon implementation
of TRICARE’s OPPS.
(1) For network
hospitals.
The temporary
transitional payment adjustments will cover a four-year period.
The four-year transition will set higher payment percentages for
the ten Ambulatory Payment Classification (APC) codes 604-609 and
613-616, with reductions in each of the transition years. For non-network
hospitals, the adjustments will cover a three year period, with
reductions in each of the transition years. For network hospitals,
under the TTPAs, the APC payment level for the five clinic visit APCs
would be set at 175 percent of the Medicare APC level, while the
five ER visit APCs would be increased by 200 percent in the first
year of OPPS implementation. In the second year, the APC payment levels
would be set at 150 percent of the Medicare APC level for clinic
visits and 175 percent for ER APCs. In the third year, the APC visit
amounts would be set at 130 percent of the Medicare APC level for clinic
visits and 150 percent for ER APCs. In the fourth year, the APC
visit amounts would be set at 115 percent of the Medicare APC level
for clinic visits and 130 percent for ER APCs. In the fifth year,
the TRICARE and Medicare payment levels for the 10 APC visit codes
would be identical.
(2) For non-network
hospitals.
Under the TTPAs,
the APC payment level for the five clinic and ER visit APCs would
be set at 140 percent of the Medicare APC level in the first year
of OPPS implementation. In the second year, the APC payment levels
would be set at 125 percent of the Medicare APC level for clinic
and ER visits. In the third year, the APC visit amounts would be
set at 110 percent of the Medicare APC level for clinic and ER visits.
In the fourth year, the TRICARE and Medicare payment levels for
the 10 APC visit codes would be identical.
(3) An additional
temporary military contingency payment adjustment (TMCPA) will also
be available at the discretion of the Director, Defense Health Agency
(DHA), or a designee, at any time after implementation to adopt,
modify and/or extend temporary adjustments to OPPS payments for TRICARE
network hospitals deemed essential for military readiness and deployment
in time of contingency operations. Any TMCPAs to OPPS payments shall
be made only on the basis of a determination that it is impracticable
to support military readiness or contingency operations by making
OPPS payments in accordance with the same reimbursement rules implemented
by Medicare. The criteria for adopting, modifying, and/or extending
deviations and/or adjustments to OPPS payments shall be issued through
TRICARE policies, instructions, procedures and guidelines as deemed appropriate
by the Director, DHA, or a designee. TMCPAs may also be extended
to non-network hospitals on a case-by-case basis for specific procedures
where it is determined that the procedures cannot be obtained timely
enough from a network hospital. For such case-by-case extensions, “Temporary”
might be less than three years at the discretion of the DHA Director,
or designee.
(iii) Outpatient
Services Subject to CAH Reasonable Cost Method.
For services on or after December
1, 2009, outpatient services provided by a CAH, shall be reimbursed
at 101 percent of reasonable cost. This does not include any costs
of physician services or other professional services provided to
CAH outpatients.
(iv) CAH Ambulance
Services.
Effective for
services provided on or after December 1, 2009, payment for ambulance
services furnished by a CAH or an entity that is owned and operated
by a CAH is the reasonable costs of the CAH or the entity in furnishing
those services, but only if the CAH or the entity is the only provider
or supplier of ambulance services located within a 35-mile drive
of the CAH or the entity as specified under 42 CFR part 413.70(b)(5)(ii).
(7) Reimbursement
for inpatient services provided by an SCH.
(i) In
accordance with 10 U.S.C. 1079(j)(2), TRICARE payment methods for
institutional care shall be determined, to the extent practicable,
in accordance with the same reimbursement rules as those that apply
to payments to providers of services of the same type under Medicare.
TRICARE’s SCH reimbursements approximate Medicare’s for SCHs. Inpatient
services provided by an SCH, other than services provided in psychiatric
and rehabilitation distinct part units, shall be reimbursed through
a two-step process.
(ii) The first step
referred to in paragraph (a)(7)(i) of this section will be to calculate
the TRICARE allowable cost by multiplying the applicable TRICARE
percentage by the billed charge amount on each institutional inpatient
claim. The applicable TRICARE percentage is the greater of: the
SCH’s most recently available cost-to-charge ratio (CCR) from the
Centers for Medicare and Medicaid Services’ (CMS’) inpatient Provider
Specific File (after the ratio has been converted to a percentage),
or the TRICARE allowed-to-billed ratio, defined as the ratio of
the TRICARE allowed amounts (including discounts) to the amount
of billed charges for TRICARE inpatient admissions at the SCH in
FY 2012 (after it has been converted to a percentage). The TRICARE
allowed-to-billed ratio in FY 2012 shall be reduced as follows (after
the ratio has been converted to a percentage:
(A) In the first year
of implementation, 10 percentage points for network SCHs and 15
percentage points for non-network SCHs.
(B) In the second year
of implementation, 20 percentage points for network SCHs and 30
percentage points for non-network SCHs.
(C) In
the third year of implementation, 30 percentage points for network
SCHs and 45 percentage points for non-network SCHs.
(D) In the fourth year
of implementation, 40 percentage points for network SCHs and 60
percentage points for non-network SCHs.
(E) In the fifth year
of implementation, 50 percentage points for network SCHs and 75
percentage points for non-network SCHs.
(F) In the sixth year
of implementation, 60 percentage points for network SCHs and 90
percentage points for non-network SCHs.
(G) In the seventh
year of implementation, 70 percentage points for network SCHs and
100 percentage points for non-network SCHs.
(H) In the eighth year
of implementation, 80 percentage points for network SCHs and 100 percentage
points for non-network SCHs.
(I) In the ninth year
of implementation, 90 percentage points for network SCHs and 100
percentage points for non-network SCHs.
(J) In the tenth year
of implementation, 100 percentage points for network SCHs and 100 percentage
points for non-network SCHs.
(iii) The
second step referred to in paragraph (a)(7)(i) of this section is
a year-end adjustment. The year-end adjustment will compare the
aggregate allowable costs over a 12-month period under paragraph
(a)(7)(ii) of this section to the aggregate amount that would have
been allowed for the same care using the TRICARE DRG-method (under
paragraph (a)(1) of this section). In the event that the DRG method
amount is the greater, the year-end adjustment will be the amount
by which it exceeds the aggregate allowable costs. In addition,
the year-end adjustment also may incorporate a possible upward adjustment
for inpatient services based on a GTMCPA for TRICARE network hospitals
under paragraph (a)(8) of this section.
(iv) At
the end of an SCH’s transition period, when the SCH reaches its
Medicare CCR, a special allowable cost shall be applicable for discharges
that group to inpatient nursery and labor/delivery DRGs. For these
discharges, instead of using the percentage of the SCH’s Medicare
cost-to-charge ratio (as described in paragraph (a)(7)(ii) of this
section), the percentage will be 130 percent of the Medicare CCR.
(v) The SCH reimbursement
provisions of paragraphs (a)(7)(i) through (iv) of this section
do not apply to any costs of physician services or other professional
services provided to SCH inpatients (which are subject to individual
provider payment provisions of this section), inpatient services
provided in psychiatric distinct part units (which are subject to
the CHAMPUS mental health per-diem payment system), or inpatient
services provided in rehabilitation distinct part units (which are
reimbursed on the basis of billed charges or set rates).
(vi) The SCH payment
system under this paragraph (a)(7) applies to hospitals classified
by CMS as Essential Access Community Hospitals (EACHs).
(vii) The SCH payment
system under this paragraph (a)(7) does not apply to hospitals in
States that are paid by Medicare and TRICARE under a cost containment
waiver.
(8) General temporary military contingency payment
adjustment for SCHs and CAHs.
(i) Payments under
paragraph (a) of this section for inpatient services provided by
SCHs and CAHs may be supplemented by a GTMCPA. This is a year-end
discretionary, temporary adjustment that the TMA Director may approve
based on all the following criteria:
(A) The
hospital serves a disproportionate share of ADSMs and ADDs;
(B) The hospital is
a TRICARE network hospital;
(C) The
hospital’s actual costs for inpatient services exceed TRICARE payments
or other extraordinary economic circumstance exists; and,
(D) Without
the GTMCPA, DoD’s ability to meet military contingency mission requirements
will be significantly compromised.
(ii) Policy
and procedural instructions implementing the GTMCPA will be issued
as deemed appropriate by the Director, TMA, or a designee. As with
other discretionary authority under this Part, a decision to allow
or deny a GTMCPA to a hospital is not subject to the appeal and
hearing procedures of Sec. 199.10.
(9) Reimbursement
for inpatient services provided by a Long Term Care Hospital (LTCH).
