3.2.1 Capital Costs
DHA will reimburse hospitals,
through the contractor, for their capital costs as reported annually
to the contractor (see below). The contractor shall make annual
payments for capital costs. See
Chapter 3, Section 2 for
the procedures for paying capital costs.
3.2.1.1 TRICARE will authorize the
contractor to reimburse 100% of capital-related costs.
3.2.1.2 Allowable capital costs are
those specified in Medicare Regulation Section 413.130 of Title
42 Code of Federal Regulations (CFR).
3.2.1.3 The
contractor shall, to obtain the total allowable capital costs from
the Medicare cost reports for initial and amended requests, add
the figures from Worksheet D, Part I, Column 3, lines 30-33, lines
34 and 35 if the cost report reflects intensive care unit costs,
and line 43, to the figures from Worksheet D, Part II, Column 1,
lines 50-76 and 88-93.
3.2.1.4 Services, facilities, or supplies
provided by supplying organizations. If services, facilities, or
supplies are provided to the hospital by a supplying organization
related to the hospital within the meaning of Medicare Regulation
Section 413.17, then the contractor shall ensure the hospital includes
in its capital-related costs, the capital-related costs of the supplying
organization. However, if the supplying organization is not related
to the provider within the meaning of 413.17, the contractor shall
not consider any part of the charge to the provider a capital-related
cost unless the services, facilities, or supplies are capital-related
in nature and:
3.2.1.4.1 The capital-related equipment
is leased or rented by the provider;
3.2.1.4.2 The capital-related equipment
is located on the provider’s premises; and
3.2.1.4.3 The capital-related portion
of the charge is separately specified in the charge to the provider.
3.2.2 Direct Medical Education Costs
DHA, through the contractor,
will reimburse hospitals their actual direct medical education costs
as reported annually to the contractor (see below). Such direct
medical education costs shall be for a teaching program approved
under Medicare Regulation Section 413.85. The contractor shall make
annual payments for direct medical education costs and those payments
shall be calculated using the same steps required for calculating capital
payments below. Allowable direct medical education costs are those
specified in Medicare Regulation Section 413.85. See
Chapter 3, Section 2 for the procedures for
paying direct medical education costs.
3.2.2.1 Direct medical education costs
generally include:
3.2.2.1.1 Formally organized or planned
programs of study usually engaged in by providers in order to enhance
the quality of care in an institution.
3.2.2.1.2 Nursing schools.
3.2.2.1.3 Medical education of paraprofessionals
(e.g., radiological technicians).
3.2.2.2 Direct medical education costs
do not include:
3.2.2.2.1 On-the-job training or other
activities which do not involve the actual operation or support,
except through tuition or similar payments, of an approved education
program.
3.2.2.2.2 Patient education or general
health awareness programs offered as a service to the community
at large.
3.2.2.3 The contractor shall, to obtain
the total allowable direct medical education costs from the Medicare cost
reports on all initial and amended requests, add the figures from
Worksheet B, Part I, Columns 20-23, lines 30-33, lines 34 and 35
if the cost report reflects intensive care unit costs, 43; and 50-76;
and 88-93.
3.2.3 Determining
Amount Of Capital And Direct Medical Education (CAP/DME) Payment
In order to account for payments
by Other Health Insurance (OHI), the contractor shall determine
payment amounts for CAP/DME according to the following steps. Throughout
these calculations, the contractor shall not count claims for which
they made no reimbursement because OHI paid the full TRICARE-allowable
amount.
Step 1: Determine
the ratio of TRICARE inpatient days to total inpatient days using
the data described below. In determining total TRICARE inpatient
days the following are not to be included:
• Any days determined to be not
medically necessary, and
• Days included on claims for
which TRICARE made no payment because OHI paid the full TRICARE-allowable amount.
Step 2: Multiply
the ratio from Step
1 by total allowable
capital costs.
Step 3: Reduce
the amount from Step
2 by the appropriate
capital reduction percentage(s). This is the total allowable TRICARE
capital payment for DRG discharges.
Step 4: Multiply
the ratio from Step
1 by total allowable
direct medical education costs. This is the total allowable TRICARE
direct medical education payment for DRG discharges.
Step 5: Combine the amounts from Steps
3 and
4.
This is the amount the contractor shall pay the hospital for CAP/DME.
