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TRICARE Reimbursement Manual 6010.61-M, April 1, 2015
Mental Health
Chapter 7
Addendum B
Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates
Revision:  C-44, December 13, 2019
1.0  DATA COLLECTION FORM
1.1  The Defense Health Agency (DHA) Form 771 is designed for the collection of reimbursement data used in the calculation of prospective all-inclusive per diem rates for RTCs seeking certification under the TRICARE RTC program. The form will be sent out as part of the RTC certification package encouraging the facility to conduct a preliminary review of the reimbursement methodology prior to completion of the program certification portion of the application. Refer to attached DHA Form 771.
1.2  After submission of the DHA Form 771 to the TRICARE Quality Monitoring Contractor (TQMC), contractors should anticipate that the TQMC will, if needed, contact the facility, assist with gathering any additional information needed and calculate the initial per diem RTC reimbursement rate. When the rate is calculated, the TQMC will return the rate to the requesting contractor via secured means and provide the rate to the Government for posting on https://health.mil. Receipt of the calculated rate should be acknowledged to the TQMC at the address provided by the Contracting Officer Representative (COR) or the TQMC. The rate calculation process will begin with the contractor’s submission of DHA Form 771 to the TQMC. A complete or substantially complete DHA Form 771 will expedite the rate calculation process.
1.3  If an RTC requests an initial per diem reimbursement rate calculation before submitting a request for TRICARE participation, the RTC should be referred by the contractor to this chapter. An RTC shall use this guidance to determine the approximate rate.
1.4  The DHA Form 771 is divided into two distinct data collection areas, one dealing with administrative information and the other with reimbursement information.
1.4.1  Administrative Information. Items 1 through 8 of the form identify the facility and establish the base year period over which the reimbursement data was collected. The Employer Identification Number (EIN) is of particular importance since it identifies the RTC for payment.
1.4.2  Reimbursement Information. Items 9 through 11 provide the reimbursement data necessary to calculate an all-inclusive prospective per diem rate for applying RTCs. The data represents those reimbursement levels that the RTC was willing to accept from other third-party payers during its base period. This allows the establishment of a per diem rate which reflects a reasonable amount consistent with rates charged by its peers nationally and with reimbursement it is accepting from other third-party payers.
2.0  Administrative Support
2.1  The reviewer will provide the name and telephone number of a contact person that can provide additional help and instruction in filling out the data request form.
2.2  Examples of rate calculations are useful in establishing a conceptual understanding of the per diem methodology and for allowing the RTC to approximate its rates. These examples should include, but not be limited to, the following reimbursement concepts/issues:
•  33-1/3% rule.
•  All-inclusive rate.
•  Charges allowed outside all-inclusive rate.
•  Rate updates.
•  Open vs. closed staffing models.
3.0  REVIEW AND ANALYSIS OF SUBMITTED INFORMATION
3.1  Conduct a preliminary review of the information/data submitted on the DHA Form 771 paying particular attention to the opening and data collection start dates. The data collection start date for RTCs which were in operation during the entire base period (July 1, 1987 - June 30, 1988) will be July 1, 1987. The data collection start date will be the same as the opening date for facilities who began operation after June 30, 1988, or began operation before July 1, 1988, but had less than six months of operation by July 1, 1988, since the RTC’s base period will be its first 12 months of operation. If the dates are not the same, follow the guidelines below:
3.1.1  Contact the person designated in Item #4 of DHA Form 771 for clarification regarding the discrepancy.
3.1.2  If the discrepancy resulted from a transcription error, correct the error and proceed with the review.
3.1.3  If the discrepancy did not result from a transcription error, have the RTC submit revised data encompassing the correct data collection period (i.e., data collected over the first 12 months of operation).
3.2  The reimbursement sections (Items 9 through 10) will be reviewed to make sure the submitted information is complete and correctly formatted. The data contained in these sections will be used to figure the RTC’s prospective all-inclusive per diem rate and will be the basis for all future rates. The following are the data element requirements under each of these sections:
3.2.1  Item #9. This section requests information on all third-party payers establishing or affecting an RTC’s rates during its specified base period. It includes the following reimbursement information:
3.2.1.1  Name, address and telephone number of each payer for whom a rate was established/accepted. This information is important for verification of rates under Items 9 through 11, especially in the case of state patients where there is often a negotiated contract. If the state rate represents 33-1/3% of total patient days, it is advisable for the reviewer to request copies of these contracts in order to verify the negotiated rates in effect during the RTCs base period. However, the reviewer will be given discretion in setting its own review parameters for requesting supporting documentation.
