1.0 APPLICABILITY
The TRICARE Overseas Program
(TOP) contractor shall apply this policy for reimbursement of all
hospital inpatient services provided in the locations identified
in paragraph 4.2. This policy revises, replaces, and supersedes
the previously issued policy, effective October 1, 2004, for hospital
reimbursement in the Philippines. Puerto Rico follows Continental
United States (CONUS) based reimbursement methodologies used for
the 50 US and the District of Columbia.
3.0 POLICY
The institutional per diem
for those specified locations outside the 50 US and the District
of Columbia is the maximum amount TRICARE will authorize to be paid
for inpatient services on a per diem basis. The TOP contractor shall
ensure its allowable institutional rates for those specified locations
outside the 50 US and the District of Columbia, are the lesser of
(a) billed charges or; (b) the amount based on prospectively determined
per diems which are adjusted by a country specific index factor.
4.0 BACKGROUND
Reimbursement Systems:
4.1 General
4.1.1 The TOP
contractor shall make payment for inpatient hospital stays in specified
locations outside the 50 US and the District of Columbia, using
the lesser of:
• Billed charges; or
• The prospectively determined
per diems adjusted by a country specific index.
4.1.2 The prospectively determined
per diem rates for specified locations outside the 50 US and the
District of Columbia, are developed into reimbursement groupings
by using diagnosis codes. The TOP contractor shall use diagnosis
codes as contained in the International Classification of Diseases,
10th Revision, Clinical Modification (ICD-10-CM). The per diem rates
are the maximum allowable amounts that TRICARE shall reimburse and
the amount on which patient cost-shares are calculated. The National
US per diem rate is multiplied by a unique country specific index
factor which adjusts the National US per diems for the applicable
country. The country specific hospital per diem, for those specified
locations outside the 50 US and the District of Columbia is the product
of the National US per diem and the country specific index.
4.2
Applicability
4.2.1 The TOP contractor shall apply
this payment system to all hospitals providing services in:
• The Philippines.
• Panama.
• Other as designated by the
Government.
4.2.2 The TOP
contractor shall apply this payment system to hospital inpatient
services furnished to retirees or their eligible family members
or non-Prime Active Duty Family Members (ADFMs) falling under the
claims processing jurisdiction of the TOP contractor.
4.2.3 The TOP contractor shall ensure
institutional providers accepting, admitting and treating TRICARE beneficiaries
receive the per diem reimbursement on applicable hospital services
included on inpatient claims. The TOP contractor shall use this
payment system regardless of the type of hospital inpatient services
provided. The prospectively determined per diem rates established
under this system are all-inclusive and are intended to include,
but not be limited to:
• A standard amount for nursing
and technician services;
• Room, board and meals;
• Drugs including any take home
drugs;
• Biologicals; surgical dressings,
splints, casts;
• Durable Medical Equipment (DME)
for use in the hospital and is related to the provision of a surgical
service, procedure or procedures, equipment related to the provision
and performance of surgical procedures; laboratory services and
testing; x-ray or other diagnostic procedures directly related to
the inpatient Episode Of Care (EOC);
• Special unit operating costs,
such as intensive care units; malpractice costs, if applicable,
or other administrative costs related to the services furnished
to the patients, recordkeeping and the provision of records;
• Housekeeping items and services;
and
• Capital costs.
4.2.4 The per diem rates do not include
such items as physicians’ fees, irrespective of a physician’s employment
status with the hospital. The per diem rates do not include other
professional providers (e.g., nurse anesthetist) recognized by TRICARE
who render directly related inpatient services and bill independently
from the hospital for them. The TOP contractor shall ensure the
hospital or institutional provider submits a valid primary ICD-10-CM
code or narrative description of services. The TOP contractor shall
ensure the medical description supports development of the claim
prior to reimbursement.
