3.0 POLICY
3.1 Statutory
Background
3.1.1 Under 10 United States Code
(USC) 1079(i)(2), the amount to be paid to hospitals, Skilled Nursing Facilities
(SNFs), and other institutional providers under CHAMPUS shall, by
regulation, be established “to the extent practicable in accordance
with the same reimbursement rules as apply to payments to providers
of services of the same type under Medicare.” Similarly, under 10
USC 1079(h), the amount to be paid to health care professionals
and other non-institutional health care providers “shall be equal
to an amount determined to be appropriate, to the extent practicable,
in accordance with the same reimbursement rules used by Medicare.”
Based on these statutory provisions, CHAMPUS adopted Medicare’s
Prospective Payment System (PPS) for reimbursement of hospital outpatient
services currently in effect for the Medicare program as required
under the Balanced Budget Act (BBA) of 1997 (Public Law 105-33),
which provided comprehensive provisions for establishment of a hospital Outpatient
Prospective Payment System (OPPS).
3.1.2 Centers
for Medicare and Medicaid Services (CMS) published a proposed rule
in the Federal Register (FR) on September 8, 1998 (63
FR 47552) setting forth the proposed PPS for hospital outpatient
services. On June 30, 1999, a correction notice was published (64
FR 35258) to correct a number of technical and typographical errors contained
in the September 8, 1998 Proposed Rule.
3.1.3 Subsequent
to publication of the proposed rule, the Balanced Budget Refinement
Act (BBRA) of 1999, enacted on November 29, 1999, made major changes
that affected the proposed OPPS. The following BBRA 1999 provisions
were implemented in a Final Rule (65 FR 18434) published on April
7, 2000:
3.1.3.1 Made adjustments for covered
services whose costs exceeded a given threshold (i.e., an outlier payment).
3.1.3.2 Established transitional pass-through
payments for certain medical devices, drugs, and biologicals.
3.1.3.3 Placed limitations on judicial
review for determining outlier payments and the determination of additional
payments for certain medical devices, drugs, and biologicals.
3.1.3.4 Included as covered outpatient
services implantable prosthetics and Durable Medical Equipment (DME)
and diagnostic x-ray, laboratory, and other tests associated with
those implantable items.
3.1.3.5 Limited the variation of costs
of services within each payment classification group by providing
that the highest median cost for an item or service within the group
cannot be more than two times greater than the lowest median cost
for an item or service within the group (referred to as the “two
times rule”). An exception to this requirement may be made in unusual
cases, such as low volume items and services, but may not be made
in the case of a drug or biological that has been designated as
an orphan drug under Section 526 of the Federal Food, Drug and Cosmetic
Act.
3.1.3.6 Required at least annual review
of the groups, relative payment weights, and the wage and other adjustments
to take into account changes in medical practice, the addition of
new services, new cost data, and other relevant information or factors.
3.1.3.7 Established transitional corridors
that would limit payment reductions under the hospital OPPS.
3.1.3.8 Established hold harmless provisions
for rural and cancer hospitals.
3.2 Participation Requirement
In order to be an authorized
provider under the TRICARE OPPS, an institutional provider must
be a participating provider for all claims in accordance with
32 CFR 199.6(a)(8).
3.3 Unbundling Provisions
As a prelude to implementation
of the OPPS, Omnibus Budget Reconciliation Act (OBRA) of 1996 prohibited payment
for nonphysician services furnished to hospital patients (inpatients
and outpatients), unless the services were furnished either directly
or under arrangement with the hospital except for services of Physician
Assistants (PAs), Nurse Practitioners (NPs), and Clinical Nurse
Specialists (CNSs). This facilitated the payment of services included
within the scope of each Ambulatory Payment Classification (APC).
The Act provided for the imposition of civil money penalties not
to exceed $2,000, and a possible exclusion from participation in
Medicare, Medicaid and other federal health care programs for any
person who knowingly and willfully presents, or causes to be presented, a
bill or request for payment for a hospital outpatient service that
violates the requirement for billing subject to the following exceptions:
3.3.1 Payment for clinical diagnostic
lab may be made only to the person or entity that performed or supervised
the performance of the test. In the case of a clinical diagnostic
laboratory test that is provided under arrangement made by a hospital
or Critical Access Hospital (CAH), payment is made to the hospital.
The hospital is not responsible for billing for the diagnostic test
if a hospital patient leaves the hospital and goes elsewhere to obtain
the diagnostic test.