3.2.1.2  The rates accepted from each third-party payer during the RTC’s designated base period. The accepted rates should not be confused with actual charged amounts. It is not uncommon to bill third-party payers amounts in excess of their allowed charges knowing payment will be less than the charged amounts. The allowed charge represents the amount the facility is willing to accept from a payer for RTC care. A determination will be made whether the listed facility rates represent total daily charges (i.e., represent an all-inclusive rate) or only the institutional component of the accepted rate using the following guidelines:
3.2.1.2.1  If there are no additional charges listed under Item #10, the facility rates appearing in Item #9 will be determined as all-inclusive, and as such, represent payment in full for all mental health services provided within the RTC (both professional and institutional).
3.2.1.2.2  If additional charges are listed under Item #10, a determination will be made on whether they apply to all of the third-party payers appearing in Item #9; i.e., whether all of the third-party payers allow payment of additional services above the facility rates listed in Item #9. The reviewer will note that where state or local agencies are involved most of their reimbursement is based upon flat per diem rates. The reviewer will contact the RTC if there is any question regarding the applicability of Item #10 charges to any one of the listed third-party payers.
3.2.1.3  The number of patient days provided/paid at each accepted rate. Cumulative patient days will be used in determining the rate high enough to cover at least one-third of the total patient days subject to the cap amount.
3.2.2  Item #10. This section requests information on the payment of any additional services allowed outside the facility rates recorded under Item #9. The sum of these charges will be added to the facility rate in calculating the TRICARE all-inclusive per diem rate. The RTC shall provide the methodology (the actual calculations) used in establishing the charge Per Patient Day (PPD) for each of the services listed in this section.
3.2.2.1  Required data elements:
•  The service for which additional payment is allowed.
•  The frequency of the service.
•  The accepted charge/rate per service.
•  The accepted charge/rate PPD.
3.2.2.2  The following are examples of services which may be allowed for payment outside the facility rates reflected in Item #9:
•  Admission history and physical.
•  Medical visits for physical illness or injury.
•  Lab drug testing.
•  EKG.
•  Family therapy.
•  Pharmaceuticals.
•  Individual and group psychotherapy.
3.2.3  Item #11. This section pertains to the payment of educational services in an RTC. Educational charges are excluded from payment under the prospective per diem system. If the RTC indicates that educational charges are included within the facility rate, they will be removed prior to establishing the TRICARE all-inclusive rate. The educational rate/charge per patient per day reported in Item #11.b will be subtracted from the overall facility rate. Educational services shall be paid apart from the facility per diem only when the services have been authorized by the reviewer. The RTC may provide educational services to its children under the following arrangements:
•  The RTC has its own educational program whereby it bills for the entire educational component, incorporating facility and professional costs (i.e., bills for teachers, books, supplies, classroom facilities, etc.).
•  The RTC has an agreement with its local school district to share in the education of its children. In most cases the local school district agrees to supply the teachers while the RTC provides the classrooms. The RTC only bills for the facilities charges.
•  The local school district accepts total responsibility for educating the RTC children. No educational charges are billed since the children attend public school during the day.
3.3  The data collected and used to establish RTC per diem rates will be retained indefinitely.
4.0  BASE YEAR CALCULATIONS
4.1  For RTCs new to the TRICARE program, one of the following two alternative methods will be used in determining their individual rates:
4.1.1  The rates for an RTC which was in operation during the base period (July 1, 1987 through June 30, 1988) will be calculated based on the actual charging practices of the RTC during the 12 months ending July 1, 1988. The individual RTC rate will be the lower of either the TRICARE rate in effect on June 30, 1988, or the rate high enough to cover at least one-third of the total patient days of care provided by the RTC during the 12 months ending July 1, 1988 subject to a maximum cap.
4.1.2  The rates for an RTC which began operation after June 30, 1988, or began operation before July 1, 1988, but had less than six months of operation by July 1, 1988, will be based on the actual charging practices during its first six to 12 consecutive months, with six months being the minimum time in operation for authorization under the TRICARE program. A period of less than 12 months will be used only when the RTC has been in operation for less than 12 months. Once a full 12 months is available, the rate will be recalculated using the additional reimbursement data. The rates will be calculated the same as in paragraph 4.1.1, except a different base period will be used.