(i) In accordance with
10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional
care shall be determined, to the extent practicable, in accordance
with the same reimbursement rules as those that apply to payments to
providers of services of the same type under Medicare. The TRICARE-LTC-DRG
reimbursement methodology shall be in accordance with Medicare's
Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs)
as found in regulation at 42 CFR part 412, subpart O. Inpatient
services provided in hospitals subject to the Medicare LTCH Prospective
Payment System (PPS) and classified as LTCHs and also as specified
in 42 CFR parts 412 and 413 will be paid in accordance with the
provisions outlined in sections 1886(d)(1)(B)(IV) and 1886(m)(6)
of the Social Security Act and its implementing Medicare regulation
(42 CFR parts 412, 413, and 170) to the extent practicable. Under
the above governing provisions, TRICARE will recognize, to the extent
practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's
LTCH PPS methodology to include the relative weights, inpatient
operating and capital costs of furnishing covered services (including
routine and ancillary services), interrupted stay policy, short-stay
and high cost outlier payments, site-neutral payments, wage adjustments
for variations in labor-related costs across geographical regions,
cost-of-living adjustments, payment adjustments associated with
the quality reporting program, method of payment for preadmission services,
and updates to the system. TRICARE will not be adopting Medicare's
25 percent threshold payment adjustment.
Note
to paragraph (a)(9)(i): LTCH admissions that are in response
to the COVID-19 declared PHE and occur during the COVID-19 PHE period
will be reimbursed the LTCH PPS standard Federal rate.
(ii) Implementation
of the TRICARE LTCH PPS will include a gradual transition to full
implementation of the Medicare LTCH PPS rates as follows:
(A) For the first 12
months following implementation, the TRICARE LTCH PPS allowable
cost will be 135 percent of Medicare LTCH PPS amounts.
(B) For the second
12 months of implementation, TRICARE LTCH PPS allowable cost will
be 115 percent of the Medicare LTCH PPS amounts.
(C) For the third 12
months of implementation, and subsequent years, TRICARE LTCH PPS
allowable cost will be 100 percent of the Medicare LTCH PPS amounts.
(iii) Exemption.
The TRICARE
LTCH PPS methodology under this paragraph does not apply to hospitals
in States that are reimbursed by Medicare and TRICARE under a waiver
that exempts them from Medicare's inpatient prospective payment
system or the TRICARE DRG-based payment system, to Children's Hospitals,
or to Neoplastic Disease Care Hospitals, respectively.
(10) Reimbursement
for inpatient services provided by Inpatient Rehabilitation Facilities
(IRF).
(i) In accordance with
10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional
care shall be determined to the extent practicable, in accordance
with the same reimbursement rules as those that apply to payments
to providers of services of the same type under Medicare. The TRICARE
IRF PPS reimbursement methodology shall be in accordance with Medicare's
IRF PPS as found in 42 CFR part 412. Inpatient services provided
in IRFs subject to the Medicare IRF prospective payment system (PPS) and
classified as IRFs and also as specified in 42 CFR 412.604 will
be paid in accordance with the provisions outlined in section 1886(j)
of the Social Security Act and its implementing Medicare regulation
found at 42 CFR part 412, subpart P to the extent practicable. Under
the above governing provisions, TRICARE will recognize, to the extent
practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's
IRF PPS methodology to include the relative weights, payment rates
covering all operating and capitals costs of furnishing rehabilitative
services adjusted for wage variations in labor-related costs across
geographical regions, adjustments for the 60 percent compliance
threshold, teaching adjustment, rural adjustment, high-cost outlier
payments, low income payment adjustment, payment adjustments associated
with the quality reporting program, and updates to the system.
(ii) Implementation
of the TRICARE IRF PPS will include a gradual transition to full
implementation of the Medicare IRF PPS rates as follows:
(A) For the first 12
months of implementation, the TRICARE IRF PPS allowable cost will
be 135 percent of Medicare IRF PPS amounts.
(B) For the second
12 months of implementation, the TRICARE IRF PPS allowable cost
will be 115 percent of the Medicare IRF PPS amounts.
(C) For the third 12
months of implementation, and subsequent years, the TRICARE IRF
PPS allowable cost will be 100 percent of the Medicare IRF PPS amounts.
(iii) The IRF PPS allowable
cost in paragraph (a)(10)(ii) of this section may be supplemented
by an inpatient general temporary military contingency payment adjustment
(GTMCPA) for TRICARE authorized IRFs.
(A) This is a year-end
discretionary, temporary adjustment that the Director, DHA (or designee)
may approve based on the following criteria:
(1) The IRF serves a disproportionate share
of ADSMs and ADDs;
(2) The IRF is
a TRICARE network hospital;
(3) The IRF's
actual costs for inpatient services exceed TRICARE payments or other
extraordinary economic circumstance exists; and
(4) Without the
GTMCPA, DoD's ability to meet military contingency mission requirements
will be significantly compromised.
(B) Policy and procedural
instructions implementing the GTMCPA will be issued as deemed appropriate
by the Director, DHA (or designee). As with other discretionary
authority under this part, a decision to allow or deny a GTMCPA
to an IRF is not subject to the appeal and hearing procedures of Sec.
199.10.
(iv) Exemption.
The TRICARE
IRF PPS methodology under this paragraph does not apply to hospitals in
States that are reimbursed by Medicare and TRICARE under a waiver
that exempts them from Medicare's inpatient prospective payment
system or the TRICARE DRG-based payment system, to Children's hospitals,
or to VA hospitals, respectively.
(b)
Skilled
nursing facilities (SNFs).
(1) Use
of Medicare prospective payment system and rates.
TRICARE payments
to SNFs are determined using the same methods and rates used under
the Medicare prospective payment system for SNFs under 42 CFR part
413, subpart J, except for children under age ten. SNFs receive
a per diem payment of a predetermined Federal payment rate appropriate for
the case based on patient classification (using the RUG classification
system), urban or rural location of the facility, and area wage
index.
(2) Payment in full.
The SNF payment rates represent payment
in full (subject to any applicable beneficiary cost shares) for
all costs (routine, ancillary, and capital-related) associated with
furnishing inpatient SNF services to TRICARE beneficiaries other
than costs associated with operating approved educational activities.
(3) Education costs.
Costs
for approved educational activities shall be subject to separate
payment under procedures established by the Director, TRICARE Management
Activity. Such procedures shall be similar to procedures for payments
for direct medical education costs of hospitals under paragraph (a)(1)(iii)(G)(2) of
this section.
(4) Resident assessment data.
SNFs are required to submit the same resident
assessment data as is required under the Medicare program. (The
residential assessment is addressed in the Medicare regulations
at 42 CFR 483.20.) SNFs must submit assessments according to an
assessment schedule. This schedule must include performance of patient
assessments on the 5th, 14th, and 30th days of SNF care and at each
successive 30 day interval of SNF admissions that are longer than
30 days. It must also include such other assessments that are necessary
to account for changes in patient care needs. TRICARE pays a default
rate for the days of a patient’s care for which the SNF has failed
to comply with the assessment schedule.
(c) Reimbursement for
Other Than Hospitals and SNFs.
The Director, OCHAMPUS, or a designee, shall
establish such other methods of determining allowable cost or charge
reimbursement for those institutions, other than hospitals and SNFs,
as may be required.
(d)
Payment
of institutional facility costs for ambulatory surgery.
(1) In general.
CHAMPUS
pays institutional facility costs for ambulatory surgery on the
basis of prospectively determined amounts, as provided in this paragraph,
with the exception of ambulatory surgery procedures performed in hospital
outpatient departments or in CAHs, which are to be reimbursed in
accordance with the provisions of paragraph (a)(6)(ii) or (a)(6)(iii)
respectively, of this section. This payment method is similar to
that used by the Medicare program for ambulatory surgery. This paragraph
applies to payment for freestanding ambulatory surgical centers.
It does not apply to professional services. A list of ambulatory surgery
procedures subject to the payment method set forth in the paragraph
shall be published periodically by the Director, TRICARE Management
Activity (TMA). Payment to freestanding ambulatory surgery centers
is limited to these procedures.
(2) Payment in full.
The payment
provided for under this paragraph is the payment in full for services covered
by this paragraph. Facilities may not charge beneficiaries for amounts,
if any, in excess of the payment amounts determined pursuant to
this paragraph.
(3) Calculation
of standard payment rates.
Standard
payment rates are calculated for groups of procedures under the
following steps:
(i) Step
1: Calculate a median standardized cost for each procedure.
For each
ambulatory surgery procedure, a median standardized cost will be
calculated on the basis of all ambulatory surgery charges nationally
under CHAMPUS during a recent one-year base period. The steps in
this calculation include 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 a cost-to-charge
ratio, calculating a median cost for each procedure, and updating
to the year for which the payment rates will be in effect by the Consumer
Price Index-Urban. In applying a cost-to-charge ratio, the Medicare
cost-to-charge ratio for freestanding ambulatory surgery centers
(FASCs) will be used for all charges from FASCs, and the Medicare
cost-to-charge ratio for hospital outpatient settings will be used
for all charges from hospitals.
(ii) Step 2: Grouping
procedures.
Procedures
will then be placed into one of ten groups by their median per procedure
cost, starting with $0 to $299 for group 1 and ending with $1000
to $1299 for group 9 and $1300 and above for group 10, with groups
2 through 8 set on the basis of $100 fixed intervals.