3.4 Applicability
and Scope of Coverage
Following
are the providers and services for which TRICARE will make payment
under the OPPS.
3.4.1 Provider Categories
3.4.1.1 Providers Included In OPPS
3.4.1.1.1 All hospitals participating
in the Medicare program, except for those excluded under
paragraph 3.4.1.2.
3.4.1.1.2 Hospital-based PHPs do not
require separate TRICARE authorization. Authorization of a hospital
by TRICARE is sufficient for its PHP to be an authorized TRICARE
provider.
3.4.1.1.3 Hospitals or distinct parts
of hospitals that are excluded from the inpatient Diagnosis Related Groups
(DRG) to the extent that the hospital or distinct part furnishes
outpatient services.
Note: All Hospital Outpatient Departments
(HOPDs) will be subject to the OPPS unless specifically excluded under
this chapter. The marketing contractor shall have responsibility
for educating providers to bill under the OPPS even if they are
not a Medicare participating/certified provider (i.e., not subject
to the DRG inpatient reimbursement system).
3.4.1.1.4 Small
Rural and Sole Community Hospitals (SCHs) in Rural Areas
TRICARE delayed implementation
of its OPPS for small rural hospitals with 100 or fewer beds and
rural SCHs with 100 or fewer beds until January 1, 2010.
3.4.1.2
Providers
Excluded From OPPS
3.4.1.2.1 Outpatient services provided
by hospitals of the Indian Health Service (IHS) will continue to
be paid under separately established rates.
3.4.1.2.2 Certain hospitals that qualify
for payment under the state’s cost containment waiver, e.g., Maryland.
3.4.1.2.4 Hospitals located outside one
of the 50 United States (US), the District of Columbia, and Puerto Rico.
3.4.1.2.5 Specialty
care providers to include:
• Cancer and children’s hospitals
• Freestanding Ambulatory Surgery
Centers (ASCs)
• Freestanding PHPs and Intensive
Outpatient Programs ((IOPs) that offer psych and substance use treatments, Substance
Use Disorder Rehabilitation Facilities (SUDRFs), and freestanding
Opioid Treatment Programs (OTPs)
• Comprehensive Outpatient Rehabilitation
Facilities (CORFs)
• Home Health Agencies (HHAs)
• Hospice programs
• Community Mental Health Centers
(CMHCs)
• Other corporate services providers
(e.g., Freestanding Cardiac Catheterization, Sleep Disorder Diagnostic Centers,
and Freestanding Hyperbaric Oxygen Treatment Centers).
Note: Antigens, splints, casts and
hepatitis B vaccines furnished outside the patient’s plan of care
in CORFs, HHAs and hospice programs will continue to receive reimbursement
under current TRICARE allowable charge methodology.
• Freestanding Birthing Centers
• Department of Veterans Affairs
(DVA)/Veterans Health Administration (VHA) Hospitals
• Freestanding End Stage Renal
Disease (ESRD) Facilities
• SNFs
• Psychiatric Residential Treatment
Centers (RTCs)
3.4.2 Scope of Services
3.4.2.1 Services excluded under the
hospital OPPS and paid under the CHAMPUS Maximum Allowable Charge
(CMAC) or other TRICARE recognized allowable charge methodology.
3.4.2.1.1 Physician services.
3.4.2.1.2 NP and CNS services.
3.4.2.1.3 PA services.
3.4.2.1.4 Certified Nurse-Midwife (CNM)
services.
3.4.2.1.5 Services of qualified psychologists.
3.4.2.1.6 Clinical Social Worker (CSW)
services.
3.4.2.1.7 Services of an anesthetist.
3.4.2.1.8 Screening and diagnostic mammographies.
3.4.2.1.9 Influenza and pneumococcal
pneumonia vaccines.
Note: Hospitals, HHAs, and hospices
will continue to receive CMAC payments for influenza and pneumococcal pneumonia
vaccines due to considerable fluctuations in their availability
and cost.
3.4.2.1.10 Clinical diagnostic laboratory
services. Effective January 1, 2014, most laboratory tests will
be packaged under OPPS. See
Section 4.
3.4.2.1.11 Take home surgical dressings.
3.4.2.1.12 Non-implantable DME, prosthetics
(prosthetic devices), orthotics, and supplies (DMEPOS) paid under
the DMEPOS fee schedule when the hospital is acting as a supplier
of these items.
