3.2.1 Capital Costs
The TRICARE Program will reimburse
hospitals for their capital costs as reported annually to the contractor
(see below). Payment for capital costs are made annually. See
Chapter 3, Section 2 for the procedures for
paying capital costs.
3.2.1.1 The TRICARE Program will reimburse
100% of capital-related costs.
3.2.1.2 Allowable capital costs are
those specified in Medicare Regulation Section 413.130 of Title 42
Code of Federal Regulations (CFR).
3.2.1.3 To
obtain the total allowable capital costs from the Medicare cost
reports for initial and amended requests, the contractor shall add
the figures from Worksheet D, Part I, Column 3, lines 30-33, lines
34 and 35 if the cost report reflects intensive care unit costs,
and line 43, to the figures from Worksheet D, Part II, Column 1,
lines 50-76 and 88-93.
3.2.1.4 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 Section
413.17, then the hospital shall 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 413.17, no part of the charge to the provider is considered
a capital-related cost unless the services, facilities, or supplies
are capital-related in nature and:
3.2.1.4.1 The capital-related equipment
is leased or rented by the provider;
3.2.1.4.2 The capital-related equipment
is located on the provider’s premises; and
3.2.1.4.3 The capital-related portion
of the charge is separately specified in the charge to the provider.
3.2.2 Direct Medical Education Costs
The TRICARE Program will reimburse
hospitals their actual direct medical education costs as reported annually
to the contractor (see below). Such direct medical education costs
are for a teaching program approved under Medicare Regulation Section
413.85. Payment for direct medical education costs are made annually
and are calculated using the same steps required for calculating
capital payments below. Allowable direct medical education costs
are those specified in Medicare Regulation Section 413.85. See
Chapter 3, Section 2 for the procedures for
paying direct medical education costs.
3.2.2.1 Direct medical education costs
generally include:
3.2.2.1.1 Formally organized or planned
programs of study usually engaged in by providers to enhance the
quality of care in an institution.
3.2.2.1.2 Nursing schools.
3.2.2.1.3 Medical education of paraprofessionals
(e.g., radiological technicians).
3.2.2.2 Direct medical education costs
do not include:
3.2.2.2.1 On-the-job training or other
activities which do not involve the actual operation or support,
except through tuition or similar payments, of an approved education
program.
3.2.2.2.2 Patient education or general
health awareness programs offered as a service to the community
at large.
3.2.2.3 To obtain the total allowable
direct medical education costs from the Medicare cost reports on
all initial and amended requests the contractor shall add the figures
from Worksheet B, Part I, Columns 20-23, lines 30-33, lines 34 and
35 if the cost report reflects intensive care unit costs, 43; and 50-76;
and 88-93.
3.2.3 Determining
Amount Of Capital And Direct Medical Education (CAP/DME) Payment
To account for payments by
Other Health Insurance (OHI), TRICARE’ payment amounts for CAP/DME are determined
according to the following steps. Throughout these calculations
claims on which the TRICARE Program made no payment because OHI
paid the full TRICARE-allowable amount are not counted.
Step 1: Determine
the ratio of TRICARE inpatient days to total inpatient days using
the data described below. In determining total TRICARE inpatient
days the following are not to be included:
• Any days determined to be not
medically necessary, and
• Days included on claims for
which the TRICARE Program made no payment because OHI paid the full
TRICARE-allowable amount.
Step 2: Multiply
the ratio from Step
1 by total allowable
capital costs.
Step 3: Reduce
the amount from Step
2 by the appropriate
capital reduction percentage(s). This is the total allowable TRICARE
capital payment for DRG discharges.
Step 4: Multiply
the ratio from Step
1 by total allowable
direct medical education costs. This is the total allowable TRICARE
direct medical education payment for DRG discharges.
Step 5: Combine the amounts from Steps
3 and
4.
This is the amount of TRICARE payment due the hospital for CAP/DME.
3.2.4 Payment Of CAP/DME Costs
3.2.4.1 General
All hospitals subject to the
TRICARE DRG-based payment system, except for children’s hospitals
(see below), are reimbursed for allowed CAP/DME costs by submitting
a request and the applicable pages from the Medicare cost-report
to the TRICARE contractor.
