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§ 199.14
(B) Calculated amount. The amount in
dispute is calculated as the amount of
money the dental plan contractor
would pay if the services involved in
the dispute were determined to be authorized benefits of the TDP. Examples
of amounts of money that are excluded
by this section from payments for authorized benefits include, but are not
limited to:
(1) Amounts in excess of the dental
plan contractor’s—determined allowable charge.
(2)
The
beneficiary’s
cost-share
amounts.
(3) Amounts that the beneficiary, or
parent, guardian, or other responsible
person has no legal obligation to pay.
(4) Amounts excluded under the provisions of § 199.8 of this part.
(viii)
Levels
of
appeal.
See
§ 199.10(a)(8)(i). Initial determinations
involving the sanctioning (exclusion,
suspension, or termination) of TDP
providers shall be appealed directly to
the hearing level.
(ix) Appeal decision. See § 199.10(a)(9).
(2) Reconsideration. See § 199.10(b).
(3) Formal review. See § 199.10(c).
(4)
Hearing—(i)
General.
See
§§ 1.99.10(d) and 199.10(d)(1) through
(d)(5) and (d0(7) through (d)(12) for information on the hearing process.
(ii) Authority of the hearing officer.
The hearing officer, in exercising the
authority to conduct a hearing under
this part, will be bound by 10 U.S.C.,
chapter 55, and this part. The hearing
officer in addressing substantive, appealable issues shall be bound by the
dental benefits brochure applicable for
the date(s) of service, policies, procedures, instructions and other guidelines issued by the ASD(HA), or a designee, or by the Director, OCHAMPUS,
or a designee, in effect for the period in
which the matter in dispute arose. A
hearing officer may not establish or
amend the dental benefits brochure,
policy, procedures, instructions, or
guidelines. However, the hearing officer may recommend reconsideration of
the policy, procedures, instructions or
guidelines by the ASD (HA), or a designee, when the final decisions is issued
in the case.
(5) Final decision. See §§ 199.10(e)(1)
and 199.10(e)(1)(i) for information on
final decisions in the appeal and hear-
ing process, with the exception that no
recommended decision shall be referred
for review by ASD(HA).
(i) Implementing Instructions. The Director, TRICARE Management Activity or designee may issue TRICARE
Dental Program policies, standards,
and criteria as may be necessary to implement the intent of this section.
[66 FR 12860, Mar. 1, 2001; 66 FR 16400, Mar. 26,
2001, as amended at 68 FR 65174, Nov. 19, 2003;
69 FR 55359, Sept. 14, 2004; 70 FR 55252, Sept.
21, 2005; 71 FR 1696, Jan. 11, 2006; 71 FR 66872,
Nov. 17, 2006; 72 FR 53685, Sept. 20, 2007]
§ 199.14 Provider
methods.
reimbursement
(a) Hospitals. The CHAMPUS-determined allowable cost for reimbursement of a hospital shall be determined
on the basis of one of the following
methodologies.
(1) CHAMPUS Diagnosis Related Group
(DRG)-based payment system. Under the
CHAMPUS DRG-based payment system, payment for the operating costs
of inpatient hospital services furnished
by hospitals subject to the system is
made on the basis of prospectively-determined rates and applied on a per discharge basis using DRGs. Payments
under this system will include a differentiation for urban (using large
urban and other urban areas) and rural
hospitals and an adjustment for area
wage differences and indirect medical
education costs. Additional payments
will be made for capital costs, direct
medical education costs, and outlier
cases.
(i) General—(A) DRGs used. The
CHAMPUS DRG-based payment system
will use the same DRGs used in the
most recently available grouper for the
Medicare Prospective Payment System, except as necessary to recognize
distinct characteristics of CHAMPUS
beneficiaries and as described in instructions issued by the Director,
OCHAMPUS.
(B) Assignment of discharges to DRGs.
(1) The classification of a particular
discharge shall be based on the patient’s age, sex, principal diagnosis
(that is, the diagnosis established,
after study, to be chiefly responsible
for causing the patient’s admission to
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
the hospital), secondary diagnoses, procedures performed and discharge status. In addition, for neonatal cases
(other than normal newborns) the classification shall also account for birthweight, surgery and the presence of
multiple, major and other neonatal
problems, and shall incorporate annual
updates to these classification features.
(2) Each discharge shall be assigned
to only one DRG regardless of the number of conditions treated or services
furnished during the patient’s stay.
(C) Basis of payment—(1) Hospital billing. Under the CHAMPUS DRG-based
payment system, hospitals are required
to submit claims (including itemized
charges) in accordance with § 199.7(b).
The CHAMPUS fiscal intermediary will
assign the appropriate DRG to the
claim based on the information contained in the claim. Any request from
a hospital for reclassification of a
claim to a higher weighted DRG must
be submitted, within 60 days from the
date of the initial payment, in a manner
prescribed
by
the
Director,
OCHAMPUS.
(2) Payment on a per discharge basis.
Under the CHAMPUS DRG-based payment system, hospitals are paid a predetermined amount per discharge for
inpatient hospital services furnished to
CHAMPUS beneficiaries.
(3) Claims priced as of date of admission. Except for interim claims submitted for qualifying outlier cases, all
claims
reimbursed
under
the
CHAMPUS DRG-based payment system
are to be priced as of the date of admission, regardless of when the claim is
submitted.
(4) Payment in full. The DRG-based
amount paid for inpatient hospital
services is the total CHAMPUS payment for the inpatient operating costs
(as described in paragraph (a)(1)(i)(C)(5)
of this section) incurred in furnishing
services covered by the CHAMPUS. The
full prospective payment amount is
payable for each stay during which
there is at least one covered day of
care, except as provided in paragraph
(a)(1)(iii)(E)(1)(i)(A) of this section.
(5) Inpatient operating costs. The
CHAMPUS DRG-based payment system
provides a payment amount for inpatient operating costs, including:
(i) Operating costs for routine services, such as the costs of room, board,
and routine nursing services;
(ii) Operating costs for ancillary services, such as hospital radiology and
laboratory services (other than physicians’ services) furnished to hospital
inpatients;
(iii) Special care unit operating costs;
and
(iv) Malpractice insurance costs related to services furnished to inpatients.
(6) Discharges and transfers—(i) Discharges. A hospital inpatient is discharged when:
(A) The patient is formally released
from the hospital (release of the patient to another hospital as described
in paragraph (a)(1)(i)(C)(6)(ii) of this
section, or a leave of absence from the
hospital, will not be recognized as a
discharge for the purpose of determining payment under the CHAMPUS
DRG-based payment system);
(B) The patient dies in the hospital;
or
(C) The patient is transferred from
the care of a hospital included under
the CHAMPUS DRG-based payment
system to a hospital or unit that is excluded from the prospective payment
system.
(ii) Transfers. Except as provided
under paragraph (a)(1)(i)(C)(6)(i) of this
section, a discharge of a hospital inpatient is not counted for purposes of the
CHAMPUS DRG-based payment system
when the patient is transferred:
(A) From one inpatient area or unit
of the hospital to another area or unit
of the same hospital;
(B) From the care of a hospital included under the CHAMPUS DRGbased payment system to the care of
another hospital paid under this system;
(C) From the care of a hospital included under the CHAMPUS DRGbased payment system to the care of
another hospital that is excluded from
the CHAMPUS DRG-based payment
system because of participation in a
statewide cost control program which
is exempt from the CHAMPUS DRGbased payment system under paragraph
(a)(1)(ii)(A) of this section; or
(D) From the care of a hospital included under the CHAMPUS DRG-
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Office of the Secretary of Defense
§ 199.14
based payment system to the care of a
uniformed services treatment facility.
(iii) Payment in full to the discharging
hospital. The hospital discharging an
inpatient shall be paid in full under the
CHAMPUS DRG-based payment system.
(iv) Payment to a hospital transferring
an inpatient to another hospital. If a hospital subject to the CHAMPUS DRGbased payment system transfers an inpatient to another such hospital, the
transferring hospital shall be paid a per
diem rate (except that in neonatal
cases, other than normal newborns, the
hospital will be paid at 125 percent of
that per diem rate), as determined
under instructions issued by TSO, for
each day of the patient’s stay in that
hospital, not to exceed the DRG-based
payment that would have been paid if
the patient had been discharged to another setting. For admissions occurring on or after October 1, 1995, the
transferring hospital shall be paid
twice the per diem rate for the first
day of any transfer stay, and the per
diem amount for each subsequent day,
up to the limit described in this paragraph.
(v) Additional payments to transferring
hospitals. A transferring hospital may
qualify for an additional payment for
extraordinary cases that meet the criteria for long-stay or cost outliers.
(D)
DRG
system
updates.
The
CHAMPUS DRG-based payment system
is modeled on the Medicare Prospective
Payment System (PPS) and uses annually updated items and numbers from
the Medicare PPS as provided for in
this part and in instructions issued by
the Director, OCHAMPUS. The effective date of these items and numbers
shall correspond to that under the
Medicare PPS except where distinctions are made in this part.
(ii) Applicability of the DRG system—
(A) Areas affected. The CHAMPUS DRGbased payment system shall apply to
hospitals’ services in the fifty states,
the District of Columbia, and Puerto
Rico, except that any state which has
implemented a separate DRG-based
payment system or similar payment
system in order to control costs and is
exempt from the Medicare Prospective
Payment System may be exempt from
the CHAMPUS DRG-based payment
system if it requests exemption in
writing, and provided payment under
such system does not exceed payment
which would otherwise be made under
the CHAMPUS DRG-based payment
system.
(B) Services subject to the DRG-based
payment system. All normally covered
inpatient hospital services furnished to
CHAMPUS beneficiaries by hospitals
are subject to the CHAMPUS DRGbased payment system.
(C) Services exempt from the DRG-based
payment system. The following hospital
services, even when provided in a hospital subject to the CHAMPUS DRGbased payment system, are exempt
from the CHAMPUS DRG-based payment system. The services in paragraphs
(a)(1)(ii)(C)(1)
through
(a)(1)(ii)(C)(4)
and
(a)(1)(ii)(C)(7)
through (a)(1)(ii)(C)(9) of this section
shall be reimbursed under the procedures in paragraph (a)(3) of this section, and the services in paragraphs
(a)(1)(ii)(C)(5) and (a)(1)(ii)(C)(6) of this
section shall be reimbursed under the
procedures in paragraph (g) of this section.
(1) Services provided by hospitals exempt from the DRG-based payment
system.
(2) All services related to solid organ
acquisition for CHAMPUS covered
transplants by CHAMPUS-authorized
transplantation centers.
(3) All services related to heart and
liver transplantation for admissions
prior to October 1, 1998, which would
otherwise be paid under DRG 103 and
480, respectively.
(4) All services related to CHAMPUS
covered solid organ transplantations
for which there is no DRG assignment.
(5) All professional services provided
by hospital-based physicians.
(6) All services provided by nurse anesthetists.
(7) All services related to discharges
involving pediatric bone marrow transplants (patient under 18 at admission).
(8) All services related to discharges
involving children who have been determined to be HIV seropositive (patient under 18 at admission).
(9) All services related to discharges
involving pediatric cystic fibrosis (patient under 18 at admission).
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
(10) For admissions occurring on or
after October 1, 1990, and before October 1, 1994, and for discharges occurring
on or after October 1, 1997, the costs of
blood clotting factor for hemophilia inpatients. An additional payment shall
be made to a hospital for each unit of
blood clotting factor furnished to a
CHAMPUS inpatient who is hemophiliac in accordance with the amounts
established under the Medicare Prospective Payment System (42 CFR
412.115).
(D) Hospitals subject to the CHAMPUS
DRG-based payment system. All hospitals within the fifty states, the District of Columbia, and Puerto Rico
which are certified to provide services
to CHAMPUS beneficiaries are subject
to the DRG-based payment system except for the following hospitals or hospital units which are exempt.
(1) Psychiatric hospitals. A psychiatric
hospital which is exempt from the
Medicare Prospective Payment System
is also exempt from the CHAMPUS
DRG-based payment system. In order
for a psychiatric hospital which does
not participate in Medicare to be exempt from the CHAMPUS DRG-based
payment system, it must meet the
same criteria (as determined by the Director, OCHAMPUS, or a designee) as
required for exemption from the Medicare Prospective Payment System as
contained in 42 CFR 412.23.
(2) Rehabilitation hospitals. A rehabilitation hospital which is exempt from
the Medicare Prospective Payment
System is also exempt from the
CHAMPUS DRG-based payment system. In order for a rehabilitation hospital which does not participate in
Medicare to be exempt from the
CHAMPUS DRG-based payment system, it must meet the same criteria (as
determined
by
the
Director,
OCHAMPUS, or a designee) as required
for exemption from the Medicare Prospective Payment System as contained
in 42 CFR 412.23.
(3) Psychiatric and rehabilitation units
(distinct parts). A psychiatric or rehabilitation unit which is exempt from
the Medicare prospective payment system is also exempt from the CHAMPUS
DRG-based payment system. In order
for a distinct unit which does not participate in Medicare to be exempt from
the CHAMPUS DRG-based payment
system, it must meet the same criteria
(as determined by the Director,
OCHAMPUS, or a designee) as required
for exemption from the Medicare Prospective Payment System as contained
in 42 CFR 412.23.
(4) Long-term hospitals. A long-term
hospital which is exempt from the
Medicare prospective payment system
is also exempt from the CHAMPUS
DRG-based payment system. In order
for a long-term hospital which does not
participate in Medicare to be exempt
from the CHAMPUS DRG-based payment system, it must meet the same
criteria (as determined by the Director,
TSO, or a designee) as required for exemption from the Medicare Prospective
Payment System as contained in
§ 412.23 of Title 42 CFR.
(5) Hospitals within hospitals. A hospital within a hospital which is exempt
from the Medicare prospective payment system is also exempt from the
CHAMPUS DRG-based payment system. In order for a hospital within a
hospital which does not participate in
Medicare to be exempt from the
CHAMPUS DRG-based payment system, it must meet the same criteria (as
determined by the Director, TSO, or a
designee) as required for exemption
from the Medicare Prospective Payment System as contained in 42 CFR
412.22 and the criteria for one or more
of the excluded hospital classifications
described in § 412.23 of Title 42 CFR.
(6) Sole community hospitals. Any hospital which has qualified for special
treatment under the Medicare prospective payment system as a sole community hospital and has not given up that
classification is exempt from the
CHAMPUS DRG-based payment system. (See subpart G of 42 CFR part 412.)
(7) Christian Science sanitoriums. All
Christian Science sanitoriums (as defined in paragraph (b)(4)(viii) of § 199.6)
are exempt from the CHAMPUS DRGbased payment system.
