1.0 Applicability
This policy is mandatory for
reimbursement of services provided by either network or non-network
providers. However, alternative network reimbursement methodologies
are permitted when approved by the Defense Health Agency (DHA) and
specifically included in the network provider agreement.
3.0 HVBP
Background
3.1 The HVBP Program was created
by the Centers for Medicare and Medicaid Services (CMS) and rewards acute
care hospitals with incentive payments for the quality of care they
give to Medicare beneficiaries. This program adjusts payments to
hospitals under the Inpatient Prospective Payment System (IPPS)
based on the quality of care they deliver.
3.2 The program:
• Withholds participating hospitals’
payments by a percentage specified by law.
• Uses the estimated total amount
of those reductions to fund value-based incentive payments to hospitals based
on their performance in the program, which is used to calculate
each hospital’s total performance score.
• Applies the net result of the
reduction and the incentive as a claim-by-claim adjustment factor
(determined by each hospital’s total performance score) to the base
operating Diagnosis Related Groups (DRG) payment amount for claims
in the fiscal year associated with the performance period.
3.3 Hospital
reimbursements are adjusted based on how well they perform compared
to all hospitals, or how much they improve their own performance
compared to their performance during a prior baseline period.
4.0 Policy
Section 705(a) of the NDAA
FY 2017 authorizes the development and implementation of value-based
incentive programs to encourage health care providers to improve
the quality and delivery of services to TRICARE beneficiaries. The
statute further allows the Secretary to adopt value-based incentive
programs conducted by CMS or any other Federal Government, State
Government, or commercial health care program in fulfillment of
the statutory authority granted under this section. In addition,
Title 10, United States Code (USC), Section 1079(i)(2), requires
that the amount to be paid to hospitals, Skilled Nursing Facilities
(SNFs), and other institutional providers under the TRICARE program,
“shall be determined to the extent practicable in accordance with
the same reimbursement rules as apply to payments to providers of
services of the same type under Medicare”. These statutory provisions
have been implemented through an Interim Final Rule (IFR) with Request
for Comment, published in the Federal Register on September
3, 2020, amending the TRICARE regulation by adding 32
CFR 199.14(a)(1)(iii)(E)(6) to allow adoption of Medicare’s
value-based incentive program as required under Section 3001(a)
of PL 111-148 (Patient Protection and Affordable Care Act), which
provides for the establishment of the Hospital Value-Based Purchasing
Program (HVBP) described in Section 1886(o) of the Social Security
Act. In adopting the Medicare HVBP adjustments to TRICARE DRGs,
the regulation authorizes the Director, DHA, to 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.
4.1 Applicability
And Scope Of Coverage
All hospitals that meet the
classification criteria for payment under Title 42 Code of Federal
Regulation (CFR) part 412, Section 412.161, are considered to be
subject to HVBP under the TRICARE program.
4.2 Payment
Method
4.2.1 Each year, the IPPS Final Rule
includes a table of the actual HVBP Program adjustment factors for
the fiscal year. The contractor shall reimburse hospitals subject
to HVBP using HVBP adjustments using the hospital-specific HVBP
adjustment factor to be applied to that fiscal year found in the
current CMS IPPS Final Rule and IPPS Rule webpage. Past year adjustments
are also available on the Medicare HVBP website.
4.2.2 The HVBP
adjustment factors within the IPPS Final Rule Table are organized
by Medicare CMS Certification Number (also known as MCR Number).
The contractor shall determine each hospital’s HVBP adjustment factor
using the hospital-specific CMS Certification Number within 30 calendar
days of publication of the IPPS Final Rule.
4.2.3 The contractor
shall be responsible for classifying the appropriate CMS Certification
Number to the TRICARE inpatient hospital, since the CMS certification
number is not included on the claim.
4.2.4 The contractor
shall use the hospital’s Medicare ID by Tax ID and National Provider
Identifier (NPI); however, it is possible for a TRICARE hospital
Tax ID/NPI to have more than one CMS Certification Number. As a result,
the contractor shall identify the correct CMS Certification Number
by either Tax ID (or NPI)/Sub ID in order to accurately map CMS
Certification Numbers to TRICARE facilities.
4.2.5 The contractor shall use the
relevant CMS adjustment rate for hospital claims based on the date
of admission. For example, the CMS adjustment calculated for FY
2020 would be used for hospital admissions in FY 2020 and the adjustments
for FY 2021 would be used for FY 2021 hospital admissions. See
Figure 1.41-1.
Figure 1.41-1 Example
of Use for CMS HVBP Adjustment Factors
Admission Date
|
Discharge Date
|
Adjustment Year
|
February 12, 2020
|
February 29, 2020
|
FY 2020
|
September 29, 2020
|
October 4, 2020
|
FY 2020
|
December 20, 2020
|
January 5, 2020
|
FY 2021
|
January 25, 2021
|
February 3, 2021
|
FY 2021
|
4.2.6 The contractor
shall apply the hospital’s HVBP adjustment factor to the base DRG
payment amount for each claim, prior to any adjustments for outliers,
Indirect Medical Education (IDME), or any other adjustments. If
a hospital does not have an adjustment factor listed on the CMS
IPPS Final Rule Table, it is assumed that the hospital does not
participate in HVBP and the contractor shall use a 1.0 HVBP adjustment
factor, meaning no net change in base operating DRG payment. See
Figure 1.41-2.
Figure 1.41-2 Example
of Calculation of Net Change in Base Operating DRG Payment Amount with
HVBP Adjustments
1.
Base Payment
Amount (Pre-Outlier or other Adjustments)
|
2.
HVBP Adjustment Factor
|
3.
HVBP Adjustment x Base
Payment (1 x 2)
|
Net Change
in Base Operating DRG Payment Amount (3 - 1)
|
$20,000
|
1.023
|
$20,460
|
$20,460 - $20,000 = $460
|
$20,000
|
0.998
|
$19,960
|
$19,960 - $20,000 = -$40
|
4.2.7 Each inpatient
claim will continue to be processed using standard IPPS logic for
outliers or other adjustments. The HVBP adjustment as calculated
in
paragraph 4.2.5 will then be either added
(if positive value) or subtracted (if negative value) from the TRICARE
allowed amount in order to determine final claims payment amount.
See
Figure 1.41-3.
Figure 1.41-3 Example
of Calculation Final Payment Using HVBP
1.
Claim
Allowed Amount (Including Outlier, if applicable, for Case)
|
2.
Net Change
in Base Operating DRG Payment Amount (i.e., HVBP
Adjustment Amount)
|
Final
Payment Amount
(1 + 2)
|
$25,000
|
$50
|
$25,050
|
$65,450
|
- $500
|
$64,950
|
$4,000
|
$250
|
$4,250
|
4.3 4.3 Hospitals
excluded from IPPS, including:
• Psychiatric Hospitals
• Rehabilitation Hospitals
• Long Term Care (LTC) Hospitals
• Children’s Hospitals
• Critical Access Hospitals (CAHs)
• PPS-exempt TRICARE cancer hospitals
EXCLUSIONS
5.1 Currently
hospitals located in Puerto Rico and other United States (US) territories
do not participate in HVBP. If CMS decides at a later date to include
these hospitals, TRICARE will also include them in HVBP.
5.2 Hospitals
that are located in the state of Maryland participate in the CMS
Maryland All-Payer Model, and thus do not participate in HVBP.
5.3 Other
hospitals excluded from the CMS HVBP Program.