3.2.4.1.1 Initial requests for payment
of CAP/DME are filed with the TRICARE contractor on or before the
last day of the 12th month following the close of the hospitals’
cost-reporting period. The request covers the one year period corresponding
to the hospital’s Medicare cost-reporting period. Thus, for cost-reporting
periods, requests for payment of CAP/DME are filed no later than
12 months following the close of the cost-reporting period. For
example, if a hospital’s cost-reporting period ends on June 30,
2016, the request for payment is filed on or before June 30, 2017.
Those hospitals that are not Medicare participating providers are
to use an October 1 through September 30 Fiscal Year (FY) for reporting
CAP/DME costs.
3.2.4.1.1.1 An extension of the due date
for filing the initial request is granted when an extension has
been granted by the Centers for Medicare and Medicaid Services (CMS)
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, as described in Section 413.24 of
Title 42 CFR.
3.2.4.1.1.2 All costs reported to the TRICARE
contractor shall correspond to the costs reported on the hospital’s
Medicare cost report. If the costs change as a result of a subsequent
Medicare desk review, audit or appeal, the revised costs along with
the applicable pages from the amended Medicare cost report are provided
to the TRICARE contractor within 30 days of the date the hospital
is notified of the change. The request is signed by the hospital
official responsible for verifying the amounts. The Medicare Notice
of Program Reimbursement (NPR) letter is submitted with the amended
cost report.
3.2.4.1.1.3 The 30 day period is a means
of encouraging hospitals to report changes in its CAP/DME costs
in a timely manner. If the contractor receives an amended request
beyond the 30 days, it shall process the adjustment and inform the
provider of the importance of submitting timely amendments.
3.2.4.1.1.4 The hospital official is certifying
in the initial submission of the cost report that any changes resulting
from a subsequent Medicare audit shall be promptly reported. Failure
to promptly report the changes resulting from a Medicare audit is
considered a misrepresentation of the cost report information. Such
a practice may be considered fraudulent, and may result in criminal
civil penalties or administrative sanctions of suspension or exclusion
as an authorized provider.
3.2.4.2 Information
Necessary For Payment Of CAP/DME Costs
The following information is reported
to the contractor:
3.2.4.2.1 The hospital’s name.
3.2.4.2.2 The hospital’s address.
3.2.4.2.3 The hospital’s TRICARE provider
number.
3.2.4.2.4 The hospital’s Medicare provider
number.
3.2.4.2.5 The period covered--this shall correspond
to the hospital’s Medicare cost-reporting period.
3.2.4.2.6 Total
inpatient days provided to all patients in units subject to DRG-based
payment.
3.2.4.2.7 Total
TRICARE inpatient days provided in units subject to DRG-based payment.
(This is only days which were “allowed” for payment. Therefore,
days which were determined not medically necessary are not to be
included.) Total inpatient days provided to active duty members
in units subject to DRG-based payment.
3.2.4.2.8 Total
allowable capital costs. This shall correspond with the applicable
pages from the Medicare cost-report.
3.2.4.2.9 Total
allowable direct medical education costs. This shall correspond
with the applicable pages from the Medicare cost-report.
3.2.4.2.10 Total
full-time equivalents for:
• Residents.
• Interns (see below).
3.2.4.2.11 Total inpatient beds (see below).
3.2.4.2.12 Title of official signing the
report.
3.2.4.2.13 Reporting date.
3.2.4.2.14 The report shall contain a
certification statement that any changes to items in
paragraphs 3.2.4.2.6,
3.2.4.2.7,
3.2.4.2.8,
3.2.4.2.9,
and
3.2.4.2.10, which are a result of a review,
audit, or appeal of the provider’s Medicare cost-report, is reported
to the contractor within 30 days of the date the hospital is notified
of the change.
3.2.4.2.15 All cost reports shall be certified
by an officer or administrator of the provider. The general concept
is to notify the certifying official that misrepresentation or falsification
of any of the information in the cost report is punishable by fine
and/or imprisonment. The signing official shall acknowledge this
as well as certify that the cost report filed, together with any
supporting documentation, is true, correct and complete based upon
the books and records of the provider.
