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 Government Designated Authority (GDA). The GDA
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:
• GDAs
• Providers through the contractor
• Beneficiaries through the contractor
• Contractor through the its
GDA
• Market/Military Medical Treatment
Facility (MTF) through the GDA.
3.3.3 How to apply:
3.3.3.1 Applicant must submit a written
waiver request to the contractor or GDA. 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 Market/MTF
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 GDa shall conduct a thorough
analysis and forward recommendations with a cost estimate for approval
to DHA for coordination. Disapprovals by the GDA 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: The contractor
shall have the authority to offer specified providers up to 15%
above CMAC for joining the network, if the contractor approves an
increase of up to 15% above the CMAC.
• Locality waivers: The contractor
shall adjust, if DHA approves a higher payment rate for certain
services in a locality, reimbursement rates for those procedure
codes in that locality in order to improve the access to services.
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