(a)
Hospitals.
The CHAMPUS-determined allowable
cost for reimbursement of a hospital shall be determined on the
basis of one of the following methodologies.
(1) CHAMPUS
Diagnosis Related Group (DRG)-based payment system.
Under the CHAMPUS DRG-based
payment system, payment for the operating costs of inpatient hospital
services furnished by hospitals subject to the system is made on
the basis of prospectively-determined rates and applied on a per
discharge basis using DRGs. Payments under this system will include
a differentiation for urban (using large urban and other urban areas)
and rural hospitals and an adjustment for area wage differences
and indirect medical education costs. Additional payments will be
made for capital costs, direct medical education costs, and outlier
cases.
(i) General--
(A) DRGs
used.
The CHAMPUS DRG-based payment
system will use the same DRGs used in the most recently available
grouper for the Medicare Prospective Payment System, except as necessary
to recognize distinct characteristics of CHAMPUS beneficiaries and
as described in instructions issued by the Director, OCHAMPUS.
(B) Assignment of discharges to DRGs.
(1) The classification
of a particular discharge shall be based on the patient’s age, sex,
principal diagnosis (that is, the diagnosis established, after study,
to be chiefly responsible for causing the patient’s admission to
the hospital), secondary diagnoses, procedures performed and discharge
status. In addition, for neonatal cases (other than normal newborns)
the classification shall also account for birthweight, surgery and
the presence of multiple, major and other neonatal problems, and
shall incorporate annual updates to these classification features.
(2) Each discharge
shall be assigned to only one DRG regardless of the number of conditions
treated or services furnished during the patient’s stay.
(C) Basis of payment--
(1) Hospital billing.
Under the CHAMPUS DRG-based
payment system, hospitals are required to submit claims (including
itemized charges) in accordance with Sec. 199.7(b). The CHAMPUS
fiscal intermediary will assign the appropriate DRG to the claim
based on the information contained in the claim. Any request from
a hospital for reclassification of a claim to a higher weighted DRG
must be submitted, within 60 days from the date of the initial payment,
in a manner prescribed by the Director, OCHAMPUS.
(2) Payment
on a per discharge basis.
Under the CHAMPUS DRG-based
payment system, hospitals are paid a predetermined amount per discharge
for inpatient hospital services furnished to CHAMPUS beneficiaries.
(3) Pricing
of claims.
All final claims with discharge
dates of September 30, 2014, or earlier that are reimbursed under
the CHAMPUS DRG-based payment system are to be priced as of the
date of admission, regardless of when the claim is submitted. All
final claims with discharge dates of October 1, 2014, or later that
are reimbursed under the CHAMPUS DRG-based payment system are to
be priced as of the date of discharge.
(4) Payment
in full.
The DRG-based amount paid for
inpatient hospital services is the total CHAMPUS payment for the
inpatient operating costs (as described in paragraph (a)(1)(i)(C)(5)
of this section) incurred in furnishing services covered by the
CHAMPUS. The full prospective payment amount is payable for each
stay during which there is at least one covered day of care, except
as provided in paragraph (a)(1)(iii)(E)(1)(i)(A) of
this section.
(5) Inpatient
operating costs.
The CHAMPUS DRG-based payment
system provides a payment amount for inpatient operating costs,
including:
(i) Operating costs for routine services,
such as the costs of room, board, and routine nursing services;
(ii) Operating
costs for ancillary services, such as hospital radiology and laboratory
services (other than physicians’ services) furnished to hospital
inpatients;
(iii) Special care unit operating costs; and
(iv) Malpractice
insurance costs related to services furnished to inpatients.
(6) Discharges
and transfers.
(i) Discharges.
A hospital inpatient is discharged
when:
(A) The patient is formally released from
the hospital (release of the patient to another hospital as described
in paragraph (a)(1)(i)(C)(6)(ii) of this section,
or a leave of absence from the hospital, will not be recognized
as a discharge for the purpose of determining payment under the
CHAMPUS DRG-based payment system);
(B) The patient
dies in the hospital; or
(C) The patient is transferred from the care
of a hospital included under the CHAMPUS DRG-based payment system
to a hospital or unit that is excluded from the prospective payment
system.
(ii) Transfers.
Except as provided under paragraph
(a)(1)(i)(C)(6)(i) of this section, a discharge
of a hospital inpatient is not counted for purposes of the CHAMPUS
DRG-based payment system when the patient is transferred:
(A) From one
inpatient area or unit of the hospital to another area or unit of
the same hospital;
(B) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of another hospital
paid under this system;
(C) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of another hospital
that is excluded from the CHAMPUS DRG-based payment system because
of participation in a statewide cost control program which is exempt
from the CHAMPUS DRG-based payment system under paragraph (a)(1)(ii)(A)
of this section; or
(D) From the care of a hospital included under
the CHAMPUS DRG-based payment system to the care of a uniformed
services treatment facility.
(iii) Payment
in full to the discharging hospital.
The
hospital discharging an inpatient shall be paid in full under the
CHAMPUS DRG-based payment system.
(iv) Payment
to a hospital transferring an inpatient to another hospital.
If a hospital subject to the CHAMPUS
DRG-based payment system transfers an inpatient to another such
hospital, the transferring hospital shall be paid a per diem rate
(except that in neonatal cases, other than normal newborns, the hospital
will be paid at 125 percent of that per diem rate), as determined
under instructions issued by TSO, for each day of the patient’s
stay in that hospital, not to exceed the DRG-based payment that would
have been paid if the patient had been discharged to another setting.
For admissions occurring on or after October 1, 1995, the transferring
hospital shall be paid twice the per diem rate for the first day
of any transfer stay, and the per diem amount for each subsequent
day, up to the limit described in this paragraph.
(v) Additional
payments to transferring hospitals.
A transferring
hospital may qualify for an additional payment for extraordinary
cases that meet the criteria for long-stay or cost outliers.
(D) DRG system updates.
The
CHAMPUS DRG-based payment system is modeled on the Medicare Prospective
Payment System (PPS) and uses annually updated items and numbers
from the Medicare PPS as provided for in this part and in instructions
issued by the Director, DHA. The effective date of these items and
numbers shall not correspond to that under Medicare PPS but shall
be delayed until January 1, to align with TRICARE’s program year
reporting. This allows for an administrative simplicity that optimizes
healthcare delivery by reducing existing administrative burden and
costs.
(ii) Applicability
of the DRG system.
(A) Areas affected.
The CHAMPUS DRG-based payment
system shall apply to hospitals’ services in the fifty states, the
District of Columbia, and Puerto Rico, except that any state which
has implemented a separate DRG-based payment system or similar payment
system in order to control costs and is exempt from the Medicare
Prospective Payment System may be exempt from the CHAMPUS DRG-based
payment system if it requests exemption in writing, and provided payment
under such system does not exceed payment which would otherwise
be made under the CHAMPUS DRG-based payment system.
(B) Services
subject to the DRG-based payment system.
All normally
covered inpatient hospital services furnished to CHAMPUS beneficiaries
by hospitals are subject to the CHAMPUS DRG-based payment system.
(C) Services
exempt from the DRG-based payment system.
The
following hospital services, even when provided in a hospital subject
to the CHAMPUS DRG-based payment system, are exempt from the CHAMPUS
DRG-based payment system. The services in paragraphs (a)(1)(ii)(C)(1)
through (a)(1)(ii)(C)(4) and (a)(1)(ii)(C)(7)
through (a)(1)(ii)(C)(9) of this section shall
be reimbursed under the procedures in paragraph (a)(4) of this section,
and the services in paragraphs (a)(1)(ii)(C)(5)
and (a)(1)(ii)(C)(6) of this section shall be reimbursed
under the procedures in paragraph (j) of this section.
(1) Services
provided by hospitals exempt from the DRG-based payment system.
(2) All services
related to solid organ acquisition for CHAMPUS covered transplants
by CHAMPUS-authorized transplantation centers.
(3) All services
related to heart and liver transplantation for admissions prior
to October 1, 1998, which would otherwise be paid under the respective
DRG.
(4) All services
related to CHAMPUS covered solid organ transplantations for which
there is no DRG assignment.
(5) All professional
services provided by hospital-based physicians.
(6) All services
provided by nurse anesthetists.
(7) All services
related to discharges involving pediatric bone marrow transplants
(patient under 18 at admission).
(8) All services
related to discharges involving children who have been determined
to be HIV seropositive (patient under 18 at admission).
(9) All services
related to discharges involving pediatric cystic fibrosis (patient
under 18 at admission).
(10) For admissions occurring on or after October
1, 1990, and before October 1, 1994, and for discharges occurring
on or after October 1, 1997, the costs of blood clotting factor
for hemophilia inpatients. An additional payment shall be made to
a hospital for each unit of blood clotting factor furnished to a
CHAMPUS inpatient who is hemophiliac in accordance with the amounts
established under the Medicare Prospective Payment System (42 CFR
412.115).
(D) Hospitals
subject to the CHAMPUS DRG-based payment system.
All hospitals
within the fifty states, the District of Columbia, and Puerto Rico
which are certified to provide services to CHAMPUS beneficiaries
are subject to the DRG-based payment system except for the following
hospitals or hospital units which are exempt.
(1) Psychiatric
hospitals.
A psychiatric hospital which
is exempt from the Medicare Prospective Payment System is also exempt
from the CHAMPUS DRG-based payment system. In order for a psychiatric
hospital which does not participate in Medicare to be exempt from
the CHAMPUS DRG-based payment system, it must meet the same criteria
(as determined by the Director, OCHAMPUS, or a designee) as required
for exemption from the Medicare Prospective Payment System as contained
in 42 CFR 412.23.
(2) Inpatient
Rehabilitation Facilities (IRF).
Prior to implementation of
the IRF PPS methodology described in paragraph (a)(10) of this section,
an inpatient rehabilitation facility which is exempt from the Medicare
prospective payment system is also exempt from the TRICARE DRG-based
payment system.
(3) Psychiatric
and rehabilitation units (distinct parts).
Prior
to implementation of the IRF PPS methodology described in paragraph
(a)(10) of this section, a rehabilitation unit which is exempt from the
Medicare prospective payment system is also exempt from the TRICARE
DRG-based payment system. A psychiatric unit which is exempt from
the Medicare prospective payment system is also exempt from the
TRICARE DRG-based payment system.
(4) Long
Term Care Hospitals.
Prior to implementation of
the LTCH PPS methodology described in paragraph (a)(9) of this section,
a long-term care hospital which is exempt from the Medicare prospective
payment system is also exempt from the CHAMPUS DRG-based payment
system.
(5) Hospitals
within hospitals.
A hospital within a hospital
which is exempt from the Medicare prospective payment system is
also exempt from the CHAMPUS DRG-based payment system. In order for
a hospital within a hospital which does not participate in Medicare
to be exempt from the CHAMPUS DRG-based payment system, it must
meet the same criteria (as determined by the Director, TSO, or a
designee) as required for exemption from the Medicare Prospective
Payment System as contained in 42 CFR 412.22 and the criteria for
one or more of the excluded hospital classifications described in
Sec. 412.23 of Title 42 CFR.
(6) Sole
community hospitals (SCHs).
Prior to implementation of
the SCH reimbursement method described in paragraph (a)(7) of this
section, any hospital that has qualified for special treatment under the
Medicare prospective payment system as an SCH (see subpart G of
42 CFR part 412) and has not given up that classification is exempt
from the CHAMPUS DRG-based payment system.
(7) Christian
Science sanitoriums.
All Christian Science sanitoriums
(as defined in paragraph (b)(4)(viii) of Sec. 199.6) are exempt
from the CHAMPUS DRG-based payment system.
(8) Cancer
hospitals.
Any hospital which qualifies
as a cancer hospital under the Medicare standards and has elected
to be exempt from the Medicare prospective payment system is exempt
from the CHAMPUS DRG-based payment system. (See 42 CFR 412.94.)
(9) Hospitals
outside the 50 states, the District of Columbia, and Puerto Rico.
A hospital is excluded from
the CHAMPUS DRG-based payment system if it is not located in one
of the fifty States, the District of Columbia, or Puerto Rico.
(10) CAHs.
Effective December 1, 2009,
any facility which has been designated and certified as a CAH as
contained in 42 CFR Part 485.606 is exempt from the CHAMPUS DRG-based
payment system.
(E) Hospitals
which do not participate in Medicare.
Any
hospital which is subject to the CHAMPUS DRG-based payment system
and which otherwise meets CHAMPUS requirements but which is not
a Medicare-participating provider (having completed a form HCA-1514,
Hospital Request for Certification in the Medicare/Medicaid Program
and a form HCFA-1561, Health Insurance Benefit Agreement) must complete
a participation agreement with TRICARE. By completing the participation agreement,
the hospital agrees to participate on all CHAMPUS inpatient claims
and to accept the CHAMPUS-determined allowable amount as payment
in full for these claims. Any hospital which does not participate
in Medicare and does not complete a participation agreement with
TRICARE will not be authorized to provide services to TRICARE beneficiaries.
(F) Substance
Use Disorder Rehabilitation facilities.
With admissions
on or after July 1, 1995, substance use disorder rehabilitation
facilities, authorized under Sec. 199.6(b)(4)(xiv), are subject
to the DRG-based payment system.
(iii) Determination
of payment amounts.
The actual payment for an individual
claim under the CHAMPUS DRG-based payment system is calculated by
multiplying the appropriate adjusted standardized amount (adjusted
to account for area wage differences using the wage indexes used
in the Medicare program) by a weighting factor specific to each
DRG.
(A) Calculation of DRG weights.
(1) Grouping
of charges.
All discharge records in the
database shall be grouped by DRG.
(2) Remove
DRGs.
Those DRGs that represent discharges
with invalid data or diagnoses insufficient for DRG assignment purposes
are removed from the database.
(3) Indirect
medical education standardization.
To
standardize the charges for the cost effects of indirect medical
education factors, each teaching hospital’s charges will be divided
by 1.0 plus the following ratio on a hospital-specific basis:
(4) Wage
level standardization.
To
standardize the charge records for area wage differences, each charge
record will be divided into labor-related and nonlabor-related portions,
and the labor-related portion shall be divided by the most recently
available Medicare wage index for the area. The labor-related and
nonlabor-related portions will then be added together.
(5) Elimination
of statistical outliers.
All
unusually high or low charges shall be removed from the database.
(6) Calculation
of DRG average charge.
After
the standardization for indirect medical education, and area wage
differences, an average charge for each DRG shall be computed by
summing charges in a DRG and dividing that sum by the number of
records in the DRG.
(7) Calculation
of national average charge per discharge.
A
national average charge per discharge shall be calculated by summing
all charges and dividing that sum by the total number of records
from all DRG categories.
(8) DRG
relative weights.
DRG
relative weights shall be calculated for each DRG category by dividing each
DRG average charge by the national average charge.
(B) Empty
and low-volume DRGs.
For any DRG with less than
ten (10) occurrences in the CHAMPUS database, the Director, TSO,
or designee, has the authority to consider alternative methods for estimating
CHAMPUS weights in these low-volume DRG categories.
(C) Updating
DRG weights.
The CHAMPUS DRG weights shall
be updated or adjusted as follows:
(1) DRG weights
shall be recalculated annually using CHAMPUS charge data and the
methodology described in paragraph (a)(1)(iii)(A) of this section.
(2) When a new
DRG is created, CHAMPUS will, if practical, calculate a weight for
it using an appropriate charge sample (if available) and the methodology
described in paragraph (a)(1)(iii)(A) of this section.
(3) In the case
of any other change under Medicare to an existing DRG weight (such
as in connection with technology changes), CHAMPUS shall adjust
its weight for that DRG in a manner comparable to the change made
by Medicare.
(D) Calculation
of the adjusted standardized amounts.
The
following procedures shall be followed in calculating the CHAMPUS
adjusted standardized amounts.
(1) Differentiate
large urban and other area charges.
All
charges in the database shall be sorted into large urban and other
area groups (using the same definitions for these categories used
in the Medicare program. The following procedures will be applied
to each group.
(2) Indirect
medical education standardization.
To
standardize the charges for the cost effects of indirect medical
education factors, each teaching hospital’s charges will be divided
by 1.0 plus the following ratio on a hospital-specific basis:
(3) Wage
level standardization.
To
standardize the charge records for area wage differences, each charge
record will be divided into labor-related and nonlabor-related portions,
and the labor-related portion shall be divided by the most recently
available Medicare wage index for the area. The labor-related and
nonlabor-related portions will then be added together.
(4) Apply
the cost to charge ratio.
Each
charge is to be reduced to a representative cost by using the Medicare
cost to charge ratio. This amount shall be increased by 1 percentage
point in order to reimburse hospitals for bad debt expenses attributable
to CHAMPUS beneficiaries.
