4.1 Background
4.1.1 Hospitals are authorized TRICARE
institutional providers under 10 United States Code (USC) 1079(j)(2)
and (4). Under 10 USC 1079(j)(2), the amount to be paid to hospitals,
Skilled Nursing Facilities (SNFs), and other institutional providers
under TRICARE, “shall be determined to the extent practicable in
accordance with the same reimbursement rules as apply to payments
to providers of services of the same type under [Medicare].”. Under
32 CFR 199.14(a)(1)(ii)(D)(1) through
(9) it specifically lists those hospitals
that are exempt from the Diagnosis Related Group (DRG)-based payment
system. Prior to December 1, 2009, CAHs were not listed as excluded,
thereby making them subject to the DRG-based payment system.
4.1.2 Legislation enacted as part
of the Balanced Budget Act (BBA) of 1997 authorized states to establish
State Medicare Rural Hospital Flexibility Programs (MRHFPs), under
which certain facilities participating in Medicare could become
CAHs. CAHs represent a separate provider type with their own Medicare
conditions of participation as well as a separate payment method.
Since that time, a number of hospitals, acute care and general,
as well as Sole Community Hospitals (SCHs), have taken the necessary
steps to be designated as CAHs. Since the statutory authority requires
TRICARE to apply the same reimbursement rules as apply to payments
to providers of services of the same type under Medicare to the
extent practicable, effective December 1, 2009, TRICARE is exempting
CAHs from the DRG-based payment system and adopting a reasonable
cost method similar to Medicare principles for reimbursing CAHs.
To be eligible as a CAH, a facility must be a currently participating
Medicare hospital, a hospital that ceased operations on or after
November 29, 1989, or a health clinic or health center that previously
operated as a hospital before being downsized to a health clinic
or health center. The facility must be located in a rural area of
a State that has established a MRHFP, or must be located in a Core Based
Statistical Area (CBSA) of such a State and be treated as being
located in a rural area based on a law or regulation of the State,
as described in 42 CFR 412.103. It also must be located more than
a 35-mile drive from any other hospital or CAH unless it is designated
by the State, prior to January 1, 2006, to be a “necessary provider”.
In mountainous terrain or in areas with only secondary roads available,
the mileage criterion is 15 miles. In addition, the facility must
make available 24-hour emergency care services, provide not more
than 25 beds for acute (hospital-level) inpatient care or in the
case of a CAH with a swing bed agreement, swing beds used for SNF-level
care. The CAH maintains a Length-Of-Stay (LOS), as determined on
an annual average basis, of no longer than 96 hours. The facility
is also required to meet the conditions of participation for CAHs
(42 CFR Part 485, Subpart F). Designation by the State is not sufficient
for CAH status. To participate and be paid as a CAH, a facility
must be certified as a CAH by the Centers of Medicare and Medicaid
Services (CMS).
For temporary waivers of certain participation requirements
as a result of Coronavirus 2019 (COVID-19), see the TRICARE Policy
Manual (TPM), Chapter 1, Section 15.1.
4.2 Scope of Benefits
4.2.1 Inpatient
Services
4.2.1.1 For
admissions on or after December 1, 2009, payment for inpatient services
of a CAH other than services of a distinct part unit, shall be reimbursed
101% of reasonable costs. Reference
paragraph 4.3 for information
on the reasonable cost method.
4.2.1.2 Items and services that a CAH
provides to its inpatients shall be covered if they are items and
services of a type that would be covered if furnished by an acute
care hospital to its inpatients. A CAH may use its inpatient facilities
to provide post-hospital SNF care and be paid for SNF-level services if
it meets the following requirements:
• The facility
has been certified as a CAH by CMS;
• The facility
operates up to 25 beds for either acute (CAH) care or SNF swing
bed care; and
• The facility has been granted
swing-bed approval by CMS.
4.2.1.3 Payment for post-hospital SNF
care furnished by a CAH, shall be reimbursed under the reasonable
cost method.