3.2.4.3 Contractor Actions
3.2.4.3.1 Initial
requests for CAP/DME payment.
3.2.4.3.1.1 The contractor may, but is
not required, to provide inpatient day verification reports to hospitals
prior to an initial request being submitted.
3.2.4.3.1.2 The
contractor shall verify the number of TRICARE and active duty inpatient
days with its data. If the contractor’s data represents a greater
number of days than submitted on the hospital’s request, payment
is based upon the contractor’s data. If the hospital’s request represents
a greater number of days than the contractor’s data, the contractor
shall notify the hospital of the discrepancy and inform them payment
is based upon the number of days it has on file unless the hospital
can provide documentation substantiating the additional days. The
notification to the hospital is made within 10 business days of
identification of the discrepancy and include the inpatient day
verification report.
3.2.4.3.1.3 The contractor shall wait until
the end of the following month to hear from the hospital. If the
hospital does not respond, the contractor shall make payment based upon its
totals.
3.2.4.3.1.4 The contractor shall verify
the accuracy of the financial amounts listed for CAP/DME with the
applicable pages of the Medicare cost report. If the financial amounts
do not match, the contractor shall reimburse the hospital based upon the
figures in the cost-report and notify the hospital of the same.
3.2.4.3.1.5 The contractor shall make the
CAP/DME payment to the hospital within 30 days of the initial request
unless notification has been sent to the hospital regarding a discrepancy
in the number of days as outlined in
paragraph 3.2.4.3.1.2.
3.2.4.3.2 Amended Requests for CAP/DME.
3.2.4.3.2.1 The contractor may, but is
not required, to provide inpatient day verification reports to hospitals
prior to an amended request being submitted.
3.2.4.3.2.2 The
contractor shall process amended payment requests based upon changes
in the Medicare cost-report as a result of desk reviews, audits
and appeals. An adjustment is not processed unless there are changes
to items 6 through 10 on the initial CAP/DME reimbursement request.
The contractor shall not process amended requests for days only.
3.2.4.3.2.3 The contractor shall verify
the number of TRICARE and active duty inpatient days with its data.
If the contractor’s data represents a greater number of days than
submitted on the hospital’s request, payment is based upon the contractor’s
data. If the hospital’s request represents a greater number of days
than the contractor’s data, the contractor shall notify the hospital
of the discrepancy and inform them payment is based upon the number
of days it has on file unless the hospital provides documentation
substantiating the additional days. The notification to the hospital shall be
made within 10 business days of identification of the discrepancy
and include the inpatient day verification report.
3.2.4.3.2.4 The contractor shall wait until
the end of the following month to hear from the hospital. If the
hospital does not respond, the contractor shall make payment based upon its
totals.
3.2.4.3.2.5 The contractor shall verify
the accuracy of the financial amounts listed for CAP/DME with the
applicable pages of the amended Medicare cost report. If the financial
amounts do not match, the contractor shall reimburse the hospital
based upon the figures in the cost-report and notify the hospital
of the same.
3.2.4.3.2.6 The contractor shall make the
CAP/DME payment to the hospital within 30 days of the amended request
unless notification has been sent to the hospital regarding a discrepancy
in the number of days as outlined in
paragraph 3.2.4.3.2.2.
3.2.4.3.2.7 The contractor shall proactively
research the Medicare web site (
https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/index.html)
to identify hospitals in its region that submitted amended Medicare
cost reports, obtain copies of the amended cost reports from hospitals
that failed to submit them to the TRICARE contractor as required, recalculate
the CAP/DME costs based upon the revised cost report data, and initiate
a collection action or notifying the hospital if an underpayment
was identified based upon the results of recalculation. The CMS
post the Hospital Cost Report files 30 days after the end of each
quarter.
3.2.4.3.2.8 The contractor shall complete
the “Annual Capital and Direct Medical Education Report” and submit
the information to the Contracting Officer (CO) and the Contracting
Officer’s Representative (COR). Details for reporting are identified
in DD Form 1423, Contract Data Requirements List (CDRL), located
in Section J of the applicable contract.