(5) Preliminary
base year standardized amount.
A
preliminary base year standardized amount shall be calculated by
summing all costs in the database applicable to the large urban
or other area group and dividing by the total number of discharges
in the respective group.
(6) Update
for inflation.
The preliminary base year standardized
amounts shall be updated using an annual update factor equal to
1.07 to produce fiscal year 1988 preliminary standardized amounts. Therefore,
any development of a new standardized amount will use an inflation
factor equal to the hospital market basket index used by the Health
Care Financing Administration in their Prospective Payment System.
(7) The preliminary
standardized amounts, updated for inflation, shall be divided by
a system standardization factor so that total DRG outlays, given
the database distribution across hospitals and diagnosis, are equal
to the total charges reduced to costs.
(8) Labor
and nonlabor portions of the adjusted standardized amounts.
The adjusted standardized amounts
shall be divided into labor and nonlabor portions in accordance
with the Medicare division of labor and nonlabor portions.
(E) Adjustments to the DRG-based payments amounts.
The following adjustments to
the DRG-based amounts (the weight multiplied by the adjusted standardized
amount) will be made. Additional adjustments to DRG
amounts are included in paragraph (a)(1)(iv) of this section.
(1) Outliers.
The DRG-based payment to a
hospital shall be adjusted for atypical cases. These outliers are
those cases that have either an unusually short length-of-stay or
extremely long length-of-stay or that involve extraordinarily high
costs when compared to most discharges classified in the same DRG. Cases
which qualify as both a length-of-stay outlier and a cost outlier
shall be paid at the rate which results in the greater payment.
(i) Length-of-stay
outliers.
Length-of-stay outliers shall
be identified and paid by the fiscal intermediary when the claims
are processed.
(A) Short-stay
outliers.
Any discharge with a length-of-stay
(LOS) less than 1.94 standard deviations from the DRG’s arithmetic
LOS shall be classified as a short-stay outlier. Short-stay outliers
shall be reimbursed at 200 percent 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 DRG amount divided
by the arithmetic mean length-of-stay for the DRG.
(B) Long-stay
outliers.
Any discharge (except for neonatal
services and services in children’s hospitals) which has a length-of-stay
(LOS) exceeding a threshold established in accordance with the criteria
used for the Medicare Prospective Payment System as contained in
42 CFR 412.82 shall be classified as a long-stay outlier. Any discharge
for neonatal services or for services in a children’s hospital which
has a LOS exceeding the lesser of 1.94 standard deviations or 17
days from the DRG’s arithmetic mean LOS also shall be classified
as a long-stay outlier. Long-stay outliers shall be reimbursed the
DRG-based amount plus a percentage (as established for the Medicare
Prospective Payment System) of the per diem rate for the DRG for
each covered day of care beyond the long-stay outlier threshold.
The per diem rate shall equal the DRG amount divided by the arithmetic
mean LOS for the DRG. For admissions on or after October 1, 1997,
the long stay outlier has been eliminated for all cases except children’s
hospitals and neonates. For admissions on or after October 1, 1998,
the long stay outlier has been eliminated for children’s hospitals
and neonates.
(ii) Cost
outliers.
Additional payment for cost
outliers shall be made only upon request by the hospital.
(A) Cost
outliers except those in children’s hospitals or for neonatal services.
Any discharge which has standardized
costs that exceed a threshold established in accordance with the
criteria used for the Medicare Prospective Payment System as contained
in 42 CFR 412.84 shall qualify as a cost outlier. The standardized
costs shall be calculated by multiplying the total charges by the
factor described in paragraph (a)(1)(iii)(D)(4) of
this section and adjusting this amount for indirect medical education
costs. Cost outliers shall be reimbursed the DRG-based amount plus
a percentage (as established for the Medicare Prospective Payment
System) of all costs exceeding the threshold. Effective with admissions occurring
on or after October 1, 1997, the standardized costs are no longer
adjusted for indirect medical education costs.
(B) Cost
outliers in children’s hospitals for neonatal services.
Any discharge for services
in a children’s hospital or for neonatal services which has standardized
costs that exceed a threshold of the greater of two times the DRG-based
amount or $13,500 shall qualify as a cost outlier. The standardized
costs shall be calculated by multiplying the total charges by the
factor described in paragraph (a)(1)(iii)(D)(4) of this
section (adjusted to include average capital and direct medical
education costs) and adjusting this amount for indirect medical
education costs. Cost outliers for services in children’s hospitals
and for neonatal services shall be reimbursed the DRG-based amount
plus a percentage (as established for the Medicare Prospective Payment
System) of all costs exceeding the threshold. Effective with admissions occurring
on or after October 1, 1998, standardized costs are no longer adjusted
for indirect medical education costs. In addition, CHAMPUS will
calculate the outlier payments that would have occurred at each
of the 59 Children’s hospitals under the FY99 outlier policy for
all cases that would have been outliers under the FY94 policies
using the most accurate data available in September 1998. A ratio
will be calculated which equals the level of outlier payments that
would have been made under the FY94 outlier policies and the outlier
payments that would be made if the FY99 outlier policies had applied
to each of these potential outlier cases for these hospitals. The
ratio will be calculated across all outlier claims for the 59 hospitals
and will not be hospital specific. The ratio will be used to increase
cost outlier payments in FY 1999 and FY 2000, unless the hospital
has a negotiated agreement with a managed care support contractor
which would affect this payment. For hospitals with managed care
support agreements which affect these payments, CHAMPUS will apply
these payments if the increased payments would be consistent with
the agreements. In FY 2000 the ratio of outlier payments (long stay and
cost) that would have occurred under the FY 94 policy and actual
cost outlier payments made under the FY 99 policy will be recalculated.
If the ratio has changed significantly, the ratio will be revised
for use in FY 2001 and thereafter. In FY 2002, the actual cost outlier
cases in FY 2000 and 2001 will be reexamined. The ratio of outlier
payments that would have occurred under the FY94 policy and the
actual cost outlier payments made under the FY 2000 and FY 2001
policies. If the ratio has changed significantly, the ratio will
be revised for use in FY 2003.
(C) Cost
outliers for burn cases.
All
cost outliers for DRGs related to burn cases shall be reimbursed
the DRG-based amount plus a percentage (as established for the Medicare
Prospective Payment System) of all costs exceeding the threshold.
The standardized costs and thresholds for these cases shall be calculated
in accordance with Sec. 199.14(a)(1)(iii)(E)(1)(ii)(A) and Sec.
199.14(a)(1)(iii)(E)(1)(ii)(B).
(2) Wage
adjustment.
CHAMPUS will adjust the labor
portion of the standardized amounts according to the hospital’s
area wage index. The wage adjusted DRG payment will also be multiplied
by 1.2 for an individual diagnosed with COVID-19 and/or Coronavirus
discharged during the Secretary of Health and Human Services’ declared
public health emergency (PHE).
(3) Indirect
medical education adjustment.
The
wage adjusted DRG payment will also be multiplied by 1.0 plus the
hospital’s indirect medical education ratio.
(4) Children’s
hospital differential.
With
respect to claims from children’s hospitals, the appropriate adjusted
standardized amount shall also be adjusted by a children’s hospital
differential.
(i) Qualifying children’s
hospitals.
Hospitals qualifying for the
children’s hospital differential are hospitals that are exempt from
the Medicare Prospective Payment System, or, in the case of hospitals that
do not participate in Medicare, that meet the same criteria (as
determined by the Director, OCHAMPUS, or a designee) as required
for exemption from the Medicare Prospective Payment System as contained
in 42 CFR 412.23.
(ii) Calculation
of differential.
The
differential shall be equal to the difference between a specially calculated
children’s hospital adjusted standardized amount and the adjusted
standardized amount for fiscal year 1988. The specially calculated
children’s hospital adjusted standardized amount shall be calculated
in the same manner as set forth in Sec. 199.14(a)(1)(iii)(D), except
that:
(A) The base period shall be fiscal year 1988
and shall represent total estimated charges for discharges that
occurred during fiscal year 1988.
(B) No cost to
charge ratio shall be applied.
(C) Capital costs
and direct medical education costs will be included in the calculation.
(D) The factor
used to update the database for inflation to produce the fiscal
year 1988 base period amount shall be the applicable Medicare inpatient
hospital market basket rate.
(iii) Transition
rule.
Until March 1, 1992, separate
differentials shall be used for each higher volume children’s hospital
(individually) and for all other children’s hospitals (in the aggregate).
For this purpose, a higher volume hospital is a hospital that had
50 or more CHAMPUS discharges in fiscal year 1988.
(iv) Hold
harmless provision.
At
such time as the weights initially assigned to neonatal DRGs are recalibrated
based on sufficient volume of CHAMPUS claims records, children’s
hospital differentials shall be recalculated and appropriate retrospective
and prospective adjustments shall be made. To the extent practicable,
the recalculation shall also include reestimated values of other
factors (including but not limited to direct education and capital
costs and indirect education factors) for which more accurate data
became available.
(v) No update for
inflation.
The children’s hospital differential,
calculated (and later recalculated under the hold harmless provision)
for the base period of fiscal year 1988, shall not be updated for subsequent
fiscal years.
(vi) Administrative
corrections.
In connection with determinations
pursuant to paragraph (a)(1)(iii)(E)(4)(iii) of
this section, any children’s hospital that believes OCHAMPUS erroneously
failed to classify the hospital as a high volume hospital or incorrectly
calculated (in the case of a high volume hospital) the hospital’s
differential may obtain administrative corrections by submitting
appropriate documentation to the Director, OCHAMPUS (or a designee).
(iv) Special Programs and
Incentive Payments.(A) Additional payment for
new medical services and technologies. TRICARE will
make New Technology Add On Payments (NTAPs) adjustments to DRGs
as provided in paragraphs (a)(1)(iv)(A)(1) through
(a)(1)(iv)(A)(11) of this section. The Director,
Defense Health Agency (DHA), shall provide notice of the issuance
of policies and guidelines adopting such adjustments together with
any variations deemed necessary to address unique issues involving
the beneficiary population or program administration.
(1) Adoption
of Medicare NTAPs. For
TRICARE covered services and supplies, TRICARE will adopt Medicare
NTAPs as implemented under 42 CFR 412.87 under the same conditions
as published by the Centers for Medicare & Medicaid Services,
except for pediatric cases.
(2) Pediatric
cases. For
pediatric NTAP DRGs, the TRICARE NTAP adjustment shall be modified
to be set at 100 percent of the costs in excess of the Medicare
Severity-Diagnosis Related Group (MS-DRG) payment. As used in this
paragraph, pediatric is defined as services and supplies provided
to individuals under the age of 18, or who are being treated in
a children's hospital or in a pediatric ward.
(3) TRICARE
designated NTAP adjustments. For
categories of TRICARE covered services and supplies for which Medicare
has not established an NTAP adjustment for DRGs, the Director, DHA
may designate a TRICARE NTAP adjustment through a process using
criteria to identify and select such new technology services/supplies
similar to that utilized by Medicare under 42 CFR 412.87. The Director, DHA
may then designate a TRICARE NTAP reimbursement adjustment through
a process using a methodology similar to the Medicare methodology
outlined in 42 CFR 412.88. This discretionary authority to designate
TRICARE NTAP adjustments shall apply to services and supplies typically provided
to TRICARE beneficiaries age 64 or younger when Medicare has not
established an NTAP adjustment for such services/supplies. As with
other discretionary authority under this part, a decision to designate
a TRICARE category of services/supplies for an NTAP adjustment to
DRGs and the amount of such an adjustment are not subject to the
appeal and hearing procedures of Sec. 199.10. The Director, DHA,
shall select which new technologies may be designated as TRICARE
NTAPs and will publish this list based on the eligibility criteria
and reimbursement methodology provided in paragraphs (a)(1)(iv)(A)(4)
through (a)(1)(iv)(A)(11) of this section.
(4) Eligibility
requirements and reimbursement methodology for TRICARE designated
NTAP adjustments. A new medical
service or technology represents an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of TRICARE beneficiaries. The totality of the circumstances
is considered when making a determination that a new medical service
or technology represents an advance that substantially improves,
relative to services or technologies previously available, the diagnosis
or treatment of TRICARE beneficiaries.
(5) Criteria
for improvement. A determination
that a new medical service or technology represents an advance that
substantially improves, relative to services or technologies previously
available, the diagnosis or treatment of TRICARE beneficiaries means
one or more of the following:
(i) The new medical service
or technology offers a treatment option for a patient population unresponsive
to, or ineligible for, currently available treatments.
(ii) The new medical service
or technology offers the ability to diagnose a medical condition
in a patient population where that medical condition is currently
undetectable, or offers the ability to diagnose a medical condition
earlier in a patient population than allowed by currently available methods
and there must also be evidence that use of the new medical service
or technology to make a diagnosis affects the management of the
patient.
(iii) The
use of the new medical service or technology significantly improves
clinical outcomes relative to services or technologies previously
available as demonstrated by one or more of the following seven
outcomes: A reduction in at least one clinically significant adverse
event, including a reduction in mortality or a clinically significant
complication; A decreased rate of at least one subsequent diagnostic
or therapeutic intervention; A decreased number of future hospitalizations
or physician visits; A more rapid beneficial resolution of the disease
process treatment including, but not limited to, a reduced length
of stay or recovery time; An improvement in one or more activities
of daily living; An improved quality of life; or A demonstrated
greater medication adherence or compliance.
(iv) The totality of the
information otherwise demonstrates that the new medical service
or technology substantially improves, relative to technologies previously
available, the diagnosis or treatment of TRICARE beneficiaries.
(6) Evidence. Evidence from
scientific literature may be sufficient to establish that a new
medical service or technology represents an advance that substantially
improves, relative to services or technologies previously available,
the diagnosis or treatment of TRICARE beneficiaries.
(7) Prevalence. The medical condition
diagnosed or treated by the new medical service or technology may
have a low prevalence among TRICARE beneficiaries.
(8) Subpopulation. The new medical
service or technology may represent an advance that substantially
improves, relative to services or technologies previously available,
the diagnosis or treatment of a subpopulation of patients with the
medical condition diagnosed or treated by the new medical service
or technology.
(9) Newness
criteria. A
medical service or technology may be considered new within 2 or
3 years after the point at which data begin to become available
reflecting the inpatient hospital code assigned to the new service
or technology (depending on when a new code is assigned and data
on the new service or technology becomes available for DRG recalibration).
After TRICARE has recalibrated the DRGs, based on available data,
to reflect the costs of an otherwise new medical service or technology, the
medical service or technology will no longer be considered “new”
under the criterion of this section.
(10) Payment
methodology. For
discharges involving new medical services or technologies that meet the
criteria specified in paragraphs (a)(1)(iv)(A)(4)
through (a)(1)(iv)(A)(9) and that are approved
as TRICARE NTAPs per paragraph (a)(1)(iv)(A)(11)
of this section, TRICARE payment will be the lesser of:
(i) The CMS designated percentage
of the estimated costs of the new technology or medical service, as
published in 42 CFR 412.88; or
(ii) The CMS designated percentage
of the difference between the full DRG payment and the hospital's
estimated cost for the case, as published in 42 CFR 412.88.
(11) Publication
and timing. TRICARE may consider
whether a new medical service or technology meets the eligibility
criteria specified in paragraphs (a)(1)(iv)(A)(4)
through (a)(1)(iv)(A)(9) of this section and announce
the results on the NTAP website. In doing so, TRICARE only considers,
for add-on payments for a particular fiscal year, an application
for which the new medical device or product has received FDA marketing
authorization by July 1 prior to the particular fiscal year; or
the application is submitted under an alternative pathway to the
FDA for which conditional NTAP approval for FDA marketing authorization
is granted before July 1 of the fiscal year for which the applicant
applied for new technology add-on payments.
(B) Hospital Value Based Purchasing.
TRICARE will adopt the Medicare
Hospital Value Based Purchasing (HVBP) Program adjustments to DRGs
to incentivize hospitals as implemented under 42 CFR 412.160, when
determined by the ASD(HA), as practicable. The Director, DHA, shall
provide notice of the issuance of policies and guidelines adopting
such adjustments together with any variations deemed necessary to
address unique issues involving the beneficiary population or program administration.
(C) Updating
the adjusted standardized amounts.
Beginning
in FY 1989, the adjusted standardized amounts will be updated by
the Medicare annual update factor, unless the adjusted standardized amounts
are recalculated.
(D) Annual cost pass-throughs.
(1) Capital
costs.
When requested in writing by
a hospital, CHAMPUS shall reimburse the hospital its share of actual
capital costs as reported annually to the CHAMPUS fiscal intermediary.
