3.2 Calculation
Of The ASA
The following
procedures are followed in calculating the TRICARE ASA.
3.2.1 Apply the Cost-to-Charge Ratio
(CCR)
In this
step each charge is reduced to a representative cost by using the
Medicare CCR. Effective CY 2021, the
CCR is 0.2495. Effective CY 2022, the CCR is 0.2495. Effective
CY 2023, the CCR is 0.2540.
3.2.2 Increase for Bad Debts
The base standardized amount is increased
by 0.01 to reimburse hospitals for bad debt expenses attributable
to TRICARE beneficiaries. Effective FY 2013, the base standardized
amount will be increased by 0.0065.
3.2.3 Update
for Inflation
Any recalculation
of the ASA uses an inflation factor equal to the hospital market
basket index used by the Centers for Medicare and Medicaid Services
(CMS) in their Inpatient Prospective Payment System (IPPS).
3.2.4 Preliminary Non-Teaching Standardized
Amount
At this
point Indirect Medical Education (IDME) costs have been removed
through standardization in the weight methodology and direct medical
education costs have been removed through the application of the
Medicare CCR which does not include direct medical education costs.
Therefore, a non-teaching standardized amount is computed by dividing
aggregate costs by the number of discharges in the database.
3.2.5 Preliminary Teaching Standardized
Amounts
A separate
standardized amount is calculated for each teaching hospital to
reimburse for IDME expenses. This is done by multiplying the non-teaching
standardized amount by 1.0 plus each hospital’s IDME factor.
3.2.6 System Standardization
The preliminary standardized
amounts is further standardized using a factor which equals total
DRG payments using the preliminary standardized amounts divided
by the sum of all costs in the database (updated for inflation).
To achieve standardization, each preliminary standardized amount is divided
by this factor. This step is necessary so that total DRG system
outlays, given the same distribution among hospitals and diagnoses,
are equal whether based upon DRGs or on charges reduced to costs.
3.2.7 Labor-Related and Non-Labor-Related
Portions of the ASA
The ASA
shall be divided into labor-related and nonlabor-related portions
according to the ratio of these amounts in the national ASA under
the Medicare IPPS. Effective October 1, 2013, and subsequent years,
for wage index values greater than 1.0, the labor related portion
of the ASA shall equal 68.3%, and the non-labor related portion
shall equal 31.7%. For wage indexes less than or equal to 1.0 the labor-related
portion for the ASA shall equal 62% and the non-labor-related portion
shall equal 38%.
3.2.8 Updating
the Standardized Amounts
For years
subsequent to the initial year, the standardized amounts is updated
by the final published Medicare annual update factor, unless the
standardized amounts are recalculated.