(8) Cancer hospitals. Any hospital
which qualifies as a cancer hospital
under the Medicare standards and has
elected to be exempt from the Medicare
prospective payment system is exempt
from the CHAMPUS DRG-based payment system. (See 42 CFR 412.94.)
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Office of the Secretary of Defense
§ 199.14
(9) Hospitals outside the 50 states, the
District of Columbia, and Puerto Rico. A
hospital
is
excluded
from
the
CHAMPUS DRG-based payment system
if it is not located in one of the fifty
States, the District of Colubmia, or
Puerto Rico.
(10) CAHs. Effective December 1, 2009,
any facility which has been designated
and certified as a CAH as contained in
42 CFR Part 485.606 is exempt from the
CHAMPUS DRG-based payment system.
(E) Hospitals which do not participate
in Medicare. It is not required that a
hospital be a Medicare-participating
provider in order to be an authorized
CHAMPUS provider. However, any hospital which is subject to the CHAMPUS
DRG-based payment system and which
otherwise meets CHAMPUS requirements but which is not a Medicare-participating provider (having completed
a form HCFA–1514, Hospital Request
for Certification in the Medicare/Medicaid Program and a form HCFA–1561,
Health Insurance Benefit Agreement)
must complete a participation agreement with OCHAMPUS. By completing
the participation agreement, the hospital agrees to participate on all
CHAMPUS inpatient claims and to accept the CHAMPUS-determined allowable amount as payment in full for
these claims. Any hospital which does
not participate in Medicare and does
not complete a participation agreement with OCHAMPUS will not be authorized
to
provide
services
to
CHAMPUS beneficiaries.
(F) Substance Use Disorder Rehabilitation facilities. With admissions on or
after July 1, 1995, substance use disorder rehabilitation facilities, authorized under § 199.6(b)(4)(xiv), are subject
to the DRG-based payment system.
(iii)
Determination
of
payment
amounts. The actual payment for an individual claim under the CHAMPUS
DRG-based payment system is calculated by multiplying the appropriate
adjusted standardized amount (adjusted to account for area wage differences using the wage indexes used in
the Medicare program) by a weighting
factor specific to each DRG.
(A) Calculation of DRG weights—(1)
Grouping of charges. All discharge
records in the database shall be
grouped by DRG.
(2) Remove DRGs 469 and 470. Records
from DRGs 469 and 470 shall be removed
from the database.
(3) Indirect medical education standardization. To standardize the charges for
the cost effects of indirect medical education factors, each teaching hospital’s
charges will be divided by 1.0 plus the
following ratio on a hospital-specific
basis:
number of interns + residents ⎞
⎡⎛
⎤
1.43 × ⎢ 1.0 +
.5795 − 1.0 ⎥
⎝
⎠
number
of
beds
⎣
⎦
(4) Wage level standardization. To
standardize the charge records for area
wage differences, each charge record
will be divided into labor-related and
nonlabor-related portions, and the
labor-related portion shall be divided
by the most recently available Medicare wage index for the area. The
labor-related and nonlabor-related portions will then be added together.
(5) Elimination of statistical outliers.
All unusually high or low charges shall
be removed from the database.
(6) Calculation of DRG average charge.
After the standardization for indirect
medical education, and area wage dif-
ferences, an average charge for each
DRG shall be computed by summing
charges in a DRG and dividing that
sum by the number of records in the
DRG.
(7) Calculation of national average
charge per discharge. A national average
charge per discharge shall be calculated by summing all charges and dividing that sum by the total number of
records from all DRG categories.
(8) DRG relative weights. DRG relative
weights shall be calculated for each
DRG category by dividing each DRG
average charge by the national average
charge.
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285
§ 199.14
32 CFR Ch. I (7–1–11 Edition)
(B) Empty and low-volume DRGs. For
any DRG with less than ten (10) occurrences in the CHAMPUS database, the
Director, TSO, or designee, has the authority to consider alternative methods for estimating CHAMPUS weights
in these low-volume DRG categories.
(C) Updating DRG weights. The
CHAMPUS DRG weights shall be updated or adjusted as follows:
(1) DRG weights shall be recalculated
annually using CHAMPUS charge data
and the methodology described in paragraph (a)(1)(iii)(A) of this section.
(2) When a new DRG is created,
CHAMPUS will, if practical, calculate
a weight for it using an appropriate
charge sample (if available) and the
methodology described in paragraph
(a)(1)(iii)(A) of this section.
(3) In the case of any other change
under Medicare to an existing DRG
weight (such as in connection with
technology changes), CHAMPUS shall
adjust its weight for that DRG in a
manner comparable to the change
made by Medicare.
(D) Calculation of the adjusted standardized amounts. The following procedures shall be followed in calculating
the CHAMPUS adjusted standardized
amounts. (1) Differentiate large urban
and other area charges. All charges in
the database shall be sorted into large
urban and other area groups (using the
same definitions for these categories
used in the Medicare program. The following procedures will be applied to
each group.
(2) Indirect medical education standardization. To standardize the charges for
the cost effects of indirect medical education factors, each teaching hospital’s
charges will be divided by 1.0 plus the
following ratio on a hospital-specific
basis:
number of interns + residents ⎞
⎡⎛
⎤
1.43 × ⎢ 1.0 +
.5795 − 1.0 ⎥
⎝
⎠
number
of
beds
⎣
⎦
(3) Wage level standardization. To
standardize the charge records for area
wage differences, each charge record
will be divided into labor-related and
nonlabor-related portions, and the
labor-related portion shall be divided
by the most recently available Medicare wage index for the area. The
labor-related and nonlabor-related portions will then be added together.
(4) Apply the cost to charge ratio. Each
charge is to be reduced to a representative cost by using the Medicare cost to
charge ratio. This amount shall be increased by 1 percentage point in order
to reimburse hospitals for bad debt expenses attributable to CHAMPUS beneficiaries.
(5) Preliminary base year standardized amount. A preliminary base year
standardized amount shall be calculated by summing all costs in the
database applicable to the large urban
or other area group and dividing by the
total number of discharges in the respective group.
(6) Update for inflation. The preliminary base year standardized amounts
shall be updated using an annual update factor equal to 1.07 to produce fiscal year 1988 preliminary standardized
amounts. Therefore, any development
of a new standardized amount will use
an inflation factor equal to the hospital market basket index used by the
Health Care Financing Administration
in their Prospective Payment System.
(7) The preliminary standardized
amounts, updated for inflation, shall be
divided by a system standardization
factor so that total DRG outlays, given
the database distribution across hospitals and diagnosis, are equal to the
total charges reduced to costs.
(8) Labor and nonlabor portions of the
adjusted standardized amounts. The adjusted standardized amounts shall be
divided into labor and nonlabor portions in accordance with the Medicare
division of labor and nonlabor portions.
(E) Adjustments to the DRG-based payments amounts. The following adjustments to the DRG-based amounts (the
weight multiplied by the adjusted
standardized amount) will be made.
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Office of the Secretary of Defense
§ 199.14
(1) Outliers. The DRG-based payment
to a hospital shall be adjusted for
atypical cases. These outliers are those
cases that have either an unusually
short length-of-stay or extremely long
length-of-stay or that involve extraordinarily high costs when compared to
most discharges classified in the same
DRG. Cases which qualify as both a
length-of-stay outlier and a cost
outlier shall be paid at the rate which
results in the greater payment.
(i) Length-of-stay outliers. Length-ofstay outliers shall be identified and
paid by the fiscal intermediary when
the claims are processed.
(A) Short-stay outliers. Any discharge
with a length-of-stay (LOS) less than
1.94 standard deviations from the
DRG’s arithmetic LOS shall be classified as a short-stay outlier. Short-stay
outliers shall be reimbursed at 200 percent 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 DRG
amount divided by the arithmetic
mean length-of-stay for the DRG.
(B) Long-stay outliers. Any discharge
(except for neonatal services and services in children’s hospitals) which has a
length-of-stay
(LOS)
exceeding
a
threshold established in accordance
with the criteria used for the Medicare
Prospective Payment System as contained in 42 CFR 412.82 shall be classified as a long-stay outlier. Any discharge for neonatal services or for
services in a children’s hospital which
has a LOS exceeding the lesser of 1.94
standard deviations or 17 days from the
DRG’s arithmetic mean LOS also shall
be classified as a long-stay outlier.
Long-stay outliers shall be reimbursed
the DRG-based amount plus a percentage (as established for the Medicare
Prospective Payment System) of the
per diem rate for the DRG for each covered day of care beyond the long-stay
outlier threshold. The per diem rate
shall equal the DRG amount divided by
the arithmetic mean LOS for the DRG.
For admissions on or after October 1,
1997, the long stay outlier has been
eliminated for all cases except children’s hospitals and neonates. For admissions on or after October 1, 1998, the
long stay outlier has been eliminated
for children’s hospitals and neonates.
(ii) Cost outliers. Additional payment
for cost outliers shall be made only
upon request by the hospital.
(A) Cost outliers except those in children’s hospitals or for neonatal services. Any discharge which has standardized costs that exceed a threshold
established in accordance with the criteria used for the Medicare Prospective
Payment System as contained in 42
CFR 412.84 shall qualify as a cost
outlier. The standardized costs shall be
calculated by multiplying the total
charges by the factor described in paragraph (a)(1)(iii)(D)(4) of this section
and adjusting this amount for indirect
medical education costs. Cost outliers
shall be reimbursed the DRG-based
amount plus a percentage (as established for the Medicare Prospective
Payment System) of all costs exceeding the threshold. Effective with admissions occurring on or after October
1, 1997, the standardized costs are no
longer adjusted for indirect medical
education costs.
(B) Cost outliers in children’s hospitals for neonatal services. Any discharge for services in a children’s hospital or for neonatal services which has
standardized costs that exceed a
threshold of the greater of two times
the DRG-based amount or $13,500 shall
qualify as a cost outlier. The standardized costs shall be calculated by multiplying the total charges by the factor
described in paragraph (a)(1) (iii) (D) (4)
of this section (adjusted to include average capital and direct medical education costs) and adjusting this
amount for indirect medical education
costs. Cost outliers for services in children’s hospitals and for neonatal services shall be reimbursed the DRG-based
amount plus a percentage (as established for the Medicare Prospective
Payment System) of all costs exceeding the threshold. Effective with admissions occurring on or after October
1, 1998, standardized costs are no longer
adjusted for indirect medical education
costs. In addition, CHAMPUS will calculate the outlier payments that would
have occurred at each of the 59 Children’s hospitals under the FY99 outlier
policy for all cases that would have
been outliers under the FY94 policies
using the most accurate data available
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
in September 1998. A ratio will be calculated which equals the level of
outlier payments that would have been
made under the FY94 outlier policies
and the outlier payments that would be
made if the FY99 outlier policies had
applied to each of these potential
outlier cases for these hospitals. The
ratio will be calculated across all
outlier claims for the 59 hospitals and
will not be hospital specific. The ratio
will be used to increase cost outlier
payments in FY 1999 and FY 2000, unless the hospital has a negotiated
agreement with a managed care support contractor which would affect this
payment. For hospitals with managed
care support agreements which affect
these payments, CHAMPUS will apply
these payments if the increased payments would be consistent with the
agreements. In FY 2000 the ratio of
outlier payments (long stay and cost)
that would have occurred under the FY
94 policy and actual cost outlier payments made under the FY 99 policy will
be recalculated. If the ratio has
changed significantly, the ratio will be
revised for use in FY 2001 and thereafter. In FY 2002, the actual cost
outlier cases in FY 2000 and 2001 will be
reexamined. The ratio of outlier payments that would have occurred under
the FY94 policy and the actual cost
outlier payments made under the FY
2000 and FY 2001 policies. If the ratio
has changed significantly, the ratio
will be revised for use in FY 2003.
(C) Cost outliers for burn cases. All
cost outliers for DRGs related to burn
cases shall be reimbursed the DRGbased amount plus a percentage (as established for the Medicare Prospective
Payment System) of all costs exceeding the threshold. The standardized
costs and thresholds for these cases
shall be calculated in accordance with
§ 199.14(a)(1)(iii)(E)(1)(ii)(A)
and
§ 199.14(a)(1)(iii)(E)(1)(ii)(B).
(2) Wage adjustment. CHAMPUS will
adjust the labor portion of the standardized amounts according to the hospital’s area wage index.
(3) Indirect medical education adjustment. The wage adjusted DRG payment
will also be multiplied by 1.0 plus the
hospital’s indirect medical education
ratio.
(4) Children’s hospital differential.
With respect to claims from children’s
hospitals, the appropriate adjusted
standardized amount shall also be adjusted by a children’s hospital differential.
(i) Qualifying children’s hospitals. Hospitals qualifying for the children’s hospital differential are hospitals that are
exempt from the Medicare Prospective
Payment System, or, in the case of
hospitals that do not participate in
Medicare, that meet the same criteria
(as determined by the Director,
OCHAMPUS, or a designee) as required
for exemption from the Medicare Prospective Payment System as contained
in 42 CFR 412.23.
(ii) Calculation of differential. The differential shall be equal to the difference between a specially calculated
children’s hospital adjusted standardized amount and the adjusted standardized amount for fiscal year 1988. The
specially calculated children’s hospital
adjusted standardized amount shall be
calculated in the same manner as set
forth in § 199.14(a)(1)(iii)(D), except
that:
(A) The base period shall be fiscal
year 1988 and shall represent total estimated charges for discharges that occurred during fiscal year 1988.
(B) No cost to charge ratio shall be
applied.
(C) Capital costs and direct medical
education costs will be included in the
calculation.
(D) The factor used to update the
database for inflation to produce the
fiscal year 1988 base period amount
shall be the applicable Medicare inpatient hospital market basket rate.
(iii) Transition rule. Until March 1,
1992, separate differentials shall be
used for each higher volume children’s
hospital (individually) and for all other
children’s hospitals (in the aggregate).
For this purpose, a higher volume hospital is a hospital that had 50 or more
CHAMPUS discharges in fiscal year
1988.
(iv) Hold harmless provision. At such
time as the weights initially assigned
to neonatal DRGs are recalibrated
based
on
sufficient
volume
of
CHAMPUS claims records, children’s
hospital differentials shall be recalculated and appropriate retrospective
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Office of the Secretary of Defense
§ 199.14
and prospective adjustments shall be
made. To the extent practicable, the
recalculation shall also include reestimated values of other factors (including but not limited to direct education
and capital costs and indirect education factors) for which more accurate
data became available.
(v) No update for inflation. The children’s hospital differential, calculated
(and later recalculated under the hold
harmless provision) for the base period
of fiscal year 1988, shall not be updated
for subsequent fiscal years.