4.2.1.4 Payment to a CAH for inpatient
services shall not include any costs of physician services or other
professional services to CAH inpatients. Payment for professional
medical services furnished in a CAH to CAH inpatients shall be made
on a fee schedule, charge, or other fee basis, as would apply if
the services had been furnished in a Hospital Outpatient Department
(HOPD). For purposes of CAH payment, professional medical services
are defined as services provided by a physician or other practitioner,
e.g., a Physician Assistant (PA) or a Nurse Practitioner (NP). These
services are to be billed on the CMS 1500 Claim Form using the appropriate
Healthcare Common Procedure Coding System (HCPCS) code or a UB-04
using the appropriate HCPCS code and professional revenue codes.
4.2.1.5 A CAH may establish psychiatric
and rehabilitation distinct part units effective for cost reporting
periods. The CAH distinct part units must meet the following requirements:
• The facility
distinct part unit has been certified as a CAH by CMS;
• The distinct
part unit meets the conditions of participation requirements for
hospitals;
• The distinct part unit must
also meet the requirements, other than conditions of participation
requirements, that would apply if the unit were established in an
acute care hospital;
• Inpatient
services provided in psychiatric distinct part units are subject
to the CHAMPUS mental health per diem system and inpatient services
provided in rehabilitation distinct part units shall be reimbursed
based on billed charges or set rates.
• Beds in
these distinct part units are excluded from the 25 bed count limit
for CAHs;
• The bed limitations for each
distinct part unit is 10.
• CAHs are
not subject to the lesser of cost or charges principle.
4.2.2 Outpatient Services
4.2.2.1 Outpatient services including
ambulatory surgery, provided by a CAH shall be reimbursed 101% of
reasonable costs. Reference
paragraph 4.3 for information on the reasonable
cost method.
4.2.2.2 Payment to a CAH for outpatient
services shall not include any costs of physician services or other
professional services to CAH outpatients. Payment for professional
medical services furnished in a CAH to CAH outpatients shall be
made on a fee schedule, charge, or other fee basis, as would apply
if the services had been furnished in a HOPD. For purposes of CAH
payment, professional medical services are defined as services provided
by a physician or other practitioner, e.g., a PA or a NP. These services
are to be billed on a CMS 1500 Claim Form using appropriate HCPCS
code or a UB-04 using the appropriate HCPCS code and professional
revenue code.
4.2.2.3 Payment for clinical diagnostic
laboratory tests shall be reimbursed under the reasonable cost method
only if the individuals are outpatients of the CAH and are physically
present in the CAH at the time the specimens are collected (bill
type 85X). A CAH cannot seek reasonable cost reimbursement for tests
provided to individuals in locations such as rural health clinics,
the individual’s home or SNF. Individuals in these locations are
non-patients of a CAH and their lab test would be categorized as
“referenced lab tests” for the non-patients bill type 14X), and
shall be paid under the CHAMPUS Maximum Allowable Charge (CMAC).
4.2.2.4 Multi-day supplies of take-home
oral anti-cancer drugs, oral anti-emetic drugs, and immunosuppressive
drugs, as well as the associated supplying fees and all inhalation
drugs and the associated dispensing fees shall be paid under the
allowable charge method. The associated supplying and dispensing
fees must be billed on the same claim as the drug. Hospitals shall
submit a separate claim for these services on a CMS 1500 Claim Form
identifying the specific drugs and supplies. The drugs should be
identified by both the appropriate
J code and National
Drug Code (NDC).
Note: When
an outpatient service includes an oral anti-cancer drug, oral anti-emetic
drug or immunosuppressive drug, so long as no more than one day’s
drug supply (i.e., only today’s) is given to the beneficiary, and
the beneficiary receives additional services, the claim shall be
processed and paid under the reasonable cost method. Inhalation
drugs that are an integral part of a hospital procedure (inpatient
or outpatient) shall also be processed and paid under the reasonable
cost method, when billed in conjunction with other services on the
same day.