3.2.4 Payment Of CAP/DME Costs
3.2.4.1 General
The contractor shall reimburse
all hospitals subject to the TRICARE DRG-based payment system, except
for children’s hospitals (see below) for allowed CAP/DME costs when
the hospital submits a request and the applicable pages from the
Medicare cost-report to the contractor.
3.2.4.1.1 The contractor shall ensure
the hospital files initial requests for payment of CAP/DME with
the contractor on or before the last day of the 12th month following
the close of the hospitals’ cost-reporting period. The request shall
cover the one year period corresponding to the hospital’s Medicare
cost-reporting period. Thus, for cost-reporting periods, the contractor
shall ensure the hospital files requests for payment of CAP/DME
no later than 12 months following the close of the cost-reporting
period. For example, if a hospital’s cost-reporting period ends
on June 30, 2016, the contractor shall ensure the hospital files
the request for payment on or before June 30, 2017. The contractor
shall ensure those hospitals that Medicare participating providers
are to use an October 1 through September 30 fiscal year for reporting
CAP/DME costs.
3.2.4.1.1.1 The contractor shall grant
an extension of the due date for filing the initial request only
if an extension has been granted by the Centers for Medicare and
Medicaid Services (CMS) due to a provider’s operations being significantly
adversely affected due to extraordinary circumstances over which
the provider has no control, such as flood or fire, as described
in Section 413.24 of Title 42 CFR.
3.2.4.1.1.2 The contractor shall ensure
the hospital reported all costs correspond to the costs reported
on the hospital’s Medicare cost report. If the costs change as a
result of a subsequent Medicare desk review, audit or appeal, the
contractor shall ensure the hospital provides the revised costs
along with the applicable pages from the amended Medicare cost report
to the contractor within 30 days of the date the hospital is notified
of the change. The contractor shall ensure the hospital official
responsible for verifying the amounts signs the request. The contractor
shall ensure the hospital submits the Medicare Notice of Program
Reimbursement (NPR) letter with the amended cost report.
3.2.4.1.1.3 The contractor shall process
an amended request received beyond the 30 calendar days and shall inform
the provider of the importance of submitting timely amendments.
The 30 calendar day period is a means of encouraging hospitals to
report changes in its CAP/DME costs in a timely manner.
3.2.4.1.1.4 The hospital official is certifying
in the initial submission of the cost report that any changes resulting
from a subsequent Medicare audit will be promptly reported. Failure
to promptly report the changes resulting from a Medicare audit is
considered a misrepresentation of the cost report information. Such
a practice can be considered fraudulent, which may result in criminal
civil penalties or administrative sanctions of suspension or exclusion
as an authorized provider.
3.2.4.2 Information
Necessary For Payment Of CAP/DME Costs
The contractor shall ensure
the hospital reports the following information to the contractor:
3.2.4.2.1 The hospital’s name.
3.2.4.2.2 The hospital’s address.
3.2.4.2.3 The hospital’s TRICARE provider
number.
3.2.4.2.4 The hospital’s Medicare provider
number.
3.2.4.2.5 The period covered--this shall
correspond to the hospital’s Medicare cost-reporting period.
3.2.4.2.6 Total
inpatient days provided to all patients in units subject to DRG-based
payment.
3.2.4.2.7 Total
TRICARE inpatient days provided in units subject to DRG-based payment.
(This shall be only days which were “allowed” for payment. Therefore,
days which were determined to be not medically necessary shall not
be included.) Total inpatient days provided to active duty members
in units subject to DRG-based payment.
3.2.4.2.8 Total
allowable capital costs. This shall correspond with the applicable
pages from the Medicare cost-report.
3.2.4.2.9 Total
allowable direct medical education costs. This shall correspond
with the applicable pages from the Medicare cost-report.
3.2.4.2.10 Total
full-time equivalents for:
• Residents.
• Interns (see below).
3.2.4.2.11 Total inpatient beds (see below).
3.2.4.2.12 Title of official signing the
report.
3.2.4.2.13 Reporting date.
3.2.4.2.14 The report shall contain a
certification statement that any changes to items in
paragraphs 3.2.4.2.6,
3.2.4.2.7,
3.2.4.2.8,
3.2.4.2.9,
and
3.2.4.2.10, which are a result of a review,
audit, or appeal of the provider’s Medicare cost-report, shall be
reported to the contractor within 30 calendar days of the date the
hospital is notified of the change.
