1.0 APPLICABILITY
1.1 This policy
is mandatory for reimbursement of services provided by either network
or non-network providers. However, alternative network reimbursement
methodologies are permitted when approved by the Defense Health
Agency (DHA) and specifically included in the network provider agreement.
1.2 Reimbursement of surgical procedures
performed in an ASC prior to the implementation of the reasonable
cost method for Critical Access Hospitals (CAHs) and implementation
of TRICARE’s Outpatient Prospective Payment System (OPPS), and thereafter,
freestanding ASCs (FASCs), and other providers who are exempt from
the TRICARE OPPS and provide scheduled ambulatory surgery. For purposes
of this section, these facilities are known as non-OPPS facilities.
Non-OPPS facilities include any facility not subject to the OPPS
as outlined in
Chapter 13, Section 1, paragraph 3.4.1.2.
3.0 POLICY
Ambulatory surgery procedures
performed by providers described in
paragraph 2.0 are reimbursed using
prospectively determined rates. The rates
are:
established on a cost-basis, divided into eleven payment groups
representing ranges of costs, and adjusted for area labor costs
based on Metropolitan Statistical Areas (MSAs). No additional benefits
are payable outside the ASC payment rate; e.g., revenue codes 260,
450, 510, 636, etc.
3.1 The ambulatory
surgery payment system is used regardless
of where the ambulatory surgery procedures are provided, that is,
in a freestanding ASC, in a Hospital Outpatient Department (HOPD),
or in a hospital Emergency Room (ER). No additional benefits are
payable outside the ASC payment rate; e.g., revenue codes 260, 450,
510, 636, etc.
3.2 The payment
rates established under this system apply only to the facility charges
for ambulatory surgery. The facility rate is a standard overhead
amount that includes nursing and technician services; use of the
facility; drugs including take-home drugs for less than $40; biologicals; surgical
dressings, splints, casts and equipment directly related to provision
of the surgical procedure; materials for anesthesia; Intraocular
Lenses (IOLs); and administrative, recordkeeping and housekeeping
items and services.
3.3 This payment rate does not
include items such as physicians’ fees (or fees of other professional providers
authorized to render the services and to bill independently for
them); laboratory, X-rays or diagnostic procedures (other than those
directly related to the performance of the surgical procedure); orphan
drugs; prosthetic devices (except IOLs); ambulance services; leg,
arm, and back braces; artificial limbs; and Durable Medical Equipment
(DME) for use in the patient’s home.
Note: A radiology and diagnostic
procedure is considered directly related to the performance of the
surgical procedure only if it is an inherent part of the surgical
procedure, e.g., the Common Procedure Terminology (CPT) code for
the surgical procedure includes the diagnostic or radiology procedure
as part of the code description (i.e., CPT procedure code 47560).
3.4 Ambulatory Surgery Payment
Rates
3.4.1 DHA, or
its data contractor, shall calculate
the payment rates and will provide them electronically to the claims
processing contractor annually. The
electronic media will include the locally-adjusted payment rate
for each payment group for each MSA and will identify, by procedure code,
the procedures in each group and the effective date for each procedure.
The MSAs and corresponding wage indexes are those
used by Medicare.
3.4.2 In addition
to the payment rates, the contractor is provided
a ZIP Code to MSA crosswalk, so that
they can determine which payment rate to use for each ambulatory
surgery provider. For this purpose the ZIP Code
of the facility’s physical address (as opposed to its billing address)
is used. This crosswalk will be
updated periodically throughout the year and sent to the contractors.
3.4.3 To
calculate payment rates, only those procedures with at least 25
claims nationwide during the database period are used.
3.4.4 The rates were initially calculated
using the following steps.
3.4.4.1 For each ambulatory surgery
procedure, a median standardized cost was calculated on the basis
of all ambulatory surgery charges nationally under
the TRICARE
Program during
the one-year database period. The steps in this calculation included:
• 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 the Cost-to-Charge
Ratio (CCR) using the Medicare CCR for FASCs for TRICARE ASCs.
• Calculating a median cost for
each procedure; and
• Updating to the year for which
the payment rates were in effect by the Consumer Price Index-Urban
(CPI-U).
3.4.4.2 Procedures were placed into
one of 10 groups by their median per procedure cost, starting with
$0 to $299 for Group 1 and ending with $1,000 to $1,299 for Group
9 and $1,300 and above for Group 10. Groups 2 through 8 were set
on the basis of $100 fixed intervals.