4.2.2.5 Authorized Partial Hospitalization
Programs (PHPs) shall be reimbursed under the reasonable cost method.
4.2.2.6 CAHs are not subject to the
lesser of cost or charges principle.
4.2.3 Ambulance
Services
4.2.3.1 Ambulance services furnished
by CAHs exempt from the allowable charge methodology, are paid under
the reasonable cost method.
4.2.3.2 Effective for services provided
on or after October 1, 2013, ambulance services furnished by CAHs
exempt from the Medicare Ambulance Fee Schedule (AFS)/TRICARE CMAC
(see
Chapter 1, Section 14), are paid under the
reasonable cost method.
4.2.3.3 To be exempt, the provider
must “self-attest” on each claim by using the B2 condition code. This
self-attestation indicates compliance with the eligibility criteria
included in 42 CFR 413.70(b)(5) and requires the provider to be
the only provider or supplier of ambulance services located within
a 35 mile drive of the CAH. Additionally, if there is no provider
or supplier of ambulance services located within a 35 mile drive
of the CAH, but there is an entity owned and operated by the CAH
located more than a 35 mile drive from the CAH, that CAH-owned and
operated entity can only be paid 101% of reasonable costs for its
ambulance services if it is the closest provider or supplier of
ambulance services to the CAH. Under TRICARE, these ambulance services
shall be reimbursed using the hospital’s outpatient Cost-to-Charge
Ratio (CCR).
4.2.3.4 Reasonable cost will be determined
without regard to any per-trip limits or fee schedule that would
otherwise apply. The distance between the CAH or entity and the
other provider or supplier of ambulance services will be determined
as the shortest distance in miles measured over improved roads between
the CAH or the entity and the site at which the vehicles of the
nearest provider or supplier of ambulance services are garaged.
An improved road is any road that is maintained by a local, state,
or federal Government entity and is available for use by the general
public. An improved road includes the paved surface up to the front
entrance of the CAH and the front entrance of the garage.
Note: CAHs that are not exempt from
the allowable charge methodology or the Medicare AFS/CMAC (as described
in
Chapter 1, Section 14), may not report condition
code B2.
4.3
Reasonable
Cost Methodology
Reasonable
cost is based on the actual cost of providing services and excluding
any costs, that are unnecessary in the efficient delivery of services
covered by the program.
4.3.1 DHA
shall calculate an overall inpatient CCR and overall outpatient
CCR, obtained from data on the hospital’s most recently filed Medicare
cost report as of July 1 of each year.
4.3.2 The inpatient
and outpatient CCRs are calculated using Medicare charges, e.g.,
Medicare costs for outpatient services are derived by multiplying
an overall hospital outpatient CCR (by department or cost center)
by Medicare charges in the same category.
4.3.3 The following
methods are used by DHA to calculate the CCRs for CAHs. The worksheet
and column references are to the CMS Form 2552-96 (Cost Report for
Electronic Filing of Hospitals).
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Inpatient CCRs
|
|
Numerator
|
Medicare costs were defined
as Worksheet D-1, Part II, line 49 MINUS (worksheet D, Part III,
Column 8, sum of lines 25-30 PLUS Worksheet D, Part IV, line 101).
|
|
Denominator
|
Medicare charges were defined
as Worksheet D-4, Column 2, sum of lines 25-30 and 103.
|
|
Outpatient CCRs
|
|
Numerator
|
Outpatient costs were taken
from Worksheet D, Part V, line 104, the sum of Columns 6, 7, 8,
and 9.
|
|
Denominator
|
Total outpatient charges were
taken from the same Worksheet D, Part V, line 104, sum of Columns
2, 3, 4, and 5 for the same breakdowns.
