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2 CHANGE M NOVEMBER 15, 2017 REMOVE PAGE(S) INSERT PAGE(S) CHAPTER 1 Table of Contents, pages 1 and 2 Table of Contents, pages 1 and 2 Section 7, pages 1 and 2 Section 7, pages 1 and 2 Section 8, page 1 Section 8, page 1 Section 28, pages 1 through 5 Section 28, pages 1 through 5 CHAPTER 2 Section 1, pages 5 through 17 Section 1, pages 5 through 18 Addendum A, pages 3 through 11 Addendum A, pages 3 through 12 Addendum B, page 1 Addendum B, page 1 CHAPTER 3 Section 4, pages 3 and 4 Section 4, pages 3 and 4 CHAPTER 4 Section 3, pages 11 and 12 Section 3, pages 11 and 12 CHAPTER 6 Section 10, pages 1 and 2 Section 10, pages 1 and 2 CHAPTER 7 Table of Contents, page 1 Table of Contents, page 1 Section 1, pages 3 through 6 Section 1, pages 3 through 6 Section 2, pages 1 through 3 Section 2, pages 1 through 4 Section 3, pages 1 and 2 Section 3, pages 1 and 2 Section 4, pages 1 through 6 Section 4, pages 1 through 6 Section 5, pages 1 through 3 Addendum B, pages 1 through 19 Addendum B, pages 1 through 19 CHAPTER 13 Section 1, pages 3 through 11 Section 1, pages 3 through 11 Section 2, pages 7 through 14 Section 2, pages 7 through 16 2

3 Chapter 1 General Revision: Section/Addendum Subject/Addendum Title 1 Network Provider Reimbursement 2 Accommodation Of Discounts Under Provider Reimbursement Methods 3 Claims Auditing Software 4 Reimbursement In Teaching Setting 5 National Health Service Corps (NHSC) Physicians Of The Public Health Service (PHS) 6 Reimbursement Of Physician Assistants (PAs), Nurse Practitioners (NPs), And Certified Psychiatric Nurse Specialists (CPNSs) 7 Reimbursement Of Covered Services Provided By Individual Health Care Providers And Other Non-Institutional Health Care Providers 8 Economic Interest In Connection With Mental Health Admissions 9 Anesthesia 10 Postoperative Pain Management - Epidural Analgesia 11 Claims For Durable Equipment (DE) And Durable Medical Equipment, Prosthetics, Orthotics, And Supplies (DMEPOS) 12 Oxygen And Related Supplies 13 Laboratory Services 14 Ambulance Services Figure Ground Ambulance Scenarios In Which The Beneficiary Dies Figure Air Ambulance Scenarios in Which The Beneficiary Dies Figure Air Ambulance Scenarios in Which The Flight is Aborted 15 Legend Drugs And Insulin 16 Surgery 17 Assistant Surgeons 18 Professional Services: Obstetrical Care 19 Charges For Provider Administrative Expenses 20 State Agency Billing 21 Hospital Reimbursement - Billed Charges Set Rates 1

4 Chapter 1, General Section/Addendum Subject/Addendum Title 22 Hospital Reimbursement - Other Than Billed Charges 23 Hospital Reimbursement - Payment When Only Skilled Nursing Facility (SNF) Level Of Care Is Required 24 Hospital Reimbursement - Outpatient Services 25 Preferred Provider Organization (PPO) Reimbursement 26 Supplemental Insurance 27 Legal Obligation To Pay 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements 29 Reimbursement Of Emergency Inpatient Admissions To Unauthorized Facilities 30 Reimbursement Of Travel Expenses For Specialty Care 31 Newborn Charges 32 Hospital-Based Birthing Room 33 Bonus Payments In Health Professional Shortage Areas (HPSAs) 34 Hospital Inpatient Reimbursement In Locations Outside The 50 United States (U.S.) And The District Of Columbia Figure Country Specific Index Factors Figure Institutional Inpatient Diagnostic Groupings For Specified Locations Outside The 50 U.S. And The District Of Columbia - National Inpatient Per Diem Amounts Figure Unique Admissions - National Inpatient Per Diem Amounts 35 Professional Provider Reimbursement In Specified Locations Outside The 50 United States (U.S.) And The District Of Columbia Figure Country Specific Index Factors 36 Forensic Examinations Following Sexual Assault or Domestic Violence 37 Medical Errors A B Sample State Agency Billing Agreement Figures Figure 1.B-1 Suggested Wording To The Beneficiary Concerning Rental vs. Purchase Of Durable Medical Equipment (DME) 2