• An item such as crutches or
a walker that is given to the patient to take home, but that may
also be used while the patient is at the hospital, would be paid
for under the hospital OPPS.
• Payment may not be made for
items furnished by a supplier of medical equipment and supplies
unless the supplier obtains a supplier number. However, since there
is no reason to split a claim for DME payment under TRICARE, a separate
supplier number will not be required for a hospital to receive reimbursement
for DME.
3.4.2.1.13 Hospital outpatient services
furnished to SNF inpatients as part of their resident assessment
or comprehensive care plan that are furnished by the hospital “under
arrangements” but billable only by the SNF.
3.4.2.1.14 Services and procedures designated
as requiring inpatient care.
3.4.2.1.15 Services excluded by statute
(excluded from the definition of “covered Outpatient Department (OPD)
Services”):
• Ambulance services
• Physical Therapy (PT)
• Occupational Therapy (OT)
• Speech-Language Pathology (SLP)
Note: The above services are subject
to the CMAC or other TRICARE recognized reimbursement methodology (e.g.,
statewide prevailings).
3.4.2.1.16 Ambulatory surgery procedures
performed in freestanding ASCs will continue to be reimbursed under
the per diem system established in
Chapter 9, Section 1.
3.4.2.2 Costs excluded under the hospital
OPPS:
3.4.2.2.1 Direct cost of medical education
activities.
3.4.2.2.2 Costs of approved nursing and
allied health education programs.
3.4.2.2.3 Costs associated with interns
and residents not in approved teaching programs.
3.4.2.2.4 Costs of teaching physicians.
3.4.2.2.5 Costs of anesthesia services
furnished to hospital outpatients by qualified non-physician anesthetists
(Certified Registered Nurse Anesthetists (CRNAs) and Anesthesiologist
Assistants (AAs)) employed by the hospital or obtained under arrangements,
for hospitals.
3.4.2.2.6 Bad debts for uncollectible
and coinsurance amounts.
3.4.2.2.7 Organ acquisition costs.
3.4.2.2.8 Corneal tissue acquisition
costs incurred by hospitals that are paid on a reasonable cost basis.
3.4.2.2.9 Autologous stem cell processing
and harvesting procedures.
3.4.2.3 Services included in payment
under the OPPS (not an all-inclusive list).
3.4.2.3.1 Hospital-based PHPs (psych
and Substance Use Disorder SUD) which are paid a per diem OPPS,
and for dates of service on or after October 3, 2016, Intensive
Outpatient Programs (IOPs). Partial hospitalization is a distinct
and organized intensive psychiatric outpatient day treatment program,
designed to provide patients who have profound and disabling mental
health and SUD conditions with an individualized, coordinated, comprehensive,
and multidisciplinary treatment program. IOP is a comprehensive
and complementary schedule of recognized treatment approaches that
may include day, evening, night, and weekend services consisting
of individual and group counseling or therapy, and family counseling
or therapy as clinically indicated for children and adolescents,
or adults aged 18 and over, and may include case management to link
patients and their families with community-based support systems.
3.4.2.3.2 OTPs are organized, ambulatory,
addiction treatment services for patients with an opioid use disorder.
Hospital-based Methadone OTPs shall be reimbursed a weekly all-inclusive
per diem rate, including the cost of the drug and related services
(i.e., the costs related to the initial intake/assessment, drug
dispensing and screening, and integrated psychosocial and medical
treatment and support services). The bundled weekly per diem payments
shall be accepted as payment in full, subject to the outpatient
cost-sharing provisions under
32 CFR 199.4(f).
When providing other medications which are more likely to be prescribed
and administered in an Office-Based Opioid Treatment (OBOT) setting,
but which are still available for treatment of SUDs in an outpatient treatment
program setting, OTPs shall be reimbursed on a fee-for-service basis
(i.e., separate payments will be allowed for both the medication
and accompanying support services), subject to the outpatient cost-sharing provisions
under
32 CFR 199.4(f).
3.4.2.3.3 All hospital outpatient services,
except those that are identified as excluded. The following are services
that are included in OPPS:
3.4.2.3.3.1 Surgical procedures.
Note: All hospital based ASC claims
that are submitted to be paid under OPPS must be submitted with
a Type Of Bill (TOB) 13X. If a claim is submitted to be paid with
TOB 83X the claim will be denied.
3.4.2.3.3.2 Radiology, including radiation
therapy.