3.2.4.3.2.9 For a period of one year following
the report period, the “Quarterly Capital and Direct Medical Education
Over and Under Payment Report”, is updated on a calendar quarterly
basis to reflect collections that are received, or underpayments
refunded at the hospital’s request, after the end of the previous Calendar Year (CY) report.
The quarterly reports shall pertain only to cases initiated in the CY being
reported. Details for reporting are identified in DD Form 1423,
CDRL located in Section J of the applicable contract.
3.2.4.4 Negotiated Rates. If a contract
between the TRICARE Prime contractor and a subcontractor or institutional
network provider does not specifically state the negotiated rate
including all costs that are otherwise eligible for additional payment,
such as CAP/DME, the TRICARE Prime contractor shall reimburse these
costs to the subcontractors and institutional network providers
if a request for reimbursement is made.
3.2.4.5 CAP/DME costs for children’s
hospitals. Amounts for CAP/DME are included in both the hospital-specific
and the national children’s hospital differentials (see below).
The amounts are based upon national average costs. No separate or
additional payment is allowed.
3.2.4.6 CAP/DME costs under TRICARE
for Life (TFL). The TRICARE Program will make no payments for CAP/DME
costs for any claims on which Medicare makes payment. These costs
are included in the Medicare payment. TRICARE CAP/DME cost payments are made
only on claims on which the TRICARE Program is the primary payer
(e.g., claims for stays beyond 150 days), and in those cases payment is made
following the procedures described above.
3.2.5 Children’s Hospital Differential
3.2.5.1 General
All DRG-based payments to children’s
hospitals are increased by adding the applicable children’s hospital
differential to the appropriate ASA prior to multiplying by the
DRG weight.
3.2.5.2 Qualifying
for the Children’s Hospital Differential
To qualify for a children’s
hospital differential adjustment, the hospital shall be exempt from
the Medicare Prospective Payment System (PPS) as a children’s hospital.
If the hospital is not Medicare-participating, it shall meet the
criteria in
32 CFR 199.6(b)(4)(i). In addition, more than
half of its inpatients shall be individuals under the age of 18.
3.2.5.3
Calculation
of the Children’s Hospital Differentials
Differentials are calculated
so that they are “revenue neutral” for children’s hospitals. When
calculating ASAs, DHA subtracts the appropriate ASA from the children’s
hospital ASAs, and these amounts are the children’s hospital differentials.
The differentials are not subject to annual inflation updates nor are they recalculated
except as provided below.
3.2.5.4 Differential
Amounts
3.2.5.4.1 Calculation of the national
children’s hospital differentials. These differentials are calculated
using the procedures described in
paragraph 3.2.5.3, but based upon a database
of only low-volume children’s hospitals.
3.2.5.4.2 Claims are reimbursed using
a single set of differentials which do not distinguish high-volume
and low-volume children’s hospitals. The differentials are:
|
|
Large Urban Areas
|
|
|
|
Labor portion
|
$1,945.99
|
|
|
|
Non-labor portion
|
+ 689.42
|
|
|
|
|
$2,635.41
|
3.2.6
Outliers
3.2.6.1
General
The TRICARE Program will adjust
the DRG-based payment to a hospital for atypical cases. These outliers are
those cases that have either an unusually short Length-Of-Stay (LOS)
or involve extraordinarily high costs when compared to most discharges
classified in the same DRG. Recognition of these outliers is particularly
important, since the number of TRICARE cases in many hospitals is
relatively small, and there may not be an opportunity to “average
out” DRG-based payments over a number of claims. The contractor shall not document
or verify the medical necessity of outliers prior to payment, since
outlier review is part of the admission and quality review system.
However, in determining additional cost outlier payments on all
claims qualifying as a cost outlier, the contractor must identify
and reduce the billed charge for any non-covered items such as comfort
and convenience items (line N), as well as any duplicate charges
(line X) and services which may be separately billed (line 7) such
as professional fees, outpatient services, and solid organ transplant
acquisition costs. Comfort and convenience items are defined as
those optional items which the patient elects at an additional charge
(e.g., television, guest trays, beautician services), but are not
medically necessary in the treatment of a patient’s condition.