3.2.4.2.15 The contractor shall ensure
all cost reports are certified by an officer or administrator of
the provider. The general concept is to notify the certifying official
that misrepresentation or falsification of any of the information
in the cost report is punishable by fine and/or imprisonment. The
contractor shall ensure the signing official acknowledges this as
well as certifies that the cost report filed, together with any
supporting documentation, is true, correct and complete based upon
the books and records of the provider.
3.2.4.3 Contractor Actions
3.2.4.3.1 Initial
requests for CAP/DME payment.
3.2.4.3.1.1 The contractor may, but is
not required, to provide inpatient day verification reports to hospitals prior
to an initial request being submitted.
3.2.4.3.1.2 The
contractor shall verify the number of TRICARE and active duty inpatient
days with its data. If the contractor’s data represents a greater
number of days than submitted on the hospital’s request, the contractor shall
base payment on the contractor’s data. If the hospital’s request
represents a greater number of days than the contractor’s data,
the contractor shall notify the hospital of the discrepancy and
inform them payment will be based on the number of days it has on
file unless they can provide documentation substantiating the additional days.
The contractor shall make notification to the hospital within 10
business days of identification of the discrepancy and include the
inpatient day verification report.
3.2.4.3.1.3 The contractor shall give the
hospital until the end of the following month to respond. If the hospital
does not respond, the contractor shall make payment based on its
totals.
3.2.4.3.1.4 The contractor shall verify
the accuracy of the financial amounts listed for CAP/DME with the applicable
pages of the Medicare cost report. If the financial amounts do not
match, the contractor shall reimburse the hospital based on the
figures in the cost-report and notify the hospital of the same.
3.2.4.3.1.5 The contractor shall make the
CAP/DME payment to the hospital within 30 calendar days of the initial
request unless notification has been sent to the hospital regarding
a discrepancy in the number of days as outlined in
paragraph 3.2.4.3.1.2.
3.2.4.3.2 Amended Requests for CAP/DME.
3.2.4.3.2.1 The contractor may, but is
not required, to provide inpatient day verification reports to hospitals prior
to an amended request being submitted.
3.2.4.3.2.2 The
contractor shall process amended payment requests based on changes
in the Medicare cost-report as a result of desk reviews, audits
and appeals. The contractor shall not process an adjustment unless
there are changes to items 6 through 10 on the initial CAP/DME reimbursement
request. The contractor shall not process amended requests for days
only.
3.2.4.3.2.3 The contractor shall verify
the number of TRICARE and active duty inpatient days with its data.
If the contractor’s data represents a greater number of days than
submitted on the hospital’s request, the contractor shall base payment
on the contractor’s data. If the hospital’s request represents a
greater number of days than the contractor’s data, the contractor
shall notify the hospital of the discrepancy and inform them payment
will be based on the number of days it has on file unless they can
provide documentation substantiating the additional days. The contractor
shall provide notification to the hospital within 10 business days
of identification of the discrepancy and include the inpatient day
verification report.
3.2.4.3.2.4 The contractor shall give the
hospital until the end of the following month to respond. If the hospital
does not respond, the contractor shall make payment based on its
totals.
3.2.4.3.2.5 The contractor shall verify
the accuracy of the financial amounts listed for CAP/DME with the applicable
pages of the amended Medicare cost report. If the financial amounts
do not match, the contractor shall reimburse the hospital based
on the figures in the cost-report and notify the hospital of the
same.
3.2.4.3.2.6 The contractor shall make the
CAP/DME payment to the hospital within 30 days of the amended request
unless notification has been sent to the hospital regarding a discrepancy
in the number of days as outlined in
paragraph 3.2.4.3.2.2.
3.2.4.3.2.7 The contractor shall proactively
research the Medicare website (
https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/index.html)
to identify hospitals in their geographic area of responsibility
that submitted amended Medicare cost reports, obtain copies of the
amended cost reports from hospitals that failed to submit them to
the TRICARE contractor as required, recalculate the CAP/DME costs
based on the revised cost report data, and initiate a collection
action or notify the hospital if an underpayment was identified
based on the results of recalculation. The CMS post the Hospital
Cost Report files 30 calendar days after the end of each quarter.