4.3 Country
Specific Index
The country
specific index is a factor obtained from the World Bank’s International
Comparison Program. The index factor, known as Purchasing Power
Parity (PPP) conversion factor, is based on a large array of goods
and services or market basket within the specific country which
is then standardized and weighted to a US standard and currency. The
World Bank defines PPP conversion factor as: “Number of units of
a country’s currency required to buy the same amount of goods and
services in the domestic market that a US dollar would buy in the
US.” The use of the country specific index enables a conversion
and therefore creates parity between the US and the specific country
in the purchasing of the same amount and type of medical services.
TRICARE uses the World Bank’s International Comparison Program country
specific index as provided in Figure 1.34-1.
4.4 Institutional Payment Rates
4.4.2 The rate setting methodology
was developed as follows:
• Used the first alpha character
and two digits of a primary diagnosis code.
• Eighteen diagnosis groupings
were defined and designed based on the groupings and definitions
contained in the ICD-10-CM publication. For example, Group 1 is
defined as ICD-10-CM codes A00 to B99, or Infectious and Parasitic
Diseases. The first alpha character and two digits of a primary
diagnosis code are used for placement into one of the 18 groups.
• The payment rate for each of
the 18 diagnostic groups was the average allowed amount per day
over all the ICD-10-CM codes in a diagnosis group, based upon the
claim’s primary diagnosis, plus an add-on to reimburse for capital
costs.
• Group payments were calculated
by dividing total allowed charges by total inpatient days for the
group.
• Once the 18 groupings were
defined, certain unique admissions were identified for reimbursement
separately from the 18 groupings. These are listed in Figure 1.34-3.
4.5 Payments
4.5.1 General.
The TOP contractor shall base the per diem group payment rate on
the first alpha character and two digits of the primary diagnosis
code. For hospital inpatient care, the TOP contractor shall reimburse
the lesser of:
• Actual billed charges for hospital
inpatient care; or
• The US National per diem rate
authorized under TRICARE, multiplied by the country specific index
factor, is the country specific hospital per diem. The TOP contractor
shall multiply this per diem by the number of covered days of hospital
inpatient care. This equals the maximum amount allowed by TRICARE
to be paid for the episode on inpatient care.
4.5.2 The TOP contractor shall take
only the primary diagnosis code, on the date of admission, into consideration
when determining the group for a payment rate. The TOP contractor
shall assign only one payment group to each independent episode
of inpatient care. The contractor shall ensure each institutional
claim for service reimbursement contains a valid ICD-10-CM code
or narrative description of services, and that it is used to represent
the primary diagnosis for inpatient admission. If a valid diagnosis
code or narrative description is not supplied by the institutional
provider, the TOP contractor shall develop one with supporting documentation.
The TOP contractor shall ensure development of an institutional
claim results in providing the necessary elements to satisfy TRICARE
Encounter Data (TED) record requirements.
4.6 Beneficiary - Change in Eligibility
Status
Since
payment is on a per diem basis, the TOP contractor shall pay hospital
claims for services for the days the beneficiary is TRICARE eligible
and the TOP contractor shall deny claims for the days the beneficiary
is not TRICARE eligible.
4.7 Beneficiary
Cost-Shares
The TOP
contractor shall apply inpatient cost-shares as contained in
Chapter 2, Section 1, for non-Diagnosis Related Group
(DRG) facilities to the hospital allowable charge authorized under
TRICARE.
4.8 Updating Payment Rates
4.8.1 DHA will communicate additions,
changes, revisions, or deletions to the diagnosis codes or country specific
index to the TOP contractor and the TOP contractor shall consider
these as routine updates to this payment system and process them
under TRICARE Operations Manual (TOM), Chapter 1, Section 4.
4.8.2 DHA will update inpatient per
diem rates for Panama and the Philippines annually in conjunction
with the TRICARE DRG update in the US.
4.9 The TOP contractor shall maintain
the current year and two immediate past years’ iterations of the
US National per diems authorized under TRICARE and the country specific
index factors.
4.10 There
is no TRICARE waiver process applicable to hospitals in specified
locations outside the 50 US and the District of Columbia for institutional
inpatient rates.