3.2.6.2 Provider Reporting of Outliers
The provider shall identify
outliers on the CMS 1450 UB-04, Form Locator (FL) 24 - 30. Code
60 is used to report LOS outliers, and code 66 is used to signify
that a cost outlier is not being requested. If a claim qualifies
as a cost outlier and code 66 is not entered in the appropriate
FL (i.e., it is blank or code 61), the contractor shall accept this
as a request for cost outlier payment by the hospital.
3.2.6.3 Short-Stay Outliers
The TRICARE DRG-based payment
system uses short-stay outliers and are reimbursed using a per diem amount.
All short-stay outliers are identified by the contractor when the
claims are processed, and necessary adjustments to the payment amounts
are made automatically.
• Any discharge which has a LOS
less than or equal to the greater of 1 or 1.94 standard deviations below
the arithmetic mean LOS for that DRG shall be classified as a short-stay
outlier. In determining the actual short-stay threshold, the calculation
will be rounded down to the nearest whole number, and any stay equal
to or less than the short-stay threshold will be considered a short-stay
outlier.
• Short-stay outliers are reimbursed
at 200% 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 wage-adjusted DRG amount divided by the arithmetic mean
LOS for the DRG. The per diem rate is calculated before the DRG-based
amount is adjusted for IDME. Cost outlier payments shall be paid
on short stay outlier cases that qualify as a cost outlier.
• Any stay which qualifies as
a short-stay outlier (a transfer cannot qualify as a short-stay
outlier), even if payment is limited to the normal DRG amount, is
to be considered and reported on the payment records as a short-stay
outlier. This will ensure that outlier data is accurate and will
prevent the beneficiary from paying an excessive cost-share in certain
circumstances.
3.2.6.4 Cost
Outliers
3.2.6.4.1 The following steps are followed
when calculating cost outlier payments for all cases other than
neonates and children’s hospitals:
Standard Cost = (Billed Charges
x CCR)
Outlier Payment = 80% of (Standard
Cost - Threshold)
Total Payments = Outlier Payments
+ (DRG Base Rate x (1 + (IDME))
Note: Noncovered charges continue
to be subtracted from the billed charges prior to multiplying the
billed charges by the CCR.
3.2.6.4.1.1
The
CCR for admissions occurring on or after January 1, 2021, is 0.2495.
The CCR for admissions occurring on or after January 1, 2022, is
0.2495. The CCR for admissions occurring on or after January
1, 2023, is 0.2540.
3.2.6.4.1.2 The National Operating Standard
Cost as a Share of Total Costs (NOSCASTC) for calculating the cost-outlier
threshold
for CY 2021 is 0.926, for
CY 2022 is 0.926, and for CY 2023 is 0.928.
3.2.6.4.2 For CY 2021, a TRICARE fixed
loss cost-outlier threshold is set at $26,913. Effective January
1, 2021, the cost-outlier threshold shall be the DRG-based amount
(wage-adjusted) plus the IDME payment, plus the flat rate of $26,913
(also wage-adjusted).
3.2.6.4.3 For CY 2022, a TRICARE fixed
loss cost-outlier threshold is set at $28,695.
Effective January 1, 2022, the cost-outlier threshold shall be the
DRG-based amount (wage-adjusted) plus the IDME payment, plus the
flat rate of $28,695 (also wage-adjusted).
3.2.6.4.4 For CY 2023,
a TRICARE fixed loss cost-outlier threshold is set at $36,486. Effective January
1, 2023, the cost-outlier threshold shall be the DRG-based amount
(wage-adjusted) plus the IDME payment, plus the flat rate of $36,486
(also wage-adjusted).
3.2.6.4.5 The cost-outlier threshold
is calculated as follows:
{[Fixed Loss Threshold x ((Labor-Related
Share x Applicable wage index) + Non-labor-related share) x NOSCASTC]
+ (DRG Base Payment (wage-adjusted) x (1 + IDME))}
Example: Using FY 1999 figures {[10,129
x ((0.7110 x Applicable wage index) + 0.2890) x 0.913] + (DRG Based
Payment (wage-adjusted) x (1 + IDME))}
3.2.6.5 Burn Outliers
3.2.6.5.2 Burn cases which qualify as
short-stay outliers, regardless of the date of admission, shall reimbursed
according to the procedures for short-stay outliers.