(vi) Administrative corrections. In connection with determinations pursuant
to paragraph (a)(1)(iii) (E)(4)(iii) of this
section, any children’s hospital that
believes OCHAMPUS erroneously failed
to classify the hospital as a high volume hospital or incorrectly calculated
(in the case of a high volume hospital)
the hospital’s differential may obtain
administrative corrections by submitting appropriate documentation to the
Director, OCHAMPUS (or a designee).
(F) Updating the adjusted standardized
amounts. Beginning in FY 1989, the adjusted standardized amounts will be
updated by the Medicare annual update
factor, unless the adjusted standardized amounts are recalculated.
(G) Annual cost pass-throughs—(1)
Capital costs. When requested in writing
by a hospital, CHAMPUS shall reimburse the hospital its share of actual
capital costs as reported annually to
the CHAMPUS fiscal intermediary.
Payment for capital costs shall be
made annually based on the ratio of
CHAMPUS inpatient days for those
beneficiaries subject to the CHAMPUS
DRG-based payment system to total
inpatient days applied to the hospital’s
total allowable capital costs. Reductions in payments for capital costs
which are required under Medicare
shall also be applied to payments for
capital costs under CHAMPUS.
(i) Costs included as capital costs. Allowable capital costs are those specified in Medicare Regulation § 413.130, as
modified by § 412.72.
(ii) 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
§ 413.17, then the hospital must include
in its capital-related costs, the capitalrelated 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 change to the provider may be
considered a capital-related cost unless
the services, facilities, or supplies are
capital-related in nature and:
(A) The capital-related equipment is
leased or rented by the provider;
(B) The capital-related equipment is
located on the provider’s premises; and
(C) The capital-related portion of the
charge is separately specified in the
charge to the provider.
(2) Direct medical education costs.
When requested in writing by a hospital, CHAMPUS shall reimburse the
hospital its actual direct medical education costs as reported annually to
the CHAMPUS fiscal intermediary.
Such teaching costs must be for a
teaching program approved under
Medicare Regulation § 413.85. Payment
for direct medical education costs shall
be made annually based on the ratio of
CHAMPUS inpatient days for those
beneficiaries subject to the CHAMPUS
DRG-based payment system to total
inpatient days applied to the hospital’s
total allowable direct medical education costs. Allowable direct medical
education costs are those specified in
Medicare Regulation § 413.85.
(3) Information necessary for payment of capital and direct medical education costs. All hospitals subject to
the CHAMPUS DRG-based payment
system, except for children’s hospitals,
may be reimbursed for allowed capital
and direct medical education costs by
submitting a request to the CHAMPUS
contractor. Beginning October 1, 1998,
such request shall be filed with
CHAMPUS on or before the last day of
the twelfth month following the close
of the hospitals’ cost reporting period,
and shall cover the one-year period corresponding to the hospital’s Medicare
cost-reporting period. The first such request may cover a period of less than a
full year—from the effective date of
the CHAMPUS DRG-based payment
system to the end of the hospital’s
Medicare cost-reporting period. All
costs reported to the CHAMPUS contractor must correspond to the costs
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
reported on the hospital’s Medicare
cost report. An extension of the due
date for filing the request may only be
granted if an extension has been granted by HCFA 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. (If
these costs change as a result of a subsequent audit by Medicare, the revised
costs are to be reported to the hospital’s CHAMPUS contractor within 30
days of the date the hospital is notified
of the change). The request must be
signed by the hospital official responsible for verifying the amounts and
shall contain the following information.
(i) The hospital’s name.
(ii) The hospital’s address.
(iii) The hospital’s CHAMPUS provider number.
(iv) The hospital’s Medicare provider
number.
(v) The period covered—this must
correspond to the hospital’s Medicare
cost-reporting period.
(vi) Total inpatient days provided to
all patients in units subject to DRGbased payment.
(vii) Total allowed CHAMPUS inpatient days provided in units subject to
DRG-based payment.
(viii) Total allowable capital costs.
(ix) Total allowable direct medical
education costs.
(x) Total full-time equivalents for:
(A) Residents.
(B) Interns.
(xi) Total inpatient beds as of the end
of the cost-reporting period. If this has
changed during the reporting period,
an explanation of the change must be
provided.
(xii) Title of official signing the report.
(xiii) Reporting date.
(xiv) The report shall contain a certification statement that any changes
to
the
items
in
paragraphs
(a)(1)(iii)(G)(3)(vi), (vii), (viii), (ix), or
(x), which are a result of an audit of
the hospital’s Medicare cost-report,
shall be reported to CHAMPUS within
thirty (30) days of the date the hospital
is notified of the change.
(2) CHAMPUS mental health per diem
payment system. The CHAMPUS mental
health per diem payment system shall
be used to reimburse for inpatient mental health hospital care in specialty
psychiatric hospitals and units. Payment is made on the basis of prospectively determined rates and paid on a
per diem basis. The system uses two
sets of per diems. One set of per diems
applies to hospitals and units that have
a
relatively
higher
number
of
CHAMPUS discharges. For these hospitals and units, the system uses hospital-specific per diem rates. The other
set of per diems applies to hospitals
and units with a relatively lower number of CHAMPUS discharges. For these
hospitals and units, the system uses regional per diems, and further provides
for adjustments for area wage differences and indirect medical education costs and additional passthrough payments for direct medical
education costs.
(i) Applicability of the mental health
per diem payment system—(A) Hospitals
and units covered. The CHAMPUS mental health per diem payment system
applies to services covered (see paragraph (a)(2)(i)(B) of this section) that
are provided in Medicare prospective
payment system (PPS) exempt psychiatric specialty hospitals and all
Medicare PPS exempt psychiatric specialty units of other hospitals. In addition, any psychiatric hospital that does
not participate in Medicare, or any
other hospital that has a psychiatric
specialty unit that has not been so designated for exemption from the Medicare prospective payment system because the hospital does not participate
in Medicare, may be designated as a
psychiatric hospital or psychiatric specialty unit for purposes of the
CHAMPUS mental health per diem
payment system upon demonstrating
that it meets the same criteria (as determined by the Director, OCHAMPUS)
as required for the Medicare exemption. The CHAMPUS mental health per
diem payment system does not apply
to mental health services provided in
other hospitals.
(B) Services covered. Unless specifically exempted, all covered hospitals’
and units’ inpatient claims which are
classified into a mental health DRG
(DRG categories 425–432, but not DRG
424) or an alcohol/drug abuse DRG
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Office of the Secretary of Defense
§ 199.14
(DRG categories 433–437) shall be subject to the mental health per diem payment system.
(ii) Hospital-specific per diems for higher volume hospitals and units. This paragraph describes the per diem payment
amounts for hospitals and units with a
higher volume of CHAMPUS discharges.
(A)(1) Per diem amount. A hospitalspecific per diem amount shall be calculated for each hospital and unit with
a higher volume of CHAMPUS discharges. The base period per diem
amount shall be equal to the hospital’s
average daily charge in the base period.
The base period amount, however, may
not exceed the cap described in paragraph (a)(2)(ii)(B) of this section. The
base period amount shall be updated in
accordance with paragraph (a)(2)(iv) of
this section.
(2) In states that have implemented a
payment system in connection with
which hospitals in that state have been
exempted from the CHAMPUS DRGbased payment system pursuant to
paragraph (a)(1)(ii)(A) of this section,
psychiatric hospitals and units may
have per diem amounts established
based on the payment system applicable to such hospitals and units in the
state. The per diem amount, however,
may not exceed the cap amount applicable to other higher volume hospitals.
(B) Cap—(1) As it affects payment for
care provided to patients prior to April
6, 1995, the base period per diem
amount may not exceed the 80th percentile of the average daily charge
weighted for all discharges throughout
the United States from all higher volume hospitals.
(2) Applicable to payments for care
provided to patients on or after April 6,
1996, the base period per diem amount
may not exceed the 70th percentile of
the average daily charge weighted for
all discharges throughout the United
States from all higher volume hospitals. For this purpose, base year
charges shall be deemed to be charges
during the period of July 1, 1991 to
June 30, 1992, adjusted to correspond to
base year (FY 1988) charges by the percentage change in average daily
charges for all higher volume hospitals
and units between the period of July 1,
1991 to June 30, 1992 and the base year.
(C) Review of per diem. Any hospital
or unit which believes OCHAMPUS calculated a hospital-specific per diem
which differs by more than $5.00 from
that calculated by the hospital or unit
may
apply
to
the
Director,
OCHAMPUS, or a designee, for a recalculation. The burden of proof shall be
on the hospital.
(iii) Regional per diems for lower volume hospitals and units. This paragraph
describes the per diem amounts for
hospitals and units with a lower volume of CHAMPUS discharges.
(A) Per diem amounts. Hospitals and
units with a lower volume of
CHAMPUS patients shall be paid on
the basis of a regional per diem
amount, adjusted for area wages and
indirect medical education. Base period
regional per diems shall be calculated
based upon all CHAMPUS lower volume hospitals’ claims paid during the
base period. Each regional per diem
amount shall be the quotient of all covered charges divided by all covered
days of care, reported on all CHAMPUS
claims from lower volume hospitals in
the region paid during the base period,
after having standardized for indirect
medical education costs and area wage
indexes and subtracted direct medical
education costs. Regional per diem
amounts are adjusted in accordance
with paragraph (a)(2)(iii)(C) of this section. Additional pass-through payments to lower volume hospitals are
made in accordance with paragraph
(a)(2)(iii)(D) of this section. The regions shall be the same as the Federal
census regions.
(B) Review of per diem amount. Any
hospital that believes the regional per
diem amount applicable to that hospital has been erroneously calculated
by OCHAMPUS by more than $5.00 may
submit to the Director, OCHAMPUS, or
a designee, evidence supporting a different regional per diem. The burden of
proof shall be on the hospital.
(C) Adjustments to regional per diems.
Two adjustments shall be made to the
regional per diem rates.
(1) Area wage index. The same area
wage indexes used for the CHAMPUS
DRG-based payment system (see paragraph (a)(1)(iii)(E)(2) of this section)
shall be applied to the wage portion of
the applicable regional per diem rate
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
for each day of the admission. The
wage portion shall be the same as that
used for the CHAMPUS DRG-based
payment system.
(2) Indirect medical education. The indirect medical education adjustment
factors shall be calculated for teaching
hospitals in the same manner as is used
in the CHAMPUS DRG-based payment
system (see paragraph (a)(1)(iii)(E)(3) of
this section) and applied to the applicable regional per diem rate for each
day of the admission.
(D) Annual cost pass-through for direct
medical education. In addition to payments made to lower volume hospitals
under paragraph (a)(2)(iii) of this section, CHAMPUS shall annually reimburse hospitals for actual direct medical education costs associated with
services to CHAMPUS beneficiaries.
This reimbursement shall be done pursuant to the same procedures as are applicable to the CHAMPUS DRG-based
payment
system
(see
paragraph
(a)(1)(iii)(G) of this section).
(iv) Base period and update factors—
(A) Base period. The base period for calculating the hospital-specific and regional per diems, as described in paragraphs (a)(2)(ii) and (a)(2)(iii) of this
section, is Federal fiscal year 1988.
Base period calculations shall be based
on actual claims paid during the period
July 1, 1987 through May 31, 1988,
trended forward to represent the 12month period ending September 30, 1988
on the basis of the Medicare inpatient
hospital market basket rate.
(B) Alternative hospital-specific data
base. Upon application of a higher volume hospital or unit to the Director,
OCHAMPUS, or a designee, the hospital or unit may have its hospital-specific base period calculations based on
claims with a date of discharge (rather
than date of payment) between July 1,
1987 through May 31, 1988 if it has generally experienced unusual delays in
claims payments and if the use of such
an alternative data base would result
in a difference in the per diem amount
of at least $5.00. For this purpose, the
unusual delays means that the hospital’s or unit’s average time period between date of discharge and date of
payment is more than two standard deviations longer than the national average.
(C) Update factors—(1) The hospitalspecific per diems and the regional per
diems calculated for the base period
pursuant to paragraphs (a)(2)(ii) of this
section shall remain in effect for federal fiscal year 1989; there will be no
additional update for fiscal year 1989.
(2) Except as provided in paragraph
(a)(2)(iv)(C)(3) of this section, for subsequent federal fiscal years, each per
diem shall be updated by the Medicare
update factor for hospitals and units
exempt from the Medicare prospective
payment system.
(3) As an exception to the update required by paragraph (a)(2)(iv)(C)(2) of
this section, all per diems in effect at
the end of fiscal year 1995 shall remain
in effect, with no additional update,
throughout fiscal years 1996 and 1997.
For fiscal year 1998 and thereafter, the
per diems in effect at the end of fiscal
year 1997 will be updated in accordance
with paragraph (a)(2)(iv)(C)(2).
(4) Hospitals and units with hospitalspecific rates will be notified of their
respective rates prior to the beginning
of each Federal fiscal year. New hospitals shall be notified at such time as
the hospital rate is determined. The actual amounts of each regional per diem
that will apply in any Federal fiscal
year shall be published in the FEDERAL
REGISTER at approximately the start of
that fiscal year.
(v) Higher volume hospitals. This paragraph describes the classification of
and other provisions pertinent to hospitals with a higher volume of
CHAMPUS patients.
(A) In general. Any hospital or unit
that had an annual rate of 25 or more
CHAMPUS discharges of CHAMPUS patients during the period July 1, 1987
through May 31, 1988 shall be considered a higher volume hospital has 25 or
more CHAMPUS discharges, that hospital shall be considered to be a higher
volume hospital during Federal fiscal
year 1989 and all subsequent fiscal
years. All other hospitals and units
covered by the CHAMPUS mental
health per diem payment system shall
be considered lower volume hospitals.
(B) Hospitals that subsequently become
higher volume hospitals. In any Federal
fiscal year in which a hospital, including a new hospital (see paragraph
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Office of the Secretary of Defense
§ 199.14
(a)(2)(v)(C) of this section), not previously classified as a higher volume
hospital has 25 or more CHAMPUS discharges, that hospital shall be considered to be a higher volume hospital
during the next Federal fiscal year and
all subsequent fiscal years. The hospital specific per diem amount shall be
calculated in accordance with the provisions of paragraph (a)(2)(ii) of this
section, except that the base period average daily charge shall be deemed to
be the hospital’s average daily charge
in the year in which the hospital had 25
or more discharges, adjusted by the
percentage change in average daily
charges for all higher volume hospitals
and units between the year in which
the hospital had 25 or more CHAMPUS
discharges and the base period. The
base period amount, however, may not
exceed the cap described in paragraph
(a)(2)(ii)(B) of this section.