|
4.3.4 To
reimburse the vast majority of CAHs for all their costs in an administratively
feasible manner, TRICARE will identify CCRs that are outliers using
the method used by Medicare to identify outliers in its Outpatient
Prospective Payment System (OPPS) reimbursement methods. Specifically, Medicare
classifies CCR outliers as values that fall outside of three standard
deviations from the geometric mean. Applying this method to the
CAH data, those limits will be considered the threshold limits on
the CCR for reimbursement purposes. If a hospital’s CCR exceeds
the outlier threshold, the CCR is replaced with the statewide median
CCR. The 101% of reasonable cost is determined by taking the applicable
CCR (hospital specific or statewide median listed in the CAH CCR
file sent to the contractors by DHA) multiplied by billed charges,
which are then multiplied by 101%. The CAH Fiscal Year (FY) is effective
on December 1 of each year.
4.3.5 DHA
will provide a list of CAHs to the contractor with their corresponding
inpatient and outpatient CCRs by November 1 each year. Based on
the requirement in
paragraph 4.3.4, CCRs with outliers have been
replaced with the statewide median CCRs. The CCRs shall be updated
on an annual basis using the second quarter CMS Hospital Cost Report
Information System (HCRIS) data. The updated CCRs shall be effective
as of December 1 of each respective year, with the first update occurring
December 1, 2009.
4.3.6 DHA
will also provide the contractor the State median inpatient and
outpatient CAH CCRs to use when a hospital specific CCR is not available.
4.4 General Temporary Military
Contingency Payment Adjustment (GTMCPA) Payments
4.4.1 The
Director, DHA or designee, may approve a GTMCPA payment based on
all of the following:
• The hospital
serves a disproportionate share of Service members and Active Duty Dependents
(ADDs), i.e., 10% or more of an CAH’s total admissions are for Service members
and ADDs;
• The hospital is a TRICARE network
hospital;
• The hospital’s actual costs
for inpatient services exceed TRICARE payments or other extraordinary
economic circumstance exists; and
• Without
the GTMCPA payment, Department of Defense’s (DoD’s) ability to meet
military contingency mission requirements will be significantly
compromised.
4.4.2 Following
is the GTMCPA payment process for the first TRICARE CAHs.
4.4.2.1 The hospital may submit a request
for a discretionary GTMCPA payment to their contractor. The request
must be made to the contractor within 12 months of the end of the
CAH year (December 1 through November 30) for which the hospital
is requesting a GTMCPA payment. For example, a hospital must submit
a request for a GTMCPA payment for the CAH year ending November
30, 2016, by November 30, 2017. Late submissions or requests for
extensions will not be considered. Hospitals will be given a grace
period of six months from January 1, 2017, ending June 30, 2017,
to submit GTMCPA payment requests for CAH years ending on or before
November 30, 2015.
4.4.2.2 The
hospital shall submit the following information to the contractor
for review and consideration:
• The
total number of inpatient admissions during the previous TRICARE
CAH year and the number of Service member and ADD admissions for
this same period. Hospitals shall not include admissions by non-ADSM
or non-ADFM beneficiaries (i.e., retiree or retiree dependents),
TRICARE for Life (TFL) beneficiaries, overseas beneficiaries, or beneficiaries
with Other Health Insurance (OHI). Only inpatient admissions should
be reported. Uniformed Services Family Health Plan (USFHP) Service
member and ADD inpatient admissions visits may be included in the
hospital’s submission if the visits were paid utilizing the CAH
Reimbursement System, but shall be separately identified by the
hospital.
• A full 12 months of claims
payment data for the previous TRICARE CAH year.
4.4.2.3 The
contractor shall perform a thorough evaluation of the hospital’s
request in paragraph 4.4.2.2. The evaluation shall consist of the
following:
4.4.2.3.1 The contractor shall evaluate
the hospital’s package for completeness. The contractor shall verify
the hospital has provided all components in
paragraph 4.4.2.2.