3.4.4.3 The standard payment amount
per group is the volume weighted median
per procedure cost for the procedures in that group.
3.4.4.4 Procedures for which there
was no or insufficient (less than 25 claims) data were assigned to
groups by:
• Calculating a volume-weighted
ratio of the TRICARE Program payment
rates to Medicare payment rates for those procedures with sufficient
data;
• Applying the ratio to the Medicare
payment rate for each procedure; and
• Assigning the procedure to
the appropriate payment group.
3.4.5 The amount paid for any ambulatory
surgery service under these procedures are not to exceed
the amount that would be allowed if the services were provided on
an inpatient basis. The allowable inpatient amount equals the applicable
Diagnosis Related Group (DRG) relative weight multiplied by the
national large urban adjusted standardized amount. This amount is adjusted
by the applicable hospital wage index.
3.4.6 As of November 1, 1998, an
eleventh payment group is added to this payment system. This group
will include extracorporeal shock wave lithotripsy.
3.4.7 Grouping and Additions to the
ASC Procedure List for Dates of Service On or After March 1, 2017
3.4.7.1 Effective
March 1, 2017, only those procedures listed on DHA’s ambulatory
surgery web site shall be cost-shared in FASCs. Upon evaluation,
TRICARE may add additional procedures to the list. Groupings shall
be accomplished in accordance with the following procedures:
3.4.7.1.1 Prior
to March 1, 2017, DHA shall:
• Step 1: Review all allowed
ASC charges in the ASC Calendar Years (CYs) 2014 and 2015 for procedures
not included on TRICARE’s ASC list, and identify those procedures
with at least 25 claims in either CY.
• Step 2: Deflate the billed
charges to the base period, and shall then update the base year
charges forward to the current ASC Fiscal Year (FY) using
the ASC annual update factors. Then the most recent Medicare ASC
CCR (1994, 0.483) shall be used to convert the charges to costs.
The procedure shall then be placed in one of the eleven TRICARE
payment groups.
• Step 3: For codes with less
than 25 claims in CY 2014 or 2015, the surgery codes shall be evaluated to
determine if there is a similar code within a group on the current
TRICARE ASC list. If so, the code shall be assigned to the similar
group. Information about the code’s grouping under Medicare’s current
ASC fee schedule shall be utilized to support the grouping.
• Step 4: Shall compare all procedures
assigned to a group under this methodology with the current Medicare
ASC payment. If assignment using these methods results in an amount
less than would be paid under the current Medicare payment, TRICARE
shall raise the rates for that procedure to equal the amount paid
by Medicare. This step shall only occur for newly-added procedures
to the ASC list.
3.4.7.1.2 The contractor
shall bring additional procedures that are not on
the ASC list to the attention of DHA, for evaluation by DHA for
inclusion on the ASC list, which shall be updated on an annual basis.
3.4.7.1.3 Newly-added procedure rates
developed through the procedures established in
paragraph 3.4.7.1 apply only
to FASCs. Other non-OPPS providers (
e.g.,
those listed in
Chapter 13, Section 1, paragraph 3.4.1.2 except
FASCs), are not subject to the newly-added rates for surgical procedures
and shall continue to be paid in accordance with the
Chapter 1, Section 24. Effective January 1,
2018, newly-added procedure rates shall be updated annually on January
1. DHA shall notate those procedures that are newly-added within
the listing posted to the DHA web site.
3.4.7.2 Newly-added procedures
are added
to the ASC list on the effective date of each ASC update year (November
1 for dates prior to January 1, 2017, and thereafter January 1 of
each following
CY). The first group
of newly-added procedures (described in
paragraph 3.4.7.1.1)
are added
to the list before March 1, 2017, and
are effective
for a partial year, i.e., March 1 through October 31, 2017. The second
group of newly-added procedures shall be effective November 1, 2017,
to December 31, 2017. The list of newly-added procedures shall then
be updated and revised on a quarterly basis (January 1, April 1,
July 1, and October 1).
3.5 Payments
3.5.1 General
The payment for a procedure is 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 ASCs by Medicare.
This calculation is done by DHA, or
its data contractor. For participating claims, the ambulatory surgery
payment rate is reimbursed regardless
of the actual charges made by the facility--that is, regardless
of whether the actual charges are greater or smaller than the payment
rate. For nonparticipating claims, reimbursement (TRICARE payment
plus beneficiary cost-share plus any double coverage payments, if
applicable) are not to exceed the lower
of the billed charge or the group payment rate.