(iii) Step
3: Adjustments to groups.
The
Director, OCHAMPUS may make adjustments to the groupings resulting
from step 2 to account for any ambulatory surgery procedures for
which there were insufficient data to allow a grouping or to correct
for any anomalies resulting from data or statistical factors or
other special factors that fairness requires be specially recognized.
In making any such adjustments, the Director may take into consideration
the placing of particular procedures in the ambulatory surgery groups
under Medicare.
(iv) Step 4: Standard
payment amount per group.
The standard payment amount per group
will be the volume weighted median per procedure cost for the procedures
in that group. For cases in which the standard payment amount per
group exceeds the CHAMPUS-determined inpatient allowable amount, the
Director, TSO or his designee, may make adjustments.
(v) Step 5: Actual
payments.
Actual
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 ambulatory surgery centers by Medicare.
(4) Multiple procedures.
In cases
in which authorized multiple procedures are performed during the same
operative session, payment shall be based on 100 percent of the
payment amount for the procedure with the highest ambulatory surgery
payment amount, plus, for each other procedure performed during
the session, 50 percent of its payment amount.
(5) Annual updates.
The standard
payment amounts will be updated annually by the same update factor
as is used in the Medicare annual updates for ambulatory surgery
center payments.
(6) Recalculation of rates.
The Director, OCHAMPUS may periodically
recalculate standard payment rates for ambulatory surgery using
the steps set forth in paragraph (d)(3) of this section.
(e)
Reimbursement
of Birthing Centers.
(1) Reimbursement for
maternity care and childbirth services furnished by an authorized
birthing center shall be limited to the lower of the CHAMPUS established
all-inclusive rate or the center’s most-favored all-inclusive rate.
The all-inclusive rate shall include the following to the extent
that they are usually associated with a normal pregnancy and childbirth:
Laboratory studies, prenatal management, labor management, delivery,
post-partum management, newborn care, birth assistant, certified
nurse-midwife professional services, physician professional services,
and the use of the facility.
(2) The
CHAMPUS established all-inclusive rate is equal to the sum of the
CHAMPUS area prevailing professional charge for total obstetrical
care for a normal pregnancy and delivery and the sum of the average
CHAMPUS allowable institutional charges for supplies, laboratory,
and delivery room for a hospital inpatient normal delivery. The
CHAMPUS established all-inclusive rate areas will coincide with those
established for prevailing professional charges and will be updated
concurrently with the CHAMPUS area prevailing professional charge
database.
(3) Extraordinary
maternity care services, when otherwise authorized, may be reimbursed
at the lesser of the billed charge or the CHAMPUS allowable charge.
(4) Reimbursement
for an incomplete course of care will be limited to claims for professional
services and tests where the beneficiary has been screened but rejected
for admission into the birthing center program, or where the woman
has been admitted but is discharged from the birthing center program prior
to delivery, adjudicated as individual professional services and
items.
(5) The
beneficiary’s share of the total reimbursement to a birthing center
is limited to the cost-share amount plus the amount billed for non-covered
services and supplies.
(f)
Reimbursement
of Residential Treatment Centers.
The CHAMPUS rate is the per diem rate that
CHAMPUS will authorize for all mental health services rendered to
a patient and the patient’s family as part of the total treatment
plan submitted by a CHAMPUS-approved RTC, and approved by the Director,
OCHAMPUS, or designee.
(1) The all-inclusive
per diem rate for RTCs operating or participating in CHAMPUS during
the base period of July 1, 1987, through June 30, 1988, will be
the lowest of the following conditions:
(i) The CHAMPUS rate
paid to the RTC for all-inclusive services as of June 30, 1988,
adjusted by the Consumer Price Index--Urban (CPI-U) for medical
care as determined applicable by the Director, OCHAMPUS, or designee;
or
(ii) The
per diem rate accepted by the RTC from any other agency or organization
(public or private) that is high enough to cover one-third of the
total patient days during the 12-month period ending June 30, 1988,
adjusted by the CPI-U; or
Note: The per diem
rate accepted by the RTC from any other agency or organization includes
the rates accepted from entities such as Government contractors
in CHAMPUS demonstration projects.
(iii) An
OCHAMPUS determined capped per diem amount not to exceed the 80th
percentile of all established CHAMPUS RTC rates nationally, weighted
by total CHAMPUS days provided at each rate during the base period
discussed in paragraph (f)(1) of this section.
(2) The
all-inclusive per diem rates for RTCs which began operation after
June 30, 1988, or began operation before July 1, 1988, but had less
than 6 months of operation by June 30, 1988, will be calculated
based on the lower of the per diem rate accepted by the RTC that
is high enough to cover one-third of the total patient days during
its first 6 to 12 consecutive months of operation, or the CHAMPUS
determined capped amount. Rates for RTCs beginning operation prior
to July 1, 1988, will be adjusted by an appropriate CPI-U inflation
factor for the period ending June 30, 1988. A period of less than
12 months will be used only when the RTC has been in operation for
less than 12 months. Once a full 12 months is available, the rate
will be recalculated.
(3) For
care on or after April 6, 1995, the per diem amount may not exceed
a cap of the 70th percentile of all established Federal fiscal year
1994 RTC rates nationally, weighted by total CHAMPUS days provided
at each rate during the first half of Federal fiscal year 1994,
and updated to FY95. For Federal fiscal years 1996 and 1997, the
cap shall remain unchanged. For Federal fiscal years after fiscal year
1997, the cap shall be adjusted by the Medicare update factor for
hospitals and units exempt from the Medicare prospective payment
system.
(4) All educational
costs, whether they include routine education or special education
costs, are excluded from reimbursement except when appropriate education
is not available from, or not payable by, a cognizant public entity.
(i) The
RTC shall exclude educational costs from its daily costs.
(ii) The RTC’s accounting
system must be adequate to assure CHAMPUS is not billed for educational costs.
(iii)
The
RTC may request payment of educational costs on an individual case
basis from the Director, OCHAMPUS, or designee, when appropriate
education is not available from, or not payable by, a cognizant
public entity. To qualify for reimbursement of educational costs
in individual cases, the RTC shall comply with the application procedures
established by the Director, OCHAMPUS, or designee, including, but
not limited to, the following:
(A) As
part of its admission procedures, the RTC must counsel and assist
the beneficiary and the beneficiary’s family in the necessary procedures
for assuring their rights to a free and appropriate public education.
(B) The RTC must document
any reasons why an individual beneficiary cannot attend public educational
facilities and, in such a case, why alternative educational arrangements
have not been provided by the cognizant public entity.
(C) If
reimbursement of educational costs is approved for an individual
beneficiary by the Director, OCHAMPUS, or designee, such educational
costs shall be shown separately from the RTC’s daily costs on the
CHAMPUS claim. The amount paid shall not exceed the RTC’s most-favorable
rate to any other patient, agency, or organization for special or
general educational services whichever is appropriate.
(D) If the RTC fails
to request CHAMPUS approval of the educational costs on an individual
case, the RTC agrees not to bill the beneficiary or the beneficiary’s
family for any amounts disallowed by CHAMPUS. Requests for payment
of educational costs must be referred to the Director, OCHAMPUS,
or designee for review and a determination of the applicability
of CHAMPUS benefits.
(5) Subject
to the applicable RTC cap, adjustments to the RTC rates may be made
annually.
(i) For
Federal fiscal years through 1995, the adjustment shall be based
on the Consumer Price Index-Urban (CPI-U) for medical care as determined
applicable by the Director, OCHAMPUS.
(ii) For
purposes of rates for Federal fiscal years 1996 and 1997:
(A) For
any RTC whose 1995 rate was at or above the thirtieth percentile
of all established Federal fiscal year 1995 RTC rates normally,
weighted by total CHAMPUS days provided at each rate during the first
half of Federal fiscal year 1994, that rate shall remain in effect,
with no additional update, throughout fiscal years 1996 and 1997;
and
(B) For any RTC whose
1995 rate was below the 30th percentile level determined under paragraph (f)(5)(ii)(A)
of this section, the rate shall be adjusted by the lesser of: the
CPI-U for medical care, or the amount that brings the rate up to
that 30th percentile level.
(iii) For
subsequent Federal fiscal years after fiscal year 1997, RTC rates
shall be updated by the Medicare update factor for hospitals and
units exempt from the Medicare prospective payment system.
(6) For
care provided on or after July 1, 1995, CHAMPUS will not pay for
days in which the patient is absent on leave from the RTC. The RTC
must identify these days when claiming reimbursement.
(g)
Reimbursement
of hospice programs.
Hospice care will be reimbursed at
one of four predetermined national CHAMPUS rates based on the type
and intensity of services furnished to the beneficiary. A single
rate is applicable for each day of care except for continuous home
care where payment is based on the number of hours of care furnished
during a 24-hour period. These rates will be adjusted for regional
differences in wages using wage indices for hospice care.
(1) National
hospice rates.