4.4.2.3.2 The
contractor shall perform a validation that the hospital meets the
disproportionate share criteria. The contractor shall independently
calculate the number of ADD/Service member inpatient admissions,
utilizing the contractor’s data systems, and divide it by the total
CAH inpatient admissions reported by the hospital in
paragraph 4.4.2.2.
The contractor shall compare this result to the hospital’s submission
in
paragraph 4.4.2.2 to ensure the hospital met
the disproportionate share criteria in
paragraph 4.4.1. The contractor
shall work with the hospital to resolve discrepancies in the reported data
prior to submission of the request to DHA if the hospital’s data
show that they qualify, but the contractor’s data show that they
do not.
4.4.2.3.3 The
contractor shall perform an evaluation to determine if the hospital
is essential for continued network adequacy and is necessary to
support military contingency mission requirements. The contractor
shall report the following data elements for the prior CAH year,
as well as provide a brief narrative with supporting rationale,
describing why the hospital is essential for continued network adequacy
and why a GTMCPA payment is necessary to maintain this continued
network adequacy.
• Number
of acute care hospitals and beds in the network locality;
• Efforts
that have been made to create an adequate network;
• Availability
and types of services of military acute care services in the locations
or nearby; and
• Other cost effective alternatives
and other relevant factors.
4.4.2.3.4 If
the contractor’s independent analysis shows that: (1) the hospital
met the disproportionate share criteria; and (2) the hospital is
essential for continued network adequacy, the contractor shall submit
all documentation in
paragraphs 4.4.2.2 and
4.4.2.3.3 to
the Director, TRICARE Regional Office (DTRO). If the hospital fails
to meet the disproportionate share criteria or is not essential for
continued network adequacy, the contractor shall notify the DTRO
of their findings, but will not submit the full request for a GTMCPA
payment to the DTRO unless requested by the DTRO.
4.4.3 The
DTRO shall perform a thorough review and analysis of the hospital’s
submission and the contractor’s review, utilizing any DHA data the
DTRO deems necessary, to determine if the hospital meets the four
criteria listed in
paragraph 4.4.1 and qualifies for a GTMCPA
payment. If the hospital qualifies, the GTMCPA payment will be set,
utilizing DHA data, so the hospital’s Payment-to-Cost Ratio (PCR)
for TRICARE inpatient hospital services does not exceed a ratio
of 1.15. A hospital shall not be approved for a GTMCPA if the payment
would result in the hospital’s PCR exceeding 1.15. The DTRO shall
forward their recommendation for approval of the GTMCPA payment
and the recommended percentage adjustment to the Director, DHA.
Disapprovals by the DTRO will not be forwarded to the Director,
DHA, for review and approval. The PCR shall be calculated as follows:
4.4.3.1 Step
1. Determine actual TRICARE CAH payments, excluding OHI and USFHP
claims. The CAH GTMCPA payment is specific to the CAH reimbursement
system and there is no authority to include non-CAH paid amounts
in the PCR calculation. Claims for beneficiaries with OHI, claims
for beneficiaries with USFHP, claims for ineligible beneficiaries,
duplicate claims, and denied claims shall not be included in the
calculation.
4.4.3.2 Step 2. Determine the hospital’s
costs, by identifying the billed charges for all non-OHI, non-USFHP
CAH inpatient claims. There is no authority to include non-CAH amounts
in the PCR calculation. Claims for beneficiaries with OHI, claims
for beneficiaries with USFHP, claims for ineligible beneficiaries,
duplicate claims, and denied claims shall not be included in the
calculation.
4.4.3.3 Step 3. Divide Step 1 by Step
2.
4.4.3.4 Step 4. If the amount in Step
3 is lower than 1.15 the hospital may receive a payment so that total
TRICARE payments are equal to or less than 115% of their costs.
The percentage used is at the discretion of the Director, DHA.
