1.0 APPLICABILITY
1.1 The contractor
shall apply this policy to reimburse network or non-network provider
services. However, the contractor shall allow alternative network
reimbursement methodologies when approved by the Defense Health
Agency (DHA) and specifically included in the network provider agreement.
1.2 The contractor shall use this
policy to reimburse surgical procedures performed in an ASC prior
to the implementation of the reasonable cost method for Critical
Access Hospitals (CAHs) and implementation of TRICARE’s Outpatient
Prospective Payment System (OPPS), and thereafter, freestanding
ASCs (FASCs), and other providers who are exempt from the TRICARE
OPPS and provide scheduled ambulatory surgery. For purposes of this section,
these facilities are known as non-OPPS facilities. Non-OPPS facilities
include any facility not subject to the OPPS as outlined in
Chapter 13, Section 1.
3.0 POLICY
The contractor shall reimburse
ambulatory surgery procedures performed by providers described in
paragraph 2.0 using
prospectively determined rates. The rates will be on a cost-basis,
divided into eleven payment groups representing ranges of costs,
and adjusted for area labor costs based on Metropolitan Statistical
Areas (MSAs). The contractor shall not pay for additional benefits
outside the ASC payment rate; e.g., Revenue Codes 260, 450, 510, 636.
3.1 The contractor shall use the
ambulatory surgery payment system regardless of where the ambulatory surgery
procedures are provided, that is, in a freestanding ASC, in a Hospital
Outpatient Department (HOPD), or in a hospital Emergency Room (ER).
The contractor shall not pay additional benefits outside the ASC
payment rate; e.g., Revenue Codes 260, 450, 510, 636.
3.2 The contractor shall pay payment
rates established under this system only to the facility charges
for ambulatory surgery. The facility rate is a standard overhead
amount that includes nursing and technician services; use of the
facility; drugs including take-home drugs for less than $40; biologicals;
surgical dressings, splints, casts and equipment directly related
to provision of the surgical procedure; materials for anesthesia;
Intraocular Lenses (IOLs); and administrative, recordkeeping and
housekeeping items and services.
3.3 The DHA payment rate does not
include items such as physicians’ fees (or fees of other professional providers
authorized to render the services and to bill independently for
them); laboratory, X-rays or diagnostic procedures (other than those
directly related to the performance of the surgical procedure);
orphan drugs; prosthetic devices (except IOLs); ambulance services;
leg, arm, and back braces; artificial limbs; and Durable Medical
Equipment (DME) for use in the patient’s home.
Note: The contractor shall consider
a radiology and diagnostic procedure directly related to the performance
of the surgical procedure only if it is an inherent part of the
surgical procedure, e.g., the Common Procedure Terminology (CPT)
code for the surgical procedure includes the diagnostic or radiology
procedure as part of the code description (i.e., CPT code 47560).
3.4 Ambulatory Surgery Payment
Rates
3.4.1 DHA will
calculate the payment rates and will provide them electronically
to the contractors annually. The electronic media will include the
locally-adjusted payment rate for each payment group for each MSA
and will identify, by procedure code, the procedures in each group
and the effective date for each procedure. The MSAs and corresponding
wage indexes will be those used by Medicare.
3.4.2 In addition to the payment
rates, DHA will provide the contractors with a ZIP code to MSA crosswalk,
so that they can determine which payment rate to use for each ambulatory
surgery provider. For this purpose, the contractor shall use the
ZIP code of the facility’s physical address (as opposed to its billing
address). DHA will update this crosswalk periodically throughout
the year and send it to the contractor.
3.4.3 In order to calculate payment
rates, DHA will only use those procedures with at least 25 claims nationwide
during the database period.
3.4.4 DHA initially calculated rates
using the following steps.
3.4.4.1 For each ambulatory surgery
procedure, DHA calculated a median standardized cost on the basis
of all ambulatory surgery charges nationally under TRICARE during
the one-year database period. The steps in this calculation included:
• Standardizing for local labor
costs by reference to the same wage index and labor/non-labor-related
cost ratio as applies to the facility under Medicare;
• Applying the Cost-to-Charge
Ratio (CCR) using the Medicare CCR for FASCs for TRICARE ASCs.