Payment for capital costs shall be made annually based on the ratio
of CHAMPUS inpatient days for those beneficiaries subject to the
CHAMPUS DRG-based payment system to total inpatient days applied
to the hospital’s total allowable capital costs. Reductions in payments
for capital costs which are required under Medicare shall also be
applied to payments for capital costs under CHAMPUS.
(i) Costs
included as capital costs.
Allowable capital costs are
those specified in Medicare Regulation Sec. 413.130, as modified
by Sec. 412.72.
(ii) 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 Sec. 413.17, then the hospital must include 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 Sec. 413.17, no part of the change to the
provider may be considered a capital-related cost unless the services,
facilities, or supplies are capital-related in nature and:
(A) The capital-related
equipment is leased or rented by the provider;
(B) The capital-related
equipment is located on the provider’s premises; and
(C) The capital-related
portion of the charge is separately specified in the charge to the
provider.
(2) Direct medical
education costs.
When
requested in writing by a hospital, CHAMPUS shall reimburse the
hospital its actual direct medical education costs as reported annually
to the CHAMPUS fiscal intermediary. Such teaching costs must be
for a teaching program approved under Medicare Regulation Sec. 413.85.
Payment for direct medical education costs shall be made annually
based on the ratio of CHAMPUS inpatient days for those beneficiaries
subject to the CHAMPUS DRG-based payment system to total inpatient
days applied to the hospital’s total allowable direct medical education
costs. Allowable direct medical education costs are those specified
in Medicare Regulation Sec. 413.85.
(3) Information
necessary for payment of capital and direct medical education costs.
All hospitals subject to the
CHAMPUS DRG-based payment system, except for children’s hospitals,
may be reimbursed for allowed capital and direct medical education
costs by submitting a request to the CHAMPUS contractor. Beginning
October 1, 1998, such request shall be filed with CHAMPUS on or before
the last day of the twelfth month following the close of the hospitals’
cost reporting period, and shall cover the one-year period corresponding
to the hospital’s Medicare cost-reporting period. The first such
request may cover a period of less than a full year--from the effective
date of the CHAMPUS DRG-based payment system to the end of the hospital’s
Medicare cost-reporting period. All costs reported to the CHAMPUS
contractor must correspond to the costs reported on the hospital’s
Medicare cost report. An extension of the due date for filing the
request may only be granted if an extension has been granted by
HCFA 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. (If these costs change as
a result of a subsequent audit by Medicare, the revised costs are
to be reported to the hospital’s CHAMPUS contractor within 30 days
of the date the hospital is notified of the change). The request
must be signed by the hospital official responsible for verifying
the amounts and shall contain the following information.
(i) The hospital’s
name.
(ii) The hospital’s address.
(iii) The hospital’s
CHAMPUS provider number.
(iv) The hospital’s Medicare provider number.
(v) The period
covered--this must correspond to the hospital’s Medicare cost-reporting
period.
(vi) Total inpatient days provided to all patients
in units subject to DRG-based payment.
(vii) Total allowed
CHAMPUS inpatient days provided in units subject to DRG-based payment.
(viii) Total
allowable capital costs.
(ix) Total allowable direct medical education
costs.
(x) Total full-time equivalents for:
(A) Residents.
(B) Interns.
(xi) Total inpatient
beds as of the end of the cost-reporting period. If this has changed
during the reporting period, an explanation of the change must be
provided.
(xii) Title of official signing the report.
(xiii) Reporting
date.
(xiv) The report shall contain a certification
statement that any changes to the items in paragraphs (a)(1)(iii)(G)(3)(vi),
(vii), (viii), (ix),
or (x), which are a result of an audit of the hospital’s
Medicare cost-report, shall be reported to CHAMPUS within thirty
(30) days of the date the hospital is notified of the change.
(2) CHAMPUS
mental health per diem payment system.
The
CHAMPUS mental health per diem payment system shall be used to reimburse
for inpatient mental health hospital care in specialty psychiatric
hospitals and units. Payment is made on the basis of prospectively
determined rates and paid on a per diem basis. The system uses two
sets of per diems. One set of per diems applies to hospitals and
units that have a relatively higher number of CHAMPUS discharges.
For these hospitals and units, the system uses hospital-specific
per diem rates. The other set of per diems applies to hospitals
and units with a relatively lower number of CHAMPUS discharges.
For these hospitals and units, the system uses regional per diems,
and further provides for adjustments for area wage differences and
indirect medical education costs and additional pass-through payments
for direct medical education costs.
(i) Applicability
of the mental health per diem payment system.
(A) Hospitals
and units covered.
The CHAMPUS mental health per
diem payment system applies to services covered (see paragraph (a)(2)(i)(B)
of this section) that are provided in Medicare prospective payment
system (PPS) exempt psychiatric specialty hospitals and all Medicare
PPS exempt psychiatric specialty units of other hospitals. In addition,
any psychiatric hospital that does not participate in Medicare,
or any other hospital that has a psychiatric specialty unit that
has not been so designated for exemption from the Medicare prospective
payment system because the hospital does not participate in Medicare,
may be designated as a psychiatric hospital or psychiatric specialty
unit for purposes of the CHAMPUS mental health per diem payment
system upon demonstrating that it meets the same criteria (as determined
by the Director, OCHAMPUS) as required for the Medicare exemption.
The CHAMPUS mental health per diem payment system does not apply
to mental health services provided in other hospitals.
(B) Services covered.
Unless
specifically exempted, all covered hospitals’ and units’ inpatient
claims which are classified into a mental health DRG (DRG categories
425-432, but not DRG 424) or an alcohol/drug abuse DRG (DRG categories
433-437) shall be subject to the mental health per diem payment system.
(ii) Hospital-specific
per diems for higher volume hospitals and units.
This paragraph
describes the per diem payment amounts for hospitals and units with
a higher volume of CHAMPUS discharges.
(A)
(1) Per diem
amount.
A hospital-specific per diem
amount shall be calculated for each hospital and unit with a higher
volume of CHAMPUS discharges. The base period per diem amount shall
be equal to the hospital’s average daily charge in the base period.
The base period amount, however, may not exceed the cap described
in paragraph (a)(2)(ii)(B) of this section. The base period amount
shall be updated in accordance with paragraph (a)(2)(iv) of this
section.
(2) In states that have implemented a payment
system in connection with which hospitals in that state have been
exempted from the CHAMPUS DRG-based payment system pursuant to paragraph (a)(1)(ii)(A)
of this section, psychiatric hospitals and units may have per diem
amounts established based on the payment system applicable to such
hospitals and units in the state. The per diem amount, however,
may not exceed the cap amount applicable to other higher volume
hospitals.
(B) Cap--
(1) As it affects
payment for care provided to patients prior to April 6, 1995, the
base period per diem amount may not exceed the 80th percentile of
the average daily charge weighted for all discharges throughout
the United States from all higher volume hospitals.
(2) Applicable
to payments for care provided to patients on or after April 6, 1996,
the base period per diem amount may not exceed the 70th percentile
of the average daily charge weighted for all discharges throughout
the United States from all higher volume hospitals. For this purpose,
base year charges shall be deemed to be charges during the period
of July 1, 1991 to June 30, 1992, adjusted to correspond to base
year (FY 1988) charges by the percentage change in average daily
charges for all higher volume hospitals and units between the period
of July 1, 1991 to June 30, 1992 and the base year.
(C) Review of
per diem.
Any hospital or unit which
believes OCHAMPUS calculated a hospital-specific per diem which
differs by more than $5.00 from that calculated by the hospital
or unit may apply to the Director, OCHAMPUS, or a designee, for
a recalculation. The burden of proof shall be on the hospital.
(iii) Regional
per diems for lower volume hospitals and units.
This paragraph
describes the per diem amounts for hospitals and units with a lower
volume of CHAMPUS discharges.
(A) Per diem amounts.
Hospitals and units with a
lower volume of CHAMPUS patients shall be paid on the basis of a
regional per diem amount, adjusted for area wages and indirect medical
education. Base period regional per diems shall be calculated based
upon all CHAMPUS lower volume hospitals’ claims paid during the
base period. Each regional per diem amount shall be the quotient
of all covered charges divided by all covered days of care, reported
on all CHAMPUS claims from lower volume hospitals in the region
paid during the base period, after having standardized for indirect
medical education costs and area wage indexes and subtracted direct
medical education costs. Regional per diem amounts are adjusted
in accordance with paragraph (a)(2)(iii)(C) of this section. Additional
pass-through payments to lower volume hospitals are made in accordance
with paragraph (a)(2)(iii)(D) of this section. The regions shall
be the same as the Federal census regions.
(B) Review of per diem amount.
Any
hospital that believes the regional per diem amount applicable to
that hospital has been erroneously calculated by OCHAMPUS by more
than $5.00 may submit to the Director, OCHAMPUS, or a designee,
evidence supporting a different regional per diem. The burden of proof
shall be on the hospital.
(C) Adjustments
to regional per diems.
Two
adjustments shall be made to the regional per diem rates.
(1) Area
wage index.
The same area wage indexes
used for the CHAMPUS DRG-based payment system (see paragraph (a)(1)(iii)(E)(2) of
this section) shall be applied to the wage portion of the applicable
regional per diem rate for each day of the admission. The wage portion
shall be the same as that used for the CHAMPUS DRG-based payment
system.
(2) Indirect
medical education.
The
indirect medical education adjustment factors shall be calculated for
teaching hospitals in the same manner as is used in the CHAMPUS
DRG-based payment system (see paragraph (a)(1)(iii)(E)(3) of
this section) and applied to the applicable regional per diem rate
for each day of the admission.
(D) Annual cost pass-through for direct medical
education.
In addition to payments made
to lower volume hospitals under paragraph (a)(2)(iii) of this section,
CHAMPUS shall annually reimburse hospitals for actual direct medical
education costs associated with services to CHAMPUS beneficiaries. This
reimbursement shall be done pursuant to the same procedures as are
applicable to the CHAMPUS DRG-based payment system (see paragraph
(a)(1)(iii)(G) of this section).
(iv) Base
period and update factors.
(A) Base
period.
The base period for calculating
the hospital-specific and regional per diems, as described in paragraphs
(a)(2)(ii) and (a)(2)(iii) of this section, is Federal fiscal year
1988. Base period calculations shall be based on actual claims paid
during the period July 1, 1987 through May 31, 1988, trended forward
to represent the 12-month period ending September 30, 1988 on the
basis of the Medicare inpatient hospital market basket rate.
(B) Alternative
hospital-specific data base.
Upon application of a higher
volume hospital or unit to the Director, OCHAMPUS, or a designee,
the hospital or unit may have its hospital-specific base period calculations
based on claims with a date of discharge (rather than date of payment)
between July 1, 1987 through May 31, 1988 if it has generally experienced
unusual delays in claims payments and if the use of such an alternative
data base would result in a difference in the per diem amount of
at least $5.00. For this purpose, the unusual delays means that
the hospital’s or unit’s average time period between date of discharge
and date of payment is more than two standard deviations longer
than the national average.
(C) Update factors--
(1) The hospital-specific
per diems and the regional per diems calculated for the base period
pursuant to paragraphs (a)(2)(ii) of this section shall remain in
effect for federal fiscal year 1989; there will be no additional
update for fiscal year 1989.
(2) Except as
provided in paragraph (a)(2)(iv)(C)(3) of this section, for subsequent
federal fiscal years, each per diem shall be updated by the Medicare
Inpatient Prospective Payment System update factor.
(3) As an exception
to the update required by paragraph (a)(2)(iv)(C)(2) of
this section, all per diems in effect at the end of fiscal year
1995 shall remain in effect, with no additional update, throughout fiscal
years 1996 and 1997. For fiscal year 1998 and thereafter, the per
diems in effect at the end of fiscal year 1997 will be updated in
accordance with paragraph (a)(2)(iv)(C)(2).
(4) Hospitals
and units with hospital-specific rates will be notified of their
respective rates prior to the beginning of each Federal fiscal year.
New hospitals shall be notified at such time as the hospital rate
is determined. The actual amount of each regional per diem that
will apply in any Federal fiscal year shall be posted to the Agency’s
official Web site at the start of that fiscal year.
(v) Higher volume hospitals.
This paragraph
describes the classification of and other provisions pertinent to
hospitals with a higher volume of CHAMPUS patients.
(A) In general.
Any hospital or unit that had
an annual rate of 25 or more CHAMPUS discharges of CHAMPUS patients
during the period July 1, 1987 through May 31, 1988 shall be considered
a higher volume hospital has 25 or more CHAMPUS discharges, that
hospital shall be considered to be a higher volume hospital during
Federal fiscal year 1989 and all subsequent fiscal years. All other
hospitals and units covered by the CHAMPUS mental health per diem
payment system shall be considered lower volume hospitals.
(B) Hospitals that subsequently become higher
volume hospitals.
In
any Federal fiscal year in which a hospital, including a new hospital
(see paragraph (a)(2)(v)(C) of this section), not previously classified
as a higher volume hospital has 25 or more CHAMPUS discharges, that
hospital shall be considered to be a higher volume hospital during
the next Federal fiscal year and all subsequent fiscal years. The
hospital specific per diem amount shall be calculated in accordance
with the provisions of paragraph (a)(2)(ii) of this section, except
that the base period average daily charge shall be deemed to be
the hospital’s average daily charge in the year in which the hospital
had 25 or more discharges, adjusted by the percentage change in
average daily charges for all higher volume hospitals and units
between the year in which the hospital had 25 or more CHAMPUS discharges
and the base period. The base period amount, however, may not exceed
the cap described in paragraph (a)(2)(ii)(B) of this section.
(C) Special
retrospective payment provision for new hospitals.
For purposes of this paragraph,
a new hospital is a hospital that qualifies for the Medicare exemption
from the rate of increase ceiling applicable to new hospitals which
are PPS-exempt psychiatric hospitals. Any new hospital that becomes
a higher volume hospital, in addition to qualifying prospectively
as a higher volume hospital for purposes of paragraph (a)(2)(v)(B)
of this section, may additionally, upon application to the Director, OCHAMPUS,
receive a retrospective adjustment. The retrospective adjustment
shall be calculated so that the hospital receives the same government
share payments it would have received had it been designated a higher
volume hospital for the federal fiscal year in which it first had
25 or more CHAMPUS discharges and the preceding fiscal year (if
it had any CHAMPUS patients during the preceding fiscal year). Such
new hospitals must agree not to bill CHAMPUS beneficiaries for any
additional costs beyond that determined initially.
(D) Review of classification.
Any
hospital or unit which OCHAMPUS erroneously fails to classify as
a higher volume hospital may apply to the Director, OCHAMPUS, or
a designee, for such a classification. The hospital shall have the
burden of proof.
(vi) Payment
for hospital based professional services.
Lower
volume hospitals and units may not bill separately for hospital
based professional mental health services; payment for those services
is included in the per diems. Higher volume hospitals and units,
whether they billed CHAMPUS separately for hospital based professional
mental health services or included those services in the hospital’s
billing to CHAMPUS, shall continue the practice in effect during
the period July 1, 1987 to May 31, 1988 (or other data base period
used for calculating the hospital’s or unit’s per diem), except
that any such hospital or unit may change its prior practice (and
obtain an appropriate revision in its per diem) by providing to
OCHAMPUS notice in accordance with procedures established by the
Director, OCHAMPUS, or a designee.
(vii) Leave days.
CHAMPUS shall not pay for days
where the patient is absent on leave from the specialty psychiatric
hospital or unit. The hospital must identify these days when claiming reimbursement.
CHAMPUS shall not count a patients’s leave of absence as a discharge
in determining whether a facility should be classified as a higher
volume hospital pursuant to paragraph (a)(2)(v) of this section.
(viii) Exemptions
from the CHAMPUS mental health per diem payment system.
The following providers and
procedures are exempt from the CHAMPUS mental health per diem payment
system.
(A) Non-specialty providers.
Providers
of inpatient care which are not either psychiatric hospitals or psychiatric
specialty units as described in paragraph (a)(2)(i)(A) of this section
are exempt from the CHAMPUS mental health per diem payment system.
Such providers should refer to paragraph (a)(1) of this section
for provisions pertinent to the CHAMPUS DRG-based payment system.
(B) DRG 424.
Admissions
for operating room procedures involving a principal diagnosis of
mental illness (services which group into DRG 424) are exempt from
the per diem payment system. They will be reimbursed pursuant to
the provisions of paragraph (a)(3) of this section.
(C) Non-mental
health services.
Admissions
for non-mental health procedures in specialty psychiatric hospitals
and units are exempt from the per diem payment system. They will
be reimbursed pursuant to the provisions of paragraph (a)(3) of
this section.
(D) Sole
community hospitals (SCHs).