3.2.4.3.2.8 The contractor shall complete
a monthly CAP/DEM report in accordance with the DD Form 1423, Contract
Data Requirements List (CDRL), located in Section J of the applicable
contract.
3.2.4.4 Negotiated Rates. The contractor
shall reimburse these costs to its subcontractors and institutional network
providers if a request for reimbursement is made and if a contract
between the contractor and its subcontractor or institutional network
provider does not specifically state the negotiated rate including
all costs that would otherwise be eligible for additional payment,
such as CAP/DME.
3.2.4.5 CAP/DME costs for children’s
hospitals. Amounts for CAP/DME are included in both the hospital-specific
and the national children’s hospital differentials (see below).
The amounts are based on national average costs. The contractor
shall not make a separate or additional payment.
3.2.4.6 CAP/DME costs under TRICARE
for Life (TFL). The contractor shall not reimburse CAP/DME costs
for any claims on which Medicare makes payment. These costs are
included in the Medicare payment. The contractor shall only reimburse
CAP/DME costs on claims on which TRICARE is the primary payer (e.g.,
claims for stays beyond 150 calendar days), and in those cases the
contractor shall make payment following the procedures described above.
3.2.5 Children’s Hospital Differential
3.2.5.1 General
All DRG-based payments to children’s
hospitals shall be increased by adding the applicable children’s
hospital differential to the appropriate ASA prior to multiplying
by the DRG weight.
3.2.5.2 Qualifying
for the Children’s Hospital Differential
In order to qualify for a children’s
hospital differential adjustment, the contractor shall ensure the
hospital is exempt from the Medicare Prospective Payment System
(PPS) as a children’s hospital. If the hospital is not Medicare-participating,
the contractor shall ensure it meets the criteria in
32 CFR 199.6(b)(4)(i). In addition, the contractor shall
ensure that more than half of the hospital’s inpatients are individuals
under the age of 18.
3.2.5.3
Calculation
of the Children’s Hospital Differentials
DHA calculate differentials
so that they are “revenue neutral” for children’s hospitals. When
calculating ASAs, DHA subtracts the appropriate ASA from the children’s
hospital ASAs, and these amounts are the children’s hospital differentials.
DHA will not apply annual inflation updates to the differentials
nor will DHA recalculate the differentials except as provided below.
3.2.5.4 Differential Amounts
3.2.5.4.1 Calculation of the national
children’s hospital differentials. The contractor shall calculate differentials
using the procedures described in
paragraph 3.2.5.3, but based on a database
of only low-volume children’s hospitals.
3.2.5.4.2 The contractor shall reimburse
claims using a single set of differentials which do not distinguish high-volume
and low-volume children’s hospitals. The differentials are:
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Large Urban Areas
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Labor portion
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$1,945.99
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Non-labor portion
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+ 689.42
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$2,635.41
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3.2.6
Outliers
3.2.6.1
General
3.2.6.1.1 DHA will adjust the DRG-based
payment to a hospital for atypical cases. These outliers are those cases
that have either an unusually short Length-Of-Stay (LOS) or involve
extraordinarily high costs when compared to most discharges classified
in the same DRG. Recognition of these outliers is particularly important, since
the number of TRICARE cases in many hospitals is relatively small,
and there may not be an opportunity to “average out” DRG-based payments
over a number of claims. The contractor is not required to document
or verify the medical necessity of outliers prior to payment, since
outlier review will be part of the admission and quality review
system.
3.2.6.1.2 The contractor shall, in determining
additional cost outlier payments on all claims qualifying as a cost
outlier, identify and reduce the billed charge for any non-covered
items such as comfort and convenience items (line N), as well as
any duplicate charges (line X) and services which can be separately
billed (line 7) such as professional fees, outpatient services,
and solid organ transplant acquisition costs. Comfort and convenience
items are defined as those optional items which the patient may
elect at an additional charge (e.g., television, guest trays, beautician
services), but are not medically necessary in the treatment of a
patient’s condition.
3.2.6.2 Provider
Reporting of Outliers
The contractor
shall ensure the provider identifies outliers on the CMS 1450 UB-04,
Form Locator (FL) 24 - 30. The contractor shall ensure the provider
uses code 60 to report LOS outliers, and uses code 66 to signify
that a cost outlier is not being requested. If a claim qualifies
as a cost outlier and code 66 is not entered in the appropriate
FL (i.e., it is blank or code 61), the contractor shall accept this
as a request for cost outlier payment by the hospital.