3.5.2
Procedures
Which Do Not Have An Ambulatory Surgery Rate and Are Provided by
an FASC
3.5.2.2 Non-surgical services, such
as evaluation and management visits, laboratory, and radiology services
are
paid in accordance with TRICARE’s
allowable charge methodology (see
Chapter
5).
3.5.3 Multiple and Terminated Procedures
3.5.3.1 Discounting for Multiple Surgical
Procedures
3.5.3.1.2 Discounting of multiple surgical
procedures is subject to the provisions in
Chapter 13, Section 3.
3.5.3.1.3 Effective March 1, 2017, FASCs
shall be reimbursed for only those surgical services on TRICARE’s
ASC list (see
paragraph 3.5.2).
3.5.3.2 Discounting for Bilateral Procedures
3.5.3.2.2 Modifiers for Discounting Terminated
Surgical Procedures
3.5.3.2.2.1 Industry standard modifiers will be
billed on outpatient hospital or individual professional claims
to further define the procedure code or indicate that certain reimbursement situations will apply
to the billing. Recognition and utilization of modifiers are essential
for ensuring accurate processing and payment of these claim types.
3.5.3.2.2.2 Industry standard modifiers
are used to identify surgical procedures which have been terminated
prior to and after the delivery of anesthesia.
• Modifiers 52 and 73 are used
to identify a surgical procedure that is terminated prior to the
delivery of anesthesia and is reimbursed at 50% of the allowable; e.g.,
the ASC tier rate, the Ambulatory Payment Classification (APC) allowable
amount for OPPS claims, or the CHAMPUS Maximum Allowable Charge
(CMAC) for individual professional providers.
• Modifiers 53 and 74 are used
for terminated surgical procedures after delivery of anesthesia
which are reimbursed at 100% of the appropriated allowable amounts
referenced above.
3.5.3.3 Unbundling of Procedures
The contractor shall
ensure that reimbursement for claims involving multiple procedures
conforms to the unbundling guidelines as outlined in
Chapter 1, Section 3.
3.5.3.4 Incidental Procedures
The rules for reimbursing incidental
procedures as contained in
Chapter 1, Section 3,
are
applied to ambulatory surgery procedures
reimbursed under the rules set forth in this section. That is, no reimbursement
is
made for incidental procedures performed
in conjunction with other procedures which are not classified as
incidental. This limitation applies to payments for facility claims
as well as to professional services.
3.6 Updating Payment Rates
The rates
are updated
annually by DHA by the same update factor as is used in the Medicare
annual updates for ASC payments.
• The rates were updated by 2.6%
effective January 1, 2020.
• The rates were updated by 2.4%
effective January 1, 2021.
• The rates were
updated by 2.0% effective January 1, 2022.
3.7 Claims for Ambulatory Surgery
3.7.1 Claim Forms
Claims for facility charges shall be
submitted on a Centers for Medicare and Medicaid Services (CMS) 1450
UB-04. Claims for professional charges are submitted
on either a CMS 1450 UB-04 or a CMS 1500 Claim Form. The preferred
form is the CMS 1500 Claim Form. When professional services are
billed on a CMS 1450 UB-04, the information on the CMS 1450 UB-04
should indicate that these services are professional in nature and
be identified by the appropriate CPT-4 code and revenue code.
3.7.2 Billing Data
The claim
shall identify
all procedures which were performed (by CPT-4 or HCPCS code). The
facility claim shall be submitted on the CMS 1450 UB-04, the procedure
code
is shown in Form Locator (FL)
44.
Note: Claims from ASCs shall be
submitted on the CMS 1450 UB-04 claim form. Claims not submitted
on the appropriate claim form are denied.
3.8 Wage Index Changes
If, during the year, Medicare
revises any of the wage indexes used for ambulatory surgery reimbursement,
such changes will not be incorporated into the TRICARE payment rates
until the next routine update. These changes will not be incorporated
regardless of the reason Medicare revised the wage index.
3.9 Subsequent Hospital Admissions
If a beneficiary is admitted
to a hospital subject to the DRG-based payment system as a result
of complications, etc. of ambulatory surgery, the ambulatory surgery
procedures are to be billed and reimbursed separately from the hospital
inpatient services. The same rules are applicable
to ER services.
3.11 Exclusions
Surgical procedures that do
not have an ambulatory surgery rate listed on DHA’s ambulatory surgery web
site are excluded from cost-sharing in freestanding ASCs.