Prior to implementation of
the SCH reimbursement method described in paragraph (a)(7) of this
section, any hospital that has qualified for special treatment under the
Medicare prospective payment system as an SCH and has not given
up that classification is exempt.
(E) Hospitals
outside the U.S.
A hospital is exempt if it
is not located in one of the 50 states, the District of Columbia
or Puerto Rico.
(ix) Payment
for psychiatric and substance use disorder rehabilitation partial
hospitalization services, intensive outpatient psychiatric and substance
use disorder services and opioid treatment services--
(A) Per diem payments.
Psychiatric and substance use
disorder partial hospitalization services, intensive outpatient
psychiatric and substance use disorder services and opioid treatment
services authorized by Sec. 199.4(b)(9), (b)(10), and (b)(11), respectively,
and provided by institutional providers authorized under Sec. 199.6(b)(4)(xii),
(b)(4)(xviii) and (b)(4)(xix), respectively, are reimbursed on the
basis of prospectively determined, all-inclusive per diem rates
pursuant to the provisions of paragraphs (a)(2)(ix)(A)(1) through
(3) of this section, with the exception of hospital-based psychiatric
and substance use disorder and opioid services which are reimbursed
in accordance with provisions of paragraph (a)(6)(ii) of this section
and freestanding opioid treatment programs when reimbursed on a fee-for-service
basis as specified in paragraph (a)(2)(ix)(A)(3)(ii) of this section.
The per diem payment amount must be accepted as payment in full,
subject to the outpatient cost-sharing provisions under Sec. 199.4(f),
for institutional services provided, including board, routine nursing
services, group therapy, ancillary services (e.g., music, dance,
and occupational and other such therapies), psychological testing
and assessment, overhead and any other services for which the customary practice
among similar providers is included in the institutional charges,
except for those services which may be billed separately under paragraph
(a)(2)(ix)(B) of this section. Per diem payment will not be allowed
for leave days during which treatment is not provided.
(1) Partial
hospitalization programs.
For
any full-day partial hospitalization program (minimum of 6 hours),
the maximum per diem payment amount is 40 percent of the average
inpatient per diem amount per case established under the TRICARE
mental health per diem reimbursement system during the fiscal year
for both high and low volume psychiatric hospitals and units [as
defined in paragraph (a)(2) of this section]. Intensive outpatient
services provided in a PHP setting lasting less than 6 hours, with
a minimum of 2 hours, will be paid as provided in paragraph (a)(2)(ix)(A)(2)
of this section. PHP per diem rates will be updated annually by
the Medicare update factor used for their Inpatient Prospective Payment
System.
(2) Intensive
outpatient programs.
For
intensive outpatient programs (IOPs) (minimum of 2 hours), the maximum
per diem amount is 75 percent of the rate for a full-day partial
hospitalization program as established in paragraph (a)(2)(ix)(A)(1)
of this section. IOP per diem rates will be updated annually by the
Medicare update factor used for their Inpatient Prospective Payment
System.
(3) Opioid
treatment programs.
Opioid
treatment programs (OTPs) authorized by Sec. 199.4(b)(11) and provided
by providers authorized under Sec. 199.6(b)(4)(xix) will be reimbursed
based on the variability in the dosage and frequency of the drug
being administered and in related supportive services.
(i) Weekly
all-inclusive per diem rate.
Methadone
OTPs will be reimbursed the lower of the billed charge or the weekly
all-inclusive per diem rate (the weekly national all-inclusive rate
adjusted for locality), 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
will be accepted as payment in full, subject to the outpatient cost-sharing
provisions under Sec. 199.4(f). The methadone per diem rate for
OTPs will be updated annually by the Medicare update factor used
for their Inpatient Prospective Payment System.
(ii) Exceptions
to per diem reimbursement.
When
providing other medications which are more likely to be prescribed
and administered in an office-based opioid treatment setting, but
which are still available for treatment of substance use disorders
in an outpatient treatment program setting, OTPs will 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 Sec. 199.4(f). OTPs’
rates will be updated annually by the Medicare update factor used
for their Inpatient Prospective Payment System.
(iii) Discretionary
authority.
The Director, TRICARE, will
have discretionary authority in establishing the reimbursement methodologies
for new drugs and biologicals that may become available for the treatment
of substance use disorders in OTPs. The type of reimbursement (e.g.,
fee-for-service versus bundled per diem payments) will be dependent
on the variability of the dosage and frequency of the medication
being administered, as well as the support services.
(B) Services
which may be billed separately.
Psychotherapy sessions and
non-mental health related medical services not normally included
in the evaluation and assessment of PHP, IOP or OTPs, provided by
authorized independent professional providers who are not employed
by, or under contract with, PHP, IOP or OTPs for the purposes of
providing clinical patient care are not included in the per diem
rate and may be billed separately. This includes ambulance services
when medically necessary for emergency transport.
(3) Reimbursement
for inpatient services provided by a CAH.
(i) For admissions
on or after December 1, 2009, inpatient services provided by a CAH,
other than services provided in psychiatric and rehabilitation distinct
part units, shall be reimbursed at allowable cost (i.e., 101 percent
of reasonable cost) under procedures, guidelines, and instructions
issued by the Director, DHA, or designee. This does not include
any costs of physicians’ services or other professional services
provided to CAH inpatients. Inpatient services provided in psychiatric
distinct part units would be subject to the TRICARE mental health
payment system. Inpatient services provided in rehabilitation distinct
part units would be subject to billed charges. Upon implementation
of TRICARE’s IRF PPS, inpatient services provided in rehabilitation
distinct part units would be subject to the TRICARE IRF PPS methodology
in paragraph (a)(10) of this section.
(ii) The percentage
amount stated in paragraph (a)(3)(i) of this section is subject
to possible upward adjustment based on a inpatient GTMCPA for TRICARE
network hospitals deemed essential for military readiness and support
during contingency operations under paragraph (a)(8) of this section.
(4) Billed
charges and set rates.
The
allowable cost for authorized care in all hospitals not subject
to the TRICARE DRG-based payment system, the TRICARE mental health
per-diem system, the TRICARE reasonable cost method for CAHs, the
TRICARE reimbursement rules for SCHs, the TRICARE LTCH-PPS, or the
TRICARE IRF PPS shall be determined on the basis of billed charges
or set rates.
(i) The
actual charge for such service made to the general public; or
(ii) The allowed charge
applicable to the policyholders or subscribers of the CHAMPUS fiscal intermediary
for comparable services under comparable circumstances, when extended
to CHAMPUS beneficiaries by consent or agreement; or
(iii) The
allowed charge applicable to the citizens of the community or state
as established by local or state regulatory authority, excluding
title XIX of the Social Security Act or other welfare program, when extended
to CHAMPUS beneficiaries by consent or agreement.
(5) CHAMPUS
discount rates.
The CHAMPUS-determined allowable
cost for authorized care in any hospital may be based on discount
rates established under paragraph (l) of this section.
(6) Hospital
outpatient services.
This paragraph (a)(6) identifies
and clarifies payment methods for certain outpatient services, including
emergency services, provided by hospitals.
(i) Outpatient Services Not Subject to Hospital
Outpatient Prospective Payment System (OPPS).
The following
are payment methods for outpatient services that are either provided
in an OPPS exempt hospital or paid outside the OPPS payment methodology
under existing fee schedules or other prospectively determined rates
in a hospital subject to OPPS reimbursement.
(A) Laboratory
services.
TRICARE payments for hospital
outpatient laboratory services including clinical laboratory services
are based on the allowable charge method under paragraph (j)(1)
of the section. In the case of laboratory services for which the
CMAC rates are established under that paragraph, a payment rate
for the technical component of the laboratory services is provided.
Hospital charges for an outpatient laboratory service are reimbursed
using the CMAC technical component rate.
(B) Rehabilitation
therapy services.
Rehabilitation therapy services
provided on an outpatient basis by hospitals are paid on the same
basis as rehabilitation therapy services covered by the allowable charge
method under paragraph (j)(1) of this section.
(C) Venipuncture.
Routine venipuncture services
provided on an outpatient basis by hospitals are paid on the same
basis as such services covered by the allowable charge method under
paragraph (j)(1) of this section. Routine venipuncture services
provided on an outpatient basis by institutional providers other
than hospitals are also paid on this basis.
(D) Radiology
services.
TRICARE payments for hospital
outpatient radiology services are based on the allowable charge
method under paragraph (j)(1) of the section. In the case of radiology
services for which the CMAC rates are established under that paragraph,
a payment rate for the technical component of the radiology services
is provided. Hospital charges for an outpatient radiology service are
reimbursed using the CMAC technical component rate.
(E) Diagnostic
services.
TRICARE payments for hospital
outpatient diagnostic services are based on the allowable charge
method under paragraph (j)(1) of the section. In the case of diagnostic
services for which the CMAC rates are established under that paragraph,
a payment rate for the technical component of the diagnostic services
is provided. Hospital charges for an outpatient diagnostic service are
reimbursed using the CMAC technical component rate.
(F) Ambulance
services.
Ambulance services provided
on an outpatient basis by hospitals are paid on the same basis as
ambulance services covered by the allowable charge method under
paragraph (j)(1) of this section.
(G) Durable
medical equipment (DME) and supplies.
Durable
medical equipment and supplies provided on an outpatient basis by
hospitals are paid on the same basis as durable medical equipment and
supplies covered by the allowable charge method under paragraph
(j)(1) of this section.
(H) Oxygen
and related supplies.
Oxygen and related supplies
provided on an outpatient basis by hospitals are paid on the same
basis as oxygen and related supplies covered by the allowable charge method
under paragraph (j)(1) of this section.
(I) Drugs
administered other than by oral method.
Drugs
administered other than by oral method provided on an outpatient
basis by hospitals are paid on the same basis as drugs administered
other than by oral method covered by the allowable charge method
under paragraph (j)(1) of this section.
(J) Professional provider services.
TRICARE payments for hospital
outpatient professional provider services rendered in an emergency
room, clinic, or hospital outpatient department, etc., are based
on the allowable charge method under paragraph (j)(1) of the section.
In the case of professional services for which the CMAC rates are
established under that paragraph, a payment rate for the professional component
of the services is provided. Hospital charges for an outpatient
professional service are reimbursed using the CMAC professional
component rate. If the professional outpatient hospital services
are billed by a professional provider group, not by the hospital,
no payment shall be made to the hospital for these services.
(K) Facility
charges.
TRICARE payments for hospital
outpatient facility charges that would include the overhead costs
of providing the outpatient service would be paid as billed. For
the definition of facility charge, see Sec. 199.2(b).
(L) Ambulatory
surgery services.
Hospital
outpatient ambulatory surgery services shall be paid in accordance
with Sec. 199.14(d).
(ii) Outpatient
services subject to OPPS--
(A) General.
Outpatient
services provided in hospitals subject to Medicare OPPS as specified
in 42 CFR 413.65 and 42 CFR 419.20 will be paid in accordance with
the provisions outlined in sections 1833t of the Social Security
Act and its implementing Medicare regulation (42 CFR part 419) subject
to exceptions as authorized by this paragraph (a)(6)(ii).
(B) Under
the above governing provisions, TRICARE will recognize to the extent
practicable, in accordance with 10 U.S.C. 1089(j)(2), Medicare’s
OPPS reimbursement methodology to include specific coding requirements,
ambulatory payment classifications (APCs), nationally established
APC amounts and associated adjustments (e.g., discounting across
geographical regions and outlier calculations).
(C) While
TRICARE intends to remain as true as possible to Medicare’s basic
OPPS methodology, there will be some deviations required to accommodate
TRICARE’s unique benefit structure and beneficiary population as
authorized under the provisions of 10 U.S.C. 1079(j)(2).
(D) TRICARE
is also authorized to deviate from Medicare’s basic OPPS methodology
to establish special reimbursement methods, amounts, and procedures
to encourage use of high-value products and discourage use of low-value
products with respect to pharmaceutical agents provided as part
of medical services from authorized providers. Therefore, drugs
administered other than oral method provided on an outpatient basis
by hospitals are paid on the same basis as drugs administered other than
oral method covered by the allowable charge method under paragraph
(j)(1) of this section.
(E) Temporary transitional payment adjustments
(TTPAs).
Temporary transitional payment adjustments
will be in place for all hospitals, both network and non-network,
in order to buffer the initial decline in payments upon implementation
of TRICARE’s OPPS.
(1) For
network hospitals.
The
temporary transitional payment adjustments will cover a four-year period.
The four-year transition will set higher payment percentages for
the ten Ambulatory Payment Classification (APC) codes 604-609 and
613-616, with reductions in each of the transition years. For non-network
hospitals, the adjustments will cover a three year period, with
reductions in each of the transition years. For network hospitals,
under the TTPAs, the APC payment level for the five clinic visit APCs
would be set at 175 percent of the Medicare APC level, while the
five ER visit APCs would be increased by 200 percent in the first
year of OPPS implementation. In the second year, the APC payment levels
would be set at 150 percent of the Medicare APC level for clinic
visits and 175 percent for ER APCs. In the third year, the APC visit
amounts would be set at 130 percent of the Medicare APC level for clinic
visits and 150 percent for ER APCs. In the fourth year, the APC
visit amounts would be set at 115 percent of the Medicare APC level
for clinic visits and 130 percent for ER APCs. In the fifth year,
the TRICARE and Medicare payment levels for the 10 APC visit codes
would be identical.
(2) For
non-network hospitals.
Under the TTPAs, the APC payment
level for the five clinic and ER visit APCs would be set at 140
percent of the Medicare APC level in the first year of OPPS implementation.
In the second year, the APC payment levels would be set at 125 percent
of the Medicare APC level for clinic and ER visits. In the third
year, the APC visit amounts would be set at 110 percent of the Medicare APC
level for clinic and ER visits. In the fourth year, the TRICARE
and Medicare payment levels for the 10 APC visit codes would be
identical.
(3) An additional
temporary military contingency payment adjustment (TMCPA) will also
be available at the discretion of the Director, Defense Health Agency
(DHA), or a designee, at any time after implementation to adopt,
modify and/or extend temporary adjustments to OPPS payments for TRICARE
network hospitals deemed essential for military readiness and deployment
in time of contingency operations. Any TMCPAs to OPPS payments shall
be made only on the basis of a determination that it is impracticable
to support military readiness or contingency operations by making
OPPS payments in accordance with the same reimbursement rules implemented
by Medicare. The criteria for adopting, modifying, and/or extending
deviations and/or adjustments to OPPS payments shall be issued through
TRICARE policies, instructions, procedures and guidelines as deemed appropriate
by the Director, DHA, or a designee. TMCPAs may also be extended
to non-network hospitals on a case-by-case basis for specific procedures
where it is determined that the procedures cannot be obtained timely
enough from a network hospital. For such case-by-case extensions, “Temporary”
might be less than three years at the discretion of the DHA Director,
or designee.
(iii) Outpatient
Services Subject to CAH Reasonable Cost Method.
For
services on or after December 1, 2009, outpatient services provided
by a CAH, shall be reimbursed at 101 percent of reasonable cost. This
does not include any costs of physician services or other professional
services provided to CAH outpatients.
(iv) CAH Ambulance
Services.
Effective for services provided
on or after December 1, 2009, payment for ambulance services furnished
by a CAH or an entity that is owned and operated by a CAH is the reasonable
costs of the CAH or the entity in furnishing those services, but
only if the CAH or the entity is the only provider or supplier of
ambulance services located within a 35-mile drive of the CAH or
the entity as specified under 42 CFR part 413.70(b)(5)(ii).
(7) Reimbursement for inpatient services provided
by an SCH.
(i) In
accordance with 10 U.S.C. 1079(j)(2), TRICARE payment methods for
institutional care shall be determined, to the extent practicable,
in accordance with the same reimbursement rules as those that apply
to payments to providers of services of the same type under Medicare.
TRICARE’s SCH reimbursements approximate Medicare’s for SCHs. Inpatient
services provided by an SCH, other than services provided in psychiatric
and rehabilitation distinct part units, shall be reimbursed through
a two-step process.
(ii) The
first step referred to in paragraph (a)(7)(i) of this section will
be to calculate the TRICARE allowable cost by multiplying the applicable
TRICARE percentage by the billed charge amount on each institutional
inpatient claim. The applicable TRICARE percentage is the greater
of: the SCH’s most recently available cost-to-charge ratio (CCR)
from the Centers for Medicare and Medicaid Services’ (CMS’) inpatient
Provider Specific File (after the ratio has been converted to a
percentage), or the TRICARE allowed-to-billed ratio, defined as
the ratio of the TRICARE allowed amounts (including discounts) to
the amount of billed charges for TRICARE inpatient admissions at
the SCH in FY 2012 (after it has been converted to a percentage).
