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