(C) Special retrospective payment provision for new hospitals. For purposes of
this paragraph, a new hospital is a hospital that qualifies for the Medicare exemption from the rate of increase ceiling applicable to new hospitals which
are PPS-exempt psychiatric hospitals.
Any new hospital that becomes a higher volume hospital, in addition to
qualifying prospectively as a higher
volume hospital for purposes of paragraph (a)(2)(v)(B) of this section, may
additionally, upon application to the
Director, OCHAMPUS, receive a retrospective adjustment. The retrospective
adjustment shall be calculated so that
the hospital receives the same government share payments it would have received had it been designated a higher
volume hospital for the federal fiscal
year in which it first had 25 or more
CHAMPUS discharges and the preceding fiscal year (if it had any
CHAMPUS patients during the preceding fiscal year). Such new hospitals
must agree not to bill CHAMPUS beneficiaries for any additional costs beyond that determined initially.
(D) Review of classification. Any hospital or unit which OCHAMPUS erroneously fails to classify as a higher volume hospital may apply to the Director, OCHAMPUS, or a designee, for
such a classification. The hospital shall
have the burden of proof.
(vi) Payment for hospital based professional services. Lower volume hospitals
and units may not bill separately for
hospital based professional mental
health services; payment for those
services is included in the per diems.
Higher volume hospitals and units,
whether they billed CHAMPUS separately for hospital based professional
mental health services or included
those services in the hospital’s billing
to CHAMPUS, shall continue the practice in effect during the period July 1,
1987 to May 31, 1988 (or other data base
period used for calculating the hospital’s or unit’s per diem), except that
any such hospital or unit may change
its prior practice (and obtain an appropriate revision in its per diem) by providing to OCHAMPUS notice in accordance with procedures established by
the Director, OCHAMPUS, or a designee.
(vii) Leave days. CHAMPUS shall not
pay for days where the patient is absent on leave from the specialty psychiatric hospital or unit. The hospital
must identify these days when claiming reimbursement. CHAMPUS shall
not count a patients’s leave of absence
as a discharge in determining whether
a facility should be classified as a higher volume hospital pursuant to paragraph (a)(2)(v) of this section.
(viii) Exemptions from the CHAMPUS
mental health per diem payment system.
The following providers and procedures
are exempt from the CHAMPUS mental
health per diem payment system.
(A) Non-specialty providers. Providers
of inpatient care which are not either
psychiatric hospitals or psychiatric
specialty units as described in paragraph (a)(2)(i)(A) of this section are exempt from the CHAMPUS mental
health per diem payment system. Such
providers should refer to paragraph
(a)(1) of this section for provisions pertinent to the CHAMPUS DRG-based
payment system.
(B) DRG 424. Admissions for operating room procedures involving a
principal diagnosis of mental illness
(services which group into DRG 424) are
exempt from the per diem payment
system. They will be reimbursed pursuant to the provisions of paragraph
(a)(3) of this section.
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§ 199.14
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(C) Non-mental health services. Admissions for non-mental health procedures
in specialty psychiatric hospitals and
units are exempt from the per diem
payment system. They will be reimbursed pursuant to the provisions of
paragraph (a)(3) of this section.
(D) Sole community hospitals. Any hospital which has qualified for special
treatment under the Medicare prospective payment system as a sole community hospital and has not given up that
classification is exempt.
(E) Hospitals outside the U.S. A hospital is exempt if it is not located in
one of the 50 states, the District of Columbia or Puerto Rico.
(ix) Per diem payment for psychiatric
and substance use disorder rehabilitation
partial hospitalization services—(A) In
general. Psychiatric and substance use
disorder rehabilitation partial hospitalization services authorized by
§ 199.4(b)(10) and (e)(4) and provided by
institutional
providers
authorized
under § 199.6 (b)(4)(xii) and (b)(4)(xiv)
are reimbursed on the basis of prospectively determined, all-inclusive per
diem rates pursuant to the provisions
of paragraph (a)(2)(ix)(C) of this section, with the exception of hospitalbased psychiatric and substance use
disorder rehabilitation partial hospitalization services which are reimbursed in accordance with provisions of
paragraph (a)(5)(ii) of this section. The
per diem payment amount must be accepted as payment in full for all institutional services provided, including
board, routine nursing service, ancillary services (includes music, dance,
occupational and other such therapies),
psychological testing and assessment,
overhead and any other services for
which the customary practice among
similar providers is included as part of
the institutional charges.
(B) Services which may be billed separately. The following services are not
considered as included within the per
diem payment amount and may be separately billed when provided by an authorized independent professional provider:
(1) Psychotherapy sessions not included. Professional services provided
by an authorized professional provider
(who is not employed by or under contract with the partial hospitalization
program) for purposes of providing
clinical patient care to a patient in the
partial hospitalization program are not
included in the per diem rate. They
may be separately billed. Professional
mental health benefits are limited to a
maximum of one session (60 minutes
individual, 90 minutes family, etc.) per
authorized treatment day not to exceed
five sessions in any calendar week.
(2) Non-mental health related medical
services. Those services not normally
included in the evaluation and assessment of a partial hospitalization program, non-mental health related medical services, may be separately billed
when provided by an authorized independent professional provider. This includes ambulance services when medically necessary for emergency transport.
(C) Per diem rate. For any full day
partial hospitalization program (minimum of 6 hours), the maximum per
diem payment amount is 40 percent of
the average inpatient per diem amount
per
case
established
under
the
CHAMPUS mental health per diem reimbursement system for both high and
low volume psychiatric hospitals and
units (as defined in § 199.14(a)(2)) for the
fiscal year. A partial hospitalization
program of less than 6 hours (with a
minimum of three hours) will be paid a
per diem rate of 75 percent of the rate
for a full-day program.
(D) Other requirements. No payment is
due for leave days, for days in which
treatment is not provided, or for days
in which the duration of the program
services was less than three hours.
(3) Reimbursement for inpatient services
provided by a CAH. For admissions on
or after December 1, 2009, inpatient
services provided by a CAH, other than
services provided in psychiatric and rehabilitation distinct part units, shall
be reimbursed at 101 percent of reasonable cost. This does not include any
costs of physician services or other
professional services provided to CAH
inpatients. Inpatient services provided
in psychiatric distinct part units would
be subject to the CHAMPUS mental
health per diem payment system. Inpatient services provided in rehabilitation distinct part units would be subject to billed charges or set rates.
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Office of the Secretary of Defense
§ 199.14
(4) Billed charges and set rates. The allowable costs for authorized care in all
hospitals not subject to the CHAMPUS
Diagnosis Related Group-based payment system, the CHAMPUS mental
health per diem system, or the reasonable cost method for CAHs, shall be determined on the basis of billed charges
or set rates. Under this procedure the
allowable costs may not exceed the
lower of:
(i) The actual charge for such service
made to the general public; or
(ii) The allowed charge applicable to
the policyholders or subscribers of the
CHAMPUS fiscal intermediary for
comparable services under comparable
circumstances,
when
extended
to
CHAMPUS beneficiaries by consent or
agreement; or
(iii) The allowed charge applicable to
the citizens of the community or state
as established by local or state regulatory authority, excluding title XIX of
the Social Security Act or other welfare program, when extended to
CHAMPUS beneficiaries by consent or
agreement.
(5) CHAMPUS discount rates. The
CHAMPUS-determined allowable cost
for authorized care in any hospital may
be based on discount rates established
under paragraph (l) of this section.
(6) Hospital outpatient services. This
paragraph (a)(5) identifies and clarifies
payment methods for certain outpatient services, including emergency
services, provided by hospitals.
(i) Outpatient Services Not Subject to
Hospital Outpatient Prospective Payment
System (OPPS). The following are payment methods for outpatient services
that are either provided in an OPPS exempt hospital or paid outside the OPPS
payment methodology under existing
fee schedules or other prospectively determined rates in a hospital subject to
OPPS reimbursement.
(A) Laboratory services. TRICARE
payments for hospital outpatient laboratory services including clinical laboratory services are based on the allowable charge method under paragraph (j)(1) of the section. In the case
of laboratory services for which the
CMAC rates are established under that
paragraph, a payment rate for the
technical component of the laboratory
services is provided. Hospital charges
for an outpatient laboratory service
are reimbursed using the CMAC technical component rate.
(B) Rehabilitation therapy services. Rehabilitation therapy services provided
on an outpatient basis by hospitals are
paid on the same basis as rehabilitation therapy services covered by the allowable charge method under paragraph (j)(1) of this section.
(C)
Venipuncture.
Routine
venipuncture services provided on an
outpatient basis by hospitals are paid
on the same basis as such services covered by the allowable charge method
under paragraph (j)(1) of this section.
Routine venipuncture services provided
on an outpatient basis by institutional
providers other than hospitals are also
paid on this basis.
(D) Radiology services. TRICARE payments for hospital outpatient radiology services are based on the allowable charge method under paragraph
(j)(1) of the section. In the case of radiology services for which the CMAC
rates are established under that paragraph, a payment rate for the technical
component of the radiology services is
provided. Hospital charges for an outpatient radiology service are reimbursed using the CMAC technical component rate.
(E) Diagnostic services. TRICARE payments for hospital outpatient diagnostic services are based on the allowable charge method under paragraph
(j)(1) of the section. In the case of diagnostic services for which the CMAC
rates are established under that paragraph, a payment rate for the technical
component of the diagnostic services is
provided. Hospital charges for an outpatient diagnostic service are reimbursed using the CMAC technical component rate.
(F) Ambulance services. Ambulance
services provided on an outpatient
basis by hospitals are paid on the same
basis as ambulance services covered by
the allowable charge method under
paragraph (j)(1) of this section.
(G) Durable medical equipment (DME)
and supplies. Durable medical equipment and supplies provided on an outpatient basis by hospitals are paid on
the same basis as durable medical
equipment and supplies covered by the
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allowable charge method under paragraph (j)(1) of this section.
(H) Oxygen and related supplies. Oxygen and related supplies provided on an
outpatient basis by hospitals are paid
on the same basis as oxygen and related supplies covered by the allowable
charge method under paragraph (j)(1) of
this section.
(I) Drugs administered other than oral
method. Drugs administered other than
oral method provided on an outpatient
basis by hospitals are paid on the same
basis as drugs administered other than
oral method covered by the allowable
charge method under paragraph (j)(1) of
this section. The allowable charge for
drugs administered other than oral
method is established from a schedule
of allowable charges based on a formulary of the average wholesale price.
(J) Professional provider services.
TRICARE payments for hospital outpatient professional provider services
rendered in an emergency room, clinic,
or hospital outpatient department,
etc., are based on the allowable charge
method under paragraph (j)(1) of the
section. In the case of professional
services for which the CMAC rates are
established under that paragraph, a
payment rate for the professional component of the services is provided. Hospital charges for an outpatient professional service are reimbursed using the
CMAC professional component rate. If
the professional outpatient hospital
services are billed by a professional
provider group, not by the hospital, no
payment shall be made to the hospital
for these services.
(K) Facility charges. TRICARE payments for hospital outpatient facility
charges that would include the overhead costs of providing the outpatient
service would be paid as billed. For the
definition of facility charge, see
§ 199.2(b).
(L) Ambulatory surgery services. Hospital outpatient ambulatory surgery
services shall be paid in accordance
with § 199.14(d).
(ii) Outpatient Services Subject to
OPPS. Outpatient services provided in
hospitals subject to Medicare OPPS as
specified in 42 CFR 413.65 and 42 CFR
§ 419.20 will be paid in accordance with
the provisions outlined in sections
1833(t) of the Social Security Act and
its implementing Medicare regulation
(42 CFR Part 419) subject to exceptions
as authorized by § 199.14(a)(5)(ii). Under
the
above
governing
provisions,
CHAMPUS will recognize to the extent
practicable, in accordance with 10
U.S.C. 1079(j)(2), Medicare’s OPPS reimbursement methodology to include
specific coding requirements, ambulatory payment classifications (APCs),
nationally established APC amounts
and associated adjustments (e.g., discounting for multiple surgery procedures, wage adjustments for variations
in labor-related costs across geographical regions and outlier calculations). While CHAMPUS intends to remain as true as possible to Medicare’s
basic OPPS methodology, there will be
some deviations required to accommodate CHAMPUS’ unique benefit structure and beneficiary population as authorized under the provisions of 10
U.S.C. 1079(j)(2). Temporary transitional payment adjustments (TTPAs)
will be in place for all hospitals, both
network and non-network in order to
buffer the initial decline in payments
upon implementation of TRICARE’s
OPPS. For network hospitals, the temporary transitional payment adjustments (TTPAs) will cover a four-year
period. The four-year transition will
set higher payment percentages for the
ten Ambulatory Payment Classification (APC) codes 604–609 and 613–616,
with reductions in each of the transition years. For non-network hospitals,
the adjustments will cover a three year
period, with reductions in each of the
transition years. For network hospitals, under the TTPAs, the APC payment level for the five clinic visit
APCs would be set at 175 percent of the
Medicare APC level, while the five ER
visit APCs would be increased by 200
percent in the first year of OPPS implementation. In the second year, the
APC payment levels would be set at 150
percent of the Medicare APC level for
clinic visits and 175 percent for ER
APCs. In the third year, the APC visit
amounts would be set at 130 percent of
the Medicare APC level for clinic visits
and 150 percent for ER APCs. In the
fourth year, the APC visit amounts
would be set at 115 percent of the Medicare APC level for clinic visits and 130
per cent for ER APCs. In the fifth year,
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Office of the Secretary of Defense
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the TRICARE and Medicare payment
levels for the 10 APC visit codes would
be identical.
For non-network hospitals, under the
TTPAs, the APC payment level for the
five clinic and ER visit APCs would be
set at 140 percent of the Medicare APC
level in the first year of OPPS implementation. In the second year, the APC
payment levels would be set at 125 percent of the Medicare APC level for clinic and ER visits. In the third year, the
APC visit amounts would be set at 110
percent of the Medicare APC level for
clinic and ER visits. In the fourth year,
the TRICARE and Medicare payment
levels for the 10 APC visit codes would
be identical.
An additional temporary military
contingency
payment
adjustment
(TMCPA) will also be available at the
discretion of the Director, TMA, or a
designee, at any time after implementation to adopt, modify and/or extend
temporary adjustments to OPPS payments for TRICARE network hospitals
deemed essential for military readiness
and deployment in time of contingency
operations. Any TMCPAs to OPPS payments shall be made only on the basis
of a determination that it is impracticable to support military readiness or
contingency operations by making
OPPS payments in accordance with the
same reimbursement rules implemented by Medicare. The criteria for
adopting, modifying, and/or extending
deviations and/or adjustments to OPPS
payments shall be issued through
CHAMPUS policies, instructions, procedures and guidelines as deemed appropriate by the Director, TMA, or a
designee. TMCPAs may also be extended to non-network hospitals on a
case-by-case basis for specific procedures where it is determined that the
procedures cannot be obtained timely
enough from a network hospital. For
such case-by-case extensions, ‘‘Temporary’’ might be less than three years
at the discretion of the TMA Director,
or designee.