3.4.2.3.3.3 Clinic visits.
3.4.2.3.3.4 Emergency Department (ED) visits.
3.4.2.3.3.5 Diagnostic services and other
diagnostic tests.
3.4.2.3.3.6 Surgical pathology.
3.4.2.3.3.7 Cancer chemotherapy.
3.4.2.3.3.8 Implantable medical items.
• Prosthetic implants (other
than dental) that replace all or part of an internal body organ
(including colostomy bags and supplies directly related to colostomy
care and including replacement of these devices);
• Implantable DME (e.g., pacemakers,
defibrillators, drug pumps, and neurostimulators);
• Implantable items used in performing
diagnostic x-rays, diagnostic laboratory tests, and other diagnostic
tests.
Note: Because implantable items are
now packaged into the APC payment rate for the service or procedure with
which they are associated, certain items may be candidates for the
transitional pass-through payment.
3.4.2.3.3.9 Specific hospital outpatient
services furnished to a beneficiary who is admitted to a Medicare-participating
SNF for those services that are beyond the scope of SNF comprehensive
care plans. See
Chapter 8, Section 1 for
outpatient services provided to SNF patients.
3.4.2.3.3.10 Certain preventive services
furnished to healthy persons, such as colorectal cancer screening.
3.4.2.3.3.11 Acute dialysis (e.g., dialysis
for poisoning).
3.4.2.3.3.12 ESRD Services. Since TRICARE
does not have an ESRD composite rate, ESRD services are included in
TRICARE’s OPPS.
3.4.2.3.3.13 Acquisition costs for allogenic
stem cell transportation.
3.4.2.3.3.14 Autologous stem cell processing
and harvesting procedures.
3.5 Description of APC Groups
3.5.1 Group services identified by
Healthcare Common Procedure Coding System (HCPCS) codes and descriptors
within APC groups are the basis for setting payment rates under
the hospital OPPS.
3.5.2 The APC
system establishes groups of covered services so that the services
within each group are comparable clinically and with respect to
the use of resources. The fundamental criteria for grouping procedures/services
are: resource homogeneity; clinical homogeneity; provider concentration;
and frequency of service. See the TRICARE OPPS Final Rule for descriptions
(73 FR 74945).
3.6 Basic
Reimbursement Methodology
3.6.1 Under
the OPPS, hospital outpatient services are paid on a rate-per-service
basis that varies according to the APC group to which the service
is assigned.
3.6.2 The APC classification system
is composed of groups of services that are comparable clinically
and with respect to the use of resources. Level I and Level II HCPCS
codes and descriptors are used to identify and group the services
within each APC. Costs associated with items or services that are
directly related and integral to performing a procedure or furnishing
a service have been packaged into each procedure or service within
an APC group with the exception of:
• New temporary technology APCs
for certain approved services that are structured based on cost
rather than clinical homogeneity.
• Separate APCs for certain medical
devices, drugs, biologicals, radiopharmaceuticals and devices of brachytherapy
under transitional pass-through provisions.
3.6.3 Each APC weight represents
the median hospital cost of the services included in the APC relative
to the median hospital cost of services included in the hospital
clinic visits APC. APC weights are scaled to the hospital clinic
visits APC because it is one of the most frequently performed services
in the outpatient setting.
3.6.4 The items
and services within an APC group cannot be considered comparable
with respect to the use of resources if the highest median cost
for an item or service in the group is more than two times greater
than the lowest median cost for an item or service within the same
group. However, exceptions may be made to the two times rule “in
unusual cases, such as low volume items and services.”
3.6.5 The prospective payment rate
for each APC is calculated by multiplying the APC’s relative weight
by the conversion factor.
3.6.6 A wage
adjustment factor will be used to adjust the portion of the payment
rate that is attributable to labor-related costs for relative differences
in labor and non-labor-related costs across geographical regions.
3.6.7 Applicable deductible and/or
cost-sharing/copayment amounts will be subtracted from the adjusted APC
payment rate based on the eligibility status of the beneficiary
at the time outpatient services were rendered (i.e., TRICARE Prime
or TRICARE Select). See
Chapter 2.
Note: The ASC cost-sharing provision
(i.e., assessment of a single copayment for both the professional
and facility charge for a TRICARE Prime or TRICARE Select enrollee)
will be adopted as long as it is administratively feasible. For
beneficiary categories where cost-sharing is based on a percentage
of the maximum allowable amount, the ASC cost-sharing provision
does not apply. The copayment is based on site of service, except
for venipuncture and fetal monitoring. Reference
Chapter 2, Section 1.
