3.2 Calculation Of The ASA
The TRICARE ASA is calculated
as follows:
3.2.1 Apply the Cost-to-Charge Ratio
(CCR)
In this
step, each charge is reduced to a representative cost by using the
Medicare CCR. Effective FY 2019, the CCR is 0.2514. Effective CY
2020, the CCR is 0.2567. Effective CY 2021, the CCR is 0.2495.
3.2.2 Increase for Bad Debts
Increase, the base standardized
amount by 0.0065.
3.2.3 Update
for Inflation
Use an
inflation factor equal to the hospital market basket index used
by the Centers of Medicare and Medicaid Services (CMS) in their
Inpatient Prospective Payment System (IPPS) to recalculate the ASA.
3.2.4 Preliminary Non-Teaching Standardized
Amount
At this
point Indirect Medical Education (IDME) costs have been removed
through standardization in the weight methodology and direct medical
education costs have been removed through the application of the
Medicare CCR which does not include direct medical education costs.
Therefore, compute a non-teaching standardized amount by dividing
aggregate costs by the number of discharges in the database.
3.2.5 Preliminary Teaching Standardized
Amounts
Calculate
a separate standardized amount for each teaching hospital to reimburse
for IDME expenses by multiplying the non-teaching standardized amount
by 1.0 plus each hospital’s IDME factor.
3.2.6 System Standardization
The preliminary standardized
amounts will be further standardized using a factor which equals
total DRG payments using the preliminary standardized amounts divided
by the sum of all costs in the database (updated for inflation). To
achieve standardization, divide each preliminary standardized amount
by this factor. This step is necessary so that total DRG system
outlays, given the same distribution among hospitals and diagnoses,
are equal whether based on DRGs or on charges reduced to costs.
3.2.7 Labor-Related and Nonlabor-Related
Portions of the ASA
Divide
the ASA into labor-related and nonlabor-related portions according
to the ratio of these amounts in the national ASA under the Medicare
IPPS. Effective October 1, 2013, and subsequent years, for wage
index values greater than 1.0, the labor related portion of the
ASA shall equal 68.3%, and the non-labor related portion shall equal
31.7%. For wage indexes less than or equal to 1.0 the labor-related
portion for the ASA shall equal 62% and the non-labor-related portion
shall equal 38%.
3.2.8 Updating
the Standardized Amounts
For years
subsequent to the initial year, the standardized amounts will be
updated by the final published Medicare annual update factor, unless
the standardized amounts are recalculated.