4.2  The following methods are used in establishing the maximum capped per diem amounts:
4.2.1  Prior to April 6, 1995, the capped per diem amount was set at the 75th percentile of all established TRICARE RTC rates nationally and weighted by total TRICARE days provided at each rate during the base period (July 1, 1987, through June 30, 1988). The capped amount was adjusted annually by the designated update factor (currently the Medicare update factor as noted in Chapter 7, Section 1). The following are the capped amounts in effect for the past three fiscal years:
RTC Capped Amounts
Dates Of Service
Capped Amounts
October 1, 2017
- September 30, 2018
939
October 1, 2018
- September 30, 2019
967
October 1, 2019
- September 30, 2020
997
4.2.2  The 70th percentile of the day-weighted current (Fiscal Year (FY) 1995) per diems was used in establishing a new cap amount for services rendered on or after April 6, 1995. The following methodology was used in establishing the RTC cap and floor amounts:
4.2.2.1  RTC institutional claims data from the period October 1, 1993 to March 31, 1994 were used (the first half of FY 1994).
4.2.2.2  The FY 1994 per diems were merged onto the claims (from the RTC per diem list in the TRICARE Policy Manual (TPM)) and updated by 1.046 (the CPI-U) to represent FY 1995 per diems.
4.2.2.3  The 30th and 70th percentiles of the day-weighted FY 1995 per diems were calculated as $429 and $515. Any RTC per diem above $515 was cut to $515 as of April 6, 1995.
5.0  ADJUSTMENT OF BASE YEAR RATE
5.1  The base year rate is adjusted by the following annual inflation factors to bring it forward to the current fiscal year. See Section 1, paragraph 3.5.3 for the update factors for FY 2006 and forward.
Update Factors For RTC Per Diem Rates
Note:  The FY 1997 CPI-U for medical care is 2.6%. This inflation will be used in adjusting FY 1995 RTC rates falling below the 30th percentile of all established FY 1995 rates ($429.00). See also Chapter 7, Section 1, for FY 2006 and forward.
Time Period
CPI-U Inflation Factors
July 1, 1988
- November 30, 1988
2.6%
December 1, 1988
- July 30, 1989
4.9
October 1, 1989
- September 30, 1990
9.2
October 1, 1990
- September 30, 1991
8.6
October 1, 1991
- September 30, 1992
7.4
October 1, 1992
- September 30, 1993
6.0
October 1, 1993
- September 30, 1994
4.6
October 1, 1994
- September 30, 1995
4.4
October 1, 1995
- September 30, 1996
3.6
Time Period
Medicare Update Factor
October 1, 1997
- September 30, 1998
2.4
October 1, 1998
- September 30, 1999
2.4
October 1, 1999
- September 30, 2000
2.9
October 1, 2000
- September 30, 2001
3.4
October 1, 2001
- September 30, 2002
3.3
October 1, 2002
- September 30, 2003
3.5
October 1, 2003
- September 30, 2004
3.4
October 1, 2004
- September 30, 2005
3.3
October 1, 2005
- September 30, 2006
3.8
5.2  If the RTC’s base year falls within the previous year’s reporting period, the inflation factor is prorated for the remaining time in that period. The updating process can best be demonstrated through the following example:
Example:  RTC E is submitting reimbursement information as a final step in its authorization process. The data was collected over the facility’s first 12 months of operation (April 1, 2013 - March 31, 2014). Since the RTC’s base period extended six months (or 180 days, based on 30-day months and a 360-day year) into the inflation reporting period, the inflation factor for the subsequent update year (October 1 - September 30) was prorated for the remaining time period of April 1, 2014 - September 30, 2014 (six months or 180 days). The following are the calculations used in updating the RTC’s all-inclusive base year per diem to FY 2015 (current year per diem amount):
Adjustment Of Base Year Per Diem Rate
Derived rate at 33.33% of total patient days during base period of April 1, 2013 through March 31, 2014.
$500.00
Plus:
An adjustment for the annual update factor, as listed in Chapter 7, Section 1, paragraph 3.5.3
For 6-month period ending September 30, 2014 (2.5% x 6/12 = 1.25%)
6.25
Adjusted Rate
$506.25
For 12-month period ending September 30, 2015 (2.9%)
14.68
Adjusted Rate
$520.93
TRICARE all-inclusive per diem rate for services on or after October 1, 2015
$521.00
5.3  In a Final Rule published in the Federal Register (60 FR 12419) on March 7, 1995, TRICARE imposed a two-year moratorium on the annual updating of RTC per diems rates subject to the following provisions:
5.3.1  TRICARE payments will remain at FY 1995 rates for a two-year period beginning in FY 1996, for any RTC whose 1995 rate was at or above the 30th percentile of all established FY 1995 rates ($429).