The TRICARE allowed-to-billed ratio in FY 2012 shall be reduced
as follows (after the ratio has been converted to a percentage:
(A) In the first year
of implementation, 10 percentage points for network SCHs and 15
percentage points for non-network SCHs.
(B) In the second year
of implementation, 20 percentage points for network SCHs and 30
percentage points for non-network SCHs.
(C) In
the third year of implementation, 30 percentage points for network
SCHs and 45 percentage points for non-network SCHs.
(D) In the fourth year
of implementation, 40 percentage points for network SCHs and 60
percentage points for non-network SCHs.
(E) In the fifth year
of implementation, 50 percentage points for network SCHs and 75
percentage points for non-network SCHs.
(F) In the sixth year
of implementation, 60 percentage points for network SCHs and 90
percentage points for non-network SCHs.
(G) In the seventh
year of implementation, 70 percentage points for network SCHs and
100 percentage points for non-network SCHs.
(H) In the eighth year
of implementation, 80 percentage points for network SCHs and 100 percentage
points for non-network SCHs.
(I) In the ninth year
of implementation, 90 percentage points for network SCHs and 100
percentage points for non-network SCHs.
(J) In the tenth year
of implementation, 100 percentage points for network SCHs and 100 percentage
points for non-network SCHs.
(iii) The
second step referred to in paragraph (a)(7)(i) of this section is
a year-end adjustment. The year-end adjustment will compare the
aggregate allowable costs over a 12-month period under paragraph
(a)(7)(ii) of this section to the aggregate amount that would have
been allowed for the same care using the TRICARE DRG-method (under
paragraph (a)(1) of this section). In the event that the DRG method
amount is the greater, the year-end adjustment will be the amount
by which it exceeds the aggregate allowable costs. In addition,
the year-end adjustment also may incorporate a possible upward adjustment
for inpatient services based on a GTMCPA for TRICARE network hospitals
under paragraph (a)(8) of this section.
(iv) At the end of
an SCH’s transition period, when the SCH reaches its Medicare CCR,
a special allowable cost shall be applicable for discharges that
group to inpatient nursery and labor/delivery DRGs. For these discharges,
instead of using the percentage of the SCH’s Medicare cost-to-charge
ratio (as described in paragraph (a)(7)(ii) of this section), the
percentage will be 130 percent of the Medicare CCR.
(v) The SCH reimbursement
provisions of paragraphs (a)(7)(i) through (iv) of this section
do not apply to any costs of physician services or other professional
services provided to SCH inpatients (which are subject to individual
provider payment provisions of this section), inpatient services
provided in psychiatric distinct part units (which are subject to
the CHAMPUS mental health per-diem payment system), or inpatient
services provided in rehabilitation distinct part units (which are
reimbursed on the basis of billed charges or set rates).
(vi) The SCH payment
system under this paragraph (a)(7) applies to hospitals classified
by CMS as Essential Access Community Hospitals (EACHs).
(vii) The SCH payment
system under this paragraph (a)(7) does not apply to hospitals in
States that are paid by Medicare and TRICARE under a cost containment
waiver.
(8) General
temporary military contingency payment adjustment for SCHs and CAHs.
(i) Payments under
paragraph (a) of this section for inpatient services provided by
SCHs and CAHs may be supplemented by a GTMCPA. This is a year-end
discretionary, temporary adjustment that the TMA Director may approve
based on all the following criteria:
(A) The
hospital serves a disproportionate share of ADSMs and ADDs;
(B) The hospital is
a TRICARE network hospital;
(C) The
hospital’s actual costs for inpatient services exceed TRICARE payments
or other extraordinary economic circumstance exists; and,
(D) Without the GTMCPA,
DoD’s ability to meet military contingency mission requirements
will be significantly compromised.
(ii) Policy and procedural
instructions implementing the GTMCPA will be issued as deemed appropriate
by the Director, TMA, or a designee. As with other discretionary
authority under this Part, a decision to allow or deny a GTMCPA
to a hospital is not subject to the appeal and hearing procedures
of Sec. 199.10.
(9) Reimbursement for inpatient services provided
by a Long Term Care Hospital (LTCH).
(i) In accordance with
10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional
care shall be determined, to the extent practicable, in accordance
with the same reimbursement rules as those that apply to payments to
providers of services of the same type under Medicare. The TRICARE-LTC-DRG
reimbursement methodology shall be in accordance with Medicare's
Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs)
as found in regulation at 42 CFR part 412, subpart O. Inpatient
services provided in hospitals subject to the Medicare LTCH Prospective
Payment System (PPS) and classified as LTCHs and also as specified
in 42 CFR parts 412 and 413 will be paid in accordance with the
provisions outlined in sections 1886(d)(1)(B)(IV) and 1886(m)(6)
of the Social Security Act and its implementing Medicare regulation
(42 CFR parts 412, 413, and 170) to the extent practicable. Under
the above governing provisions, TRICARE will recognize, to the extent
practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's
LTCH PPS methodology to include the relative weights, inpatient
operating and capital costs of furnishing covered services (including
routine and ancillary services), interrupted stay policy, short-stay
and high cost outlier payments, site-neutral payments, wage adjustments
for variations in labor-related costs across geographical regions,
cost-of-living adjustments, payment adjustments associated with
the quality reporting program, method of payment for preadmission services,
and updates to the system. TRICARE will not be adopting Medicare's
25 percent threshold payment adjustment.
Note to paragraph (a)(9)(i):
LTCH admissions that are in response to the COVID-19 declared PHE
and occur during the COVID-19 PHE period will be reimbursed the
LTCH PPS standard Federal rate.
(ii) Implementation
of the TRICARE LTCH PPS will include a gradual transition to full
implementation of the Medicare LTCH PPS rates as follows:
(A) For
the first 12 months following implementation, the TRICARE LTCH PPS
allowable cost will be 135 percent of Medicare LTCH PPS amounts.
(B) For
the second 12 months of implementation, TRICARE LTCH PPS allowable
cost will be 115 percent of the Medicare LTCH PPS amounts.
(C) For
the third 12 months of implementation, and subsequent years, TRICARE
LTCH PPS allowable cost will be 100 percent of the Medicare LTCH
PPS amounts.
(iii) Exemption.
The TRICARE LTCH PPS methodology
under this paragraph does not apply to hospitals in States that
are reimbursed by Medicare and TRICARE under a waiver that exempts
them from Medicare's inpatient prospective payment system or the
TRICARE DRG-based payment system, to Children's Hospitals, or to
Neoplastic Disease Care Hospitals, respectively.
(10) Reimbursement
for inpatient services provided by Inpatient Rehabilitation Facilities
(IRF).
(i) In accordance
with 10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional
care shall be determined to the extent practicable, in accordance
with the same reimbursement rules as those that apply to payments
to providers of services of the same type under Medicare. The TRICARE
IRF PPS reimbursement methodology shall be in accordance with Medicare's
IRF PPS as found in 42 CFR part 412. Inpatient services provided
in IRFs subject to the Medicare IRF prospective payment system (PPS) and
classified as IRFs and also as specified in 42 CFR 412.604 will
be paid in accordance with the provisions outlined in section 1886(j)
of the Social Security Act and its implementing Medicare regulation
found at 42 CFR part 412, subpart P to the extent practicable. Under
the above governing provisions, TRICARE will recognize, to the extent
practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's
IRF PPS methodology to include the relative weights, payment rates
covering all operating and capitals costs of furnishing rehabilitative
services adjusted for wage variations in labor-related costs across
geographical regions, adjustments for the 60 percent compliance
threshold, teaching adjustment, rural adjustment, high-cost outlier
payments, low income payment adjustment, payment adjustments associated
with the quality reporting program, and updates to the system.
(ii) Implementation
of the TRICARE IRF PPS will include a gradual transition to full
implementation of the Medicare IRF PPS rates as follows:
(A) For
the first 12 months of implementation, the TRICARE IRF PPS allowable
cost will be 135 percent of Medicare IRF PPS amounts.
(B) For
the second 12 months of implementation, the TRICARE IRF PPS allowable
cost will be 115 percent of the Medicare IRF PPS amounts.
(C) For
the third 12 months of implementation, and subsequent years, the
TRICARE IRF PPS allowable cost will be 100 percent of the Medicare
IRF PPS amounts.
(iii) The IRF PPS allowable
cost in paragraph (a)(10)(ii) of this section may be supplemented
by an inpatient general temporary military contingency payment adjustment
(GTMCPA) for TRICARE authorized IRFs.
(A) This
is a year-end discretionary, temporary adjustment that the Director,
DHA (or designee) may approve based on the following criteria:
(1) The IRF serves a disproportionate share
of ADSMs and ADDs;
(2) The IRF is
a TRICARE network hospital;
(3) The IRF's
actual costs for inpatient services exceed TRICARE payments or other
extraordinary economic circumstance exists; and
(4) Without the GTMCPA, DoD's ability to meet
military contingency mission requirements will be significantly
compromised.
(B) Policy and procedural
instructions implementing the GTMCPA will be issued as deemed appropriate
by the Director, DHA (or designee). As with other discretionary
authority under this part, a decision to allow or deny a GTMCPA
to an IRF is not subject to the appeal and hearing procedures of Sec.
199.10.
(iv) Exemption.
The TRICARE IRF PPS methodology
under this paragraph does not apply to hospitals in States that
are reimbursed by Medicare and TRICARE under a waiver that exempts
them from Medicare's inpatient prospective payment system or the
TRICARE DRG-based payment system, to Children's hospitals, or to
VA hospitals, respectively.
(b)
Skilled
nursing facilities (SNFs).
(1) Use
of Medicare prospective payment system and rates.
TRICARE payments to SNFs are
determined using the same methods and rates used under the Medicare
prospective payment system for SNFs under 42 CFR part 413, subpart
J, except for children under age ten. SNFs receive a per diem payment
of a predetermined Federal payment rate appropriate for the case
based on patient classification (using the RUG classification system),
urban or rural location of the facility, and area wage index.
(2) Payment
in full.
The SNF payment rates represent
payment in full (subject to any applicable beneficiary cost shares)
for all costs (routine, ancillary, and capital-related) associated
with furnishing inpatient SNF services to TRICARE beneficiaries
other than costs associated with operating approved educational
activities.
(3) Education costs.
Costs for approved educational
activities shall be subject to separate payment under procedures
established by the Director, TRICARE Management Activity. Such procedures
shall be similar to procedures for payments for direct medical education
costs of hospitals under paragraph (a)(1)(iii)(G)(2) of
this section.
(4) Resident
assessment data.
SNFs are required to submit
the same resident assessment data as is required under the Medicare
program. (The residential assessment is addressed in the Medicare regulations
at 42 CFR 483.20.) SNFs must submit assessments according to an
assessment schedule. This schedule must include performance of patient
assessments on the 5th, 14th, and 30th days of SNF care and at each
successive 30 day interval of SNF admissions that are longer than
30 days. It must also include such other assessments that are necessary
to account for changes in patient care needs. TRICARE pays a default
rate for the days of a patient’s care for which the SNF has failed
to comply with the assessment schedule.
(c) Reimbursement for Other Than Hospitals and SNFs.
The Director, OCHAMPUS, or
a designee, shall establish such other methods of determining allowable
cost or charge reimbursement for those institutions, other than
hospitals and SNFs, as may be required.
(d)
Payment
of institutional facility costs for ambulatory surgery.
(1) In general.
CHAMPUS pays institutional
facility costs for ambulatory surgery on the basis of prospectively
determined amounts, as provided in this paragraph, with the exception
of ambulatory surgery procedures performed in hospital outpatient
departments or in CAHs, which are to be reimbursed in accordance
with the provisions of paragraph (a)(6)(ii) or (a)(6)(iii) respectively,
of this section. This payment method is similar to that used by
the Medicare program for ambulatory surgery. This paragraph applies
to payment for freestanding ambulatory surgical centers. It does
not apply to professional services. A list of ambulatory surgery
procedures subject to the payment method set forth in the paragraph
shall be published periodically by the Director, TRICARE Management
Activity (TMA). Payment to freestanding ambulatory surgery centers
is limited to these procedures.
(2) Payment in full.
The payment provided for under
this paragraph is the payment in full for services covered by this
paragraph. Facilities may not charge beneficiaries for amounts,
if any, in excess of the payment amounts determined pursuant to
this paragraph.
(3) Calculation
of standard payment rates.
Standard payment rates are
calculated for groups of procedures under the following steps:
(i) Step
1: Calculate a median standardized cost for each procedure.
For each ambulatory surgery procedure,
a median standardized cost will be calculated on the basis of all
ambulatory surgery charges nationally under CHAMPUS during a recent
one-year base period. The steps in this calculation include standardizing
for local labor costs by reference to the same wage index and labor/non-labor-related cost
ratio as applies to the facility under Medicare, applying a cost-to-charge
ratio, calculating a median cost for each procedure, and updating
to the year for which the payment rates will be in effect by the Consumer
Price Index-Urban. In applying a cost-to-charge ratio, the Medicare
cost-to-charge ratio for freestanding ambulatory surgery centers
(FASCs) will be used for all charges from FASCs, and the Medicare
cost-to-charge ratio for hospital outpatient settings will be used
for all charges from hospitals.
(ii) Step 2: Grouping
procedures.
Procedures will then be placed
into one of ten groups by their median per procedure cost, starting
with $0 to $299 for group 1 and ending with $1000 to $1299 for group
9 and $1300 and above for group 10, with groups 2 through 8 set
on the basis of $100 fixed intervals.
(iii) Step
3: Adjustments to groups.
The Director, OCHAMPUS may
make adjustments to the groupings resulting from step 2 to account
for any ambulatory surgery procedures for which there were insufficient
data to allow a grouping or to correct for any anomalies resulting
from data or statistical factors or other special factors that fairness
requires be specially recognized. In making any such adjustments,
the Director may take into consideration the placing of particular
procedures in the ambulatory surgery groups under Medicare.
(iv) Step 4: Standard
payment amount per group.
The
standard payment amount per group will be the volume weighted median
per procedure cost for the procedures in that group. For cases in
which the standard payment amount per group exceeds the CHAMPUS-determined
inpatient allowable amount, the Director, TSO or his designee, may
make adjustments.
(v) Step
5: Actual payments.
Actual
payment for a procedure will be the standard payment amount for
the group which covers that procedure, adjusted for local labor
costs by reference to the same labor/non-labor- related cost ratio
and hospital wage index as used for ambulatory surgery centers by Medicare.
(4) Multiple procedures.
In
cases in which authorized multiple procedures are performed during
the same operative session, payment shall be based on 100 percent
of the payment amount for the procedure with the highest ambulatory
surgery payment amount, plus, for each other procedure performed
during the session, 50 percent of its payment amount.
(5) Annual updates.
The
standard payment amounts will be updated annually by the same update factor
as is used in the Medicare annual updates for ambulatory surgery
center payments.
(6) Recalculation
of rates.
The Director, OCHAMPUS may
periodically recalculate standard payment rates for ambulatory surgery
using the steps set forth in paragraph (d)(3) of this section.
(e)
Reimbursement
of Birthing Centers.
(1) Reimbursement
for maternity care and childbirth services furnished by an authorized
birthing center shall be limited to the lower of the CHAMPUS established
all-inclusive rate or the center’s most-favored all-inclusive rate.
The all-inclusive rate shall include the following to the extent
that they are usually associated with a normal pregnancy and childbirth:
Laboratory studies, prenatal management, labor management, delivery,
post-partum management, newborn care, birth assistant, certified
nurse-midwife professional services, physician professional services,
and the use of the facility.
(2) The CHAMPUS established
all-inclusive rate is equal to the sum of the CHAMPUS area prevailing professional
charge for total obstetrical care for a normal pregnancy and delivery
and the sum of the average CHAMPUS allowable institutional charges
for supplies, laboratory, and delivery room for a hospital inpatient
normal delivery. The CHAMPUS established all-inclusive rate areas
will coincide with those established for prevailing professional
charges and will be updated concurrently with the CHAMPUS area prevailing
professional charge database.
(3) Extraordinary
maternity care services, when otherwise authorized, may be reimbursed
at the lesser of the billed charge or the CHAMPUS allowable charge.
(4) Reimbursement for
an incomplete course of care will be limited to claims for professional
services and tests where the beneficiary has been screened but rejected
for admission into the birthing center program, or where the woman
has been admitted but is discharged from the birthing center program prior
to delivery, adjudicated as individual professional services and
items.
(5) The beneficiary’s
share of the total reimbursement to a birthing center is limited
to the cost-share amount plus the amount billed for non-covered
services and supplies.
(f)
Reimbursement
of Residential Treatment Centers.