3.6.8 Reimbursement hierarchy for
procedures paid outside the OPPS. For information related to the
CMAC Facility Pricing Hierarchy, see
Chapter 5, Section 3.
3.6.9 Composite APCs provide a single
payment for a comprehensive diagnostic and/or treatment service defined
as a service typically reported with multiple HCPCS codes. See
Section 2 for additional information.
3.6.10 Comprehensive APCs provide
a single payment for a primary service, and payment for all adjunctive services
reported on the same claim are packaged into the payment for the
primary service. See
Section 2 for additional information.
3.7 Outpatient Code Editor (OCE)
3.7.1 The OCE with APC program edits
patient data to help identify possible errors in coding and assigns
APC numbers based on HCPCS codes for payment under the OPPS. The
OPPS is an outpatient equivalent of the inpatient, DRG-based PPS.
Like the inpatient system based on DRGs, each APC has a pre-established
prospective payment amount associated with it. However, unlike the
inpatient system that assigns a patient to a single DRG, multiple
APCs can be assigned to one outpatient record. If a patient has
multiple outpatient services during a single visit, the total payment
for the visit is computed as the sum of the individual payments
for each service. Updated versions of the OCE and data files, along
with installation and user manuals, will be delivered electronically
to the contractors.
3.7.2 The contractor
shall replace the existing OCE with the updated OCE within 21 calendar
days of receipt. See
Addendum A, for quarterly review/update process.
3.7.3 The OCE incorporates the National
Correct Coding Initiatives (NCCI) edits used by the CMS. Claims reimbursed
under the OPPS methodology are exempt from the claims auditing software
referenced in
Chapter 1, Section 3.
3.7.4 Under certain circumstances
(e.g., active duty claims), the contractor may override claims that
are normally not payable.
3.7.5 CMS has
agreed to the use of 900 series numbers (900-999) within the OCE
for TRICARE specific edits.
3.8 Pricer
Program
3.8.1 The APC Pricer will be straightforward
in that the site-of-service wage index will be used to wage adjust the
payment rate for the particular APC HCPCS Level I and II code (e.g.,
a HCPCS code with a designated Status Indicator (SI) of
J1,
S,
T,
V,
or
X)
reported off of the hospital outpatient claim. The Pricer will also
apply discounting for multiple surgical procedures performed during
a single operative session and outlier payments for extraordinarily
expensive cases. DHA will provide the contractor’s with a common
TRICARE Pricer and will provide quarterly updates.
3.8.2 The contractor shall replace
the existing Pricer with the updated Pricer within 21 calendar days
of receipt.
Note: Claims
received with service dates on or after the OPPS quarterly effective
dates (i.e., January 1, April 1, July 1, and October 1 of each calendar
year) but prior to 21 calendar days from receipt of either the OPPS
OCE or Pricer update cartridge may be considered excluded claims
as defined by the TRICARE Operations Manual (TOM),
Chapter 1, Section 3.
3.8.3 The contractor shall provide
3M with those pricing files to maintain and update the TRICARE OPPS Pricer
within five weeks prior to the quarterly update. For example, statewide
prevailings for services that do not have a CMAC and state specific
non-professional component birthing center rates. Appropriate deductible,
cost-sharing/copayment amounts and catastrophic caps limitations
will be applied outside the Pricer based on the eligibility status
of the TRICARE beneficiary at the time the outpatient services were
rendered.
3.10 Provider-Based Status for Payment
Under OPPS
The CMS
will retain sole responsibility for determining provider-based status
under the OPPS.
3.11 Implementing
Instructions
Since
this issuance only deals with a general overview of the OPPS reimbursement
methodology, the following cross-reference is provided to facilitate
access to specific implementing instructions within Chapter 13:
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Implementing Instructions/Services
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Policies
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General Overview
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Billing and Coding of Services
under APC Groups
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Reimbursement Methodology
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Claims Submission and Processing
Requirements
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Medical Review Under the Hospital
OPPS
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Addenda
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Development Schedule for TRICARE
OCE/APC - Quarterly Update
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OPPS OCE Notification Process
for Quarterly Updates
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Approval Of OPPS - OCE/APC
And NGPL Quarterly Update Process
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3.12 OPPS
Data Elements Available on DHA’s Website