(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).
(F) 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.
(G) 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.
(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) Additional
payment for new COVID-19 Treatments.
TRICARE
will adopt the Medicare New COVID-19 Treatments Add-On Payments
(NCTAP) adjustment to DRGs. New COVID-19 treatments shall be reimbursed
the lesser of (1) 65 percent of the operating outlier threshold
for the claim or (2) 65 percent of the amount by which the costs
of the case exceed the standard DRG payment for an individual treated
using new COVID-19 treatments discharged during the Secretary of
Health and Human Services’ declared public health emergency (PHE)
through the end of the FY in which the PHE terminates.
(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, to include cancer and children’s hospitals,
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, except for cancer and children’s hospitals, 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 general temporary military contingency payment adjustment
(GTMCPA) will also be available at the discretion of the Director,
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 GTMCPAs 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. For cancer and children’s hospitals to qualify for
the GTMCPA, they must meet the criteria in paragraphs (a)(6)(ii)(E)(3)(i)
through (iii) of this section. Cancer and children’s hospitals that
meet these criteria will be eligible to receive up to 115 percent of
the hospital’s costs for OPPS services. The criteria for adopting,
modifying, and/or extending deviations and/or adjustments to OPPS
payments shall be issued through CHAMPUS policies, instructions,
procedures and guidelines as deemed appropriate by the Director,
or a designee. GTMCPAs 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 Director, or designee.
The GTMCPA qualification criteria for cancer and children’s hospitals follow:(i) Have
10 percent or more of its revenue come from TRICARE for care of
ADSMs and ADDs;
(ii) Have
10,000 or more of its TRICARE visits paid under the OPPS for ADSMs
and ADDs annually; and
(iii) Be
deemed as essential for TRICARE operations.
(4) For
cancer and children’s hospitals. There
are no temporary transitional payment adjustments in place. Reimbursement
will be on the basis of OPPS, however, payments shall be adjusted
so that these providers receive 100 percent of their costs. Adjustments
shall be made on an annual basis, and within 180 days of the end
of the OPPS year (OPPS Year is defined as April 1 through March
30) DHA will calculate the hospital’s costs, utilizing the hospital-specific
outpatient cost-to-charge ratio (CCR). The costs shall be calculated
by multiplying the hospital’s billed charges for OPPS services by
the CCR. If the hospital’s costs, as calculated by DHA, exceeded
the payment that had been made under OPPS, the hospital shall receive
an annual payment adjustment so that the hospital receives 100%
of their costs.
(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
of Freestanding End Stage Renal Disease (ESRD) facilities.
(1) This paragraph
(c)(1) establishes payment methods for dialysis provided by TRICARE
authorized freestanding ESRD facilities. TRICARE shall reimburse
a single, flat, per-session fee to TRICARE authorized freestanding
ESRD facilities rendering hemodialysis or peritoneal dialysis for
treatment of ESRD or AKI. The flat, per-session fee will apply to
renal dialysis services furnished in the ESRD facility or in a patient’s
home. All renal dialysis items and services furnished in the ESRD
facility or in a patient’s home are included in the flat per-session
rate, except for those items and services listed in paragraph (c)(1)(ii)
of this section.
(i) Services included
in the flat per-session rate must be furnished by an authorized
TRICARE ESRD institutional provider:
(A) Institutional
charges (e.g., charges for facility use, use or treatment rooms,
and general nursing services);
(B) Routine laboratory
services related to the dialysis session;
(C) Pharmaceuticals
and supplies related to the dialysis;
(D) Home dialysis support
services identified at 42 CFR 494.100;
(E) Purchase and delivery
of all necessary home dialysis supplies; and
(F) Dialysis training
for days 1-120.
(ii) Services
which may be billed separately:
(A) Evaluation
and management services provided by authorized individual professional
providers. These services will continue to be reimbursed using existing
reimbursement systems (e.g., CMAC).