The
CHAMPUS rate is the per diem rate that CHAMPUS will authorize for
all mental health services rendered to a patient and the patient’s family
as part of the total treatment plan submitted by a CHAMPUS-approved
RTC, and approved by the Director, OCHAMPUS, or designee.
(1) The all-inclusive
per diem rate for RTCs operating or participating in CHAMPUS during
the base period of July 1, 1987, through June 30, 1988, will be
the lowest of the following conditions:
(i) The CHAMPUS rate
paid to the RTC for all-inclusive services as of June 30, 1988,
adjusted by the Consumer Price Index--Urban (CPI-U) for medical
care as determined applicable by the Director, OCHAMPUS, or designee;
or
(ii) The per diem rate
accepted by the RTC from any other agency or organization (public
or private) that is high enough to cover one-third of the total
patient days during the 12-month period ending June 30, 1988, adjusted
by the CPI-U; or
Note: The per diem rate accepted
by the RTC from any other agency or organization includes the rates accepted
from entities such as Government contractors in CHAMPUS demonstration
projects.
(iii) An
OCHAMPUS determined capped per diem amount not to exceed the 80th
percentile of all established CHAMPUS RTC rates nationally, weighted
by total CHAMPUS days provided at each rate during the base period
discussed in paragraph (f)(1) of this section.
(2) The all-inclusive
per diem rates for RTCs which began operation after June 30, 1988,
or began operation before July 1, 1988, but had less than 6 months
of operation by June 30, 1988, will be calculated based on the lower
of the per diem rate accepted by the RTC that is high enough to
cover one-third of the total patient days during its first 6 to
12 consecutive months of operation, or the CHAMPUS determined capped
amount. Rates for RTCs beginning operation prior to July 1, 1988,
will be adjusted by an appropriate CPI-U inflation factor for the
period ending June 30, 1988. A period of less than 12 months will
be used only when the RTC has been in operation for less than 12
months. Once a full 12 months is available, the rate will be recalculated.
(3) For
care on or after April 6, 1995, the per diem amount may not exceed
a cap of the 70th percentile of all established Federal fiscal year
1994 RTC rates nationally, weighted by total CHAMPUS days provided
at each rate during the first half of Federal fiscal year 1994,
and updated to FY95. For Federal fiscal years 1996 and 1997, the
cap shall remain unchanged. For Federal fiscal years after fiscal year
1997, the cap shall be adjusted by the Medicare update factor for
hospitals and units exempt from the Medicare prospective payment
system.
(4) All
educational costs, whether they include routine education or special
education costs, are excluded from reimbursement except when appropriate
education is not available from, or not payable by, a cognizant
public entity.
(i) The
RTC shall exclude educational costs from its daily costs.
(ii) The RTC’s accounting
system must be adequate to assure CHAMPUS is not billed for educational costs.
(iii)
The
RTC may request payment of educational costs on an individual case
basis from the Director, OCHAMPUS, or designee, when appropriate
education is not available from, or not payable by, a cognizant
public entity. To qualify for reimbursement of educational costs
in individual cases, the RTC shall comply with the application procedures
established by the Director, OCHAMPUS, or designee, including, but
not limited to, the following:
(A) As
part of its admission procedures, the RTC must counsel and assist
the beneficiary and the beneficiary’s family in the necessary procedures
for assuring their rights to a free and appropriate public education.
(B) The RTC must document
any reasons why an individual beneficiary cannot attend public educational
facilities and, in such a case, why alternative educational arrangements
have not been provided by the cognizant public entity.
(C) If
reimbursement of educational costs is approved for an individual
beneficiary by the Director, OCHAMPUS, or designee, such educational
costs shall be shown separately from the RTC’s daily costs on the
CHAMPUS claim. The amount paid shall not exceed the RTC’s most-favorable
rate to any other patient, agency, or organization for special or
general educational services whichever is appropriate.
(D) If the RTC fails
to request CHAMPUS approval of the educational costs on an individual
case, the RTC agrees not to bill the beneficiary or the beneficiary’s
family for any amounts disallowed by CHAMPUS. Requests for payment
of educational costs must be referred to the Director, OCHAMPUS,
or designee for review and a determination of the applicability
of CHAMPUS benefits.
(5) Subject to the
applicable RTC cap, adjustments to the RTC rates may be made annually.
(i) For Federal fiscal
years through 1995, the adjustment shall be based on the Consumer
Price Index-Urban (CPI-U) for medical care as determined applicable
by the Director, OCHAMPUS.
(ii) For
purposes of rates for Federal fiscal years 1996 and 1997:
(A) For
any RTC whose 1995 rate was at or above the thirtieth percentile
of all established Federal fiscal year 1995 RTC rates normally,
weighted by total CHAMPUS days provided at each rate during the first
half of Federal fiscal year 1994, that rate shall remain in effect,
with no additional update, throughout fiscal years 1996 and 1997;
and
(B) For
any RTC whose 1995 rate was below the 30th percentile level determined
under paragraph (f)(5)(ii)(A) of this section, the rate shall be
adjusted by the lesser of: the CPI-U for medical care, or the amount
that brings the rate up to that 30th percentile level.
(iii) For subsequent
Federal fiscal years after fiscal year 1997, RTC rates shall be
updated by the Medicare update factor for hospitals and units exempt
from the Medicare prospective payment system.
(6) For care provided
on or after July 1, 1995, CHAMPUS will not pay for days in which
the patient is absent on leave from the RTC. The RTC must identify
these days when claiming reimbursement.
(g)
Reimbursement
of hospice programs.
Hospice
care will be reimbursed at one of four predetermined national CHAMPUS
rates based on the type and intensity of services furnished to the beneficiary.
A single rate is applicable for each day of care except for continuous
home care where payment is based on the number of hours of care
furnished during a 24-hour period. These rates will be adjusted
for regional differences in wages using wage indices for hospice
care.
(1) National
hospice rates.
CHAMPUS will use the national
hospice rates for reimbursement of each of the following levels
of care provided by or under arrangement with a CHAMPUS approved
hospice program:
(i) Routine
home care.
The hospice will be paid the
routine home care rate for each day the patient is at home, under
the care of the hospice, and not receiving continuous home care.
This rate is paid without regard to the volume or intensity of routine
home care services provided on any given day.
(ii) Continuous home
care.
The hospice will be paid the
continuous home care rate when continuous home care is provided.
The continuous home care rate is divided by 24 hours in order to
arrive at an hourly rate.
(A) A
minimum of 8 hours of care must be provided within a 24-hour day
starting and ending at midnight.
(B) More than half
of the total actual hours being billed for each 24-hour period must
be provided by either a registered or licensed practical nurse.
(C) Homemaker
and home health aide services may be provided to supplement the
nursing care to enable the beneficiary to remain at home.
(D) For every hour
or part of an hour of continuous care furnished, the hourly rate
will be reimbursed to the hospice up to 24 hours a day.
(iii) Inpatient
respite care.
The hospice will be paid at
the inpatient respite care rate for each day on which the beneficiary
is in an approved inpatient facility and is receiving respite care.
(A) Payment for respite
care may be made for a maximum of 5 days at a time, including the
date of admission but not counting the date of discharge. The necessity
and frequency of respite care will be determined by the hospice
interdisciplinary group with input from the patient’s attending
physician and the hospice’s medical director.
(B) Payment for the
sixth and any subsequent days is to be made at the routine home
care rate.
(iv) General
inpatient care.
Payment
at the inpatient rate will be made when general inpatient care is provided
for pain control or acute or chronic symptom management which cannot
be managed in other settings. None of the other fixed payment rates
(i.e., routine home care) will be applicable for a day on which
the patient receives general inpatient care except on the date of
discharge.
(v) Date
of discharge.
For the day of discharge from
an inpatient unit, the appropriate home care rate is to be paid
unless the patient dies as an inpatient. When the patient is discharged
deceased, the inpatient rate (general or respite) is to be paid
for the discharge date.
(2) Use of
Medicare rates.
CHAMPUS
will use the most current Medicare rates to reimburse hospice programs
for services provided to CHAMPUS beneficiaries. It is CHAMPUS’ intent
to adopt changes in the Medicare reimbursement methodology as they
occur; e.g., Medicare’s adoption of an updated, more accurate wage
index.
(3) Physician
reimbursement.
Payment is dependent on the
physician’s relationship with both the beneficiary and the hospice
program.
(i) Physicians employed by, or contracted with,
the hospice.
(A) Administrative
and supervisory activities (i.e., establishment, review and updating
of plans of care, supervising care and services, and establishing
governing policies) are included in the adjusted national payment
rate.
(B) Direct
patient care services are paid in addition to the adjusted national
payment rate.
(1) Physician services will be reimbursed
an amount equivalent to 100 percent of the CHAMPUS’ allowable charge;
i.e., there will be no cost-sharing and/or deductibles for hospice
physician services.
(2) Physician payments will be counted toward
the hospice cap limitation.
(ii) Independent
attending physician.
Patient care services rendered
by an independent attending physician (a physician who is not considered
employed by or under contract with the hospice) are not part of
the hospice benefit.
(A) Attending
physician may bill in his/her own right.
(B) Services will be
subject to the appropriate allowable charge methodology.
(C) Reimbursement
is not counted toward the hospice cap limitation.
(D) Services provided
by an independent attending physician must be coordinated with any
direct care services provided by hospice physicians.
(E) The hospice must
notify the CHAMPUS contractor of the name of the physician whenever
the attending physician is not a hospice employee.
(iii) Voluntary
physician services.
No
payment will be allowed for physician services furnished voluntarily
(both physicians employed by, and under contract with, the hospice
and independent attending physicians). Physicians may not discriminate
against CHAMPUS beneficiaries; e.g., designate all services rendered
to non-CHAMPUS patients as volunteer and at the same time bill for
CHAMPUS patients.
(4) Unrelated
medical treatment.
Any
covered CHAMPUS services not related to the treatment of the terminal
condition for which hospice care was elected will be paid in accordance
with standard reimbursement methodologies; i.e., payment for these
services will be subject to standard deductible and cost-sharing
provisions under the CHAMPUS. A determination must be made whether
or not services provided are related to the individual’s terminal
illness. Many illnesses may occur when an individual is terminally
ill which are brought on by the underlying condition of the ill
patient. For example, it is not unusual for a terminally ill patient
to develop pneumonia or some other illness as a result of his or
her weakened condition. Similarly, the setting of bones after fractures
occur in a bone cancer patient would be treatment of a related condition.
Thus, if the treatment or control of an upper respiratory tract
infection is due to the weakened state of the terminal patient,
it will be considered a related condition, and as such, will be
included in the hospice daily rates.
(5) Cap amount.
Each
CHAMPUS-approved hospice program will be subject to a cap on aggregate CHAMPUS
payments from November 1 through October 31 of each year, hereafter
known as “the cap period.”
(i) The cap amount
will be adjusted annually by the percent of increase or decrease
in the medical expenditure category of the Consumer Price Index
for all urban consumers (CPI-U).
(ii) The aggregate
cap amount (i.e., the statutory cap amount times the number of CHAMPUS beneficiaries
electing hospice care during the cap period) will be compared with
total actual CHAMPUS payments made during the same cap period.
(iii) Payments
in excess of the cap amount must be refunded by the hospice program.
The adjusted cap amount will be obtained from the Health Care Financing
Administration (HCFA) prior to the end of each cap period.
(iv) Calculation of
the cap amount for a hospice which has not participated in the program
for an entire cap year (November 1 through October 31) will be based
on a period of at least 12 months but no more than 23 months. For
example, the first cap period for a hospice entering the program
on October 1, 1994, would run from October 1, 1994 through October
31, 1995. Similarly, the first cap period for hospice providers
entering the program after November 1, 1993 but before November
1, 1994 would end October 31, 1995.
(6) Inpatient
limitation.
During the 12-month period
beginning November 1 of each year and ending October 31, the aggregate
number of inpatient days, both for general inpatient care and respite care,
may not exceed 20 percent of the aggregate total number of days
of hospice care provided to all CHAMPUS beneficiaries during the
same period.
(i) If
the number of days of inpatient care furnished to CHAMPUS beneficiaries
exceeds 20 percent of the total days of hospice care to CHAMPUS
beneficiaries, the total payment for inpatient care is determined
follows:
(A) Calculate the ratio
of the maximum number of allowable inpatient days of the actual
number of inpatient care days furnished by the hospice to Medicare
patients.
(B) Multiply
this ratio by the total reimbursement for inpatient care made by
the CHAMPUS contractor.
(C) Multiply
the number of actual inpatient days in excess of the limitation
by the routine home care rate.
(D) Add the amounts
calculated in paragraphs (g)(6)(i)(B) and (C) of this section.
(ii) Compare the total
payment for inpatient care calculated in paragraph (g)(6)(i)(D)
of this section to actual payments made to the hospice for inpatient
care during the cap period.
(iii) Payments
in excess of the inpatient limitation must be refunded by the hospice
program.
(7) Hospice
reporting responsibilities.
The hospice is responsible
for reporting the following data within 30 days after the end of
the cap period:
(i) Total
reimbursement received and receivable for services furnished CHAMPUS
beneficiaries during the cap period, including physician’s services
not of an administrative or general supervisory nature.
(ii) Total reimbursement
received and receivable for general inpatient care and inpatient
respite care furnished to CHAMPUS beneficiaries during the cap period.
(iii) Total number
of inpatient days furnished to CHAMPUS hospice patients (both general
inpatient and inpatient respite days) during the cap period.
(iv) Total number of
CHAMPUS hospice days (both inpatient and home care) during the cap
period.
(v) Total
number of beneficiaries electing hospice care. The following rules
must be adhered to by the hospice in determining the number of CHAMPUS
beneficiaries who have elected hospice care during the period:
(A) The beneficiary
must not have been counted previously in either another hospice’s
cap or another reporting year.
(B) The beneficiary
must file an initial election statement during the period beginning
September 28 of the previous cap year through September 27 of the
current cap year in order to be counted as an electing CHAMPUS beneficiary
during the current cap year.
(C) Once
a beneficiary has been included in the calculation of a hospice
cap amount, he or she may not be included in the cap for that hospice
again, even if the number of covered days in a subsequent reporting
period exceeds that of the period where the beneficiary was included.
(D) There will be proportional
application of the cap amount when a beneficiary elects to receive hospice
benefits from two or more different CHAMPUS-certified hospices.
A calculation must be made to determine the percentage of the patient’s
length of stay in each hospice relative to the total length of hospice
stay.
(8) Reconsideration
of cap amount and inpatient limit.
A hospice
dissatisfied with the contractor’s calculation and application of
its cap amount and/or inpatient limitation may request and obtain
a contractor review if the amount of program reimbursement in controversy--with
respect to matters which the hospice has a right to review--is at
least $1000. The administrative review by the contractor of the
calculation and application of the cap amount and inpatient limitation
is the only administrative review available. These calculations
are not subject to the appeal procedures set forth in Sec. 199.10. The
methods and standards for calculation of the hospice payment rates
established by CHAMPUS, as well as questions as to the validity
of the applicable law, regulations or CHAMPUS decisions, are not subject
to administrative review, including the appeal procedures of Sec.
199.10.
(9) Beneficiary
cost-sharing.
There are no deductibles under
the CHAMPUS hospice benefit. CHAMPUS pays the full cost of all covered
services for the terminal illness, except for small cost-share amounts
which may be collected by the individual hospice for outpatient
drugs and biologicals and inpatient respite care.
(i) The patient is
responsible for 5 percent of the cost of outpatient drugs or $5
toward each prescription, whichever is less. Additionally, the cost
of prescription drugs (drugs or biologicals) may not exceed that
which a prudent buyer would pay in similar circumstances; that is,
a buyer who refuses to pay more than the going price for an item
or service and also seeks to economize by minimizing costs.
(ii) For inpatient
respite care, the cost-share for each respite care day is equal
to 5 percent of the amount CHAMPUS has estimated to be the cost
of respite care, after adjusting the national rate for local wage
differences.
(iii) The
amount of the individual cost-share liability for respite care during
a hospice cost-share period may not exceed the Medicare inpatient
hospital deductible applicable for the year in which the hospice
cost-share period began. The individual hospice cost-share period
begins on the first day an election is in effect for the beneficiary
and ends with the close of the first period of 14 consecutive days on
each of which an election is not in effect for the beneficiary.
(h) Reimbursement of Home Health Agencies (HHAs).
HHAs will be reimbursed using
the same methods and rates as used under the Medicare HHA prospective
payment system under Section 1895 of the Social Security Act (42
U.S.C. 1395fff) and 42 CFR Part 484, Subpart E except as otherwise necessary
to recognize distinct characteristics of TRICARE beneficiaries and
as described in instructions issued by the Director, TMA. Under
this methodology, an HHA will receive a fixed case-mix and wage-adjusted
national 60-day episode payment amount as payment in full for all
costs associated with furnishing home health services to TRICARE-eligible
beneficiaries with the exception of osteoporosis drugs and DME.