3.2.6.5.3 Burn cases which qualify as
cost outliers are reimbursed using a marginal cost factor of 90%.
3.2.6.5.4 For a burn outlier in a children’s
hospital, the appropriate children’s hospital outlier threshold
is used (see below), but the marginal cost factor is either 60%
or 90% according to the criteria above.
3.2.6.6 Children’s Hospital Outliers
The following special provisions
apply to cost outliers.
3.2.6.6.1 The threshold is the same as
that applied to other hospitals.
3.2.6.6.2
Effective
January 1, 2021, the standardized costs are calculated using a CCR
of 0.2694. Effective January 1, 2022, the standardized costs are
calculated using a CCR of 0.2694. Effective January 1,
2023, the standardized costs are calculated using a CCR of 0.2737. (This
is equivalent to the Medicare CCR increased to account for CAP/DME
costs.)
3.2.6.6.3 The marginal cost factor is 80%.
3.2.6.6.5
The
NOSCASTC for calculating the cost-outlier threshold for CY 2021
is 0.926. The NOCASTC for calculating the cost-outlier threshold
for CY 2022 is 0.926. The NOCASTC for calculating the
cost-outlier threshold for CY 2023 is 0.928.
3.2.6.6.6 The following calculation is
used in determining cost outlier payments for children’s hospitals
and neonates:
Step 1: Computation of Standardized
Costs:
Billed
Charges x CCR
(Non-covered charges are subtracted
from the billed charges prior to multiplying the charges by the CCR.)
Step 2: Determination of Cost-Outlier
Threshold:
{[Fixed Loss Threshold x ((Labor-Related
Share x Applicable wage index) + Non-labor-related share) x NOSCASTC]
+ [DRG Based Payment (wage-adjusted) x (1 + IDME)]}
Step 3: Determination of Cost Outlier
Payment
[{(Standardized
costs - Cost-Outlier Threshold) x Marginal Cost Factor} x Adjustment
Factor]
Step 4: Total
Payments = Outlier Payments + [DRG Base Rate x (1 + IDME)]
3.2.6.7 Neonatal Outliers
Neonatal outliers in hospitals
subject to the TRICARE DRG-based payment system (other than children’s hospitals) are determined
under the same rules applicable to children’s hospitals, except
that the standardized costs for cost outliers are calculated using
the CCR of 0.64. The CCR used to calculate cost outliers for neonates
in acute care hospitals is reduced to the same CCR used for all
other acute care hospitals.
3.2.7 IDME
adjustment
3.2.7.1 General
The DRG-based payments for
any hospital which has a teaching program approved under Medicare Regulation
Section 413.85, Title 42 CFR are adjusted to account for IDME costs.
The adjustment factor used is the one in effect on the date of discharge
(see below). The adjustment is made by multiplying the total DRG-based
amount by 1.0 plus a hospital-specific factor equal to:
• For admissions occurring during
FYs 2008 and subsequent years, the same formula shall be used except
the first number shall be 1.02.
3.2.7.2 Number of Interns and Residents
The TRICARE Program will use
the number of interns and residents from CMS most recently available Provider
Specific File.
3.2.7.3 Number
of Beds
The TRICARE Program will
use the number of beds from CMS’ most recently available Provider
Specific File.
3.2.7.4 Updates
of IDME Factors
3.2.7.4.1 The TRICARE Program will use
the ratio of interns and residents to beds from CMS’ most recently
available Provider Specific File to update the IDME adjustment factors.
The ratio is provided to the contractor to update each hospital’s
IDME adjustment factor at the same time as the annual DRG update.
The updated factors provided with the annual DRG update are applied
to claims with a date of discharge on or after January 1 of each
year.
3.2.7.4.2 Other updates of IDME factors. The contractor
shall update the IDME factor if a hospital provides information
(for the same base periods) which indicates that the IDME factor
provided by the TRICARE Program with the DRG update is incorrect
or needs updating. An IDME factor is updated based upon the hospital
submitting CMS Worksheet showing the number of interns, residents,
and beds. The effective date of these other updates is the date
payment is made to the hospital (check issued) for its CAP/DME costs,
but in no case later than 30 days after the hospital submits the
appropriate worksheet or information. The contractor shall notify
DHA of such IDME updates.
