Section 705(a) of the NDAA
for 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 of Defense 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, 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 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 (PPACA)),
which provides for the establishment of the HVBP Program 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.
All hospitals
that meet the classification criteria for payment under Title 42
Code of Federal Regulations (CFR) part 412, Section 412.161, are
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 Hospital Value-Based Purchasing
Program (VBP) Adjustment Factors” for the FY. The contractor shall
reimburse hospitals subject to HVBP using HVBP adjustments using
the hospital-specific HVBP adjustment factor applied that FY 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 (CCN). The contractor shall
determine each hospital’s HVBP adjustment factor using the hospital-specific
CMS Certification Number within 30 days of publication of the IPPS Final
Rule.
4.2.3 The contractor shall classify
the appropriate CCN to the TRICARE inpatient hospital, since the
CCN is not included on the claim.
4.2.4 The contractor
shall use the hospital’s Medicare identification by Tax ID and National Provider
Identifier (NPI); however, it is possible for a TRICARE hospital
Tax ID/NPI to have more than one CCN. As a result, the contractor
shall identify the correct CCN by either Tax ID (or NPI)/Sub ID
to accurately map CCNs 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 shall be used for hospital admissions in FY 2020 and the adjustments
for FY 2021 shall 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, 2021
|
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 shall continue to be processed using standard IPPS logic for
outliers or other adjustments. The HVBP adjustment as calculated
in
paragraph 4.2.5 is then either added (if positive
value) or subtracted (if negative value) from the TRICARE allowed
amount 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
|