CHAMPUS
will use the national hospice rates for reimbursement of each of
the following levels of care provided by or under arrangement with
a CHAMPUS approved hospice program:
(i) Routine home care.
The hospice will be paid the routine
home care rate for each day the patient is at home, under the care
of the hospice, and not receiving continuous home care. This rate
is paid without regard to the volume or intensity of routine home
care services provided on any given day.
(ii) Continuous home
care.
The hospice
will be paid the continuous home care rate when continuous home
care is provided. The continuous home care rate is divided by 24
hours in order to arrive at an hourly rate.
(A) A
minimum of 8 hours of care must be provided within a 24-hour day
starting and ending at midnight.
(B) More than half
of the total actual hours being billed for each 24-hour period must
be provided by either a registered or licensed practical nurse.
(C) Homemaker
and home health aide services may be provided to supplement the
nursing care to enable the beneficiary to remain at home.
(D) For
every hour or part of an hour of continuous care furnished, the
hourly rate will be reimbursed to the hospice up to 24 hours a day.
(iii) Inpatient
respite care.
The hospice
will be paid at the inpatient respite care rate for each day on which
the beneficiary is in an approved inpatient facility and is receiving
respite care.
(A) Payment for respite
care may be made for a maximum of 5 days at a time, including the
date of admission but not counting the date of discharge. The necessity
and frequency of respite care will be determined by the hospice
interdisciplinary group with input from the patient’s attending
physician and the hospice’s medical director.
(B) Payment for the
sixth and any subsequent days is to be made at the routine home
care rate.
(iv) General inpatient
care.
Payment
at the inpatient rate will be made when general inpatient care is provided
for pain control or acute or chronic symptom management which cannot
be managed in other settings. None of the other fixed payment rates
(i.e., routine home care) will be applicable for a day on which
the patient receives general inpatient care except on the date of
discharge.
(v) Date of discharge.
For the day of discharge from an inpatient
unit, the appropriate home care rate is to be paid unless the patient
dies as an inpatient. When the patient is discharged deceased, the inpatient
rate (general or respite) is to be paid for the discharge date.
(2) Use of
Medicare rates.
CHAMPUS will use the most current
Medicare rates to reimburse hospice programs for services provided
to CHAMPUS beneficiaries. It is CHAMPUS’ intent to adopt changes
in the Medicare reimbursement methodology as they occur; e.g., Medicare’s
adoption of an updated, more accurate wage index.
(3) Physician
reimbursement.
Payment is dependent
on the physician’s relationship with both the beneficiary and the
hospice program.
(i) Physicians employed by, or contracted with,
the hospice.
(A) Administrative
and supervisory activities (i.e., establishment, review and updating
of plans of care, supervising care and services, and establishing
governing policies) are included in the adjusted national payment
rate.
(B) Direct patient
care services are paid in addition to the adjusted national payment
rate.
(1) Physician services will be reimbursed
an amount equivalent to 100 percent of the CHAMPUS’ allowable charge;
i.e., there will be no cost-sharing and/or deductibles for hospice
physician services.
(2) Physician
payments will be counted toward the hospice cap limitation.
(ii) Independent
attending physician.
Patient
care services rendered by an independent attending physician (a
physician who is not considered employed by or under contract with
the hospice) are not part of the hospice benefit.
(A) Attending physician
may bill in his/her own right.
(B) Services
will be subject to the appropriate allowable charge methodology.
(C) Reimbursement
is not counted toward the hospice cap limitation.
(D) Services provided
by an independent attending physician must be coordinated with any
direct care services provided by hospice physicians.
(E) The hospice must
notify the CHAMPUS contractor of the name of the physician whenever
the attending physician is not a hospice employee.
(iii) Voluntary
physician services.
No payment will be allowed for physician
services furnished voluntarily (both physicians employed by, and
under contract with, the hospice and independent attending physicians).
Physicians may not discriminate against CHAMPUS beneficiaries; e.g.,
designate all services rendered to non-CHAMPUS patients as volunteer
and at the same time bill for CHAMPUS patients.
(4) Unrelated medical
treatment.
Any covered
CHAMPUS services not related to the treatment of the terminal condition
for which hospice care was elected will be paid in accordance with
standard reimbursement methodologies; i.e., payment for these services
will be subject to standard deductible and cost-sharing provisions
under the CHAMPUS. A determination must be made whether or not services
provided are related to the individual’s terminal illness. Many
illnesses may occur when an individual is terminally ill which are
brought on by the underlying condition of the ill patient. For example,
it is not unusual for a terminally ill patient to develop pneumonia
or some other illness as a result of his or her weakened condition.
Similarly, the setting of bones after fractures occur in a bone cancer
patient would be treatment of a related condition. Thus, if the
treatment or control of an upper respiratory tract infection is
due to the weakened state of the terminal patient, it will be considered
a related condition, and as such, will be included in the hospice
daily rates.
(5) Cap amount.
Each CHAMPUS-approved hospice program
will be subject to a cap on aggregate CHAMPUS payments from November
1 through October 31 of each year, hereafter known as “the cap period.”
(i) The
cap amount will be adjusted annually by the percent of increase
or decrease in the medical expenditure category of the Consumer
Price Index for all urban consumers (CPI-U).
(ii) The
aggregate cap amount (i.e., the statutory cap amount times the number
of CHAMPUS beneficiaries electing hospice care during the cap period)
will be compared with total actual CHAMPUS payments made during
the same cap period.
(iii) Payments
in excess of the cap amount must be refunded by the hospice program.
The adjusted cap amount will be obtained from the Health Care Financing
Administration (HCFA) prior to the end of each cap period.
(iv) Calculation
of the cap amount for a hospice which has not participated in the
program for an entire cap year (November 1 through October 31) will
be based on a period of at least 12 months but no more than 23 months.
For example, the first cap period for a hospice entering the program
on October 1, 1994, would run from October 1, 1994 through October
31, 1995. Similarly, the first cap period for hospice providers
entering the program after November 1, 1993 but before November
1, 1994 would end October 31, 1995.
(6) Inpatient limitation.
During the 12-month period beginning November
1 of each year and ending October 31, the aggregate number of inpatient
days, both for general inpatient care and respite care, may not
exceed 20 percent of the aggregate total number of days of hospice
care provided to all CHAMPUS beneficiaries during the same period.
(i) If the number of
days of inpatient care furnished to CHAMPUS beneficiaries exceeds
20 percent of the total days of hospice care to CHAMPUS beneficiaries,
the total payment for inpatient care is determined follows:
(A) Calculate the ratio
of the maximum number of allowable inpatient days of the actual
number of inpatient care days furnished by the hospice to Medicare
patients.
(B) Multiply this ratio by the total reimbursement
for inpatient care made by the CHAMPUS contractor.
(C) Multiply
the number of actual inpatient days in excess of the limitation
by the routine home care rate.
(D) Add the amounts
calculated in paragraphs (g)(6)(i)(B) and (C) of this section.
(ii) Compare the total
payment for inpatient care calculated in paragraph (g)(6)(i)(D)
of this section to actual payments made to the hospice for inpatient
care during the cap period.
(iii) Payments in excess
of the inpatient limitation must be refunded by the hospice program.
(7) Hospice reporting
responsibilities.
The
hospice is responsible for reporting the following data within 30
days after the end of the cap period:
(i) Total reimbursement
received and receivable for services furnished CHAMPUS beneficiaries during
the cap period, including physician’s services not of an administrative
or general supervisory nature.
(ii) Total reimbursement
received and receivable for general inpatient care and inpatient
respite care furnished to CHAMPUS beneficiaries during the cap period.
(iii) Total number
of inpatient days furnished to CHAMPUS hospice patients (both general
inpatient and inpatient respite days) during the cap period.
(iv) Total number of
CHAMPUS hospice days (both inpatient and home care) during the cap
period.
(v) Total number of
beneficiaries electing hospice care. The following rules must be
adhered to by the hospice in determining the number of CHAMPUS beneficiaries
who have elected hospice care during the period:
(A) The beneficiary
must not have been counted previously in either another hospice’s
cap or another reporting year.
(B) The beneficiary
must file an initial election statement during the period beginning
September 28 of the previous cap year through September 27 of the
current cap year in order to be counted as an electing CHAMPUS beneficiary
during the current cap year.
(C) Once
a beneficiary has been included in the calculation of a hospice
cap amount, he or she may not be included in the cap for that hospice
again, even if the number of covered days in a subsequent reporting
period exceeds that of the period where the beneficiary was included.
(D) There
will be proportional application of the cap amount when a beneficiary
elects to receive hospice benefits from two or more different CHAMPUS-certified
hospices. A calculation must be made to determine the percentage
of the patient’s length of stay in each hospice relative to the
total length of hospice stay.
(8) Reconsideration
of cap amount and inpatient limit.