The full case-mix and wage-adjusted 60-day episode amount will be
payment in full subject to the following adjustments and additional
payments:
(1) Split
percentage payments.
The initial percentage payment
for initial episodes is paid to an HHA at 60 percent of the case-mix
and wage adjusted 60-day episode rate. The residual final payment
for initial episodes is paid at 40 percent of the case-mix and wage
adjusted 60-day episode rate subject to appropriate adjustments.
The initial percentage payment for subsequent episodes is paid at
50 percent of the case-mix and wage-adjusted 60-day episode rate.
The residual final payment for subsequent episodes is paid at 50
percent of the case-mix and wage-adjusted 60-day episode rate subject
to appropriate adjustments.
(2) Low-utilization
payment.
A low utilization payment is
applied when a HHA furnishes four or fewer visits to a beneficiary
during the 60-day episode. The visits are paid at the national per-visit
amount by discipline updated annually by the applicable market basket
for each visit type.
(3) Partial
episode payment (PEP).
A PEP adjustment is used for
payment of an episode of less than 60 days resulting from a beneficiary’s
elected transfer to another HHA prior to the end of the 60-day episode
or discharge and readmission of a beneficiary to the same HHA before
the end of the 60-day episode. The PEP payment is calculated by
multiplying the proportion of the 60-day episode during which the
beneficiary remained under the care of the original HHA by the beneficiary’s
assigned 60-day episode payment.
(4) Significant change in condition (SCIC).
The full-episode payment amount
is adjusted if a beneficiary experiences a significant change in
condition during the 60-day episode that was not envisioned in the
initial treatment plan. The total significant change in condition
payment adjustment is a proportional payment adjustment reflecting
the time both prior to and after the patient experienced a significant
change in condition during the 60-day episode. The initial percentage payment
provided at the start of the 60-day episode will be adjusted at
the end of the episode to reflect the first and second parts of
the total SCIC adjustment determined at the end of the 60-day episode.
The SCIC payment adjustment is calculated in two parts:
(i) The first part
of the SCIC payment adjustment reflects the adjustment to the level
of payment prior to the significant change in the patient’s condition
during the 60-day episode.
(ii) The
second part of the SCIC payment adjustment reflects the adjustment
to the level of payment after the significant change in the patient’s
condition occurs during the 60-day episode.
(5) Outlier
payment.
Outlier payments are allowed
in addition to regular 60-day episode payments for beneficiaries
generating excessively high treatment costs. The following methodology
is used for calculation of the outlier payment:
(i) TRICARE makes an
outlier payment for an episode whose estimated cost exceeds a threshold amount
for each case-mix group.
(ii) The
outlier threshold for each case-mix group is the episode payment
amount for that group, the PEP adjustment amount for the episode
or the total significant change in condition adjustment amount for
the episode plus a fixed dollar loss amount that is the same for
all case-mix groups.
(iii) The
outlier payment is a proportion of the amount of estimated cost
beyond the threshold.
(iv) TRICARE
imputes the cost for each episode by multiplying the national per-visit
amount of each discipline by the number of visits in the discipline
and computing the total imputed cost for all disciplines.
(v) The fixed dollar
loss amount and the loss sharing proportion are chosen so that the
estimated total outlier payment is no more than the predetermined
percentage of total payment under the home health PPS as set by
the Centers for Medicare & Medicaid Services (CMS).
(6) Services
paid outside the HHA prospective payment system.
The following
are services that receive a separate payment amount in addition
to the prospective payment amount for home health services:
(i) Durable
medical equipment (DME).
Reimbursement of DME is based
on the same amounts established under the Medicare Durable Medical
Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule
under 42 CFR part 414, subpart D.
(ii) Osteoporosis
drugs.
Although osteoporosis drugs
are subject to home health consolidated billing, they continue to
be paid on a cost basis, in addition to episode payments.
(7) Accelerated
payments.
Upon request, an accelerated
payment may be made to an HHA that is receiving payment under the
home health prospective payment system if the HHA is experiencing financial
difficulties because there is a delay by the contractor in making
payment to the HHA. The following are criteria for making accelerated
payments:
(i) Approval of payment.
An HHA’s
request for an accelerated payment must be approved by the contractor
and TRICARE Management Activity (TMA).
(ii) Amount
of payment.
The amount of the accelerated
payment is computed as a percentage of the net payment for unbilled
or unpaid covered services.
(iii) Recovery
of payment.
Recovery of the accelerated
payment is made by recoupment as HHA bills are processed or by direct
payment by the HHA.
(8) Assessment
data.
Beneficiary assessment data,
incorporating the use of the current version of the OASIS items,
must be submitted to the contractor for payment under the HHA prospective
payment system.
(9) Administrative
review.
An HHA is not entitled to judicial
or administrative review with regard to:
(i) Establishment of
the payment unit, including the national 60-day prospective episode
payment rate, adjustments and outlier payment.
(ii) Establishment
of transition period, definition and application of the unit of
payment.
(iii) Computation
of the initial standard prospective payment amounts.
(iv) Establishment
of case-mix and area wage adjustment factors.
(i)
Changes
in Federal Law affecting Medicare.
With regard
to paragraph (b) and (h) of this section, the Department of Defense
must, within the time frame specified in law and to the extent it
is practicable, bring the TRICARE program into compliance with any
changes in Federal Law affecting the Medicare program that occur
after the effective date of the DoD rule to implement the prospective payment
systems for skilled nursing facilities and home health agencies.
(j)
Reimbursement
of individual health care professionals and other non-institutional,
non-professional providers.
The
CHAMPUS-determined reasonable charge (the amount allowed by CHAMPUS)
for the service of an individual health care professional or other
non-institutional, non-professional provider (even if employed by
or under contract to an institutional provider) shall be determined
by one of the following methodologies, that is, whichever is in
effect in the specific geographic location at the time covered services
and supplies are provided to a CHAMPUS beneficiary.
(1) Allowable
charge method--
(i) Introduction--
(A) In general.
The allowable charge method
is the preferred and primary method for reimbursement of individual
health care professionals and other non-institutional health care
providers (covered by 10 U.S.C. 1079(h)(1)). The allowable charge
for authorized care shall be the lower of the billed charge or the
local CHAMPUS Maximum Allowable Charge (CMAC).
(B) CHAMPUS Maximum Allowable Charge.
Beginning in calendar year
1992, prevailing charge levels and appropriate charge levels will
be calculated on a national level. There will then be calculated
a national CHAMPUS Maximum Allowable Charge (CMAC) level for each
procedure, which shall be the lesser of the national prevailing
charge level or the national appropriate charge level. The national CMAC
will then be adjusted for localities in accordance with paragraph
(j)(1)(iv) of this section.
(C) Limits
on balance billing by nonparticipating providers.
Nonparticipating providers
may not balance bill a beneficiary an amount which exceeds the applicable
balance billing limit. The balance billing limit shall be the same
percentage as the Medicare limiting charge percentage for nonparticipating
physicians. The balance billing limit may be waived by the Director,
OCHAMPUS on a case-by-case basis if requested by the CHAMPUS beneficiary
(or sponsor) involved. A decision by the Director to waive or not
waive the limit in any particular case is not subject to the appeal
and hearing procedures of Sec. 199.10.
(D) Special rule for TRICARE Prime Enrollees.
In the case of a TRICARE Prime
enrollee (see section 199.17) who receives authorized care from
a non-participating provider, the CHAMPUS determined reasonable
charge will be the CMAC level as established in paragraph (j)(1)(i)(B)
of this section plus any balance billing amount up to the balance
billing limit as referred to in paragraph (j)(1)(i)(C) of this section.
The authorization for such care shall be pursuant to the procedures
established by the Director, OCHAMPUS (also referred to as the TRICARE
Support Office).
(E) Special
rule for certain TRICARE Standard Beneficiaries.
In the
case of dependent spouse or child, as defined in paragraphs (b)(2)(ii)(A)
through (F) and (b)(2)(ii)(H)(1), (2),
and (4) of Sec. 199.3, of a Reserve Component member
serving on active duty pursuant to a call or order to active duty
for a period of more than 30 days in support of a contingency operation
under a provision of law referred to in section 101(a)(13)(B) of
title 10, United States Code, the Director, TRICARE Management Activity,
may authorize non-participating providers the allowable charge to
be the CMAC level as established in paragraph (j)(l)(i)(B) of this
section plus any balance billing amount up to the balance billing
limit as referred to in paragraph (j)(l)(i)(C) of this section.
(ii) Prevailing charge
level.
(A) Beginning in calendar
year 1992, the prevailing charge level shall be calculated on a
national basis.
(B) The
national prevailing charge level referred to in paragraph (j)(1)(ii)(A)
of this section is the level that does not exceed the amount equivalent
to the 80th percentile of billed charges made for similar services
during the base period. The 80th percentile of charges shall be
determined on the basis of statistical data and methodology acceptable
to the Director, OCHAMPUS (or a designee).
(C) For
purposes of paragraph (j)(1)(ii)(B) of this section, the base period
shall be a period of 12 calendar months and shall be adjusted once
a year, unless the Director, OCHAMPUS, determines that a different
period for adjustment is appropriate and publishes a notice to that
effect in the Federal Register.
(iii) Appropriate
charge level.
Beginning in calendar year
1992, the appropriate charge level shall be calculated on a national
basis. The appropriate charge level for each procedure is the product
of the two-step process set forth in paragraphs (j)(1)(iii)(A) and
(B) of this section. This process involves comparing the prior year’s
CMAC with the fully phased in Medicare fee. For years after the
Medicare fee has been fully phased in, the comparison shall be to
the current year Medicare fee. For any particular procedure for
which comparable Medicare fee and CHAMPUS data are unavailable,
but for which alternative data are available that the Director,
OCHAMPUS (or designee) determines provide a reasonable approximation
of relative value or price, the comparison may be based on such
alternative data.
(A) Step
1: Procedures classified.
All procedures are classified
into one of three categories, as follows:
(1) Overpriced
procedures.
These are the procedures for
which the prior year’s national CMAC exceeds the Medicare fee.
(2) Other
procedures.
These are procedures subject
to the allowable charge method that are not included in either the
overpriced procedures group or the underpriced procedures group.
(3) Underpriced
procedures.
These are the procedures for
which the prior year’s national CMAC is less than the Medicare fee.
(B) Step 2: Calculating appropriate charge levels.
For each year, appropriate
charge levels will be calculated by adjusting the prior year’s CMAC
as follows:
(1) For overpriced procedures, the appropriate
charge level for each procedure shall be the prior year’s CMAC,
reduced by the lesser of: the percentage by which it exceeds the
Medicare fee or fifteen percent.
(2) For other
procedures, the appropriate charge level for each procedure shall
be the same as the prior year’s CMAC.
(3) For underpriced
procedures, the appropriate charge level for each procedure shall
be the prior year’s CMAC, increased by the lesser of: the percentage
by which it is exceeded by the Medicare fee or the Medicare Economic
Index.
(C) Special
rule for cases in which the CHAMPUS appropriate charge was prematurely
reduced.
In any case in which a recalculation
of the Medicare fee results in a Medicare rate higher than the CHAMPUS appropriate
charge for a procedure that had been considered an overpriced procedure,
the reduction in the CHAMPUS appropriate charge shall be restored
up to the level of the recalculated Medicare rate.
(D) Special
rule for cases in which the national CMAC is less than the Medicare
rate.
Note: This
paragraph will be implemented when CMAC rates are published.
In any case in which the national
CMAC calculated in accordance with paragraphs (j)(1)(i) through
(iii) of this section is less than the Medicare rate, the Director,
TSO, may determine that the use of the Medicare Economic Index under
paragraph (j)(1)(iii)(B) of this section will result in a CMAC rate
below the level necessary to assure that beneficiaries will retain
adequate access to health care services. Upon making such a determination,
the Director, TSO, may increase the national CMAC to a level not
greater than the Medicare rate.
(iv) Calculating
CHAMPUS Maximum Allowable Charge levels for localities.
(A) In general.
The national CHAMPUS Maximum
Allowable Charge level for each procedure will be adjusted for localities
using the same (or similar) geographical areas and the same geographic
adjustment factors as are used for determining allowable charges
under Medicare.
(B) Special
locality-based phase-in provision.
(1) In general.
Beginning with the recalculation
of CMACS for calendar year 1993, the CMAC in a locality will not
be less than 72.25 percent of the maximum charge level in effect
for that locality on December 31, 1991. For recalculations of CMACs
for calendar years after 1993, the CMAC in a locality will not be
less than 85 percent of the CMAC in effect for that locality at
the end of the prior calendar year.
(2) Exception.
The special locality-based
phase-in provision established by paragraph (j)(1)(iv)(B)(1) of
this section shall not be applicable in the case of any procedure
code for which there were not CHAMPUS claims in the locality accounting
for at least 50 services.
(C) Special locality-based waivers of reductions
to assure adequate access to care.
Beginning
with the recalculation of CMACs for calendar year 1993, in the case
of any procedure classified as an overpriced procedure pursuant
to paragraph (j)(1)(iii)(A)(1) of this section,
a reduction in the CMAC in a locality below the level in effect
at the end of the previous calendar year that would otherwise occur
pursuant to paragraphs (j)(1)(iii) and (j)(1)(iv) of this section
may be waived pursuant to paragraph (j)(1)(iii)(C) of this section.
(1) Waiver
based on balanced billing rates.
Except
as provided in paragraph (j)(1)(iv)(C)(2) of this section
such a reduction will be waived if there has been excessive balance
billing in the locality for the procedure involved. For this purpose,
the extent of balance billing will be determined based on a review
of all services under the procedure code involved in the prior year
(or most recent period for which data are available). If the number
of services for which balance billing was not required was less than
60 percent of all services provided, the Director will determine
that there was excessive balance billing with respect to that procedure
in that locality and will waive the reduction in the CMAC that would
otherwise occur. A decision by the Director to waive or not waive
the reduction is not subject to the appeal and hearing procedures
of Sec. 199.10.
(2) Exception.
As an exception to the paragraph
(j)(1)(iv)(C)(1) of this section, the waiver required
by that paragraph shall not be applicable in the case of any procedure
code for which there were not CHAMPUS claims in the locality accounting
for at least 50 services. A waiver may, however, be granted in such
cases pursuant to paragraph (j)(1)(iv)(C)(3) of
this section.
(3) Waiver based
on other evidence that adequate access to care would be impaired.
The Director, OCHAMPUS may
waive a reduction that would otherwise occur (or restore a reduction
that was already taken) if the Director determines that available
evidence shows that the reduction would impair adequate access.
For this purpose, such evidence may include consideration of the
number of providers in the locality who provide the affected services,
the number of such providers who are CHAMPUS Participating Providers,
the number of CHAMPUS beneficiaries in the area, and other relevant
factors. Providers or beneficiaries in a locality may submit to
the Director, OCHAMPUS a petition, together with appropriate documentation
regarding relevant factors, for a determination that adequate access
would be impaired. The Director, OCHAMPUS will consider and respond
to all such petitions. Petitions may be filed at any time. Any petition
received by the date which is 120 days prior to the implementation
of a recalculation of CMACs will be assured of consideration prior
to that implementation. The Director, OCHAMPUS may establish procedures
for handling petitions. A decision by the Director to waive or not
waive a reduction is not subject to the appeal and hearing procedures
of Sec. 199.10.
(D) Special
locality-based exception to applicable CMACs to assure adequate
beneficiary access to care.
In addition to the authority
to waive reductions under paragraph (j)(1)(iv)(C) of this section,
the Director may authorize establishment of higher payment rates
for specific services than would otherwise be allowable, under paragraph
(j)(1) of this section, if the Director determines that available evidence
shows that access to health care services is severely impaired.
For this purpose, such evidence may include consideration of the
number of providers in the locality who provide the affected services, the
number of providers who are CHAMPUS participating providers, the
number of CHAMPUS beneficiaries in the locality, the availability
of military providers in the location or nearby, and any other factors
the Director determines relevant.
(1) Procedure.
Providers or beneficiaries
in a locality may submit to the Director, a petition, together with
appropriate documentation regarding relevant factors, for a determination
that adequate access to health care services is severely impaired.
The Director, will consider and respond to all petitions. A decision
to authorize a higher payment amount is subject to review and determination
or modification by the Director at any time if circumstances change
so that adequate access to health care services would no longer
be severely impaired. A decision by the Director, to authorize,
not authorize, terminate, or modify authorization of higher payment
amounts is not subject to the appeal and hearing procedures of Sec.
199.10 of the part.
(2) Establishing
the higher payment rate(s).