• Calculating a median cost for
each procedure; and
• Updating to the year for which
the payment rates were in effect by the Consumer Price Index-Urban
(CPI-U).
3.4.4.2 Procedures were placed into
one of 10 groups by their median per procedure cost, starting with
$0 to $299 for Group 1 and ending with $1,000 to $1,299 for Group
9 and $1,300 and above for Group 10. Groups 2 through 8 were set
on the basis of $100 fixed intervals.
3.4.4.3 The standard payment amount
per group will be the volume weighted median per procedure cost for
the procedures in that group.
3.4.4.4 DHA assigned procedures for
which there was no or insufficient (less than 25 claims) data to
groups by:
• Calculating a volume-weighted
ratio of TRICARE payment rates to Medicare payment rates for those procedures
with sufficient data;
• Applying the ratio to the Medicare
payment rate for each procedure; and
• Assigning the procedure to
the appropriate payment group.
3.4.5 The contractor shall ensure
the amount paid for any ambulatory surgery service under these procedures
does not exceed the amount that would be allowed if the services
were provided on an inpatient basis. The allowable inpatient amount
equals the applicable Diagnosis Related Group (DRG) relative weight
multiplied by the national large urban adjusted standardized amount.
DHA will adjust this amount by the applicable hospital wage index.
3.4.6 Grouping and Additions to the
ASC Procedure List for Dates of Service On or After March 1, 2017
3.4.6.1 Effective
March 1, 2017, the contractor shall cost-share only those procedures
listed on DHA’s ambulatory surgery website for FASCs. Upon evaluation,
DHA may add additional procedures to the list. DHA will group procedures
in accordance with the following procedures:
3.4.6.1.1 The contractor may bring additional
procedures that are not on the ASC list to DHA’s attention, for evaluation
for inclusion on the ASC list. The DHA will update the ASC list
on an annual basis on January 1st. DHA will notate newly added procedures
within the listing posted to the DHA website.
3.4.6.1.2 The contractor shall apply
newly-added procedure rates developed through the procedures established
in
paragraph 3.4.6.1 only to FASCs. The contractor
shall not apply newly-added procedure rates to other non-OPPS providers
(i.e., those listed in
Chapter 13, Section 1 except
FASCs), for surgical procedures and shall continue to pay in accordance
with the
Chapter 1, Section 24.
3.4.6.2 The list of newly-added procedures
shall then be updated and revised on a quarterly basis (January
1, April 1, July 1, and October 1).
3.5 Payments
3.5.1 General
The contractor shall payment
the standard payment amount for the group which covers that procedure,
adjusted for local labor costs by reference to the same labor/non-labor-related
cost ratio and hospital wage index as used for ASCs by Medicare.
DHA will perform this calculation. For participating claims, the
contractor shall reimburse using the ambulatory surgery payment
rate regardless of the actual charges made by the facility--that
is, regardless of whether the actual charges are greater or smaller
than the payment rate. For nonparticipating claims, the contractor
shall ensure reimbursement (TRICARE payment plus beneficiary cost-share
plus any double coverage payments, if applicable) does not exceed
the lower of the billed charge or the group payment rate.
3.5.2
Procedures
Which Do Not Have An Ambulatory Surgery Rate and Are Provided by
an FASC
3.5.2.2 The contractor shall reimburse
non-surgical services, such as evaluation and management visits, laboratory,
and radiology services in accordance with TRICARE’s allowable charge
methodology (see
Chapter 5).
3.5.3 Multiple and Terminated Procedures
3.5.3.1 Discounting for Multiple Surgical
Procedures
3.5.3.1.1 The contractor shall reimburse
professional services according to the multiple surgery guidelines
in
Chapter 1, Section 16.
3.5.3.1.2 The contractor shall discount
multiple surgical procedures is subject to the provisions in
Chapter 13, Section 3.
3.5.3.1.3 Effective March 1, 2017, the
contractor shall reimburse FASCs for only those surgical services
on TRICARE’s ASC list (see
paragraph 3.5.2).
3.5.3.2 Discounting for Bilateral Procedures
3.5.3.2.1 The contractor shall discount
bilateral procedures based on the application of discounting formulas appearing
in
Chapter 13, Section 3.