A hospice dissatisfied with the contractor’s calculation
and application of its cap amount and/or inpatient limitation may
request and obtain a contractor review if the amount of program
reimbursement in controversy--with respect to matters which the
hospice has a right to review--is at least $1000. The administrative
review by the contractor of the calculation and application of the
cap amount and inpatient limitation is the only administrative review
available. These calculations are not subject to the appeal procedures
set forth in Sec. 199.10. The methods and standards for calculation
of the hospice payment rates established by CHAMPUS, as well as
questions as to the validity of the applicable law, regulations
or CHAMPUS decisions, are not subject to administrative review,
including the appeal procedures of Sec. 199.10.
(9) Beneficiary cost-sharing.
There are no deductibles under the CHAMPUS
hospice benefit. CHAMPUS pays the full cost of all covered services
for the terminal illness, except for small cost-share amounts which
may be collected by the individual hospice for outpatient drugs
and biologicals and inpatient respite care.
(i) The patient is
responsible for 5 percent of the cost of outpatient drugs or $5
toward each prescription, whichever is less. Additionally, the cost
of prescription drugs (drugs or biologicals) may not exceed that
which a prudent buyer would pay in similar circumstances; that is,
a buyer who refuses to pay more than the going price for an item
or service and also seeks to economize by minimizing costs.
(ii) For inpatient
respite care, the cost-share for each respite care day is equal
to 5 percent of the amount CHAMPUS has estimated to be the cost
of respite care, after adjusting the national rate for local wage
differences.
(iii) The amount of
the individual cost-share liability for respite care during a hospice
cost-share period may not exceed the Medicare inpatient hospital
deductible applicable for the year in which the hospice cost-share
period began. The individual hospice cost-share period begins on
the first day an election is in effect for the beneficiary and ends
with the close of the first period of 14 consecutive days on each
of which an election is not in effect for the beneficiary.
(h) Reimbursement of
Home Health Agencies (HHAs).
HHAs will be reimbursed using the
same methods and rates as used under the Medicare HHA prospective
payment system under Section 1895 of the Social Security Act (42
U.S.C. 1395fff) and 42 CFR Part 484, Subpart E except as otherwise necessary
to recognize distinct characteristics of TRICARE beneficiaries and
as described in instructions issued by the Director, TMA. Under
this methodology, an HHA will receive a fixed case-mix and wage-adjusted
national 60-day episode payment amount as payment in full for all
costs associated with furnishing home health services to TRICARE-eligible
beneficiaries with the exception of osteoporosis drugs and DME.
The full case-mix and wage-adjusted 60-day episode amount will be
payment in full subject to the following adjustments and additional
payments:
(1) Split
percentage payments.
The
initial percentage payment for initial episodes is paid to an HHA at
60 percent of the case-mix and wage adjusted 60-day episode rate.
The residual final payment for initial episodes is paid at 40 percent
of the case-mix and wage adjusted 60-day episode rate subject to appropriate
adjustments. The initial percentage payment for subsequent episodes
is paid at 50 percent of the case-mix and wage-adjusted 60-day episode
rate. The residual final payment for subsequent episodes is paid
at 50 percent of the case-mix and wage-adjusted 60-day episode rate
subject to appropriate adjustments.
(2) Low-utilization
payment.
A low utilization
payment is applied when a HHA furnishes four or fewer visits to
a beneficiary during the 60-day episode. The visits are paid at
the national per-visit amount by discipline updated annually by
the applicable market basket for each visit type.
(3) Partial
episode payment (PEP).
A
PEP adjustment is used for payment of an episode of less than 60 days
resulting from a beneficiary’s elected transfer to another HHA prior
to the end of the 60-day episode or discharge and readmission of
a beneficiary to the same HHA before the end of the 60-day episode.
The PEP payment is calculated by multiplying the proportion of the
60-day episode during which the beneficiary remained under the care
of the original HHA by the beneficiary’s assigned 60-day episode
payment.
(4) Significant change in condition (SCIC).
The full-episode
payment amount is adjusted if a beneficiary experiences a significant
change in condition during the 60-day episode that was not envisioned
in the initial treatment plan. The total significant change in condition
payment adjustment is a proportional payment adjustment reflecting
the time both prior to and after the patient experienced a significant
change in condition during the 60-day episode. The initial percentage payment
provided at the start of the 60-day episode will be adjusted at
the end of the episode to reflect the first and second parts of
the total SCIC adjustment determined at the end of the 60-day episode.
The SCIC payment adjustment is calculated in two parts:
(i) The first part
of the SCIC payment adjustment reflects the adjustment to the level
of payment prior to the significant change in the patient’s condition
during the 60-day episode.
(ii) The second part of the SCIC payment adjustment
reflects the adjustment to the level of payment after the significant
change in the patient’s condition occurs during the 60-day episode.
(5) Outlier payment.
Outlier payments are allowed in addition
to regular 60-day episode payments for beneficiaries generating
excessively high treatment costs. The following methodology is used
for calculation of the outlier payment:
(i) TRICARE makes an
outlier payment for an episode whose estimated cost exceeds a threshold amount
for each case-mix group.
(ii) The outlier threshold for each case-mix group
is the episode payment amount for that group, the PEP adjustment
amount for the episode or the total significant change in condition
adjustment amount for the episode plus a fixed dollar loss amount
that is the same for all case-mix groups.
(iii) The outlier payment
is a proportion of the amount of estimated cost beyond the threshold.
(iv) TRICARE imputes
the cost for each episode by multiplying the national per-visit
amount of each discipline by the number of visits in the discipline
and computing the total imputed cost for all disciplines.
(v) The fixed dollar
loss amount and the loss sharing proportion are chosen so that the
estimated total outlier payment is no more than the predetermined
percentage of total payment under the home health PPS as set by
the Centers for Medicare & Medicaid Services (CMS).
(6) Services paid outside the HHA prospective
payment system.
The
following are services that receive a separate payment amount in
addition to the prospective payment amount for home health services:
(i) Durable medical equipment (DME).
Reimbursement
of DME is based on the same amounts established under the Medicare
Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)
fee schedule under 42 CFR part 414, subpart D.
(ii) Osteoporosis
drugs.
Although osteoporosis
drugs are subject to home health consolidated billing, they continue
to be paid on a cost basis, in addition to episode payments.
(7) Accelerated payments.
Upon request, an accelerated payment may
be made to an HHA that is receiving payment under the home health
prospective payment system if the HHA is experiencing financial
difficulties because there is a delay by the contractor in making
payment to the HHA. The following are criteria for making accelerated
payments:
(i) Approval of payment.
An HHA’s request
for an accelerated payment must be approved by the contractor and
TRICARE Management Activity (TMA).
(ii) Amount of payment.
The amount of
the accelerated payment is computed as a percentage of the net payment
for unbilled or unpaid covered services.
(iii) Recovery
of payment.
Recovery of
the accelerated payment is made by recoupment as HHA bills are processed
or by direct payment by the HHA.
(8) Assessment data.
Beneficiary assessment data, incorporating
the use of the current version of the OASIS items, must be submitted
to the contractor for payment under the HHA prospective payment system.
(9) Administrative review.
An HHA is not entitled to judicial or administrative
review with regard to:
(i) Establishment of the payment unit, including
the national 60-day prospective episode payment rate, adjustments
and outlier payment.
(ii) Establishment of transition period, definition
and application of the unit of payment.
(iii) Computation of
the initial standard prospective payment amounts.
(iv) Establishment
of case-mix and area wage adjustment factors.
(i)
Changes
in Federal Law affecting Medicare.
With regard to paragraph (b) and (h) of
this section, the Department of Defense must, within the time frame
specified in law and to the extent it is practicable, bring the
TRICARE program into compliance with any changes in Federal Law
affecting the Medicare program that occur after the effective date
of the DoD rule to implement the prospective payment systems for
skilled nursing facilities and home health agencies.
(j)
Reimbursement
of individual health care professionals and other non-institutional,
non-professional providers.
The CHAMPUS-determined reasonable
charge (the amount allowed by CHAMPUS) for the service of an individual
health care professional or other non-institutional, non-professional
provider (even if employed by or under contract to an institutional
provider) shall be determined by one of the following methodologies,
that is, whichever is in effect in the specific geographic location
at the time covered services and supplies are provided to a CHAMPUS
beneficiary.
(1) Allowable
charge method--
(i) Introduction--
(A) In general.
The allowable
charge method is the preferred and primary method for reimbursement
of individual health care professionals and other non-institutional
health care providers (covered by 10 U.S.C. 1079(h)(1)). The allowable
charge for authorized care shall be the lower of the billed charge
or the local CHAMPUS Maximum Allowable Charge (CMAC).
(B) CHAMPUS Maximum
Allowable Charge.
Beginning in calendar year 1992,
prevailing charge levels and appropriate charge levels will be calculated
on a national level. There will then be calculated a national CHAMPUS
Maximum Allowable Charge (CMAC) level for each procedure, which
shall be the lesser of the national prevailing charge level or the
national appropriate charge level. The national CMAC will then be
adjusted for localities in accordance with paragraph (j)(1)(iv)
of this section.
(C) Limits on balance billing by nonparticipating
providers.