(iii) Outpatient Services Subject to CAH
Reasonable Cost Method. For services on
or after December 1, 2009, outpatient
services provided by a CAH, shall be reimbursed at 101 percent of reasonable
cost. This does not include any costs of
physician services or other professional
services provided to CAH outpatients.
(iv) CAH Ambulance Services. Effective
for services provided on or after December 1, 2009, payment for ambulance
services furnished by a CAH or an entity that is owned and operated by a
CAH is the reasonable costs of the CAH
or the entity in furnishing those services, but only if the CAH or the entity
is the only provider or supplier of ambulance services located within a 35mile drive of the CAH or the entity as
specified
under
42
CFR
part
413.70(b)(5)(ii).
(b) Skilled nursing facilities (SNFs)—(1)
Use of Medicare prospective payment system and rates. TRICARE payments to
SNFs are determined using the same
methods and rates used under the
Medicare prospective payment system
for SNFs under 42 CFR part 413, subpart J, except for children under age
ten. SNFs receive a per diem payment
of a predetermined Federal payment
rate appropriate for the case based on
patient classification (using the RUG
classification system), urban or rural
location of the facility, and area wage
index.
(2) Payment in full. The SNF payment
rates represent payment in full (subject to any applicable beneficiary cost
shares) for all costs (routine, ancillary,
and capital-related) associated with
furnishing inpatient SNF services to
TRICARE beneficiaries other than
costs associated with operating approved educational activities.
(3) Education costs. Costs for approved
educational activities shall be subject
to separate payment under procedures
established by the Director, TRICARE
Management Activity. Such procedures
shall be similar to procedures for payments for direct medical education
costs of hospitals under paragraph
(a)(1)(iii)(G)(2) of this section.
(4) Resident assessment data. SNFs are
required to submit the same resident
assessment data as is required under
the Medicare program. (The residential
assessment is addressed in the Medicare regulations at 42 CFR 483.20.)
SNFs must submit assessments according to an assessment schedule. This
schedule must include performance of
patient assessments on the 5th, 14th,
and 30th days of SNF care and at each
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successive 30 day interval of SNF admissions that are longer than 30 days.
It must also include such other assessments that are necessary to account
for changes in patient care needs.
TRICARE pays a default rate for the
days of a patient’s care for which the
SNF has failed to comply with the assessment schedule.
(c) Reimbursement for Other Than Hospitals
and
SNFs.
The
Director,
OCHAMPUS, or a designee, shall establish such other methods of determining
allowable cost or charge reimbursement for those institutions, other than
hospitals and SNFs, as may be required.
(d) Payment of institutional facility
costs for ambulatory surgery—(1) In general. CHAMPUS pays institutional facility costs for ambulatory surgery on
the basis of prospectively determined
amounts, as provided in this paragraph, with the exception of ambulatory surgery procedures performed in
hospital outpatient departments or in
CAHs, which are to be reimbursed in
accordance with the provisions of paragraph (a)(6)(ii) or (a)(6)(iii) respectively, of this section. This payment
method is similar to that used by the
Medicare program for ambulatory surgery. This paragraph applies to payment for freestanding ambulatory surgical centers. It does not apply to professional services. A list of ambulatory
surgery procedures subject to the payment method set forth in the paragraph shall be published periodically
by the Director, TRICARE Management Activity (TMA). Payment to freestanding ambulatory surgery centers is
limited to these procedures.
(2) Payment in full. The payment provided for under this paragraph is the
payment in full for services covered by
this paragraph. Facilities may not
charge beneficiaries for amounts, if
any, in excess of the payment amounts
determined pursuant to this paragraph.
(3) Calculation of standard payment
rates. Standard payment rates are calculated for groups of procedures under
the following steps:
(i) Step 1: Calculate a median standardized cost for each procedure. For each
ambulatory surgery procedure, a median standardized cost will be calculated on the basis of all ambulatory
surgery charges nationally under
CHAMPUS during a recent one-year
base period. The steps in this calculation include 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 a cost-tocharge ratio, calculating a median cost
for each procedure, and updating to the
year for which the payment rates will
be in effect by the Consumer Price
Index-Urban. In applying a cost-tocharge ratio, the Medicare cost-tocharge ratio for freestanding ambulatory surgery centers (FASCs) will be
used for all charges from FASCs, and
the Medicare cost-to-charge ratio for
hospital outpatient settings will be
used for all charges from hospitals.
(ii) Step 2: Grouping procedures. Procedures will then be placed into one of
ten groups by their median per procedure cost, starting with $0 to $299 for
group 1 and ending with $1000 to $1299
for group 9 and $1300 and above for
group 10, with groups 2 through 8 set on
the basis of $100 fixed intervals.
(iii) Step 3: Adjustments to groups. The
Director, OCHAMPUS may make adjustments to the groupings resulting
from step 2 to account for any ambulatory surgery procedures for which
there were insufficient data to allow a
grouping or to correct for any anomalies resulting from data or statistical
factors or other special factors that
fairness requires be specially recognized. In making any such adjustments, the Director may take into consideration the placing of particular
procedures in the ambulatory surgery
groups under Medicare.
(iv) Step 4: standard payment amount
per group. The standard payment
amount per group will be the volume
weighted median per procedure cost for
the procedures in that group. For cases
in which the standard payment amount
per group exceeds the CHAMPUS-determined inpatient allowable amount, the
Director, TSO or his designee, may
make adjustments.
(v) Step 5: Actual payments. Actual
payment for a procedure will be 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
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Office of the Secretary of Defense
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cost ratio and hospital wage index as
used for ambulatory surgery centers by
Medicare.
(4) Multiple procedures. In cases in
which authorized multiple procedures
are performed during the same operative session, payment shall be based on
100 percent of the payment amount for
the procedure with the highest ambulatory surgery payment amount, plus, for
each other procedure performed during
the session, 50 percent of its payment
amount.
(5) Annual updates. The standard payment amounts will be updated annually by the same update factor as is
used in the Medicare annual updates
for ambulatory surgery center payments.
(6) Recalculation of rates. The Director, OCHAMPUS may periodically recalculate standard payment rates for
ambulatory surgery using the steps set
forth in paragraph (d)(3) of this section.
(e) Reimbursement of Birthing Centers.
(1) Reimbursement for maternity care
and childbirth services furnished by an
authorized birthing center shall be limited to the lower of the CHAMPUS established all-inclusive rate or the center’s most-favored all-inclusive rate.
(2) The all-inclusive rate shall include the following to the extent that
they are usually associated with a normal pregnancy and childbirth: Laboratory studies, prenatal management,
labor management, delivery, postpartum management, newborn care,
birth assistant, certified nurse-midwife
professional services, physician professional services, and the use of the facility.
(3) The CHAMPUS established all-inclusive rate is equal to the sum of the
CHAMPUS area prevailing professional
charge for total obstetrical care for a
normal pregnancy and delivery and the
sum of the average CHAMPUS allowable institutional charges for supplies,
laboratory, and delivery room for a
hospital inpatient normal delivery. The
CHAMPUS established all-inclusive
rate areas will coincide with those established for prevailing professional
charges and will be updated concurrently with the CHAMPUS area prevailing professional charge database.
(4) Extraordinary maternity care
services, when otherwise authorized,
may be reimbursed at the lesser of the
billed charge or the CHAMPUS allowable charge.
(5) Reimbursement for an incomplete
course of care will be limited to claims
for professional services and tests
where
the
beneficiary
has
been
screened but rejected for admission
into the birthing center program, or
where the woman has been admitted
but is discharged from the birthing
center program prior to delivery, adjudicated as individual professional services and items.
(6) The beneficiary’s share of the
total reimbursement to a birthing center is limited to the cost-share amount
plus the amount billed for non-covered
services and supplies.
(f) Reimbursement of Residential Treatment Centers. The CHAMPUS rate is the
per diem rate that CHAMPUS will authorize for all mental health services
rendered to a patient and the patient’s
family as part of the total treatment
plan submitted by a CHAMPUS-approved RTC, and approved by the Director, OCHAMPUS, or designee.
(1) The all-inclusive per diem rate for
RTCs operating or participating in
CHAMPUS during the base period of
July 1, 1987, through June 30, 1988, will
be the lowest of the following conditions:
(i) The CHAMPUS rate paid to the
RTC for all-inclusive services as of
June 30, 1988, adjusted by the Consumer
Price Index—Urban (CPI-U) for medical
care as determined applicable by the
Director, OCHAMPUS, or designee; or
(ii) The per diem rate accepted by the
RTC from any other agency or organization (public or private) that is high
enough to cover one-third of the total
patient days during the 12-month period ending June 30, 1988, adjusted by
the CPI-U; or
NOTE: The per diem rate accepted by the
RTC from any other agency or organization
includes the rates accepted from entities
such
as
Government
contractors
in
CHAMPUS demonstration projects.
(iii) An OCHAMPUS determined
capped per diem amount not to exceed
the 80th percentile of all established
CHAMPUS RTC rates nationally,
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weighted by total CHAMPUS days provided at each rate during the base period discussed in paragraph (f)(1) of this
section.
(2) The all-inclusive per diem rates
for RTCs which began operation after
June 30, 1988, or began operation before
July 1, 1988, but had less than 6 months
of operation by June 30, 1988, will be
calculated based on the lower of the
per diem rate accepted by the RTC that
is high enough to cover one-third of the
total patient days during its first 6 to
12 consecutive months of operation, or
the CHAMPUS determined capped
amount. Rates for RTCs beginning operation prior to July 1, 1988, will be adjusted by an appropriate CPI-U inflation factor for the period ending June
30, 1988. 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.
(3) For care on or after April 6, 1995,
the per diem amount may not exceed a
cap of the 70th percentile of all established Federal fiscal year 1994 RTC
rates nationally, weighted by total
CHAMPUS days provided at each rate
during the first half of Federal fiscal
year 1994, and updated to FY95. For
Federal fiscal years 1996 and 1997, the
cap shall remain unchanged. For Federal fiscal years after fiscal year 1997,
the cap shall be adjusted by the Medicare update factor for hospitals and
units exempt from the Medicare prospective payment system.
(4) All educational costs, whether
they include routine education or special education costs, are excluded from
reimbursement except when appropriate education is not available from,
or not payable by, a cognizant public
entity.
(i) The RTC shall exclude educational
costs from its daily costs.
(ii) The RTC’s accounting system
must be adequate to assure CHAMPUS
is not billed for educational costs.
(iii) The RTC may request payment
of educational costs on an individual
case
basis
from
the
Director,
OCHAMPUS, or designee, when appropriate education is not available from,
or not payable by, a cognizant public
entity. To qualify for reimbursement of
educational costs in individual cases,
the RTC shall comply with the application procedures established by the Director, OCHAMPUS, or designee, including, but not limited to, the following:
(A) As part of its admission procedures, the RTC must counsel and assist
the beneficiary and the beneficiary’s
family in the necessary procedures for
assuring their rights to a free and appropriate public education.
(B) The RTC must document any reasons why an individual beneficiary cannot attend public educational facilities
and, in such a case, why alternative
educational arrangements have not
been provided by the cognizant public
entity.
(C) If reimbursement of educational
costs is approved for an individual beneficiary by the Director, OCHAMPUS,
or designee, such educational costs
shall be shown separately from the
RTC’s daily costs on the CHAMPUS
claim. The amount paid shall not exceed the RTC’s most-favorable rate to
any other patient, agency, or organization for special or general educational
services whichever is appropriate.
(D) If the RTC fails to request
CHAMPUS approval of the educational
costs on an individual case, the RTC
agrees not to bill the beneficiary or the
beneficiary’s family for any amounts
disallowed by CHAMPUS. Requests for
payment of educational costs must be
referred to the Director, OCHAMPUS,
or designee for review and a determination of the applicability of CHAMPUS
benefits.
(5) Subject to the applicable RTC cap,
adjustments to the RTC rates may be
made annually.
(i) For Federal fiscal years through
1995, the adjustment shall be based on
the Consumer Price Index-Urban (CPIU) for medical care as determined applicable by the Director, OCHAMPUS.
(ii) For purposes of rates for Federal
fiscal years 1996 and 1997:
(A) For any RTC whose 1995 rate was
at or above the thirtieth percentile of
all established Federal fiscal year 1995
RTC rates normally, weighted by total
CHAMPUS days provided at each rate
during the first half of Federal fiscal
year 1994, that rate shall remain in effect, with no additional update,
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Office of the Secretary of Defense
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throughout fiscal years 1996 and 1997;
and
(B) For any RTC whose 1995 rate was
below the 30th percentile level determined under paragraph (f)(5)(ii)(A) of
this section, the rate shall be adjusted
by the lesser of: the CPI-U for medical
care, or the amount that brings the
rate up to that 30th percentile level.
(iii) For subsequent Federal fiscal
years after fiscal year 1997, RTC rates
shall be updated by the Medicare update factor for hospitals and units exempt from the Medicare prospective
payment system.
(6) For care provided on or after July
1, 1995, CHAMPUS will not pay for days
in which the patient is absent on leave
from the RTC. The RTC must identify
these days when claiming reimbursement.
(g) Reimbursement of hospice programs.
Hospice care will be reimbursed at one
of
four
predetermined
national
CHAMPUS rates based on the type and
intensity of services furnished to the
beneficiary. A single rate is applicable
for each day of care except for continuous home care where payment is
based on the number of hours of care
furnished during a 24-hour period.
These rates will be adjusted for regional differences in wages using wage
indices for hospice care.
(1) National hospice rates. CHAMPUS
will use the national hospice rates for
reimbursement of each of the following
levels of care provided by or under arrangement with a CHAMPUS approved
hospice program:
(i) Routine home care. The hospice will
be paid the routine home care rate for
each day the patient is at home, under
the care of the hospice, and not receiving continuous home care. This rate is
paid without regard to the volume or
intensity of routine home care services
provided on any given day.
(ii) Continuous home care. The hospice
will be paid the continuous home care
rate when continuous home care is provided. The continuous home care rate
is divided by 24 hours in order to arrive
at an hourly rate.
(A) A minimum of 8 hours of care
must be provided within a 24-hour day
starting and ending at midnight.
(B) More than half of the total actual
hours being billed for each 24-hour pe-
riod must be provided by either a registered or licensed practical nurse.