5.3.2  For any RTC whose FY 1995 rate was below that of the 30th percentile, the rate will be adjusted by the lesser of the CPI-U, or the amount that brings the rate up to the 30th percentile level.
5.3.3  For fiscal years after FY 1997, the individual facility rates and cap amount will be adjusted by the Medicare update factor for hospitals and units exempt from the Medicare prospective payment system at the discretion of the Director, DHA or designee.
Note:  The above provisions will lead to aggregate expenditures which approximate average facility costs. The 4.4% update factor was used in the RTC rate computation since its FY 1995 rate ($368) was below the 30th percentile level ($429).
6.0  CALCULATION OF RTC PER DIEM RATE
6.1  Array the rates accepted by other third-party payers (Item #9) in descending order from lowest to highest in the first column of the Reimbursement Information Work Sheet (see Attachment).
6.2  Place the number of days paid at each of the rates listed above in the second column of the work sheet.
6.2.1  If there is more than one rate with an individual third-party payer during the base period, the RTC shall provide the total number of patient days paid by the payer at each rate. Total patient days will be used in determining the most favored rate for the facility. The following is an example of multiple rates paid by an individual payer during the RTC’s base period:
Example:  RTC F has negotiated three separate rates with a third-party payer over its base period. The three rates were reported as follows:
1. $295/day from July 2013, through October 31, 2013 - 2,000 patient days;
2. $315/day from November 1, 2013, through February 29, 2014 - 3,000 patient days;
3. $330/day from March 1, 2014, through June 30, 2014 - 2,000 patient days.
6.2.2  Each of the above negotiated rates shall be reported separately in Item #9 of the DHA Form 771 representing a blending of payments made by a particular payor over a facility’s base period.
6.2.3  Patient days will be combined in those situations where third-party payers were paying the same rate for RTC care. This will represent the cumulative frequency of payments made at each reported reimbursement level in Item #9 of the data collection form.
6.2.4  The following examples represent the methodology used in calculating the TRICARE base year facility rate from data provided under Item #9 of the DHA Form 771:
Example:  RTC G provided the following third-party reimbursement data under Item #9 of the DHA Form 771 as part of the certification process:
Item #9 Of DHA Form 771 (Modified For Example)
Third-Party Payers
Rate Accepted
Patient Days
*** - State or local Government agency.
AA
$253
312
BB
527
207
CC
402
163
DD ***
212
198
EE
454
371
FF
603
118
GG
317
446
HH
489
538
II
552
319
JJ
503
132
Step 1:  Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate:
(1)
Rates
(2)
Patient
Days
(3)
Cumulative
Patient Days
(4)
Percent Cumulative Patient Days
$212
198
198
7.1
%
253
312
510
18.2
317
446
956
34.1
402
163
1,119
39.9
454
371
1,490
53.1
489
538
2,028
72.3
503
132
2,160
77.0
527
207
2,367
84.4
552
319
2,686
95.8
603
118
2,804
100.0
Total
2,804 Patient Days
Step 2:  Sum the patient days in column 2, which in this particular example equals 2,804 patient days.
Step 3:  Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by 0.3333.
(2,804 patient days x 0.3333 = 934.57 patient days)
Step 4:  Go down in the cumulative patient day column (column 3) to where 33-1/3% of the patient days lie (934.57).
Step 5:  Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period rate in this example would be $317 (refer to table above).
Example:  RTC H provided the following third-party reimbursement data under Item #9 of the DHA Form 771 as part of the certification process:
Item #9 Of DHA Form 771 (Modified For Example)
Third-Party Payers
Rate Accepted
Patient Days
*** - State or local Government agency.
AA
$425
201
BB ***
288
600
CC ***
235
63
DD ***
215
1,040
EE
365
276
FF
515
168
GG ***
288
346
HH
489
538
II
425
319
JJ
450
132
Step 1:  Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate:
(1)
Rates
(2)
Patient
Days
(3)
Cumulative
Patient Days
(4)
Percent Cumulative Patient Days
$215
1,040
1,040
28.2
%
235
63
1,103
29.9
288
946
2,049
55.6
365
276
2,325
63.1
425
520
2,845
77.2
450
132
2,977
80.8
489
538
3,515
95.4
515
168
3,683
100.0
Total
3,683 Patient Days
Step 2:  Sum the patient days in column 2, which in this particular example equals 3,683 patient days.