(B) Drugs, supplies,
and devices listed by Medicare as eligible for Transitional Drug
Add-on Payment Adjustment and Transitional Add-on Payment Adjustment
for New and Innovative Equipment and Supplies under the Medicare ESRD
PPS. These services will continue to be reimbursed using existing
reimbursement systems (e.g., CMAC).
(C) Professional services,
supplies, and pharmaceuticals unrelated to dialysis care (e.g.,
if a flu shot is administered at the same time as dialysis treatment).
These services will continue to be reimbursed using existing reimbursement
systems (e.g., CMAC).
(iii) Establishment
of the flat rate:
(A) Per session rate for treatment days 1-120.
The flat, per-session rate
shall be equal to the current Medicare base rate, multiplied by
the current Medicare adjustment factor applied to individuals aged
44-69 (7% for CY 22), and further multiplied by the current Medicare
adjustment factor for the date of onset (32.7% for CY 2022). The Medicare
factors utilized in subsequent years will be based on modifications
made under 42 CFR part 413, subpart H, Medicare ESRD PPS.
(B) Per
session rate for treatment day 121 and beyond.
The flat,
per-session rate shall be equal to the Medicare base rate, multiplied
by the Medicare adjustment factor applied to individuals aged 44-69.
The Medicare factors utilized in subsequent years will be based
on modifications made under 42 CFR part 413, subpart H, Medicare
ESRD PPS.
(C) Wage
adjustment.
The per-session rates in paragraphs
(c)(1)(iii)(A) and (B) of this section shall be wage adjusted using
the wage adjustment factors and labor-related shares published in
the most recent Medicare ESRD Final Rule at the time the annual
per-session rates are posted.
(D) Annual
updates.
The per session rates will
be updated within 90 days of publication of new Medicare base rates,
and published to the TRICARE website at www.health.mil.
(E) Dialysis
training.
To account for training services
and supplies, dialysis training sessions will receive a home dialysis
training add-on payment for day treatment days 121 and after. The
training add-on payment will not apply to treatment days 1-120,
as the onset adjustment factor of 32.7% is applied to the per-session
rate for treatment days 1-120.
(2) The reimbursement
methods established in paragraph (c)(1) of this section applies
to freestanding ESRD facilities meeting the requirements established
for TRICARE authorized freestanding ESRD facilities in Sec. 199.6. For
purposes of cost-sharing and copayments, treatment provided by freestanding
ESRD facilities are considered outpatient specialty visits. The
applicable copayments and cost-shares described in Sec. 199.4 and
199.17(k)(2)(iii) shall apply. Hospital-based ESRD facilities are
not subject to the provisions of this paragraph, and will continue
to be reimbursed utilizing other applicable reimbursement systems
(e.g., the Outpatient Prospective Payment System).
(d)
Payment
of institutional facility costs for ambulatory surgery.
In general, TRICARE
pays for 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 CAHs, which are to be reimbursed
in accordance with the provisions of paragraph (a)(6)(ii) or (iii)
of this section. Surgical services provided in Ambulatory Surgery
Centers (ASCs) as defined in Sec. 199.2(b) will be paid in accordance
with the provisions outlined in section 1833(t) of the Social Security
Act and its implementing Medicare regulation (42 CFR part 416).
TRICARE will recognize, to the extent practicable, in accordance
with 10 U.S.C. 1079(i)(2), Medicare’s ASC reimbursement methodology
to include specific coding requirements, prospectively determined
rates, discounts for multiple surgical procedures, the scope of
ASC services, covered surgical procedures, and the basis of payment
as described in 42 CFR part 416 with the exception that TRICARE
will implement no transitional payments. Payments to ASCs for covered
procedures and services will be based on the lesser of the billed
charge or the ASC payment rate. Payment for ambulatory surgery procedures
is limited to those procedures that are reimbursed by Medicare in
ASCs, with the exception of dental procedures that are covered by the
TRICARE program, as described in Sec. 199.4. In the absence of a
Medicare ASC fee schedule rate, the payment for a covered dental
procedure in ASCs will be based on the same rate under TRICARE’s
OPPS.
(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; 88 FR 2001, Jan 12, 2023; 88 FR 19855,
Apr 4, 2023]