(C) Homemaker and home health aide
services may be provided to supplement the nursing care to enable the
beneficiary to remain at home.
(D) For every hour or part of an hour
of continuous care furnished, the hourly rate will be reimbursed to the hospice up to 24 hours a day.
(iii) Inpatient respite care. The hospice
will be paid at the inpatient respite
care rate for each day on which the
beneficiary is in an approved inpatient
facility and is receiving respite care.
(A) Payment for respite care may be
made for a maximum of 5 days at a
time, including the date of admission
but not counting the date of discharge.
The necessity and frequency of respite
care will be determined by the hospice
interdisciplinary group with input
from the patient’s attending physician
and the hospice’s medical director.
(B) Payment for the sixth and any
subsequent days is to be made at the
routine home care rate.
(iv) General inpatient care. Payment
at the inpatient rate will be made when
general inpatient care is provided for
pain control or acute or chronic symptom management which cannot be
managed in other settings. None of the
other fixed payment rates (i.e., routine
home care) will be applicable for a day
on which the patient receives general
inpatient care except on the date of
discharge.
(v) Date of discharge. For the day of
discharge from an inpatient unit, the
appropriate home care rate is to be
paid unless the patient dies as an inpatient. When the patient is discharged
deceased, the inpatient rate (general or
respite) is to be paid for the discharge
date.
(2) Use of Medicare rates. CHAMPUS
will use the most current Medicare
rates to reimburse hospice programs
for services provided to CHAMPUS
beneficiaries. It is CHAMPUS’ intent
to adopt changes in the Medicare reimbursement methodology as they occur;
e.g., Medicare’s adoption of an updated,
more accurate wage index.
(3) Physician reimbursement. Payment
is dependent on the physician’s relationship with both the beneficiary and
the hospice program.
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(i) Physicians employed by, or contracted with, the hospice. (A) Administrative and supervisory activities (i.e.,
establishment, review and updating of
plans of care, supervising care and
services, and establishing governing
policies) are included in the adjusted
national payment rate.
(B) Direct patient care services are
paid in addition to the adjusted national payment rate.
(1) Physician services will be reimbursed an amount equivalent to 100
percent of the CHAMPUS’ allowable
charge; i.e., there will be no cost-sharing and/or deductibles for hospice physician services.
(2) Physician payments will be counted toward the hospice cap limitation.
(ii) Independent attending physician.
Patient care services rendered by an
independent attending physician (a
physician who is not considered employed by or under contract with the
hospice) are not part of the hospice
benefit.
(A) Attending physician may bill in
his/her own right.
(B) Services will be subject to the appropriate allowable charge methodology.
(C) Reimbursement is not counted toward the hospice cap limitation.
(D) Services provided by an independent attending physician must be
coordinated with any direct care services provided by hospice physicians.
(E) The hospice must notify the
CHAMPUS contractor of the name of
the physician whenever the attending
physician is not a hospice employee.
(iii) Voluntary physician services. No
payment will be allowed for physician
services furnished voluntarily (both
physicians employed by, and under
contract with, the hospice and independent attending physicians). Physicians may not discriminate against
CHAMPUS beneficiaries; e.g., designate all services rendered to nonCHAMPUS patients as volunteer and at
the same time bill for CHAMPUS patients.
(4) Unrelated medical treatment. Any
covered CHAMPUS services not related
to the treatment of the terminal condition for which hospice care was elected
will be paid in accordance with standard reimbursement methodologies; i.e.,
payment for these services will be subject to standard deductible and costsharing
provisions
under
the
CHAMPUS. A determination must be
made whether or not services provided
are related to the individual’s terminal
illness. Many illnesses may occur when
an individual is terminally ill which
are brought on by the underlying condition of the ill patient. For example,
it is not unusual for a terminally ill
patient to develop pneumonia or some
other illness as a result of his or her
weakened condition. Similarly, the setting of bones after fractures occur in a
bone cancer patient would be treatment of a related condition. Thus, if
the treatment or control of an upper
respiratory tract infection is due to the
weakened state of the terminal patient, it will be considered a related
condition, and as such, will be included
in the hospice daily rates.
(5) Cap amount. Each CHAMPUS-approved hospice program will be subject
to a cap on aggregate CHAMPUS payments from November 1 through October 31 of each year, hereafter known as
‘‘the cap period.’’
(i) The cap amount will be adjusted
annually by the percent of increase or
decrease in the medical expenditure
category of the Consumer Price Index
for all urban consumers (CPI-U).
(ii) The aggregate cap amount (i.e.,
the statutory cap amount times the
number of CHAMPUS beneficiaries
electing hospice care during the cap period) will be compared with total actual CHAMPUS payments made during
the same cap period.
(iii) Payments in excess of the cap
amount must be refunded by the hospice program. The adjusted cap amount
will be obtained from the Health Care
Financing
Administration
(HCFA)
prior to the end of each cap period.
(iv) Calculation of the cap amount
for a hospice which has not participated in the program for an entire cap
year (November 1 through October 31)
will be based on a period of at least 12
months but no more than 23 months.
For example, the first cap period for a
hospice entering the program on October 1, 1994, would run from October 1,
1994 through October 31, 1995. Similarly, the first cap period for hospice
providers entering the program after
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§ 199.14
November 1, 1993 but before November
1, 1994 would end October 31, 1995.
(6) Inpatient limitation. During the 12month period beginning November 1 of
each year and ending October 31, the
aggregate number of inpatient days,
both for general inpatient care and respite care, may not exceed 20 percent of
the aggregate total number of days of
hospice care provided to all CHAMPUS
beneficiaries during the same period.
(i) If the number of days of inpatient
care furnished to CHAMPUS beneficiaries exceeds 20 percent of the total
days of hospice care to CHAMPUS
beneficiaries, the total payment for inpatient care is determined follows:
(A) Calculate the ratio of the maximum number of allowable inpatient
days of the actual number of inpatient
care days furnished by the hospice to
Medicare patients.
(B) Multiply this ratio by the total
reimbursement for inpatient care made
by the CHAMPUS contractor.
(C) Multiply the number of actual inpatient days in excess of the limitation
by the routine home care rate.
(D) Add the amounts calculated in
paragraphs (g)(6)(i) (B) and (C) of this
section.
(ii) Compare the total payment for
inpatient care calculated in paragraph
(g)(6)(i)(D) of this section to actual
payments made to the hospice for inpatient care during the cap period.
(iii) Payments in excess of the inpatient limitation must be refunded by
the hospice program.
(7) Hospice reporting responsibilities.
The hospice is responsible for reporting
the following data within 30 days after
the end of the cap period:
(i) Total reimbursement received and
receivable
for
services
furnished
CHAMPUS beneficiaries during the cap
period, including physician’s services
not of an administrative or general supervisory nature.
(ii) Total reimbursement received
and receivable for general inpatient
care and inpatient respite care furnished to CHAMPUS beneficiaries during the cap period.
(iii) Total number of inpatient days
furnished to CHAMPUS hospice patients (both general inpatient and inpatient respite days) during the cap period.
(iv) Total number of CHAMPUS hospice days (both inpatient and home
care) during the cap period.
(v) Total number of beneficiaries
electing hospice care. The following
rules must be adhered to by the hospice
in
determining
the
number
of
CHAMPUS beneficiaries who have
elected hospice care during the period:
(A) The beneficiary must not have
been counted previously in either another hospice’s cap or another reporting year.
(B) The beneficiary must file an initial election statement during the period beginning September 28 of the previous cap year through September 27 of
the current cap year in order to be
counted as an electing CHAMPUS beneficiary during the current cap year.
(C) Once a beneficiary has been included in the calculation of a hospice
cap amount, he or she may not be included in the cap for that hospice
again, even if the number of covered
days in a subsequent reporting period
exceeds that of the period where the
beneficiary was included.
(D) There will be proportional application of the cap amount when a beneficiary elects to receive hospice benefits from two or more different
CHAMPUS-certified hospices. A calculation must be made to determine
the percentage of the patient’s length
of stay in each hospice relative to the
total length of hospice stay.
(8) Reconsideration of cap amount and
inpatient limit. A hospice dissatisfied
with the contractor’s calculation and
application of its cap amount and/or inpatient limitation may request and obtain a contractor review if the amount
of program reimbursement in controversy—with respect to matters
which the hospice has a right to review—is at least $1000. The administrative review by the contractor of the
calculation and application of the cap
amount and inpatient limitation is the
only administrative review available.
These calculations are not subject to
the appeal procedures set forth in
§ 199.10. The methods and standards for
calculation of the hospice payment
rates established by CHAMPUS, as well
as questions as to the validity of the
applicable
law,
regulations
or
CHAMPUS decisions, are not subject to
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§ 199.14
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administrative review, including the
appeal procedures of § 199.10.
(9) Beneficiary cost-sharing. There are
no deductibles under the CHAMPUS
hospice benefit. CHAMPUS pays the
full cost of all covered services for the
terminal illness, except for small costshare amounts which may be collected
by the individual hospice for outpatient drugs and biologicals and inpatient respite care.
(i) The patient is responsible for 5
percent of the cost of outpatient drugs
or $5 toward each prescription, whichever is less. Additionally, the cost of
prescription
drugs
(drugs
or
biologicals) may not exceed that which
a prudent buyer would pay in similar
circumstances; that is, a buyer who refuses to pay more than the going price
for an item or service and also seeks to
economize by minimizing costs.
(ii) For inpatient respite care, the
cost-share for each respite care day is
equal to 5 percent of the amount
CHAMPUS has estimated to be the cost
of respite care, after adjusting the national rate for local wage differences.
(iii) The amount of the individual
cost-share liability for respite care
during a hospice cost-share period may
not exceed the Medicare inpatient hospital deductible applicable for the year
in which the hospice cost-share period
began. The individual hospice costshare period begins on the first day an
election is in effect for the beneficiary
and ends with the close of the first period of 14 consecutive days on each of
which an election is not in effect for
the beneficiary.
(h) Reimbursement of Home Health
Agencies (HHAs). HHAs will be reimbursed using the same methods and
rates as used under the Medicare HHA
prospective payment system under Section 1895 of the Social Security Act (42
U.S.C. 1395fff) and 42 CFR Part 484,
Subpart E except as otherwise necessary to recognize distinct characteristics of TRICARE beneficiaries and as
described in instructions issued by the
Director, TMA. Under this methodology, an HHA will receive a fixed casemix and wage-adjusted national 60-day
episode payment amount as payment
in full for all costs associated with furnishing home health services to
TRICARE-eligible beneficiaries with
the exception of osteoporosis drugs and
DME. The full case-mix and wage-adjusted 60-day episode amount will be
payment in full subject to the following adjustments and additional payments:
(1) Split percentage payments. The initial percentage payment for initial episodes is paid to an HHA at 60 percent of
the case-mix and wage adjusted 60-day
episode rate. The residual final payment for initial episodes is paid at 40
percent of the case-mix and wage adjusted 60-day episode rate subject to
appropriate adjustments. The initial
percentage payment for subsequent
episodes is paid at 50 percent of the
case-mix and wage-adjusted 60-day episode rate. The residual final payment
for subsequent episodes is paid at 50
percent of the case-mix and wage-adjusted 60-day episode rate subject to
appropriate adjustments.
(2) Low-utilization payment. A low utilization payment is applied when a
HHA furnishes four or fewer visits to a
beneficiary during the 60-day episode.
The visits are paid at the national pervisit amount by discipline updated annually by the applicable market basket
for each visit type.
(3) Partial episode payment (PEP). A
PEP adjustment is used for payment of
an episode of less than 60 days resulting from a beneficiary’s elected transfer to another HHA prior to the end of
the 60-day episode or discharge and readmission of a beneficiary to the same
HHA before the end of the 60-day episode. The PEP payment is calculated
by multiplying the proportion of the
60-day episode during which the beneficiary remained under the care of the
original HHA by the beneficiary’s assigned 60-day episode payment.
(4) Significant change in condition
(SCIC).
The
full-episode
payment
amount is adjusted if a beneficiary experiences a significant change in condition during the 60-day episode that was
not envisioned in the initial treatment
plan. The total significant change in
condition payment adjustment is a proportional payment adjustment reflecting the time both prior to and after the
patient
experienced
a
significant
change in condition during the 60-day
episode. The initial percentage payment provided at the start of the 60-
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Office of the Secretary of Defense
§ 199.14
day episode will be adjusted at the end
of the episode to reflect the first and
second parts of the total SCIC adjustment determined at the end of the 60day episode. The SCIC payment adjustment is calculated in two parts:
(i) The first part of the SCIC payment adjustment reflects the adjustment to the level of payment prior to
the significant change in the patient’s
condition during the 60-day episode.
(ii) The second part of the SCIC payment adjustment reflects the adjustment to the level of payment after the
significant change in the patient’s condition occurs during the 60-day episode.
(5) Outlier payment. Outlier payments
are allowed in addition to regular 60day episode payments for beneficiaries
generating excessively high treatment
costs. The following methodology is
used for calculation of the outlier payment:
(i) TRICARE makes an outlier payment for an episode whose estimated
cost exceeds a threshold amount for
each case-mix group.
(ii) The outlier threshold for each
case-mix group is the episode payment
amount for that group, the PEP adjustment amount for the episode or the
total significant change in condition
adjustment amount for the episode
plus a fixed dollar loss amount that is
the same for all case-mix groups.
(iii) The outlier payment is a proportion of the amount of estimated cost
beyond the threshold.
(iv) TRICARE imputes the cost for
each episode by multiplying the national per-visit amount of each discipline by the number of visits in the
discipline and computing the total imputed cost for all disciplines.
(v) The fixed dollar loss amount and
the loss sharing proportion are chosen
so that the estimated total outlier payment is no more than the predetermined percentage of total payment
under the home health PPS as set by
the Centers for Medicare & Medicaid
Services (CMS).
(6) Services paid outside the HHA prospective payment system. The following
are services that receive a separate
payment amount in addition to the
prospective payment amount for home
health services:
(i) Durable medical equipment (DME).
Reimbursement of DME is based on the
same amounts established under the
Medicare Durable Medical Equipment,
Prosthetics, Orthotics and Supplies
(DMEPOS) fee schedule under 42 CFR
part 414, subpart D.
(ii) Osteoporosis drugs. Although
osteoporosis drugs are subject to home
health consolidated billing, they continue to be paid on a cost basis, in addition to episode payments.
(7) Accelerated payments. Upon request, an accelerated payment may be
made to an HHA that is receiving payment under the home health prospective payment system if the HHA is experiencing financial difficulties because there is a delay by the contractor in making payment to the
HHA. The following are criteria for
making accelerated payments:
(i) Approval of payment. An HHA’s request for an accelerated payment must
be approved by the contractor and
TRICARE
Management
Activity
(TMA).
