1.0 PROVIDER DISCOUNTS
The contractor may negotiate
agreements or contracts with providers which include reductions
or discounts in the TRICARE program reimbursement methodologies,
however, the provider must agree to participate on and
file TRICARE claims on behalf of the
beneficiary. This section provides direction concerning
processing of claims subject to such reductions in reimbursement.
2.0 AGREEMENTS
Agreements must meet the following
conditions:
2.1 The provider must be TRICARE-authorized.
If the provider is not currently certified, the contractor shall
certify the provider through the normal provider certification process.
If the provider is non-certifiable, the contractor shall notify
both the provider and the Military Treatment Facility (MTF)/Enhanced
Multi-Service Market (eMSM) if the MTF/eMSM is involved. Contractors
shall ensure that clinics, Preferred Provider Organizations (PPOs),
and other multi-member groups provide a list of the providers within
the organization, along with their Employer Identification Numbers
(EINs)/Social Security Numbers (SSNs). Contractors shall review
these lists, making sure that each individual provider in the groups
is authorized under TRICARE.
2.2 For all
contractor negotiated agreements, the effective dates shall be the
first day of the month following the month the agreement was signed.
2.3 The agreement shall contain
date parameters (effective and termination dates). For multi-member
groups, the effective date of each member shall be the same unless
otherwise indicated. Groups must identify the rendering physician
on the claim.
2.4 The agreement shall list specific
procedure codes and the method and the amount of discount, for example,
a general description such as gynecological procedures is not acceptable.
2.5 Providers must agree to participate
on all charges, whether the services provided are subject to the
negotiated discount or not.
2.6 Providers
cannot balance bill the beneficiary.
2.7 Provider
must agree to bill the patient’s Other Health Insurance (OHI) prior
to billing TRICARE.
2.8 Providers
must be able to fluently speak, read, and write the English language.
3.0 METHODS
At a minimum, the following
negotiated reimbursement reduction methods are authorized:
3.1 Agreements using a percent
reduction method. Under the percent reduction method, provider reimbursement
is reduced by a percentage rate (e.g., 20%) applied to the allowable
amount for established reimbursement methods in
32
CFR 199.14. If the billed charge minus the discount amount exceeds
the CHAMPUS Maximum Allowable Charge (CMAC), payment is limited
to the CMAC unless an exception is allowed under demonstration authority.
The discount shall be taken from the applicable reimbursement methodology
used for the provider, i.e., Diagnosis Related Group (DRG), mental
health per diem, Residential Treatment Center (RTC) per diem, Sole
Community Hospital (SCH) payment method for inpatient service, etc.
The cost-share is always applied after calculation of the discounted amount.
3.2 Agreements may include a discount
for the initial 1,000 claims processed (does not include adjustments)
during a stated period of time (e.g., 10%) and a higher discount
for claims exceeding 1,000, (e.g., 15%). In this case the contractor
must have counters to tally the number of claims processed by individual,
provider or group.
3.3 Agreements
using negotiated per diems are authorized for hospitalization and
RTC care, but the established method of payment cannot be altered,
i.e., a DRG hospital cannot revert to using a per diem, unless an
exception is allowed under demonstration authority. The cost-share
shall be applied after calculation of the new allowed amount.
3.4 Agreements on which each procedure
code listed in the agreement could have a different percentage discount
or fee schedule.
3.5 Agreements
which have different discounts for inpatient and outpatient services.
This can be for both professional and institutional providers.
3.6 Agreements with provider groups
when only some of the members of the group will honor the participation/discount
agreement. Groups must identify the rendering physician on the claim.
4.0 CONTRACTOR RESPONSIBILITIES
4.1 The contractor shall load the
name of the provider and EIN, the applicable negotiated reimbursement,
and the effective date parameters within 45 days of receipt of the
agreement/contract.
4.2 The contractor
shall ensure, by implementing an automated payment mechanism, that
claims from affiliated providers with agreements or contracts which
include negotiated reimbursements are processed using an authorized
and correct reimbursement method.
4.3 The contractor
shall report the discounted amount as the allowed amount.
