3.2 Calculation Of The ASA
The following procedures are followed
in calculating the TRICARE ASA.
3.2.1 Apply
the Cost-to-Charge Ratio (CCR)
In this step each charge is
reduced to a representative cost by using the Medicare CCR. Effective
CY 2020, the CCR is 0.2567. Effective CY 2021, the CCR is 0.2495. Effective
CY 2022, the CCR is 0.2495.
3.2.2 Increase for Bad Debts
The base standardized amount is increased
by 0.01 to reimburse hospitals for bad debt expenses attributable
to TRICARE beneficiaries. Effective FY 2013, the base standardized
amount will be increased by 0.0065.
3.2.3 Update
for Inflation
Any recalculation
of the ASA uses an inflation factor
equal to the hospital market basket index used by the Centers for Medicare
and Medicaid Services (CMS) in their Inpatient Prospective Payment
System (IPPS).
3.2.4 Preliminary
Non-Teaching Standardized Amount
At this point Indirect Medical
Education (IDME) costs have been removed through standardization
in the weight methodology and direct medical education costs have
been removed through the application of the Medicare CCR which does
not include direct medical education costs. Therefore, a non-teaching
standardized amount is computed by
dividing aggregate costs by the number of discharges in the database.
3.2.5 Preliminary Teaching Standardized
Amounts
A separate
standardized amount is calculated for
each teaching hospital to reimburse for IDME expenses. This is done
by multiplying the non-teaching standardized amount by 1.0 plus
each hospital’s IDME factor.
3.2.6 System
Standardization
The preliminary
standardized amounts is further standardized
using a factor which equals total DRG payments using the preliminary
standardized amounts divided by the sum of all costs in the database (updated
for inflation). To achieve standardization, each preliminary standardized
amount is divided by this factor. This
step is necessary so that total DRG system outlays, given the same
distribution among hospitals and diagnoses, are equal whether based upon DRGs
or on charges reduced to costs.
3.2.7 Labor-Related
and Non
-Labor-Related Portions of the
ASA
The ASA shall be divided into
labor-related and nonlabor-related portions according to the ratio
of these amounts in the national ASA under the Medicare IPPS. Effective
October 1, 2013, and subsequent years, for wage index values greater
than 1.0, the labor related portion of the ASA shall equal 68.3%, and
the non-labor related portion shall equal 31.7%. For wage indexes
less than or equal to 1.0 the labor-related portion for the ASA
shall equal 62% and the non-labor-related portion shall equal 38%.
3.2.8 Updating the Standardized Amounts
For years subsequent to the
initial year, the standardized amounts is updated
by the final published Medicare annual update factor, unless the
standardized amounts are recalculated.