3.2.7.4.3 This alternative updating method only applies to
those hospitals subject to the Medicare Inpatient Prospective Payment
System (IPPS) as they are the only ones included in the Provider
Specific File.
3.2.7.5 Adjustment
for Children’s Hospitals
An IDME
adjustment factor is applied to each payment to qualifying children’s
hospitals. The factors for children’s hospitals are calculated using
the same formula as for other hospitals. The initial factor is based upon the
number of interns and residents and hospital bed size as reported
by the hospital to the contractor. If the hospital provides the
data to the contractor after payments have been made, the contractor shall not
make any retroactive adjustments to previously paid claims, but
the amounts are reconciled during the “hold harmless” process. At
the end of its FY, a children’s hospital may request that its adjustment
factor be updated by providing the contractor with the necessary
information regarding its number of interns and residents and beds.
The number of interns, residents, and beds shall conform to the
requirements above. The contractor shall update the factor within
30 days of receipt of the request from the hospital, and the effective
date shall conform to the policy contained above.
3.2.7.5.1 Each year, the contractor shall
send a notice, to each children’s hospital in its Region, requesting
updated information on its number of interns, residents and beds,
from the most recent cost report submitted to CMS for July 1 through
June 30, and advise them by July 1 of that same year to provide
the updated information to the contractor so the requirement in
paragraph 3.2.7.5.2 is met. Details for reporting
are identified in DD Form 1423, Contract Data Requirements List
(CDRL), located in Section J of the applicable contract.
3.2.7.5.2 The contractor shall report the
number of interns, residents, and beds and the updated ratios for
children’s hospitals, to DHA, Medical Benefits and Reimbursement
Section (MB&RS), or designee, by September 1 of each year for
use in DHA’s annual DRG update calculations. Details for reporting
are identified in DD Form 1423, CDRL, located in Section J of the
applicable contract. These updated amounts are included in the files
for the CY DRG update.
3.2.7.6 TRICARE
for Life (TFL)
No adjustment
for IDME costs is made on any TFL claim on which Medicare has made
any payment. If the TRICARE Program is the primary payer (e.g.,
claims for stays beyond 150 days) payments are adjusted for IDME
in accordance with the provisions of this section.
3.2.8 Present On Admission (POA)
Indicators and Hospital Acquired Conditions (HACs)
3.2.8.1 For services provided on or
after ICD-10 implementation:
3.2.8.1.1 Those inpatient acute care
hospitals that are paid under the TRICARE/CHAMPUS DRG-based payment
system shall report a POA indicator for both primary and secondary
diagnoses on inpatient acute care hospital claims. Providers shall
report POA indicators to the TRICARE Program in the same manner
they report to the CMS, and in accordance with the UB-04 Data Specifications Manual,
and ICD-10-CM Official Guidelines for Coding and Reporting. See
the complete instructions in the UB-04 Data Specifications Manual
for specific instructions and examples. Specific instructions on how
to select the correct POA indicator for each diagnosis code are
included in the ICD-10-CM Official Guidelines for Coding and Reporting.
3.2.8.1.2 There are five POA indicator
reporting options, as defined by the ICD-10-CM Official Coding Guidelines
for Coding and Reporting:
|
|
Y
|
=
|
Indicates that the condition
was present on admission.
|
|
|
W
|
=
|
Affirms that the provider has
determined based upon data and clinical judgment that it is not
possible to document when the onset of the condition occurred.
|
|
|
N
|
=
|
Indicates that the condition
was not present on admission.
|
|
|
U
|
=
|
Indicates that the documentation
is insufficient to determine if the condition was present at the
time of admission.
|
|
|
1
|
=
|
(Definition prior to FY 2011.)
Signifies exemption from POA reporting. CMS established this code
as a workaround to blank reporting on the electronic 4010A1. A list
of exempt ICD-10-CM diagnosis codes is available in the ICD-10-CM
Official Coding Guidelines.
|
|
|
1
|
=
|
(Definition for FY 2011 and
subsequent years.) Unreported/not used. Exempt from POA reporting.