(ii) Amount of payment. The amount
of the accelerated payment is computed as a percentage of the net payment for unbilled or unpaid covered
services.
(iii) Recovery of payment. Recovery of
the accelerated payment is made by
recoupment as HHA bills are processed
or by direct payment by the HHA.
(8) Assessment data. Beneficiary assessment data, incorporating the use of
the current version of the OASIS
items, must be submitted to the contractor for payment under the HHA
prospective payment system.
(9) Administrative review. An HHA is
not entitled to judicial or administrative review with regard to:
(i) Establishment of the payment
unit, including the national 60-day prospective episode payment rate, adjustments and outlier payment.
(ii) Establishment of transition period, definition and application of the
unit of payment.
(iii) Computation of the initial standard prospective payment amounts.
(iv) Establishment of case-mix and
area wage adjustment factors.
(i) Changes in Federal Law affecting
Medicare. With regard to paragraph (b)
and (h) of this section, the Department
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
of Defense must, within the time frame
specified in law and to the extent it is
practicable, bring the TRICARE program into compliance with any
changes in Federal Law affecting the
Medicare program that occur after the
effective date of the DoD rule to implement the prospective payment systems
for skilled nursing facilities and home
health agencies.
(j) Reimbursement of individual
health care professionals and other
non-institutional, non-professional providers. The CHAMPUS-determined reasonable charge (the amount allowed by
CHAMPUS) for the service of an individual health care professional or other
non-institutional, non-professional provider (even if employed by or under
contract to an institutional provider)
shall be determined by one of the following methodologies, that is, whichever is in effect in the specific geographic location at the time covered
services and supplies are provided to a
CHAMPUS beneficiary.
(1) Allowable charge method—(i) Introduction—(A) In general. The allowable
charge method is the preferred and primary method for reimbursement of individual health care professionals and
other non-institutional health care
providers
(covered
by
10
U.S.C.
1079(h)(1)). The allowable charge for authorized care shall be the lower of the
billed charge or the local CHAMPUS
Maximum Allowable Charge (CMAC).
(B) CHAMPUS Maximum Allowable
Charge. Beginning in calendar year
1992, prevailing charge levels and appropriate charge levels will be calculated on a national level. There will
then
be
calculated
a
national
CHAMPUS
Maximum
Allowable
Charge (CMAC) level for each procedure, which shall be the lesser of the
national prevailing charge level or the
national appropriate charge level. The
national CMAC will then be adjusted
for localities in accordance with paragraph (j)(1)(iv) of this section.
(C) Limits on balance billing by nonparticipating
providers.
Nonparticipating providers may not balance bill a
beneficiary an amount which exceeds
the applicable balance billing limit.
The balance billing limit shall be the
same percentage as the Medicare limiting charge percentage for nonpartici-
pating physicians. The balance billing
limit may be waived by the Director,
OCHAMPUS on a case-by-case basis if
requested by the CHAMPUS beneficiary (or sponsor) involved. A decision by the Director to waive or not
waive the limit in any particular case
is not subject to the appeal and hearing
procedures of § 199.10.
(D) Special rule for TRICARE Prime
Enrollees. In the case of a TRICARE
Prime enrollee (see section 199.17) who
receives authorized care from a nonparticipating provider, the CHAMPUS
determined reasonable charge will be
the CMAC level as established in paragraph (j)(1)(i)(B) of this section plus
any balance billing amount up to the
balance billing limit as referred to in
paragraph (j)(1)(i)(C) of this section.
The authorization for such care shall
be pursuant to the procedures established by the Director, OCHAMPUS
(also referred to as the TRICARE Support Office).
(E) Special rule for certain TRICARE
Standard Beneficiaries. In the case of dependent spouse or child, as defined in
paragraphs (b)(2)(ii)(A) through (F) and
(b)(2)(ii)(H)(1), (2), and (4) of § 199.3, of a
Reserve Component member serving on
active duty pursuant to a call or order
to active duty for a period of more
than 30 days in support of a contingency operation under a provision of
law referred to in section 101(a)(13)(B)
of title 10, United States Code, the Director, TRICARE Management Activity, may authorize non-participating
providers the allowable charge to be
the CMAC level as established in paragraph (j)(l)(i)(B) of this section plus
any balance billing amount up to the
balance billing limit as referred to in
paragraph (j)(l)(i)(C) of this section.
(ii) Prevailing charge level. (A) Beginning in calendar year 1992, the prevailing charge level shall be calculated
on a national basis.
(B) The national prevailing charge
level
referred
to
in
paragraph
(j)(1)(ii)(A) of this section is the level
that does not exceed the amount equivalent to the 80th percentile of billed
charges made for similar services during the base period. The 80th percentile
of charges shall be determined on the
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Office of the Secretary of Defense
§ 199.14
basis of statistical data and methodology acceptable to the Director,
OCHAMPUS (or a designee).
(C) For purposes of paragraph
(j)(1)(ii)(B) of this section, the base period shall be a period of 12 calendar
months and shall be adjusted once a
year, unless the Director, OCHAMPUS,
determines that a different period for
adjustment is appropriate and publishes a notice to that effect in the
FEDERAL REGISTER.
(iii) Appropriate charge level. Beginning in calendar year 1992, the appropriate charge level shall be calculated
on a national basis. The appropriate
charge level for each procedure is the
product of the two-step process set
forth in paragraphs (j)(1)(iii) (A) and
(B) of this section. This process involves comparing the prior year’s
CMAC with the fully phased in Medicare fee. For years after the Medicare
fee has been fully phased in, the comparison shall be to the current year
Medicare fee. For any particular procedure for which comparable Medicare
fee and CHAMPUS data are unavailable, but for which alternative data are
available
that
the
Director,
OCHAMPUS (or designee) determines
provide a reasonable approximation of
relative value or price, the comparison
may be based on such alternative data.
(A) Step 1: Procedures classified. All
procedures are classified into one of
three categories, as follows:
(1) Overpriced procedures. These are
the procedures for which the prior
year’s national CMAC exceeds the
Medicare fee.
(2) Other procedures. These are procedures subject to the allowable charge
method that are not included in either
the overpriced procedures group or the
underpriced procedures group.
(3) Underpriced procedures. These are
the procedures for which the prior
year’s national CMAC is less than the
Medicare fee.
(B) Step 2: Calculating appropriate
charge levels. For each year, appropriate charge levels will be calculated
by adjusting the prior year’s CMAC as
follows:
(1) For overpriced procedures, the appropriate charge level for each procedure shall be the prior year’s CMAC,
reduced by the lesser of: the percentage
by which it exceeds the Medicare fee or
fifteen percent.
(2) For other procedures, the appropriate charge level for each procedure
shall be the same as the prior year’s
CMAC.
(3) For underpriced procedures, the
appropriate charge level for each procedure shall be the prior year’s CMAC,
increased by the lesser of: the percentage by which it is exceeded by the
Medicare fee or the Medicare Economic
Index.
(C) Special rule for cases in which the
CHAMPUS appropriate charge was prematurely reduced. In any case in which
a recalculation of the Medicare fee results in a Medicare rate higher than
the CHAMPUS appropriate charge for a
procedure that had been considered an
overpriced procedure, the reduction in
the CHAMPUS appropriate charge
shall be restored up to the level of the
recalculated Medicare rate.
(D) Special rule for cases in which the
national CMAC is less than the Medicare
rate.
NOTE: This paragraph will be implemented
when CMAC rates are published.
In any case in which the national
CMAC calculated in accordance with
paragraphs (j)(1)(i) through (iii) of this
section is less than the Medicare rate,
the Director, TSO, may determine that
the use of the Medicare Economic
Index under paragraph (j)(1)(iii)(B) of
this section will result in a CMAC rate
below the level necessary to assure
that beneficiaries will retain adequate
access to health care services. Upon
making such a determination, the Director, TSO, may increase the national
CMAC to a level not greater than the
Medicare rate.
(iv) Calculating CHAMPUS Maximum
Allowable Charge levels for localities—(A)
In general. The national CHAMPUS
Maximum Allowable Charge level for
each procedure will be adjusted for localities using the same (or similar)
geographical areas and the same geographic adjustment factors as are used
for determining allowable charges
under Medicare.
(B) Special locality-based phase-in provision—(1) In general. Beginning with
the recalculation of CMACS for calendar year 1993, the CMAC in a locality
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§ 199.14
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will not be less than 72.25 percent of
the maximum charge level in effect for
that locality on December 31, 1991. For
recalculations of CMACs for calendar
years after 1993, the CMAC in a locality
will not be less than 85 percent of the
CMAC in effect for that locality at the
end of the prior calendar year.
(2) Exception. The special localitybased phase-in provision established by
paragraph (j)(1)(iv)(B)(1) of this section
shall not be applicable in the case of
any procedure code for which there
were not CHAMPUS claims in the locality accounting for at least 50 services.
(C) Special locality-based waivers of reductions to assure adequate access to
care. Beginning with the recalculation
of CMACs for calendar year 1993, in the
case of any procedure classified as an
overpriced procedure pursuant to paragraph (j)(1)(iii)(A)(1) of this section, a
reduction in the CMAC in a locality
below the level in effect at the end of
the previous calendar year that would
otherwise occur pursuant to paragraphs (j)(1)(iii) and (j)(1)(iv) of this
section may be waived pursuant to
paragraph (j)(1)(iii)(C) of this section.
(1) Waiver based on balanced billing
rates. Except as provided in paragraph
(j)(1)(iv)(C)(2) of this section such a reduction will be waived if there has been
excessive balance billing in the locality
for the procedure involved. For this
purpose, the extent of balance billing
will be determined based on a review of
all services under the procedure code
involved in the prior year (or most recent period for which data are available). If the number of services for
which balance billing was not required
was less than 60 percent of all services
provided, the Director will determine
that there was excessive balance billing with respect to that procedure in
that locality and will waive the reduction in the CMAC that would otherwise
occur. A decision by the Director to
waive or not waive the reduction is not
subject to the appeal and hearing procedures of § 199.10.
(2) Exception. As an exception to the
paragraph (j)(1)(iv)(C)(1) of this section,
the waiver required by that paragraph
shall not be applicable in the case of
any procedure code for which there
were not CHAMPUS claims in the lo-
cality accounting for at least 50 services. A waiver may, however, be granted in such cases pursuant to paragraph
(j)(1)(iv)(C)(3) of this section.
(3) Waiver based on other evidence that
adequate access to care would be impaired. The Director, OCHAMPUS may
waive a reduction that would otherwise
occur (or restore a reduction that was
already taken) if the Director determines that available evidence shows
that the reduction would impair adequate access. For this purpose, such
evidence may include consideration of
the number of providers in the locality
who provide the affected services, the
number of such providers who are
CHAMPUS Participating Providers,
the number of CHAMPUS beneficiaries
in the area, and other relevant factors.
Providers or beneficiaries in a locality
may
submit
to
the
Director,
OCHAMPUS a petition, together with
appropriate documentation regarding
relevant factors, for a determination
that adequate access would be impaired. The Director, OCHAMPUS will
consider and respond to all such petitions. Petitions may be filed at any
time. Any petition received by the date
which is 120 days prior to the implementation of a recalculation of CMACs
will be assured of consideration prior
to that implementation. The Director,
OCHAMPUS may establish procedures
for handling petitions. A decision by
the Director to waive or not waive a reduction is not subject to the appeal and
hearing procedures of § 199.10.
(D) Special locality-based exception to
applicable CMACs to assure adequate
beneficiary access to care. In addition to
the authority to waive reductions
under paragraph (j)(1)(iv)(C) of this section, the Director may authorize establishment of higher payment rates for
specific services than would otherwise
be allowable, under paragraph (j)(1) of
this section, if the Director determines
that available evidence shows that access to health care services is severely
impaired. For this purpose, such evidence may include consideration of the
number of providers in the locality who
provide the affected services, the number of providers who are CHAMPUS
participating providers, the number of
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Office of the Secretary of Defense
§ 199.14
CHAMPUS beneficiaries in the locality, the availability of military providers in the location or nearby, and
any other factors the Director determines relevant.
(1) Procedure. Providers or beneficiaries in a locality may submit to
the Director, a petition, together with
appropriate documentation regarding
relevant factors, for a determination
that adequate access to health care
services is severely impaired. The Director, will consider and respond to all
petitions. A decision to authorize a
higher payment amount is subject to
review and determination or modification by the Director at any time if circumstances change so that adequate
access to health care services would no
longer be severely impaired. A decision
by the Director, to authorize, not authorize, terminate, or modify authorization of higher payment amounts is
not subject to the appeal and hearing
procedures of § 199.10 of the part.
(2) Establishing the higher payment
rate(s). When the Director, determines
that beneficiary access to health care
services in a locality is severely impaired, the Director may establish the
higher payment rate(s) as he or she
deems appropriate and cost-effective
through one of the following methodologies to assure adequate access:
(i) A percent factor may be added to
the otherwise applicable payment
amount allowable under paragraph
(j)(1) of this section;
(ii) A prevailing charge may be calculated, by applying the prevailing
charge methodology of paragraph
(j)(1)(ii) of this section to a specific locality (which need not be the same as
the localities used for purposes of paragraph (j)(1)(iv)(A) of this section; or another government payment rate may
be adopted, for example, an applicable
state Medicaid rate).
(3) Application of higher payment rates.
Higher payment rates defined under
paragraph (j)(1)(iv)(D) of this section
may be applied to all similar services
performed in a locality, or, if circumstances warrant, a new locality
may be defined for application of the
higher payments. Establishment of a
new locality may be undertaken where
access impairment is localized and not
pervasive across the existing locality.
Generally, establishment of a new,
more specific locality will occur when
the area is remote so that geographical
characteristics and other factors significantly
impair
transportation
through normal means to health care
services routinely available within the
existing locality.
(E) Special locality-based exception to
applicable CMACs to ensure an adequate
TRICARE Prime preferred network. The
Director, may authorize reimbursements to health care providers participating in a TRICARE preferred provider network under § 199.17(p) of this
part at rates higher than would otherwise be allowable under paragraph
(j)(1) of this section, if the Director, determines that application of the higher
rates is necessary to ensure the availability of an adequate number and mix
of qualified health care providers in a
network in a specific locality. This authority may only be used to ensure
adequate networks in those localities
designated by the Director, as requiring TRICAR preferred provider networks, not in localities in which preferred provider networks have been
suggested or established but are not determined by the Director to be necessary. Appropriate evidence for determining that higher rates are necessary
may include consideration of the number of available primary care and specialist providers in the network locality, availability (including reassignment) of military providers in the location or nearby, the appropriate mix of
primary care and specialists needed to
satisfy demand and meet appropriate
patient access standards (appointment/
waiting time, travel distance, etc.), the
efforts that have been made to create
an adequate network, other cost-effective alternatives, and other relevant
factors. The Director, may establish
procedures by which exceptions to applicable CMACs are requested and approved or denied under paragraph
(j)(1)(iv)(E) of this section. A decision
by the Director, to authorize or deny
an exception is not subject to the appeal and hearing procedures of § 199.10.