Nonparticipating
providers may not balance bill a beneficiary an amount which exceeds
the applicable balance billing limit. The balance billing limit
shall be the same percentage as the Medicare limiting charge percentage
for nonparticipating physicians. The balance billing limit may be
waived by the Director, OCHAMPUS on a case-by-case basis if requested
by the CHAMPUS beneficiary (or sponsor) involved. A decision by
the Director to waive or not waive the limit in any particular case
is not subject to the appeal and hearing procedures of Sec. 199.10.
(D) Special rule
for TRICARE Prime Enrollees.
In the case of a TRICARE Prime enrollee
(see section 199.17) who receives authorized care from a non-participating
provider, the CHAMPUS determined reasonable charge will be the CMAC
level as established in paragraph (j)(1)(i)(B) of this section plus
any balance billing amount up to the balance billing limit as referred
to in paragraph (j)(1)(i)(C) of this section. The authorization
for such care shall be pursuant to the procedures established by
the Director, OCHAMPUS (also referred to as the TRICARE Support
Office).
(E) Special rule for certain TRICARE Standard
Beneficiaries.
In the case
of dependent spouse or child, as defined in paragraphs (b)(2)(ii)(A)
through (F) and (b)(2)(ii)(H)(1), (2),
and (4) of Sec. 199.3, of a Reserve Component member
serving on active duty pursuant to a call or order to active duty
for a period of more than 30 days in support of a contingency operation
under a provision of law referred to in section 101(a)(13)(B) of
title 10, United States Code, the Director, TRICARE Management Activity,
may authorize non-participating providers the allowable charge to
be the CMAC level as established in paragraph (j)(l)(i)(B) of this
section plus any balance billing amount up to the balance billing
limit as referred to in paragraph (j)(l)(i)(C) of this section.
(ii) Prevailing charge
level.
(A) Beginning
in calendar year 1992, the prevailing charge level shall be calculated
on a national basis.
(B) The national prevailing
charge level referred to in paragraph (j)(1)(ii)(A) of this section
is the level that does not exceed the amount equivalent to the 80th
percentile of billed charges made for similar services during the
base period. The 80th percentile of charges shall be determined
on the basis of statistical data and methodology acceptable to the
Director, OCHAMPUS (or a designee).
(C) For
purposes of paragraph (j)(1)(ii)(B) of this section, the base period
shall be a period of 12 calendar months and shall be adjusted once
a year, unless the Director, OCHAMPUS, determines that a different
period for adjustment is appropriate and publishes a notice to that
effect in the Federal Register.
(iii) Appropriate
charge level.
Beginning
in calendar year 1992, the appropriate charge level shall be calculated
on a national basis. The appropriate charge level for each procedure
is the product of the two-step process set forth in paragraphs (j)(1)(iii)(A)
and (B) of this section. This process involves comparing the prior
year’s CMAC with the fully phased in Medicare fee. For years after
the Medicare fee has been fully phased in, the comparison shall
be to the current year Medicare fee. For any particular procedure
for which comparable Medicare fee and CHAMPUS data are unavailable,
but for which alternative data are available that the Director,
OCHAMPUS (or designee) determines provide a reasonable approximation
of relative value or price, the comparison may be based on such
alternative data.
(A) Step
1: Procedures classified.
All
procedures are classified into one of three categories, as follows:
(1) Overpriced
procedures.
These are the
procedures for which the prior year’s national CMAC exceeds the
Medicare fee.
(2) Other procedures.
These are procedures
subject to the allowable charge method that are not included in
either the overpriced procedures group or the underpriced procedures
group.
(3) Underpriced
procedures.
These are the
procedures for which the prior year’s national CMAC is less than
the Medicare fee.
(B) Step 2: Calculating appropriate charge levels.
For each
year, appropriate charge levels will be calculated by adjusting
the prior year’s CMAC as follows:
(1) For overpriced procedures, the appropriate
charge level for each procedure shall be the prior year’s CMAC,
reduced by the lesser of: the percentage by which it exceeds the
Medicare fee or fifteen percent.
(2) For other procedures, the appropriate
charge level for each procedure shall be the same as the prior year’s
CMAC.
(3) For underpriced
procedures, the appropriate charge level for each procedure shall
be the prior year’s CMAC, increased by the lesser of: the percentage
by which it is exceeded by the Medicare fee or the Medicare Economic
Index.
(C) Special rule for cases in which the CHAMPUS
appropriate charge was prematurely reduced.
In any case in which a recalculation
of the Medicare fee results in a Medicare rate higher than the CHAMPUS appropriate
charge for a procedure that had been considered an overpriced procedure,
the reduction in the CHAMPUS appropriate charge shall be restored
up to the level of the recalculated Medicare rate.
(D) Special
rule for cases in which the national CMAC is less than the Medicare
rate.
Note: This paragraph will be implemented
when CMAC rates are published.
In any
case in which the national CMAC calculated in accordance with paragraphs
(j)(1)(i) through (iii) of this section is less than the Medicare
rate, the Director, TSO, may determine that the use of the Medicare
Economic Index under paragraph (j)(1)(iii)(B) of this section will
result in a CMAC rate below the level necessary to assure that beneficiaries
will retain adequate access to health care services. Upon making
such a determination, the Director, TSO, may increase the national
CMAC to a level not greater than the Medicare rate.
(iv) Calculating
CHAMPUS Maximum Allowable Charge levels for localities.
(A) In general.
The national CHAMPUS
Maximum Allowable Charge level for each procedure will be adjusted
for localities using the same (or similar) geographical areas and
the same geographic adjustment factors as are used for determining
allowable charges under Medicare.
(B) Special locality-based
phase-in provision.
(1) In general.
Beginning
with the recalculation of CMACS for calendar year 1993, the CMAC
in a locality will not be less than 72.25 percent of the maximum
charge level in effect for that locality on December 31, 1991. For
recalculations of CMACs for calendar years after 1993, the CMAC
in a locality will not be less than 85 percent of the CMAC in effect for
that locality at the end of the prior calendar year.
(2) Exception.
The special
locality-based phase-in provision established by paragraph (j)(1)(iv)(B)(1) of
this section shall not be applicable in the case of any procedure
code for which there were not CHAMPUS claims in the locality accounting
for at least 50 services.
(C) Special locality-based
waivers of reductions to assure adequate access to care.
Beginning with
the recalculation of CMACs for calendar year 1993, in the case of
any procedure classified as an overpriced procedure pursuant to
paragraph (j)(1)(iii)(A)(1) of this section, a
reduction in the CMAC in a locality below the level in effect at
the end of the previous calendar year that would otherwise occur
pursuant to paragraphs (j)(1)(iii) and (j)(1)(iv) of this section
may be waived pursuant to paragraph (j)(1)(iii)(C) of this section.
(1) Waiver based
on balanced billing rates.
Except as provided in paragraph (j)(1)(iv)(C)(2) of
this section such a reduction will be waived if there has been excessive
balance billing in the locality for the procedure involved. For
this purpose, the extent of balance billing will be determined based
on a review of all services under the procedure code involved in
the prior year (or most recent period for which data are available).
If the number of services for which balance billing was not required
was less than 60 percent of all services provided, the Director
will determine that there was excessive balance billing with respect
to that procedure in that locality and will waive the reduction
in the CMAC that would otherwise occur. A decision by the Director
to waive or not waive the reduction is not subject to the appeal
and hearing procedures of Sec. 199.10.
(2) Exception.
As an
exception to the paragraph (j)(1)(iv)(C)(1) of
this section, the waiver required by that paragraph shall not be
applicable in the case of any procedure code for which there were
not CHAMPUS claims in the locality accounting for at least 50 services.
A waiver may, however, be granted in such cases pursuant to paragraph
(j)(1)(iv)(C)(3) of this section.
(3) Waiver based
on other evidence that adequate access to care would be impaired.
The Director, OCHAMPUS
may waive a reduction that would otherwise occur (or restore a reduction
that was already taken) if the Director determines that available
evidence shows that the reduction would impair adequate access.
For this purpose, such evidence may include consideration of the
number of providers in the locality who provide the affected services,
the number of such providers who are CHAMPUS Participating Providers,
the number of CHAMPUS beneficiaries in the area, and other relevant
factors. Providers or beneficiaries in a locality may submit to
the Director, OCHAMPUS a petition, together with appropriate documentation
regarding relevant factors, for a determination that adequate access
would be impaired. The Director, OCHAMPUS will consider and respond
to all such petitions. Petitions may be filed at any time. Any petition
received by the date which is 120 days prior to the implementation
of a recalculation of CMACs will be assured of consideration prior
to that implementation. The Director, OCHAMPUS may establish procedures
for handling petitions. A decision by the Director to waive or not
waive a reduction is not subject to the appeal and hearing procedures
of Sec. 199.10.
(D) Special locality-based exception to applicable
CMACs to assure adequate beneficiary access to care.