Step 3:  Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by 0.3333.
(3,683 patient days x 0.3333 = 1,227.54 patient days)
Step 4:  Go down in the cumulative patient day column (column 3) to where 33-1/3% of the patient days lie (1,227.54).
Step 5:  Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period rate in this example would be $288 (refer to table above).
6.3  The above methodology for deriving the rate at 33-1/3 of the total patient days will only be applicable under the following conditions:
6.3.1  If the rates in Item #9 were all-inclusive for payment of RTC care (i.e., included all payments for institutional and professional services), no additional charges will be added on to the facility rates from Item #10 of the data collection form. The rate established in Step 5 of the above examples will represent the all-inclusive base year rate prior to the inflationary adjustment.
6.3.2  If the charges for additional services listed in Item #10 applied to all of the third-party payers identified in Item #9 (i.e., all of the third-party payers listed in Item #9 allowed payment for additional services outside the facility rate- rate derived at 33-1/3% of total RTC patient days during the base period-- at the charges PPD established in Item #10), the sum of these charges are added to the facility rate prior to inflationary adjustment.
6.4  In cases where payment of additional services listed in Item #10 do not apply to all of the third-party payers listed in Item #9, or payments vary among the payers for the same services, the sum of the charges PPD for additional services (reported in the last column of Item #10) will be added to the facility rate prior to establishing the rate derived at 33-1/3% of the total patient days. The following example provides the methodology for incorporating these additional charges into the base year rate computations:
Example:  RTC I has provided a revised DHA Form 771 indicating that payments for additional services had been overlooked in completing its initial form. The following service charges PPD were provided under Item #10 with the proviso that the additional payments were not allowed by the three state agencies and two private third-party providers. The payers were identified in Item #9 of the form.
Item #10 Of DHA Form 771 (Modified For Example)
Patient Service
Frequency
Of Service
Charge Per Service
Charge Per Day (PPD)
Individual Therapy
1/week
$120.00
$17.14
Group Therapy
2/week
45.00
12.86
Admission History and Physical
1/stay
150.00
1.43
Pharmacy
($10,438/2,498 days)
4.18
Psych. Testing
28
650.00
7.29
Total $42.90
Note:  The RTC’s Average Length-Of-Stay (ALOS) was 105 days during its base period.
Item #9 Of DHA Form 771 (Modified For Example)
Third-Party Payers
Rate Accepted
Patient Days
** - State or local Government agency.
*** - Rates represent entire payment for RTC services. Charges for additional services reported in Item #10 not applied to these designated third-party payer rates.
AA
$383
114
BB **
165 ***
313
CC **
268
102
DD **
204 ***
485
EE
365
232
FF
471 ***
117
GG **
265 ***
346
HH
489
338
II
425 ***
319
JJ
425
132
(1)
Rates
(2)
Additional Payments
(3)
Patient
Days
(4)
Cumulative
Patient Days
(5)
Percent Cumulative Patient Days
$165
$N.A.
313
313
12.5
%
204
N.A.
485
798
31.9
265
N.A.
346
1,144
45.8
268
42.90
102
1,246
49.9
365
42.90
232
1,478
59.2
425
N.A.
319
1,797
71.9
383
42.90
114
1,911
76.5
425
42.90
132
2,043
81.8
471
N.A.
117
2,160
86.5
489
42.90
338
2,498
100.0
Total
2,498 Patient Days
Step 1:  Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate.
Step 2:  Sum the patient days in column 3, which in this particular example equals 2,498 patient days.
Step 3:  Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by 0.3333.
(2,498 patient days x 0.3333 = 832.58 patient days)
Step 4:  Go down in the cumulative patient day column (column 4) to where 33-1/3% of the patient days lie (832.48).
Step 5:  Go across to the rates in column 1 and 2 in which 33-1/3 of the accumulative patient days fall. This represents the TRICARE all-inclusive base year/period rate. The base year/period rate in this example would be $265 (refer to table above).
6.5  If the RTC answers no to Item #11.a., the educational rate/charge PPD reported in Item #11.b will be subtracted from the overall facility base year/period rate.
6.6  Personal item charges will also be subtracted from the all-inclusive base year/period prior to inflationary adjustment.