4.4.4 CAH
payments for the qualifying hospital will be increased by the Director,
DHA, or designee, at his/her discretion by way of an additional
GTMCPA payment after the end of the TRICARE CAH year (December 1
through November 30). Subsequent adjustments to the GTMCPA payment
will be issued to the qualifying hospital for the prior CAH year,
when requested by the hospital, to ensure claims that were paid-to-completion
(PTC) the previous year are adjusted. These adjustments separate from
the applicable GTMCPA payment approved for the current CAH year.
4.4.5 Upon
approval of the GTMCPA payment request by the Director, DHA, the
DTRO will notify the Contracting Officer (CO) who shall send a letter
to the contractor notifying them of the GTMCPA payment approval.
4.4.6 The
contractors shall process the GTMCPA payments per the instructions
in Section G of their contracts under Invoice and Payment Non-Underwritten
- Non-TEDs, Demonstrations. No GTMCPA payments shall be sent out
without approval from DHA-Aurora (DHA-A), Contract Resource Management
(CRM), Budget.
4.4.7 DHA
will send an approval to the contractors to issue GTMCPA payments
out of the non-financially underwritten bank account based on fund
availability.
4.4.8 GTMCPA
payments shall be reviewed and approved on an annual basis; i.e.,
they will have to be evaluated on a yearly basis by the Director,
TROs in order to determine if the hospital continues to serve a
disproportionate share of Service members and ADDs and whether there
are any other special circumstances significantly affecting military
contingency capabilities.
4.4.9 The Director, DHA or designee
is the final approval authority for GTMCPA payments. A decision
by the Director, DHA, or designee to approve, reject, adopt, modify,
or extend GTMCPA payments is not subject to the appeal and hearing
procedures in
32 CFR 199.10.
4.4.10 DHA,
upon request, will provide the detailed claims data used to calculate
the hospital’s PCR and maximum GTMCPA payment, if any, to the requesting
hospital through the contractor.
4.4.11 GTMCPAs
may be extended to CAH facilities that have changed their status
during the CAH GTMCPA year. If an CAH network facility changes their
status during the CAH year, and the facility was and remained a
network facility that is essential for military readiness, contingency
operations, and network adequacy and the facility served a disproportionate
share of Service members and ADDs during the period of the year
it was subject to CAH reimbursement, then a prorated CAH GTMCPA
may be authorized. Any CAH adjustment will only apply to CAH payments.
4.5 CAH Listing
4.5.1 CAHs are
reimbursed under the reasonable cost method.
4.5.2 The effective date on the CAH
list is the date supplied by the CMS upon which the facility began
receiving reimbursement from Medicare as a CAH. If a CAH is added
or dropped off of the list from the previous update, the quarterly
revision date of the current listing shall be listed as the facility’s effective
or termination date, respectively.
4.5.3 DHA
will no longer update and maintain the CAH listing on DHA’s web
site. It is the contractor’s responsibility to determine whether
a hospital has been designated as an CAH under CMS and to reimburse
them in accordance with the provisions of this policy. The contractors
shall maintain accurate network status of their regional CAHs.
4.5.4 The contractor shall take the
steps necessary to ensure they are identifying and reimbursing CAHs
appropriately. This may include referencing CMS’ list of CAH’s on
the Flex Monitoring web site at
http://www.flexmonitoring.org,
contacting hospitals in their region to verify hospital status, or
some other action to meet this requirement. On the Flex Monitoring
web site, the CAH list is located under the Data tab and includes
effective dates. CAHs are identified by the number 13 in the third
and fourth digits of a six-digit Medicare provider number.
4.6 Billing and Coding Requirements
4.6.1 The contractors shall use type
of institution 93 for CAHs.
4.6.2 CAHs
shall utilize bill type 11X for inpatient services.
4.6.3 CAHs shall utilize bill type
85X for all outpatient services including services approved as Ambulatory
Surgery Center (ASC) services.
4.6.4 CAHs
shall utilize bill type 12X for ancillary/ambulance services.
4.6.5 CAHs shall utilize bill type
14X for non-patient diagnostic services.
4.6.6 CAHs
shall use bill type 18X for swing bed services.