In addition
to the authority to waive reductions under paragraph (j)(1)(iv)(C)
of this section, the Director may authorize establishment of higher
payment rates for specific services than would otherwise be allowable,
under paragraph (j)(1) of this section, if the Director determines
that available evidence shows that access to health care services
is severely impaired. For this purpose, such evidence may include
consideration of the number of providers in the locality who provide
the affected services, the number of providers who are CHAMPUS participating
providers, the number of CHAMPUS beneficiaries in the locality,
the availability of military providers in the location or nearby,
and any other factors the Director determines relevant.
(1) Procedure.
Providers
or beneficiaries in a locality may submit to the Director, a petition,
together with appropriate documentation regarding relevant factors,
for a determination that adequate access to health care services
is severely impaired. The Director, will consider and respond to
all petitions. A decision to authorize a higher payment amount is
subject to review and determination or modification by the Director
at any time if circumstances change so that adequate access to health
care services would no longer be severely impaired. A decision by
the Director, to authorize, not authorize, terminate, or modify
authorization of higher payment amounts is not subject to the appeal
and hearing procedures of Sec. 199.10 of the part.
(2) Establishing
the higher payment rate(s).
When
the Director, determines that beneficiary access to health care
services in a locality is severely impaired, the Director may establish
the higher payment rate(s) as he or she deems appropriate and cost-effective
through one of the following methodologies to assure adequate access:
(i) A percent
factor may be added to the otherwise applicable payment amount allowable
under paragraph (j)(1) of this section;
(ii) A prevailing
charge may be calculated, by applying the prevailing charge methodology
of paragraph (j)(1)(ii) of this section to a specific locality (which
need not be the same as the localities used for purposes of paragraph
(j)(1)(iv)(A) of this section; or another government payment rate
may be adopted, for example, an applicable state Medicaid rate).
(3) Application
of higher payment rates.
Higher payment rates defined under
paragraph (j)(1)(iv)(D) of this section may be applied to all similar
services performed in a locality, or, if circumstances warrant, a
new locality may be defined for application of the higher payments.
Establishment of a new locality may be undertaken where access impairment
is localized and not pervasive across the existing locality. Generally,
establishment of a new, more specific locality will occur when the
area is remote so that geographical characteristics and other factors
significantly impair transportation through normal means to health
care services routinely available within the existing locality.
(E) Special locality-based exception to applicable
CMACs to ensure an adequate TRICARE Prime preferred network.
The Director,
may authorize reimbursements to health care providers participating
in a TRICARE preferred provider network under Sec. 199.17(p) of
this part at rates higher than would otherwise be allowable under
paragraph (j)(1) of this section, if the Director, determines that application
of the higher rates is necessary to ensure the availability of an
adequate number and mix of qualified health care providers in a
network in a specific locality. This authority may only be used
to ensure adequate networks in those localities designated by the
Director, as requiring TRICARE preferred provider networks, not
in localities in which preferred provider networks have been suggested
or established but are not determined by the Director to be necessary.
Appropriate evidence for determining that higher rates are necessary
may include consideration of the number of available primary care
and specialist providers in the network locality, availability (including reassignment)
of military providers in the location or nearby, the appropriate
mix of primary care and specialists needed to satisfy demand and
meet appropriate patient access standards (appointment/waiting time,
travel distance, etc.), the efforts that have been made to create
an adequate network, other cost-effective alternatives, and other
relevant factors. The Director, may establish procedures by which
exceptions to applicable CMACs are requested and approved or denied
under paragraph (j)(1)(iv)(E) of this section. A decision by the
Director, to authorize or deny an exception is not subject to the
appeal and hearing procedures of Sec. 199.10. When the Director,
determines that it is necessary and cost-effective to approve a
higher rate or rates in order to ensure the availability of an adequate number
of qualified health care providers in a network in a specific locality,
the higher rate may not exceed the lesser of the following:
(1) The amount
equal to the local fee for service charge for the service in the
service area in which the service is provided as determined by the
Director, based on one or more of the following payment rates:
(i) Usual, customary,
and reasonable;
(ii) The Health
Care Financing Administration’s Resource Based Relative Value Scale;
(iii) Negotiated
fee schedules;
(iv) Global fees;
or
(v) Sliding scale individual fee allowances.
(2) The amount
equal to 115 percent of the otherwise allowable charge under paragraph
(j)(1) of the section for the service.
(v) Special rules
for 1991.
(A) Appropriate charge
levels for care provided on or after January 1, 1991, and before
the 1992 appropriate levels take effect shall be the same as those
in effect on December 31, 1990, except that appropriate charge levels
for care provided on or after October 7, 1991, shall be those established
pursuant to this paragraph (j)(1)(v) of this section.
(B) Appropriate
charge levels will be established for each locality for which a
appropriate charge level was in effect immediately prior to October
7, 1991. For each procedure, the appropriate charge level shall
be the prevailing charge level in effect immediately prior to October
7, 1991, adjusted as provided in (j)(1)(v)(B)(
1)
through (
3) of this section.
(1) For each overpriced procedure, the level
shall be reduced by fifteen percent. For this purpose, overpriced
procedures are the procedures determined by the Physician Payment
Review Commission to be overvalued pursuant to the process established
under the Medicare program, other procedures considered overvalued
in the Medicare program (for which Congress directed reductions
in Medicare allowable levels for 1991), radiology procedures and
pathology procedures.
(2) For each
other procedure, the level shall remain unchanged. For this purpose,
other procedures are procedures which are not overpriced procedures
or primary care procedures.
(3) For each primary care procedure, the level
shall be adjusted by the MEI, as the MEI is applied to Medicare
prevailing charge levels. For this purpose, primary care procedures
include maternity care and delivery services and well baby care
services.
(C)
For
purposes of this paragraph (j)(i)(v), “appropriate charge levels”
in effect at any time prior to October 7, 1991 shall mean the lesser
of:
(1) The prevailing charge levels then in effect,
or
(2) The fiscal year 1988 prevailing charge
levels adjusted by the Medicare Economic Index (MEI), as the MEI
was applied beginning in the fiscal year 1989.
(vi) Special
transition rule for 1992.
(A) For purposes of
calculating the national appropriate charge levels for 1992, the
prior year’s appropriate charge level for each service will be considered
to be the level that does not exceed the amount equivalent to the
80th percentile of billed charges made for similar services during
the base period of July 1, 1986 to June 30, 1987 (determined as
under paragraph (j)(1)(ii)(B) of this section), adjusted to calendar
year 1991 based on the adjustments made for maximum CHAMPUS allowable
charge levels through 1990 and the application of paragraph (j)(1)(v)
of this section for 1991.
(B) The adjustment
to calendar year 1991 of the product of paragraph (j)(1)(vi)(A)
of this section shall be as follows:
(1) For procedures
other than those described in paragraph (j)(1)(vi)(B)(2) of
this section, the adjustment to 1991 shall be on the same basis
as that provided under paragraph (j)(1)(v) of this section.
(2) For any procedure that was considered
an overpriced procedure for purposes of the 1991 appropriate charge
levels under paragraph (j)(1)(v) of this section for which the resulting
1991 appropriate charge level was less than 150 percent of the Medicare
converted relative value unit, the adjustment to 1991 for purposes
of the special transition rule for 1992 shall be as if the procedure
had been treated under paragraph (j)(1)(v)(B)(2) of
this section for purposes of the 1991 appropriate charge level.
(vii) Adjustments
and procedural rules.
(A) The Director, OCHAMPUS may make adjustments
to the appropriate charge levels calculated pursuant to paragraphs
(j)(1)(iii) and (j)(1)(v) of this section to correct any anomalies
resulting from data or statistical factors, significant differences
between Medicare-relevant information and CHAMPUS-relevant considerations
or other special factors that fairness requires be specially recognized.
However, no such adjustment may result in reducing an appropriate
charge level.
(B) The Director, OCHAMPUS
will issue procedural instructions for administration of the allowable charge
method.
(viii) Clinical laboratory
services.
The allowable
charge for clinical diagnostic laboratory test services shall be
calculated in the same manner as allowable charges for other individual
health care providers are calculated pursuant to paragraphs (j)(1)(i)
through (j)(1)(iv) of this section, with the following exceptions
and clarifications.
(A) The calculation
of national prevailing charge levels, national appropriate charge
levels and national CMACs for laboratory service shall begin in
calendar year 1993. For purposes of the 1993 calculation, the prior
year’s national appropriate charge level or national prevailing
charge level shall be the level that does not exceed the amount
equivalent to the 80th percentile of billed charges made for similar
services during the period July 1, 1991, through June 30, 1992 (referred
to in this paragraph (j)(1)(viii) of this section as the “base period”).
(B) For
purposes of comparison to Medicare allowable payment amounts pursuant
to paragraph (j)(1)(iii) of this section, the Medicare national
laboratory payment limitation amounts shall be used.
(C) For
purposes of establishing laboratory service local CMACs pursuant
to paragraph (j)(1)(iv) of this section, the adjustment factor shall
equal the ratio of the local average charge (standardized for the distribution
of clinical laboratory services) to the national average charge
for all clinical laboratory services during the base period.