3.2.6.3 Short-Stay Outliers
The contractor shall identify
all short-stay outliers when claims are processed and shall make
necessary adjustments to the payment amounts automatically. The
TRICARE DRG-based payment system uses short-stay outliers and are
reimbursed using a per diem amount. The contractor shall reimburse
short-stay outlier claims using a per diem amount.
• The contractor shall classify
any discharge which has a LOS less than or equal to the greater
of 1 or 1.94 standard deviations below the arithmetic mean LOS for
that DRG as a short-stay outlier. In determining the actual short-stay
threshold, the contractor shall round down the calculation to the
nearest whole number, and consider any stay equal to or less than
the short-stay threshold a short-stay outlier.
• The contractor shall reimburse
short-stay outliers at 200% of the per diem rate for the DRG for
each covered day of the hospital stay, not to exceed the DRG amount.
The per diem rate shall equal the wage-adjusted DRG amount divided
by the arithmetic mean LOS for the DRG. The contractor shall calculate
the per diem rate before the DRG-based amount is adjusted for Indirect
Medical Education (IDME). The contractor shall pay the cost outlier
amount on cases that qualify as a short-stay cost outlier.
• The contractor shall ensure
the provider considers any stay which qualifies as a short-stay
outlier (a transfer cannot qualify as a short-stay outlier), even
if payment is limited to the normal DRG amount, as a short-stay outlier
and report them on payment records. This will ensure that outlier
data is accurate and will prevent the beneficiary from paying an
excessive cost-share in certain circumstances.
3.2.6.4 Cost Outliers
3.2.6.4.1 The contractor shall take the
following steps when calculating cost outlier payments for all cases other
than neonates and children’s hospitals:
Standard Cost = (Billed Charges
x Cost-to-Charge Ratio (CCR))
Outlier Payment = 80% of (Standard
Cost - Threshold)
Total
Payments = Outlier Payments + (DRG Base Rate x (1 + (IDME))
Note: Non-covered charges should
continue to be subtracted from the billed charges prior to multiplying
the billed charges by the CCR.
3.2.6.4.1.1 The CCR for admissions occurring
on or after October 1, 2018, is 0.2514. The CCR for admissions occurring
on or after January 1, 2020, is 0.2567. The CCR for admissions occurring
on or after January 1, 2021, is 0.2495.
3.2.6.4.1.2 The National Operating Standard
Cost as a Share of Total Costs (NOSCASTC) for calculating the cost-outlier
threshold for FY 2019 is 0.925, for CY 2020 is 0.939, and for CY
2021 is 0.926.
3.2.6.4.2 For FY 2019, a TRICARE fixed
loss cost-outlier threshold is set at $23,812. Effective October
1, 2018, the cost-outlier threshold shall be the DRG-based amount
(wage-adjusted) plus the IDME payment, plus the flat rate of $23,812
(also wage-adjusted).
3.2.6.4.3 For CY 2020, a TRICARE fixed
loss cost-outlier threshold is set at $24,932. Effective January
1, 2020, the cost-outlier threshold shall be the DRG-based amount
(wage-adjusted) plus the IDME payment, plus the flat rate of $24,932
(also wage-adjusted).
3.2.6.4.4 For CY 2021, a TRICARE fixed
loss cost-outlier threshold is set at $26,913. Effective January
1, 2021, the cost-outlier threshold shall be the DRG-based amount
(wage-adjusted) plus the IDME payment, plus the flat rate of $26,913
(also wage-adjusted).
3.2.6.4.5 Calculate the cost-outlier
threshold as follows:
{[Fixed
Loss Threshold x ((Labor-Related Share x Applicable wage index)
+ Non-labor-related share) x NOSCASTC] + (DRG Base Payment (wage-adjusted)
x (1 + IDME))}
Example: Using
FY 1999 figures {[10,129 x ((0.7110 x Applicable wage index) + 0.2890)
x 0.913] + (DRG Based Payment (wage-adjusted) x (1 + IDME))}
3.2.6.5 Burn Outliers
3.2.6.5.2 The contractor shall reimburse
burn cases which qualify as short-stay outliers, regardless of the date
of admission, according to the procedures for short-stay outliers.