When the Director, determines
that beneficiary access to health care services in a locality is
severely impaired, the Director may establish the higher payment rate(s)
as he or she deems appropriate and cost-effective through one of
the following methodologies to assure adequate access:
(i) A percent
factor may be added to the otherwise applicable payment amount allowable
under paragraph (j)(1) of this section;
(ii) A prevailing
charge may be calculated, by applying the prevailing charge methodology
of paragraph (j)(1)(ii) of this section to a specific locality (which
need not be the same as the localities used for purposes of paragraph
(j)(1)(iv)(A) of this section; or another government payment rate
may be adopted, for example, an applicable state Medicaid rate).
(3) Application
of higher payment rates.
Higher
payment rates defined under paragraph (j)(1)(iv)(D) of this section
may be applied to all similar services performed in a locality,
or, if circumstances warrant, a new locality may be defined for
application of the higher payments. Establishment of a new locality may
be undertaken where access impairment is localized and not pervasive
across the existing locality. Generally, establishment of a new,
more specific locality will occur when the area is remote so that geographical
characteristics and other factors significantly impair transportation
through normal means to health care services routinely available
within the existing locality.
(E) Special
locality-based exception to applicable CMACs to ensure an adequate
TRICARE Prime preferred network.
The Director, may authorize
reimbursements to health care providers participating in a TRICARE
preferred provider network under Sec. 199.17(p) of this part at
rates higher than would otherwise be allowable under paragraph (j)(1)
of this section, if the Director, determines that application of
the higher rates is necessary to ensure the availability of an adequate
number and mix of qualified health care providers in a network in
a specific locality. This authority may only be used to ensure adequate
networks in those localities designated by the Director, as requiring
TRICARE preferred provider networks, not in localities in which
preferred provider networks have been suggested or established but
are not determined by the Director to be necessary. Appropriate evidence
for determining that higher rates are necessary may include consideration
of the number of available primary care and specialist providers
in the network locality, availability (including reassignment) of
military providers in the location or nearby, the appropriate mix
of primary care and specialists needed to satisfy demand and meet
appropriate patient access standards (appointment/waiting time,
travel distance, etc.), the efforts that have been made to create
an adequate network, other cost-effective alternatives, and other
relevant factors. The Director, may establish procedures by which
exceptions to applicable CMACs are requested and approved or denied
under paragraph (j)(1)(iv)(E) of this section. A decision by the
Director, to authorize or deny an exception is not subject to the
appeal and hearing procedures of Sec. 199.10. When the Director,
determines that it is necessary and cost-effective to approve a
higher rate or rates in order to ensure the availability of an adequate number
of qualified health care providers in a network in a specific locality,
the higher rate may not exceed the lesser of the following:
(1) The amount
equal to the local fee for service charge for the service in the
service area in which the service is provided as determined by the
Director, based on one or more of the following payment rates:
(i) Usual, customary,
and reasonable;
(ii) The Health Care Financing Administration’s
Resource Based Relative Value Scale;
(iii) Negotiated
fee schedules;
(iv) Global fees; or
(v) Sliding scale
individual fee allowances.
(2) The amount
equal to 115 percent of the otherwise allowable charge under paragraph
(j)(1) of the section for the service.
(v) Special rules for 1991.
(A) Appropriate charge
levels for care provided on or after January 1, 1991, and before
the 1992 appropriate levels take effect shall be the same as those
in effect on December 31, 1990, except that appropriate charge levels
for care provided on or after October 7, 1991, shall be those established
pursuant to this paragraph (j)(1)(v) of this section.
(B) Appropriate charge
levels will be established for each locality for which a appropriate
charge level was in effect immediately prior to October 7, 1991.
For each procedure, the appropriate charge level shall be the prevailing
charge level in effect immediately prior to October 7, 1991, adjusted
as provided in (j)(1)(v)(B)(
1) through (
3)
of this section.
(1) For each overpriced procedure, the level
shall be reduced by fifteen percent. For this purpose, overpriced
procedures are the procedures determined by the Physician Payment
Review Commission to be overvalued pursuant to the process established
under the Medicare program, other procedures considered overvalued
in the Medicare program (for which Congress directed reductions
in Medicare allowable levels for 1991), radiology procedures and
pathology procedures.
(2) For each other procedure, the level shall
remain unchanged. For this purpose, other procedures are procedures
which are not overpriced procedures or primary care procedures.
(3) For each
primary care procedure, the level shall be adjusted by the MEI,
as the MEI is applied to Medicare prevailing charge levels. For
this purpose, primary care procedures include maternity care and
delivery services and well baby care services.
(C)
For
purposes of this paragraph (j)(i)(v), “appropriate charge levels”
in effect at any time prior to October 7, 1991 shall mean the lesser
of:
(1) The prevailing
charge levels then in effect, or
(2) The fiscal
year 1988 prevailing charge levels adjusted by the Medicare Economic
Index (MEI), as the MEI was applied beginning in the fiscal year
1989.
(vi) Special
transition rule for 1992.
(A) For
purposes of calculating the national appropriate charge levels for
1992, the prior year’s appropriate charge level for each service
will be considered to be the level that does not exceed the amount
equivalent to the 80th percentile of billed charges made for similar
services during the base period of July 1, 1986 to June 30, 1987
(determined as under paragraph (j)(1)(ii)(B) of this section), adjusted
to calendar year 1991 based on the adjustments made for maximum
CHAMPUS allowable charge levels through 1990 and the application
of paragraph (j)(1)(v) of this section for 1991.
(B) The adjustment
to calendar year 1991 of the product of paragraph (j)(1)(vi)(A)
of this section shall be as follows:
(1) For procedures other than those described
in paragraph (j)(1)(vi)(B)(2) of this section,
the adjustment to 1991 shall be on the same basis as that provided
under paragraph (j)(1)(v) of this section.
(2) For any procedure
that was considered an overpriced procedure for purposes of the
1991 appropriate charge levels under paragraph (j)(1)(v) of this
section for which the resulting 1991 appropriate charge level was
less than 150 percent of the Medicare converted relative value unit,
the adjustment to 1991 for purposes of the special transition rule
for 1992 shall be as if the procedure had been treated under paragraph
(j)(1)(v)(B)(2) of this section for purposes of
the 1991 appropriate charge level.
(vii) Adjustments
and procedural rules.
(A) The
Director, OCHAMPUS may make adjustments to the appropriate charge
levels calculated pursuant to paragraphs (j)(1)(iii) and (j)(1)(v)
of this section to correct any anomalies resulting from data or
statistical factors, significant differences between Medicare-relevant
information and CHAMPUS-relevant considerations or other special
factors that fairness requires be specially recognized. However,
no such adjustment may result in reducing an appropriate charge
level.
(B) The
Director, OCHAMPUS will issue procedural instructions for administration
of the allowable charge method.
(viii) Clinical
laboratory services.
The
allowable charge for clinical diagnostic laboratory test services shall
be calculated in the same manner as allowable charges for other
individual health care providers are calculated pursuant to paragraphs
(j)(1)(i) through (j)(1)(iv) of this section, with the following exceptions
and clarifications.
(A) The
calculation of national prevailing charge levels, national appropriate
charge levels and national CMACs for laboratory service shall begin
in calendar year 1993. For purposes of the 1993 calculation, the
prior year’s national appropriate charge level or national prevailing
charge level shall be the level that does not exceed the amount
equivalent to the 80th percentile of billed charges made for similar
services during the period July 1, 1991, through June 30, 1992 (referred
to in this paragraph (j)(1)(viii) of this section as the “base period”).
(B) For purposes of
comparison to Medicare allowable payment amounts pursuant to paragraph (j)(1)(iii)
of this section, the Medicare national laboratory payment limitation
amounts shall be used.
(C) For
purposes of establishing laboratory service local CMACs pursuant
to paragraph (j)(1)(iv) of this section, the adjustment factor shall
equal the ratio of the local average charge (standardized for the distribution
of clinical laboratory services) to the national average charge
for all clinical laboratory services during the base period.
(D) For purposes of
a special locality-based phase-in provision similar to that established
by paragraph (j)(1)(iv)(B) of this section, the CMAC in a locality
will not be less than 85 percent of the maximum charge level in
effect for that locality during the base period.
(ix) The allowable
charge for physician assistant services other than assistant-at-surgery
shall be at the same percentage, used by Medicare, of the allowable
charge for a comparable service rendered by a physician performing
the service in a similar location. For cases in which the physician
assistant and the physician perform component services of a procedure
other than assistant-at-surgery (e.g., home, office, or hospital
visit), the combined allowable charge for the procedure may not
exceed the allowable charge for the procedure rendered by a physician
alone. The allowable charge for physician assistant services performed
as an assistant-at-surgery shall be at the same percentage, used
by Medicare, of the allowable charge for a physician serving as
an assistant surgeon when authorized as CHAMPUS benefits in accordance
with the provisions of Sec. 199.4(c)(3)(iii). Physician assistant
services must be billed through the employing physician who must
be an authorized CHAMPUS provider.
(x) A
charge that exceeds the CHAMPUS Maximum Allowable Charge can be
determined to be allowable only when unusual circumstances or medical
complications justify the higher charge. The allowable charge may
not exceed the billed charge under any circumstances.
(xi) Pharmaceutical
agents utilized as part of medically necessary medical services.
In general, the TRICARE-determined
allowed amount shall be equal to an amount determined to be appropriate,
to the extent practicable, in accordance with the same reimbursement
rules as apply to payments for similar services under Medicare.
Under the authority of 10 U.S.C. 1079(q), in the case of any pharmaceutical
agent utilized as part of medically necessary medical services,
the Director may adopt special reimbursement methods, amounts, and
procedures to encourage the use of high-value products and discourage
the use of low-value products, as determined by the Director. For
this purpose, the Director may obtain recommendations from the Pharmaceutical
and Therapeutics Committee under Sec. 199.21 or other entities as
the Director, DHA deems appropriate with respect to the relative
value of products in a class of products subject to this paragraph
(j)(1)(xi). Among the special reimbursement methods the Director
may choose to adopt under this paragraph (j)(1)(xi) is to reimburse
the average sales price of a product plus six percent of the median
of the average sales prices of products in the product class or
category. The Director shall issue guidance regarding the special reimbursement
methods adopted and the appropriate reimbursement rates.
(2) Bonus
payments in medically underserved areas.
A
bonus payment, in addition to the amount normally paid under the
allowable charge methodology, may be made to physicians in medically underserved
areas. For purposes of this paragraph, medically underserved areas
are the same as those determined by the Secretary of Health and
Human Services for the Medicare program. Such bonus payments shall
be equal to the bonus payments authorized by Medicare, except as
necessary to recognize any unique or distinct characteristics or
requirements of the TRICARE program, and as described in instructions
issued by the Executive Director, TRICARE Management Activity. If
the Department of Health and Human Services acts to amend or remove
the provision for bonus payments under Medicare, TRICARE likewise
may follow Medicare in amending or removing provision for such payments.
(3) All-inclusive
rate.
Claims from individual health-care
professional providers for services rendered to CHAMPUS beneficiaries
residing in an RTC that is either being reimbursed on an all-inclusive
per diem rate, or is billing an all-inclusive per diem rate, shall
be denied; with the exception of independent health-care professionals
providing geographically distant family therapy to a family member
residing a minimum of 250 miles from the RTC or covered medical
services related to a nonmental health condition rendered outside
the RTC. Reimbursement for individual professional services is included
in the rate paid the institutional provider.
(4) Alternative
method.
The Director, OCHAMPUS, or
a designee, may, subject to the approval of the ASD(HA), establish
an alternative method of reimbursement designed to produce reasonable
control over health care costs and to ensure a high level of acceptance
of the CHAMPUS-determined charge by the individual health-care professionals
or other noninstitutional health-care providers furnishing services
and supplies to CHAMPUS beneficiaries. Alternative methods may not
result in reimbursement greater than the allowable charge method
above.
(k) Reimbursement
of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS).
Reimbursement of DMEPOS may
be based on the same amounts established under the Centers for Medicare
and Medicaid Services (CMS) DMEPOS fee schedule under 42 CFR part
414, subpart D.
(l)
Reimbursement
Under the Military-Civilian Health Services Partnership Program.
The Military-Civilian Health
Services Partnership Program, as authorized by section 1096, chapter
55, title 10, provides for the sharing of staff, equipment, and
resources between the civilian and military health care system in
order to achieve more effective, efficient, or economical health
care for authorized beneficiaries. Military treatment facility commanders,
based upon the authority provided by their respective Surgeons General
of the military departments, are responsible for entering into individual partnership
agreements only when they have determined specifically that use
of the Partnership Program is more economical overall to the Government
than referring the need for health care services to the civilian
community under the normal operation of the CHAMPUS Program. (See
paragraph (p) of Sec. 199.1 for general requirements of the Partnership
Program.)
(1) Reimbursement of institutional health care
providers.
Reimbursement of institutional
health care providers under the Partnership Program shall be on
the same basis as non-Partnership providers.
(2) Reimbursement of individual health-care professionals
and other non-institutional health care providers.
Reimbursement of individual
health care professionals and other non-institutional health care
providers shall be on the same basis as non-Partnership providers
as detailed in paragraph (j) of this section.
(m)
Accommodation
of Discounts Under Provider Reimbursement Methods.
(1) General
rule.
The Director. OCHAMPUS (or
designee) has authority to reimburse a provider at an amount below
the amount usually paid pursuant to this section when, under a program
approved by the Director, the provider has agreed to the lower amount.
(2) Special applications.
The following
are examples of applications of the general rule; they are not all
inclusive.
(i) In
the case and individual health care professionals and other non-institutional
providers, if the discounted fee is below the provider’s normal
billed charge and the prevailing charge level (see paragraph (g)
of this section), the discounted fee shall be the provider’s actual
billed charge and the CHAMPUS allowable charge.
(ii) In the case of
institutional providers normally paid on the basis of a pre-set
amount (such as DRG-based amount under paragraph (a)(1) of this
section or per-diem amount under paragraph (a)(2) of this section),
if the discount rate is lower than the pre-set rate, the discounted
rate shall be the CHAMPUS-determined allowable cost. This is an
exception to the usual rule that the pre-set rate is paid regardless of
the institutional provider’s billed charges or other factors.
(3) Procedures.
(i) This paragraph
applies only when both the provider and the Director have agreed to
the discounted payment rate. The Director’s agreement may be in
the context of approval of a program that allows for such discounts.
(ii) The Director of
OCHAMPUS may establish uniform terms, conditions and limitations
for this payment method in order to avoid administrative complexity.
(n)
Outside
the United States.
The
Director, OCHAMPUS, or a designee, shall determine the appropriate
reimbursement method or methods to be used in the extension of CHAMPUS
benefits for otherwise covered medical services or supplies provided
by hospitals or other institutional providers, physicians or other
individual professional providers, or other providers outside the
United States.
(o)
Implementing
Instructions.
The Director, OCHAMPUS, or
a designee, shall issue CHAMPUS policies, instructions, procedures,
and guidelines, as may be necessary to implement the intent of this section.
[55 FR 13266, Apr 10, 1990,
as amended at 55 FR 31180, Aug 1, 1990; 55 FR 42562, Oct 22, 1990;
55 FR 43342, Oct 29, 1990; 56 FR 44006, Sep 6, 1991; 56 FR 50273,
Oct 4, 1991; 58 FR 35408, Jul 1, 1993; 58 FR 51239, Oct 1, 1993;
58 FR 58961, Nov 5, 1993; 60 FR 6019, Feb 1, 1995; 60 FR 12437,
Mar 7, 1995; 60 FR 52094, Oct 5, 1995; 63 FR 7287, Feb 13, 1998;
63 FR 48446, Sep 10, 1998; 63 FR 56082, Oct 21, 1998; 64 FR 60671,
Nov 8, 1999; 65 FR 41003, Jul 3, 2000; 67 FR 45172, Aug 28, 2001;
67 FR 18115, Apr 15, 2002; 67 FR 40604, Jun 13, 2002; 69 FR 60555,
Oct 12, 2004; 70 FR 61378, Oct 24, 2005; 72 FR 63988, Nov 14, 2007;
73 FR 46809, Aug 12, 2008; 73 FR 74965, Dec 10, 2008; 74 FR 44755,
Aug 31, 2009; 77 FR 38175, Jun 27, 2012; 78 FR 48309, Aug 8, 2013;
79 FR 29087, May 21, 2014; 81 FR 61097, Sep 2, 2016; 82 FR 61692,
Dec 29, 2017; 83 FR 63577, Dec 11, 2018; 84 FR 4333, Feb 15, 2019;
85 FR 34104, Jun 3, 2020; 85 FR 54924, Sep 3, 2020;
87 FR 33013, Jun 1, 2022]