(D) For
purposes of a special locality-based phase-in provision similar
to that established by paragraph (j)(1)(iv)(B) of this section,
the CMAC in a locality will not be less than 85 percent of the maximum
charge level in effect for that locality during the base period.
(ix) The
allowable charge for physician assistant services other than assistant-at-surgery
shall be at the same percentage, used by Medicare, of the allowable
charge for a comparable service rendered by a physician performing
the service in a similar location. For cases in which the physician
assistant and the physician perform component services of a procedure
other than assistant-at-surgery (e.g., home, office, or hospital
visit), the combined allowable charge for the procedure may not
exceed the allowable charge for the procedure rendered by a physician
alone. The allowable charge for physician assistant services performed
as an assistant-at-surgery shall be at the same percentage, used
by Medicare, of the allowable charge for a physician serving as
an assistant surgeon when authorized as CHAMPUS benefits in accordance
with the provisions of Sec. 199.4(c)(3)(iii). Physician assistant
services must be billed through the employing physician who must
be an authorized CHAMPUS provider.
(x) A
charge that exceeds the CHAMPUS Maximum Allowable Charge can be
determined to be allowable only when unusual circumstances or medical
complications justify the higher charge. The allowable charge may
not exceed the billed charge under any circumstances.
(xi) Pharmaceutical
agents utilized as part of medically necessary medical services.
In general,
the TRICARE-determined allowed amount shall be equal to an amount
determined to be appropriate, to the extent practicable, in accordance
with the same reimbursement rules as apply to payments for similar
services under Medicare. Under the authority of 10 U.S.C. 1079(q),
in the case of any pharmaceutical agent utilized as part of medically
necessary medical services, the Director may adopt special reimbursement
methods, amounts, and procedures to encourage the use of high-value products
and discourage the use of low-value products, as determined by the
Director. For this purpose, the Director may obtain recommendations
from the Pharmaceutical and Therapeutics Committee under Sec. 199.21
or other entities as the Director, DHA deems appropriate with respect
to the relative value of products in a class of products subject
to this paragraph (j)(1)(xi). Among the special reimbursement methods
the Director may choose to adopt under this paragraph (j)(1)(xi)
is to reimburse the average sales price of a product plus six percent
of the median of the average sales prices of products in the product
class or category. The Director shall issue guidance regarding the
special reimbursement methods adopted and the appropriate reimbursement
rates.
(2) Bonus
payments in medically underserved areas.
A bonus payment, in addition to
the amount normally paid under the allowable charge methodology,
may be made to physicians in medically underserved areas. For purposes
of this paragraph, medically underserved areas are the same as those determined
by the Secretary of Health and Human Services for the Medicare program.
Such bonus payments shall be equal to the bonus payments authorized
by Medicare, except as necessary to recognize any unique or distinct
characteristics or requirements of the TRICARE program, and as described
in instructions issued by the Executive Director, TRICARE Management
Activity. If the Department of Health and Human Services acts to
amend or remove the provision for bonus payments under Medicare,
TRICARE likewise may follow Medicare in amending or removing provision
for such payments.
(3) All-inclusive
rate.
Claims
from individual health-care professional providers for services
rendered to CHAMPUS beneficiaries residing in an RTC that is either
being reimbursed on an all-inclusive per diem rate, or is billing
an all-inclusive per diem rate, shall be denied; with the exception
of independent health-care professionals providing geographically
distant family therapy to a family member residing a minimum of
250 miles from the RTC or covered medical services related to a
nonmental health condition rendered outside the RTC. Reimbursement
for individual professional services is included in the rate paid
the institutional provider.
(4) Alternative
method.
The Director,
OCHAMPUS, or a designee, may, subject to the approval of the ASD(HA),
establish an alternative method of reimbursement designed to produce
reasonable control over health care costs and to ensure a high level
of acceptance of the CHAMPUS-determined charge by the individual
health-care professionals or other noninstitutional health-care
providers furnishing services and supplies to CHAMPUS beneficiaries.
Alternative methods may not result in reimbursement greater than
the allowable charge method above.
(k) Reimbursement of Durable Medical Equipment,
Prosthetics, Orthotics and Supplies (DMEPOS).
Reimbursement of DMEPOS may be based on
the same amounts established under the Centers for Medicare and
Medicaid Services (CMS) DMEPOS fee schedule under 42 CFR part 414, subpart
D.
(l)
Reimbursement
Under the Military-Civilian Health Services Partnership Program.
The Military-Civilian
Health Services Partnership Program, as authorized by section 1096,
chapter 55, title 10, provides for the sharing of staff, equipment,
and resources between the civilian and military health care system
in order to achieve more effective, efficient, or economical health
care for authorized beneficiaries. Military treatment facility commanders,
based upon the authority provided by their respective Surgeons General
of the military departments, are responsible for entering into individual partnership
agreements only when they have determined specifically that use
of the Partnership Program is more economical overall to the Government
than referring the need for health care services to the civilian
community under the normal operation of the CHAMPUS Program. (See
paragraph (p) of Sec. 199.1 for general requirements of the Partnership
Program.)
(1) Reimbursement
of institutional health care providers.
Reimbursement of institutional health
care providers under the Partnership Program shall be on the same
basis as non-Partnership providers.
(2) Reimbursement
of individual health-care professionals and other non-institutional
health care providers.
Reimbursement of individual health
care professionals and other non-institutional health care providers
shall be on the same basis as non-Partnership providers as detailed
in paragraph (j) of this section.
(m)
Accommodation
of Discounts Under Provider Reimbursement Methods.
(1) General rule.
The Director. OCHAMPUS (or designee) has
authority to reimburse a provider at an amount below the amount
usually paid pursuant to this section when, under a program approved
by the Director, the provider has agreed to the lower amount.
(2) Special applications.
The following
are examples of applications of the general rule; they are not all
inclusive.
(i) In the case and
individual health care professionals and other non-institutional
providers, if the discounted fee is below the provider’s normal
billed charge and the prevailing charge level (see paragraph (g)
of this section), the discounted fee shall be the provider’s actual
billed charge and the CHAMPUS allowable charge.
(ii) In
the case of institutional providers normally paid on the basis of
a pre-set amount (such as DRG-based amount under paragraph (a)(1)
of this section or per-diem amount under paragraph (a)(2) of this section),
if the discount rate is lower than the pre-set rate, the discounted
rate shall be the CHAMPUS-determined allowable cost. This is an
exception to the usual rule that the pre-set rate is paid regardless of
the institutional provider’s billed charges or other factors.
(3) Procedures.
(i) This paragraph
applies only when both the provider and the Director have agreed to
the discounted payment rate. The Director’s agreement may be in
the context of approval of a program that allows for such discounts.
(ii) The Director of
OCHAMPUS may establish uniform terms, conditions and limitations
for this payment method in order to avoid administrative complexity.
(n)
Outside
the United States.
The Director, OCHAMPUS, or a designee,
shall determine the appropriate reimbursement method or methods
to be used in the extension of CHAMPUS benefits for otherwise covered
medical services or supplies provided by hospitals or other institutional
providers, physicians or other individual professional providers,
or other providers outside the United States.
(o)
Implementing
Instructions.
The Director,
OCHAMPUS, or a designee, shall issue CHAMPUS policies, instructions,
procedures, and guidelines, as may be necessary to implement the
intent of this section.
[55
FR 13266, Apr 10, 1990, as amended at 55 FR 31180, Aug 1, 1990;
55 FR 42562, Oct 22, 1990; 55 FR 43342, Oct 29, 1990; 56 FR 44006,
Sep 6, 1991; 56 FR 50273, Oct 4, 1991; 58 FR 35408, Jul 1, 1993;
58 FR 51239, Oct 1, 1993; 58 FR 58961, Nov 5, 1993; 60 FR 6019,
Feb 1, 1995; 60 FR 12437, Mar 7, 1995; 60 FR 52094, Oct 5, 1995;
63 FR 7287, Feb 13, 1998; 63 FR 48446, Sep 10, 1998; 63 FR 56082,
Oct 21, 1998; 64 FR 60671, Nov 8, 1999; 65 FR 41003, Jul 3, 2000;
67 FR 45172, Aug 28, 2001; 67 FR 18115, Apr 15, 2002; 67 FR 40604,
Jun 13, 2002; 69 FR 60555, Oct 12, 2004; 70 FR 61378, Oct 24, 2005;
72 FR 63988, Nov 14, 2007; 73 FR 46809, Aug 12, 2008; 73 FR 74965,
Dec 10, 2008; 74 FR 44755, Aug 31, 2009; 77 FR 38175, Jun 27, 2012;
78 FR 48309, Aug 8, 2013; 79 FR 29087, May 21, 2014; 81 FR 61097,
Sep 2, 2016; 82 FR 61692, Dec 29, 2017; 83 FR 63577, Dec 11, 2018;
84 FR 4333, Feb 15, 2019; 85 FR 34104, Jun 3, 2020;
85 FR 54924, Sep 3, 2020]