3.2.6.5.3 The contractor shall reimburse
burn cases which qualify as cost outliers using a marginal cost
factor of 90%.
3.2.6.5.4 For a burn outlier in a children’s
hospital, the contractor shall use the appropriate children’s hospital outlier
threshold (see below), but the marginal cost factor shall be either
60% or 90% according to the criteria above.
3.2.6.6 Children’s Hospital Outliers
The contractor shall apply
the following special provisions to cost outliers.
3.2.6.6.1 The contractor shall use the
same threshold as the one applied to other hospitals.
3.2.6.6.2 Effective October 1, 2018,
the standardized costs are calculated using a CCR of 0.2719. Effective January
1, 2020, the standardized costs are calculated using a CCR of 0.2774.
Effective October 1, 2021, the standardized costs are calculated
using a CCR of 0.2694. (This is equivalent to the Medicare CCR increased
to account for CAP/DME costs.)
3.2.6.6.3 The marginal cost factor shall
be 80%.
3.2.6.6.5 The NOSCASTC for calculating
the cost-outlier threshold for FY 2019 is 0.925. The NOSCASTC for calculating
the cost-outlier threshold for CY 2020 is 0.939. The NOSCASTC for
calculating the cost-outlier threshold for FY 2021 is 0.926.
3.2.6.6.6 Use the following calculation
in determining cost outlier payments for children’s hospitals and neonates:
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Step 1:
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Computation of Standardized
Costs:
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Billed Charges x CCR
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(Non-covered charges shall
be subtracted from the billed charges prior to multiplying the charges by
the CCR.)
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Step 2:
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Determination of Cost-Outlier
Threshold:
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{[Fixed Loss Threshold x ((Labor-Related
Share x Applicable wage index) + Non-labor-related share) x NOSCASTC]
+ [DRG Based Payment (wage-adjusted) x (1 + IDME)]}
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Step 3:
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Determination of Cost Outlier
Payment:
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[{(Standardized costs - Cost-Outlier
Threshold) x Marginal Cost Factor} x Adjustment Factor]
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Step 4:
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Total Payments = Outlier Payments
+ [DRG Base Rate x (1 + IDME)]
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3.2.6.7 Neonatal
Outliers
The contractor
shall determine neonatal outliers in hospitals subject to the TRICARE
DRG-based payment system (other than children’s hospitals) under
the same rules applicable to children’s hospitals, except that the
contractor shall calculate standardized costs for cost outliers
using the CCR of 0.64. The contractor shall use the same CCR used for
all other acute care hospitals.
3.2.7 IDME adjustment
3.2.7.1 General
3.2.7.1.1 The DRG-based payments for
any hospital which has a teaching program approved under Medicare Regulation
Section 413.85, Title 42 CFR shall be adjusted to account for IDME
costs. The adjustment factor used shall be the one in effect on
the date of discharge (see below). The adjustment will be made by
multiplying the total DRG-based amount by 1.0 plus a hospital-specific
factor equal to:
3.2.7.1.2 For admissions occurring during
FYs 2008 and subsequent years, the same formula shall be used except
the first number shall be 1.02.
3.2.7.2 Number
of Interns and Residents
DHA will
use the number of interns and residents from CMS most recently available
Provider Specific File.
3.2.7.3 Number
of Beds
DHA will
use the number of beds from CMS’ most recently available Provider
Specific File.
3.2.7.4 Updates
of IDME Factors
3.2.7.4.1 DHA will use the ratio of interns
and residents to beds from CMS’ most recently available Provider Specific
File to update the IDME adjustment factors. DHA will provide the
ratio to the contractor to update each hospital’s IDME adjustment
factor at the same time as the annual DRG update. The contractor
shall apply the updated factors, provided with the annual DRG update,
to claims with a date of discharge on or after January 1 of each
year.
3.2.7.4.2 Other updates of IDME factors.
The contractor shall update the IDME factor, and shall notify DHA
of such IDME updates, if a hospital provides information (for the
same base periods) which indicates that the IDME factor provided
by DHA with the DRG update is incorrect or needs to be updated.