5.0 SAMPLE NEGOTIATED REIMBURSEMENT
METHODS
5.1 Negotiated per diems or negotiated
percent reduction in the standard mental health or RTC per diem
(e.g., 20% reduction in the per diem). Negotiated per diems are
subject to the adjustments applied to regional per diems (i.e.,
wage index factor, Indirect Medical Education (IDME) costs, etc.).
A negotiated per diem for a provider shall be paid by the contractor
until expiration, renewal, or renegotiation of the contract or agreement.
Percentage reductions shall be applied to allowable charges for
professional services.
5.2 Negotiated
professional service reimbursement reductions shall be applied to
either the current or prior year’s prevailing charge profile based
on dates of service.
5.3 Examples
5.3.1 Percentage reduction applied
to the DRG allowable amount (e.g., a 10% reduction). The following
example illustrates calculation of a reduced DRG payment:
10% negotiated reduction,
$265 per diem cost-share for a retiree (assuming the per diem is
less than 10% of the billed charge), four day stay. Current cost-shares
can be found at http://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement.
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DRG allowance
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$9,000.00
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Less negotiated reduction
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- 900.00
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Negotiated allowed amount
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$8,100.00
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Less cost-share ($265 x 4 x
0.90)
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- 1,060.00
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Payment to hospital
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$7,040.00
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5.3.2 The following
example illustrates application of a percentage reduction in the
standard per diem for a high volume mental health provider or an
RTC:
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10% negotiated reduction,
25% cost-share for retiree, $375 per diem, 30 day stay.
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Standard allowed amount ($375
x 30)
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$11,250.00
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Less negotiated reduction
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-1,125.00
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Negotiated allowed amount
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$10,125.00
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Less cost-share (0.25 x $10,125)
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-2,531.25
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Payment to facility
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$7,593.75
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5.3.3 The following
example illustrates application of a percentage reduction in the
standard per diem for a low volume mental health provider:
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10% negotiated reduction,
25% cost-share for a retiree, $410 regional per diem (net of adjustments),
30 day stay billed at $500 per day.
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Standard allowed amount ($410
x 30)
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$12,300.00
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Less negotiated reduction
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-1,230.00
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Negotiated allowed amount
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$11,070.00
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Less cost-share (0.25 x $11,070)
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-2,767.50
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(Note: 25% of
the negotiated allowed amount is less than the daily cost-share
of $126.)
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Payment to facility
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$8,302.50
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5.3.4 The following
example illustrates payment calculation for a negotiated per diem (applicable
to high volume mental health providers, and RTCs):
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$400 standard per diem,
$350 negotiated per diem, 25% cost-share for a retiree, 30 day stay.
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Standard allowed amount ($400
x 30)
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$12,000.00
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Negotiated allowed amount ($350
x 30)
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$10,500.00
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Less cost-share (0.25 x $10,500)
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- 2,625.00
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Payment to facility
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$7,875.00
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5.3.5 Percentage
reduction may be applied to the billed charge (e.g., 20% reduction
in the billed charge) for inpatient or outpatient services delivered
by institutional providers not reimbursed under the DRG-based payment
system or the inpatient mental health per diem system. The following example
illustrates calculation of a payment for inpatient services using
the negotiated percent reduction method:
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10% negotiated reduction
in billed charges, 25% cost-share for a retiree, four day stay billed
at $400 per day.
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Billed charge ($400 x 4)
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$1,600.00
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Less negotiated reduction
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-160.00
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Negotiated allowed amount
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$1,440.00
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Less cost-share (0.25 x $1,440)
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-360.00
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Payment to hospital
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$1,080.00
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5.3.6 The following
example illustrates calculation of a payment for outpatient services
delivered by an institutional provider using the negotiated percent
reduction method:
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10% negotiated reduction
in billed charges, 25% cost-share for a retiree, one visit billed
for $70 for care provided in a hospital emergency room.
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Billed charge
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$70.00
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Less negotiated reduction
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-7.00
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Negotiated allowed amount
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$63.00
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Less cost-share (0.25 x $63)
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-15.75
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Payment to hospital
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$47.25
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5.3.7 The following
example illustrates application of a professional service rate reduction:
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10% negotiated reduction,
25% cost-share for a retiree.
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CMAC
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$80.00
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Less negotiated reduction
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-8.00
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Negotiated allowed amount
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$72.00
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Cost-share (0.25 x $72)
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-18.00
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Payment to provider
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$54.00
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