Example:  RTC J checked no in Item #11.a. of the DHA Form 771 reporting an educational rate/charge PPD in Item #11.b. The RTC also reported a $1 PPD charge for personal items.
Accepted Rate at 1/3 of Patient Day
$350
Plus:
Other Service Charges
45
Less:
Personal Items
1
Education
20
All-Inclusive Base Period Rate Prior to Inflationary Adjustment
$374/day
6.7  The following is a detailed example of an RTC per diem calculation incorporating all of the data elements reported on the DHA Form 771 including inflationary adjustments:
Example:  RTC K submitted the following reimbursement information as part of the certification process:
Data Review & Analysis
Item
Data Requested
Data Reported
2
EIN
38-1734578
5
Opening Date
June 1, 2010
6
Joint Commission Accreditation
October 31, 2012
7
Data Collection Dates
June 1, 2010 - May 31, 2011
Item #9 Of DHA Form 771 (Modified For Example)
Third-Party PayErs
Rate Accepted
Patient Days
AA
$285
214
BB
453
102
CC
314
371
DD
388
163
EE
502
118
FF
314
246
GG
489
138
HH
402
319
Item #10 Of DHA Form 771 (Modified For Example)
Patient Service
Frequency Of Service
Charge Per Service
Charge Per Day (PPD)
Individual Therapy
1/week
$90.00
$12.86
Group Therapy
1/week
45.00
6.43
Family Therapy
1/2 weeks
65.00
4.64
Admission History & Physical
1/stay
($175/120)
(ALOS)
1.46
Pharmacy
($5,638/1,671 days)
3.38
Psych. Testing
28
650.00
6.28
Total $35.05
Item #11. EDUCATIONAL CHARGES:
6.7.1  Are educational charges excluded from the daily rate when billing TRICARE?
YES X NO ____
6.7.2  What is the educational rate/charge per patient per day in your facility?
$37.00 PPD
BASE YEAR/PERIOD RATE CALCULATION
Step 1:  Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate:
(1)
Rates
(2)
Patient Days
(3)
Cumulative Patient Days
(4)
Percent Cumulative Patient Days
$285
214
214
12.8
%
314
617
831
49.7
388
163
994
59.5
402
319
1,313
78.6
453
102
1,415
84.7
489
138
1,553
92.9
502
118
1,671
100.0
Total
1,671 Patient Days
Step 2:  Sum the patient days in column 2, which in this particular example equals 1,671 patient days.
Step 3:  Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by 0.3333.
(1,671 patient days x 0.3333 = 556.94 patient days)
Step 4:  Go down in the cumulative day column (column 3) to where 33-1/3% of the patient days lie (556.94).
Step 5:  Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period facility rate in this example would be $314 (refer to table above).
Step 6:  Add the sum of the charges PPD reported in Item #10 of the Form 771 ($35.05/patient day) to the base year/period facility rate figured in Step 5 since additional payments are allowed for all the listed third party payers in Item #9. The base year/period all-inclusive per diem rate is $349.05.
Step 7:  Subtract any educational and/or personal item charges which are included in the all-inclusive base year/period rate calculated in Step 6. This does not apply in this particular example since there are no personal item and/or educational charges included in the base year/period facility rate.
INFLATIONARY ADJUSTMENTS
Step 1:  Adjust the base year rate by the annual inflation factors to bring it forward to the current fiscal year as follows:
Adjustment Of Base Year Per Diem Rate
Derived rate at 33.33% of total patient days during base period of June 1, 2010 - May 31, 2011.
$349.05
Plus:
Update Factors:
For 4-month period ending September 30, 2011 (0.87%) (2.6% x 4/12 = 8.7%)
3.04
Adjusted Rate
$352.09
For 12-month period ending September 30, 2012 (3.0%)
10.56
Adjusted Rate
$362.65
For 12-month period ending September 30, 2013 (2.6%)
9.43
Adjusted Rate
$372.08
For 12-month period ending September 30, 2014 (2.5%)
9.30
Adjusted Rate
$381.38
For 12-month period ending September 30, 2015 (2.9%)
11.06
Adjusted Rate
$392.44
TRICARE all-inclusive per diem rate for services on or after October 1, 2015.
$393.00
Note:  The rate is the lessor of the calculated per diem or the capped per diem rate, as noted in paragraph 4.2.1.
ATTACHMENT:
DHA Form 771
Figure 7.B-1  DHA Form 771