3.5.3.2.2 Modifiers for Discounting Terminated
Surgical Procedures
3.5.3.2.2.1 The contractor shall understand
that providers may bill industry standard modifiers on outpatient
hospital or individual professional claims to further define the
procedure code or indicate that certain reimbursement situations.
The contractor shall recognize and use modifiers to ensuring accurate
claims processing and payment.
3.5.3.2.2.2 The contractor shall understand
that providers use industry standard modifiers to identify surgical
procedures which have been terminated prior to and after the delivery
of anesthesia.
• Modifiers 52 and 73 are
used to identify a surgical procedure that is terminated prior to
the delivery of anesthesia and is reimbursed at 50% of the allowable;
i.e., the ASC tier rate, the Ambulatory Payment Classification (APC)
allowable amount for OPPS claims, or the CHAMPUS Maximum Allowable
Charge (CMAC) for individual professional providers.
• Modifiers 53 and 74 are
used for terminated surgical procedures after delivery of anesthesia
which are reimbursed at 100% of the appropriated allowable amounts
referenced above.
3.5.3.3 Unbundling of Procedures
The contractor shall ensure
claims reimbursement involving multiple procedures conforms to the
unbundling guidelines as outlined in
Chapter 1, Section 3.
3.5.3.4 Incidental Procedures
The contractor shall apply
rules in
Chapter 1, Section 3 for reimbursing incidental
procedures to ambulatory surgery procedures reimbursed under the
rules set forth in this section. That is, the contractor shall not
reimburse for incidental procedures performed in conjunction with
other procedures which are not classified as incidental. The contractor
shall apply this limitation payments for facility claims as well
as to professional services.
3.6 Updating Payment Rates
DHA will update the rates annually
by the same update factor used in the Medicare annual updates for
ASC payments.
• The rates were increased by
2.1% effective January 1, 2019.
• The rates were increased by
2.6% effective January 1, 2020.
• The rates were increased by
2.4% effective January 1, 2021.
3.7 Claims for Ambulatory Surgery
3.7.1 Claim Forms
The contractor shall ensure
claims for facility charges are submitted on a Centers for Medicare
and Medicaid Services (CMS) 1450 UB-04. The contractor shall ensure
claims for professional charges are submitted on either a CMS 1450
UB-04 or a CMS 1500 Claim Form. The preferred form is the CMS 1500
Claim Form. When professional services are billed on a CMS 1450
UB-04, the contractor shall ensure the information on the CMS 1450
UB-04 indicates that these services are professional in nature and
are identified by the appropriate CPT-4 code and revenue code.
3.7.2 Billing Data
The contractor shall ensure
the claim identifies all procedures performed (by CPT-4 or HCPCS
code). The contractor shall ensure the facility claim is submitted
on the CMS 1450 UB-04, the procedure code is shown in Form Locator (FL)
44.
Note: The contractor shall ensure
claims from ASCs are submitted on the CMS 1450 UB-04 claim form.
The contractor shall deny claims not submitted on the appropriate
claim form.
3.8 Wage Index Changes
If, during the year, Medicare
revises any of the wage indexes used for ambulatory surgery reimbursement,
DHA will not incorporate such changes into the TRICARE payment rates
until the next routine update. DHA will not incorporate these changes
regardless of the reason Medicare revised the wage index.
3.9 Subsequent Hospital Admissions
If a beneficiary is admitted
to a hospital that is subject to the DRG-based payment system due
to complications associated with ambulatory surgery, the contractor
shall ensure the provider bills the ambulatory surgery procedures
separately from the hospital inpatient services. The contractor
shall reimburse them separately. The contractor shall ensure the
provider follows the same rules applicable to ER services.
3.10 Cost-Shares For Ambulatory
Surgery Procedures
The contractor
shall cost-sharing all surgical procedures performed in an outpatient
setting at the ASC cost-sharing levels. Refer to
Chapter 2, Sections 1 and
2.
3.11 Exclusions
The contractor shall exclude
surgical procedures in freestanding ASCs that do not have an ambulatory
surgery rate listed on DHA’s ambulatory surgery website from cost-sharing.