Military Health System

1.1  This policy is mandatory for reimbursement of services provided by either network or non-network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

1.2  Hospital reimbursement - outpatient services for all services prior to implementation of the reasonable cost method for Critical Access Hospitals (CAHs) and implementation of the Outpatient Prospective Payment System (OPPS), and thereafter, for services not otherwise reimbursed under hospital OPPS.

2.1  When professional services or diagnostic tests (e.g., laboratory, radiology, electrocardiogram (EKG), electroencephalogram (EEG)) that have CHAMPUS Maximum Allowable Charge (CMAC) pricing (Chapter 5, Section 3) are billed, the claim must have the appropriate Current Procedural Terminology (CPT) coding and modifiers, if necessary. Otherwise, the service shall be denied. If only the technical component is provided by the hospital, the technical component of the appropriate CMAC shall be used.

2.2  For all other services, payment shall be made based on allowable charges when the claim has Healthcare Common Procedure Coding System (HCPCS) (Level I, II, III) coding information (these may include ambulance, Durable Medical Equipment (DME) and supplies, drugs administered other than oral method, and oxygen and related supplies). For claims development, see TRICARE Operations Manual (TOM), Chapter 8, Section 6. Other services without allowable charges, such as facility charges, shall be paid as billed. Facility charges shall have an HCPCS code on the claim for the specific service provided, e.g., Evaluation and Management (E/M) code if a visit, or surgical code if surgery. Only one facility charge (payment at billed charges), e.g., 510 and 760 series revenue codes on the same day, is allowed for a procedure or visit. For reimbursing drugs administered other than oral method, see Section 15.

2.3  When coding information is provided, outpatient hospital services including emergency and clinical services, clinical laboratory services (lab codes with one level of CMAC pricing, commonly referred to as the global rate, i.e., the same payment rate regardless of the site of service, e.g., doctor’s office, hospital or lab), rehabilitation therapy, venipuncture, and radiology services are paid using existing allowable charges. Such services are reimbursed under the allowable charge methodology that would also include the CMAC rates. In addition, venipuncture services provided on an outpatient basis by institutional providers other than hospitals are also paid on this basis. Professional services billed on a CMS 1450 UB-04 will be paid at the professional CMAC if billed with the professional service revenue code and enough information to identify the rendering provider, or the claim will be denied.

2.4  Freestanding Ambulatory Surgical Center (ASC) services are to be reimbursed in accordance with Chapter 9.

2.5  Outpatient hospital services including professional services, provided in states utilizing state developed rates applicable to all payers, e.g., Maryland, are paid at the rates established by the state. Since hospitals are required to bill these rates, reimbursement for these services is to be based on the billed charge.

2.6  Surgical outpatient procedures which are not otherwise reimbursed under the hospital OPPS will be subject to the same multiple procedure discounting guidelines and modifier requirements as prescribed under OPPS for services rendered on or after implementation of OPPS. Refer to Section 16 and Chapter 13, Section 3, for further detail.

2.7  Industry standard modifiers and condition codes may be billed on outpatient hospital claims to further define the procedure code or indicate that certain reimbursement situations may apply to the billing. Recognition and utilization of modifiers and condition codes are essential for ensuring accurate processing and payment of these claims.

2.8  Effective December 1, 2009, hospital outpatient services provided in a CAH, including ambulatory surgery services, shall be paid under the reasonable cost method, reference Chapter 15, Section 1.