An IDME factor is updated based on the hospital submitting CMS Worksheet
showing the number of interns, residents, and beds. The contractor shall
set the effective date of these other updates as the date payment
is made to the hospital (check issued) for its CAP/DME costs, but
in no case can it be later than 30 calendar days after the hospital
submits the appropriate worksheet or information.
3.2.7.4.3 The contractor shall apply
this alternative updating method only to those hospitals subject
to the Medicare Inpatient Prospective Payment System (IPPS) as they
are the only ones included in the Provider Specific File.
3.2.7.5 Adjustment for Children’s Hospitals
The contractor shall apply
an IDME adjustment factor to each payment to qualifying children’s
hospitals. The contractor shall calculate factors for children’s
hospitals using the same formula as for other hospitals. The initial factor
shall be based on the number of interns and residents and hospital
bed size as reported by the hospital to the contractor. If the hospital
provides the data to the contractor after payments have been made,
the contractor shall not make any retroactive adjustments to previously
paid claims, but shall reconcile the amounts during the “hold harmless”
process. At the end of its fiscal year, a children’s hospital may
request that its adjustment factor be updated by providing the contractor
with the necessary information regarding its number of interns and
residents and beds. The number of interns, residents, and beds shall
conform to the requirements above.
3.2.7.5.1 The contractor shall update
the factor within 30 calendar days of receipt of the request from
the hospital, and the effective date shall conform to the policy
contained above.
3.2.7.5.2 The contractor shall, each
year, send a notice, as identified by the DD Form 1423, CDRL, located
in Section J of the applicable contract, to each children’s hospital
in its geographical area of responsibility, requesting updated information
on its number of interns, residents and beds, from the most recent
cost report submitted to CMS for July 1 through June 30, and advise
them by July 1 of that same year to provide the updated information
to the contractor so the requirement in paragraph
paragraph 3.2.7.5.3 shall be met.
3.2.7.5.3 The contractor shall send the
number of interns, residents, and beds and the updated ratios for children’s
hospitals, to DHA as identified by the DD Form 1423, CDRL, located
in Section J of the applicable contract, by September 1 of each
year to be used in DHA’s annual DRG update calculations. These updated
amounts will be included in the files for the calendar year DRG
update.
3.2.7.6 TRICARE
for Life (TFL)
The contractor
shall not make adjustments for IDME costs on any TFL claim on which
Medicare has made any payment. If TRICARE is the primary payer (e.g.,
claims for stays beyond 150 calendar days) the contractor shall adjust
payments for IDME in accordance with the provisions of this section.
3.2.8 Present On Admission (POA)
Indicators and Hospital Acquired Conditions (HACs)
3.2.8.1 For services provided on or
after ICD-10 implementation:
3.2.8.1.1 Inpatient acute care hospitals,
that are paid under the TRICARE/CHAMPUS DRG-based payment system,
shall report a POA indicator for both primary and secondary diagnoses
on inpatient acute care hospital claims. The contractor shall ensure
the provider reports POA indicators to TRICARE in the same manner
they report to the CMS, and in accordance with the UB-04 Data Specifications
Manual, and ICD-10-CM Official Guidelines for Coding and Reporting.
See the complete instructions in the UB-04 Data Specifications Manual
for specific instructions and examples. Specific instructions on
how to select the correct POA indicator for each diagnosis code are
included in the ICD-10-CM Official Guidelines for Coding and Reporting.
3.2.8.1.2 There are five POA indicator
reporting options, as defined by the ICD-10-CM Official Coding Guidelines
for Coding and Reporting:
|
|
Y
|
=
|
Indicates that the condition
was present on admission.
|
|
|
W
|
=
|
Affirms that the provider has
determined based on data and clinical judgment that it is not possible
to document when the onset of the condition occurred.
|
|
|
N
|
=
|
Indicates that the condition
was not present on admission.
|
|
|
U
|
=
|
Indicates that the documentation
is insufficient to determine if the condition was present at the
time of admission.
|
|
|
1
|
=
|
(Definition prior to FY 2011.)
Signifies exemption from POA reporting. CMS established this code
as a workaround to blank reporting on the electronic 4010A1. A list
of exempt ICD-10-CM diagnosis codes is available in the ICD-10-CM
Official Coding Guidelines.
|
|
|
1
|
=
|
(Definition for FY 2011 and
subsequent years.) Unreported/not used. Exempt from POA reporting.