(This code is equivalent to a blank on the CMS 1450 UB-04; however,
it was determined that blanks are undesirable when submitting this data
via 4010A.)
|
3.2.8.2 HACs. The TRICARE Program will
adopt those HACs adopted by CMS. The HACs, and their respective
diagnosis codes, are posted at
http://www.health.mil/rates.
3.2.8.3 Provider responsibilities and
reporting requirements. For non-exempt providers, issues related
to inconsistent, missing, conflicting, or unclear documentation are resolved
by the provider. POA is defined as present at the time the order
for inpatient admission occurs. Conditions that develop during an
outpatient encounter, including emergency department, observation,
or outpatient surgery, are considered as present on admission.
3.2.8.4 The contractor shall accept,
validate, retain, pass, and store the POA indicator.
3.2.8.5 Exempt providers.
3.2.8.5.1 The following hospitals are
exempt from POA reports for the TRICARE Program:
• Critical Access Hospitals (CAHs)
• Long-Term Care (LTC) Hospitals
• State Waiver Hospitals, e.g.,
Maryland
• Cancer Hospitals
• Children’s Inpatient Hospitals
• Inpatient Rehabilitation Hospitals
• Psychiatric Hospitals and Psychiatric
Units
• Department of Veterans Affairs
(DVA)/Veterans Health Administration (VHA) Hospitals
3.2.8.5.2 The contractor shall identify
claims from those hospitals that are exempt from POA reporting,
and shall take the actions necessary to be sure that the TRICARE
grouper software does not apply HAC logic to the claim.
3.2.8.6 The DRG payment is considered
payment in full, and the hospital shall not bill the beneficiary
for any charges associated with the hospital-acquired complications
or charges because the DRG was demoted to a lesser-severity level.
3.2.8.7 Claims are denied if a non-exempt
hospital does not report a valid POA indicator for each diagnosis
on the claim.
3.2.8.8 Replacement
Devices
3.2.8.8.1 The TRICARE Program is not
responsible for the full cost of a replaced device if a hospital
receives a partial or full credit, either due to a recall or service
during the warranty period. Reimbursement in cases in which an implanted
device is replaced is made:
• At reduced or no cost to the
hospital; or
• With partial or full credit
for the removed device.
3.2.8.8.2 The following condition codes
49 and 50 allow the TRICARE Program to identify and track claims
billed for replacement devices:
• Condition Code 49. Product
replacement within product lifecycle. Condition code 49 is used
to describe replacement of a product earlier than the anticipated
lifecycle due to an indication that the product is not functioning
properly - warranty.
• Condition Code 50. Replacement
of a product earlier than the anticipated lifecycle due to an indication
that the product is not functioning properly. Condition code 50
is used to describe that the manufacturer or the United States (U.S.) Food
and Drug Administration (FDA) has identified the product for recall
and, therefore, replacement.
3.2.8.8.3 When a hospital receives a
credit for a replaced device that is 50% or greater than the cost
of the device, hospitals are required to bill the amount of the
credit in the amount portion for value code FD.
3.2.8.8.4 The contractor shall reduce
hospital reimbursement for those DRGs subject to the replacement
device policy, by the full or partial credit a provider received
for a replaced device. The specific DRGs subject to the replacement
device policy are posted on TRICARE’s DRG web page at
http://www.health.mil/rates.
As necessary, the DRGs subject to the replacement device policy
are updated as part of the annual DRG update.
3.2.8.8.5 Hospitals shall use the combination
of condition code 49 or 50, along with value code FD to
correctly bill for a replacement device that was provided with a
credit or no cost. The condition code 49 or 50 identifies a replacement
device while value code FD communicates to the TRICARE Program
the amount of the credit, or cost reduction, received by the hospital
for the replaced device.
3.2.8.8.6 The contractor shall deduct
the partial/full credit amount, reported in the amount for value
code FD from the final DRG reimbursement when the assigned
DRG is one of the DRGs subject to the replacement device policy.
3.2.8.8.7 Once a DRG rate is determined,
any full/partial credit amount is deducted from the DRG reimbursement
rate. The beneficiary copayment/cost-share is then determined based upon the reduced
rate.