When the Director, determines that it
is necessary and cost-effective to approve a higher rate or rates in order to
ensure the availability of an adequate
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
number of qualified health care providers in a network in a specific locality, the higher rate may not exceed the
lesser of the following:
(1) The amount equal to the local fee
for service charge for the service in the
service area in which the service is provided as determined by the Director,
based on one or more of the following
payment rates:
(i) Usual, customary, and reasonable;
(ii) The Health Care Financing Administration’s Resource Based Relative
Value Scale;
(iii) Negotiated fee schedules;
(iv) Global fees; or
(v) Sliding scale individual fee allowances.
(2) The amount equal to 115 percent
of the otherwise allowable charge
under paragraph (j)(1) of the section for
the service.
(v) Special rules for 1991. (A) Appropriate charge levels for care provided
on or after January 1, 1991, and before
the 1992 appropriate levels take effect
shall be the same as those in effect on
December 31, 1990, except that appropriate charge levels for care provided
on or after October 7, 1991, shall be
those established pursuant to this
paragraph (j)(1)(v) of this section.
(B) Appropriate charge levels will be
established for each locality for which
an appropriate charge level was in effect immediately prior to October 7,
1991. For each procedure, the appropriate charge level shall be the prevailing charge level in effect immediately prior to October 7, 1991, adjusted as provided in (j)(1)(v)(B) (1)
through (3) of this section.
(1) For each overpriced procedure,
the level shall be reduced by fifteen
percent. For this purpose, overpriced
procedures are the procedures determined by the Physician Payment Review Commission to be overvalued pursuant to the process established under
the Medicare program, other procedures considered overvalued in the
Medicare program (for which Congress
directed reductions in Medicare allowable levels for 1991), radiology procedures and pathology procedures.
(2) For each other procedure, the
level shall remain unchanged. For this
purpose, other procedures are proce-
dures which are not overpriced procedures or primary care procedures.
(3) For each primary care procedure,
the level shall be adjusted by the MEI,
as the MEI is applied to Medicare prevailing charge levels. For this purpose,
primary care procedures include maternity care and delivery services and
well baby care services.
(C) For purposes of this paragraph
(j)(i)(v), ‘‘appropriate charge levels’’ in
effect at any time prior to October 7,
1991 shall mean the lesser of:
(1) The prevailing charge levels then
in effect, or
(2) The fiscal year 1988 prevailing
charge levels adjusted by the Medicare
Economic Index (MEI), as the MEI was
applied beginning in the fiscal year
1989.
(vi) Special transition rule for 1992. (A)
For purposes of calculating the national appropriate charge levels for
1992, the prior year’s appropriate
charge level for each service will be
considered to be the level that does not
exceed the amount equivalent to the
80th percentile of billed charges made
for similar services during the base period of July 1, 1986 to June 30, 1987 (determined
as
under
paragraph
(j)(1)(ii)(B) of this section), adjusted to
calendar year 1991 based on the adjustments made for maximum CHAMPUS
allowable charge levels through 1990
and the application of paragraph
(j)(1)(v) of this section for 1991.
(B) The adjustment to calendar year
1991 of the product of paragraph
(j)(1)(vi)(A) of this section shall be as
follows:
(1) For procedures other than those
described in paragraph (j)(1)(vi)(B)(2) of
this section, the adjustment to 1991
shall be on the same basis as that provided under paragraph (j)(1)(v) of this
section.
(2) For any procedure that was considered an overpriced procedure for
purposes of the 1991 appropriate charge
levels under paragraph (j)(1)(v) of this
section for which the resulting 1991 appropriate charge level was less than 150
percent of the Medicare converted relative value unit, the adjustment to 1991
for purposes of the special transition
rule for 1992 shall be as if the procedure
had been treated under paragraph
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Office of the Secretary of Defense
§ 199.14
(j)(1)(v)(B)(2) of this section for purposes of the 1991 appropriate charge
level.
(vii) Adjustments and procedural rules.
(A) The Director, OCHAMPUS may
make adjustments to the appropriate
charge levels calculated pursuant to
paragraphs (j)(1)(iii) and (j)(1)(v) of this
section to correct any anomalies resulting from data or statistical factors,
significant differences between Medicare-relevant
information
and
CHAMPUS-relevant considerations or
other special factors that fairness requires be specially recognized. However, no such adjustment may result in
reducing an appropriate charge level.
(B) The Director, OCHAMPUS will
issue procedural instructions for administration of the allowable charge
method.
(viii) Clinical laboratory services. The
allowable charge for clinical diagnostic
laboratory test services shall be calculated in the same manner as allowable charges for other individual health
care providers are calculated pursuant
to paragraphs (j)(1)(i) through (j)(1)(iv)
of this section, with the following exceptions and clarifications.
(A) The calculation of national prevailing charge levels, national appropriate charge levels and national
CMACs for laboratory service shall
begin in calendar year 1993. For purposes of the 1993 calculation, the prior
year’s national appropriate charge
level or national prevailing charge
level shall be the level that does not
exceed the amount equivalent to the
80th percentile of billed charges made
for similar services during the period
July 1, 1991, through June 30, 1992 (referred to in this paragraph (j)(1)(viii) of
this section as the ‘‘base period’’).
(B) For purposes of comparison to
Medicare allowable payment amounts
pursuant to paragraph (j)(1)(iii) of this
section, the Medicare national laboratory payment limitation amounts shall
be used.
(C) For purposes of establishing laboratory service local CMACs pursuant
to paragraph (j)(1)(iv) of this section,
the adjustment factor shall equal the
ratio of the local average charge
(standardized for the distribution of
clinical laboratory services) to the national average charge for all clinical
laboratory services during the base period.
(D) For purposes of a special localitybased phase-in provision similar to
that
established
by
paragraph
(j)(1)(iv)(B) of this section, the CMAC
in a locality will not be less than 85
percent of the maximum charge level
in effect for that locality during the
base period.
(ix) The allowable charge for physician assistant services other than assistant-at-surgery may not exceed 85
percent of the allowable charge for a
comparable service rendered by a physician performing the service in a similar location. For cases in which the
physician assistant and the physician
perform component services of a procedure other than assistant-at-surgery
(e.g., home, office or hospital visit), the
combined allowable charge for the procedure may not exceed the allowable
charge for the procedure rendered by a
physician alone. The allowable charge
for physician assistant services performed as an assistant-at-surgery may
not exceed 65 percent of the allowable
charge for a physician serving as an assistant surgeon when authorized as
CHAMPUS benefits in accordance with
the provisions of § 199.4(c)(3)(iii). Physician assistant services must be billed
through the employing physician who
must be an authorized CHAMPUS provider.
(x) A charge that exceeds the
CHAMPUS
Maximum
Allowable
Charge can be determined to be allowable only when unusual circumstances
or medical complications justify the
higher charge. The allowable charge
may not exceed the billed charge under
any circumstances.
(2) Bonus payments in medically underserved areas. A bonus payment, in addition to the amount normally paid
under the allowable charge methodology, may be made to physicians in
medically underserved areas. For purposes of this paragraph, medically underserved areas are the same as those
determined by the Secretary of Health
and Human Services for the Medicare
program. Such bonus payments shall
be equal to the bonus payments authorized by Medicare, except as necessary to recognize any unique or distinct characteristics or requirements
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§ 199.14
32 CFR Ch. I (7–1–11 Edition)
of the TRICARE program, and as described in instructions issued by the
Executive Director, TRICARE Management Activity. If the Department of
Health and Human Services acts to
amend or remove the provision for
bonus
payments
under
Medicare,
TRICARE likewise may follow Medicare in amending or removing provision for such payments.
(3) All-inclusive rate. Claims from individual health-care professional providers
for
services
rendered
to
CHAMPUS beneficiaries residing in an
RTC that is either being reimbursed on
an all-inclusive per diem rate, or is
billing an all-inclusive per diem rate,
shall be denied; with the exception of
independent health-care professionals
providing geographically distant family therapy to a family member residing a minimum of 250 miles from the
RTC or covered medical services related to a nonmental health condition
rendered outside the RTC. Reimbursement for individual professional services is included in the rate paid the institutional provider.
(4) Alternative method. The Director,
OCHAMPUS, or a designee, may, subject to the approval of the ASD(HA),
establish an alternative method of reimbursement designed to produce reasonable control over health care costs
and to ensure a high level of acceptance of the CHAMPUS-determined
charge by the individual health-care
professionals or other noninstitutional
health-care providers furnishing services and supplies to CHAMPUS beneficiaries. Alternative methods may not
result in reimbursement greater than
the allowable charge method above.
(k) Reimbursement of Durable Medical
Equipment, Prosthetics, orthotics and
Supplies 9DMEPOS). Reimbursement of
DMEPOS may be based on the same
amounts established under the Centers
for Medicare and Medicaid Services
(CMS) DMEPOS fee schedule under 42
CFR part 414, subpart D.
(l) Reimbursement Under the MilitaryCivilian Health Services Partnership Program. The Military-Civilian Health
Services Partnership Program, as authorized by section 1096, chapter 55,
title 10, provides for the sharing of
staff, equipment, and resources between the civilian and military health
care system in order to achieve more
effective, efficient, or economical
health care for authorized beneficiaries. Military treatment facility
commanders, based upon the authority
provided by their respective Surgeons
General of the military departments,
are responsible for entering into individual partnership agreements only
when they have determined specifically
that use of the Partnership Program is
more economical overall to the Government than referring the need for
health care services to the civilian
community under the normal operation of the CHAMPUS Program. (See
paragraph (p) of § 199.1 for general requirements of the Partnership Program.)
(1) Reimbursement of institutional
health care providers. Reimbursement of
institutional health care providers
under the Partnership Program shall
be on the same basis as non-Partnership providers.
(2) Reimbursement of individual healthcare professionals and other non-institutional health care providers. Reimbursement of individual health care professionals and other non-institutional
health care providers shall be on the
same basis as non-Partnership providers as detailed in paragraph (j) of
this section.
(m) Accommodation of Discounts Under
Provider Reimbursement Methods—(1)
General rule. The Director. OCHAMPUS
(or designee) has authority to reimburse a provider at an amount below
the amount usually paid pursuant to
this section when, under a program approved by the Director, the provider
has agreed to the lower amount.
(2) Special applications. The following
are examples of applications of the
general rule; they are not all inclusive.
(i) In the case and individual health
care professionals and other non-institutional providers, if the discounted fee
is below the provider’s normal billed
charge and the prevailing charge level
(see paragraph (g) of this section), the
discounted fee shall be the provider’s
actual billed charge and the CHAMPUS
allowable charge.
(ii) In the case of institutional providers normally paid on the basis of a
pre-set amount (such as DRG-based
amount under paragraph (a)(1) of this
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Office of the Secretary of Defense
§ 199.15
section or per-diem amount under
paragraph (a)(2) of this section), if the
discount rate is lower than the pre-set
rate, the discounted rate shall be the
CHAMPUS-determined allowable cost.
This is an exception to the usual rule
that the pre-set rate is paid regardless
of the institutional provider’s billed
charges or other factors.
(3) Procedures. (i) This paragraph applies only when both the provider and
the Director have agreed to the discounted payment rate. The Director’s
agreement may be in the context of approval of a program that allows for
such discounts.
(ii) The Director of OCHAMPUS may
establish uniform terms, conditions
and limitations for this payment method in order to avoid administrative
complexity.
(n) Outside the United States. The Director, OCHAMPUS, or a designee,
shall determine the appropriate reimbursement method or methods to be
used in the extension of CHAMPUS
benefits for otherwise covered medical
services or supplies provided by hospitals or other institutional providers,
physicians or other individual professional providers, or other providers
outside the United States.
(o) Implementing Instructions. The Director, OCHAMPUS, or a designee,
shall issue CHAMPUS policies, instructions, procedures, and guidelines, as
may be necessary to implement the intent of this section.
[55 FR 13266, Apr. 10, 1990]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting § 199.14, see the List of CFR
Sections Affected, which appears in the
Finding Aids section of the printed volume
and at www.fdsys.gov.
§ 199.15 Quality and utilization review
peer review organization program.
(a) General—(1) Purpose. The purpose
of this section is to establish rules and
procedures for the CHAMPUS Quality
and Utilization Review Peer Review
Organization program.
(2) Applicability of program. All claims
submitted for health services under
CHAMPUS are subject to review for
quality of care and appropriate utilization. The Director, OCHAMPUS shall
establish generally accepted standards,
norms and criteria as are necessary for
this program of utilization and quality
review. These standards, norms and
criteria shall include, but not be limited to, need for inpatient admission or
inpatient or outpatient service, length
of inpatient stay, intensity of care, appropriateness of treatment, and level of
institutional care required. The Director, OCHAMPUS may issue implementing instructions, procedures and
guidelines for retrospective, concurrent and prospective review.
(3) Contractor implementation. The
CHAMPUS Quality and Utilization Review Peer Review Organization program may be implemented through
contracts administered by the Director, OCHAMPUS. These contractors
may include contractors that have exclusive functions in the area of utilization and quality review, fiscal intermediary contractors (which perform
these functions along with a broad
range of administrative services), and
managed care contractors (which perform a range of functions concerning
management of the delivery and financing of health care services under
CHAMPUS). Regardless of the contractors involved, utilization and quality
review activities follow the same
standards, rules and procedures set
forth in this section, unless otherwise
specifically provided in this section or
elsewhere in this part.
(4) Medical issues affected. The
CHAMPUS Quality and Utilization Review Peer Review Organization program is distinguishable in purpose and
impact from other activities relating
to the administration and management
of CHAMPUS in that the Peer Review
Organization program is concerned primarily with medical judgments regarding the quality and appropriateness of
health care services. Issues regarding
such matters as benefit limitations are
similar, but, if not determined on the
basis of medical judgments, are governed by CHAMPUS rules and procedures other than those provided in this
section. (See, for example, § 199.7 regarding claims submission, review and
payment.) Based on this purpose, a
major attribute of the Peer Review Organization program is that medical
judgments are made by (directly or
pursuant to guidelines and subject to
direct review) reviewers who are peers
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| File Type | application/pdf |
| File Modified | 2014-08-19 |
| File Created | 2014-08-19 |