(This code is equivalent to a blank on the CMS 1450 UB-04; however,
it was determined that blanks are undesirable when submitting this
data via 4010A.)
|
3.2.8.2 HACs. DHA will adopt those
HACs adopted by CMS. The HACs, and their respective diagnosis codes, are
posted at
http://www.health.mil/rates.
3.2.8.3 Provider responsibilities and
reporting requirements. The contractor shall ensure non-exempt provider
resolve issues related to inconsistent, missing, conflicting, or
unclear documentation. POA is defined as present at the time the
order for inpatient admission occurs. The contractor shall consider
conditions that develop during an outpatient encounter, including
emergency department, observation, or outpatient surgery as present on
admission.
3.2.8.4 The contractor shall accept,
validate, retain, pass, and store the POA indicator.
3.2.8.5 Exempt providers.
3.2.8.5.1 The following hospitals are
exempt from POA reports:
• Critical Access Hospitals (CAHs)
• Long-Term Care (LTC) Hospitals
• State Waiver Hospitals, e.g.,
Maryland
• Cancer Hospitals
• Children’s Inpatient Hospitals
• Inpatient Rehabilitation Hospitals
• Psychiatric Hospitals and Psychiatric
Units
• Department of Veterans Affairs
(DVA)/Veterans Health Administration (VHA) Hospitals
3.2.8.5.2 The contractor shall identify
claims from those hospitals that are exempt from POA reporting,
and shall take the actions required to be sure that the TRICARE
grouper software does not apply HAC logic to the claim.
3.2.8.6 The contractor shall ensure
the hospital considers the DRG payment as payment in full, and the contractor
shall ensure the hospital does not bill the beneficiary for any
charges associated with the hospital-acquired complications or charges
because the DRG was demoted to a lesser-severity level.
3.2.8.7 The contractor shall deny claims
if a non-exempt hospital does not report a valid POA indicator for each
diagnosis on the claim.
3.2.8.8 Replacement
Devices
3.2.8.8.1 The contractor shall not reimburse
for the full cost of a replaced device if a hospital receives a partial
or full credit, either due to a recall or service during the warranty
period. The contractor shall reimburse implanted device replacement:
• At reduced or no cost to the
hospital; or
• With partial or full credit
for the removed device.
3.2.8.8.2 The following Condition Codes
49 and
50 allow
DHA to identify and track claims billed for replacement devices:
• Condition Code 49.
Product replacement within product lifecycle. The contractor shall
ensure the provider uses Condition Code 49 to describe
replacement of a product earlier than the anticipated lifecycle
due to an indication that the product is not functioning properly
- warranty.
• Condition Code 50.
Replacement of a product earlier than the anticipated lifecycle
due to an indication that the product is not functioning properly.
The contractor shall ensure the provider uses Condition Code 50 to describe
that the manufacturer or the United States (US) Food and Drug Administration
(FDA) has identified the product for recall and, therefore, replacement.
3.2.8.8.3 When a hospital receives a
credit for a replaced device that is 50% or greater than the cost
of the device, the contractor shall ensure the hospital bills the
amount of the credit in the amount portion for Value Code FD.
3.2.8.8.4 The contractor shall reduce
hospital reimbursement for those DRGs subject to the replacement device
policy, by the full or partial credit a provider received for a
replaced device. The specific DRGs subject to the replacement device
policy will be posted on DHA’s DRG web page at
http://www.health.mil/rates.
As necessary, DHA will update the DRGs subject to the replacement
device policy as part of the annual DRG update.
3.2.8.8.5 The contractor shall ensure
hospitals use the combination of condition code 49 or
50, along with Value Code FD to correctly bill for
a replacement device that was provided with a credit or no cost.
The Condition Code 49 or 50 will identify
a replacement device while Value Code FD will communicate
to DHA the amount of the credit, or cost reduction, received by
the hospital for the replaced device.
3.2.8.8.6 The contractor shall deduct
the partial/full credit amount, reported in the amount for Value
Code FD from the final DRG reimbursement when the assigned
DRG is one of the DRGs subject to the replacement device policy.
3.2.8.8.7 Once a DRG rate is determined,
the contractor shall deduct any full/partial credit amount from
the DRG reimbursement rate. The contractor shall determine the beneficiary
copayment/cost-share based on the reduced rate.