5 General Chapter 1 Section 7 Reimbursement Of Covered Services Provided By Individual Health Care Providers And Other Non-Institutional Health Care Providers Issue Date: July 5, 1991 Authority: 32 CFR and 32 CFR (j) Revision: 1.0 APPLICABILITY This policy is mandatory for reimbursement of services provided by either network or nonnetwork providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 2.0 ISSUE This policy is related to reimbursement of covered beneficiary related services of individual health care providers and professionals that would otherwise meet the qualifications of individual health care providers except that they are either employed by or under contract to an institutional provider, and other non-institutional health care providers to be reimbursed. 3.0 POLICY 3.1 Covered services provided by all TRICARE authorized individual health care providers and other non-institutional health care providers shall be reimbursed using the allowable charge methodology unless otherwise stated This policy applies to all categories of individual health care providers and professionals that would otherwise meet the qualifications of individual health care providers except that they are either employed by or under contract to an institutional provider, and other non-institutional providers regardless of the beneficiary services provided This policy applies to all locations, inpatient or outpatient, where services are provided by these providers. These services could be provided by individual health care providers in a Diagnosis Related Groups (DRG) hospital, a DRG exempt hospital, an Ambulatory Surgery Center (ASC), or in a facility without a TRICARE all-inclusive rate. Note: Facility charges for inpatient and outpatient services shall continue to be billed on the current Centers for Medicare and Medicaid Services (CMS) 1450 UB-04. This would include inpatient 1

6 Chapter 1, Section 7 Reimbursement Of Covered Services Provided By Individual Health Care Providers And Other Non-Institutional Health Care Providers services that are and have been included in the reimbursement under the DRG-based payment system or the mental health per diem payment system. Outpatient facility charges would include services that aid the individual health care provider in the treatment of the beneficiary. These charges may include such services as the use of hospital facilities factoring in overhead costs of utilities, billing, equipment and maintenance costs, insurance, nursing staff, etc., including emergency room services (nonprofessional services), the services of nurses, technicians, and other aides, medical supplies (gauze, oxygen, ointments, dressings, splints, casts, prosthetic devices), and drugs and biologicals which cannot be self-administered Services provided by individual authorized health care providers and other noninstitutional health care providers shall be billed only on the current CMS 1500 Claim Form or the TRICARE 2642 for payment. Individual health care providers (e.g., physicians) and non-institutional providers (e.g., suppliers) are to use the CMS 1500 Claim Form. Institutional providers (e.g., hospitals) are to use the CMS 1500 Claim Form or the CMS 1450 UB-04 (if adequate Common Procedure Terminology (CPT) coding information is submitted) to bill for the professional component of physicians and other authorized professional providers. Beneficiaries (or their representatives) who complete and file their own claims for individual health care providers and other non-institutional health care provider services may want to use the TRICARE 2642 claim form for payment. - END - 2

7 General Chapter 1 Section 8 Economic Interest In Connection With Mental Health Admissions Issue Date: March 13, 1992 Authority: 32 CFR 199.4(g)(73) Revision: 1.0 APPLICABILITY This policy is mandatory for reimbursement of services provided by network and non-network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 2.0 ISSUE Economic interest in connection with mental health admissions. 3.0 POLICY Inpatient mental health services (including acute care, inpatient/residential Substance Use Disorder (SUD) detoxification and rehabilitation, and Residential Treatment Center (RTC) services) are excluded for care received when a patient is referred to a provider of such services by a physician (or other health care professional with authority to admit) who has an economic interest in the facility to which the patient is referred, unless a waiver is granted. Requests for waiver shall be considered under the same procedure and based on the same criteria as used for obtaining preadmission authorization (or continued stay authorization for emergency admissions), with the only additional requirement being that the economic interest be disclosed as part of the request. However, a provider may appeal a reconsidered determination that an economic relationship constitutes an economic interest within the scope of the exclusion to the same extent that a provider may appeal any other determinations. If a situation arises where a decision is made to exclude payment solely on the basis of the provider s economic interest, the normal appeals process will be available. 4.0 EXCLUSIONS The economic interest provision does not apply to: Services under the Extended Care Health Option (ECHO). Partial hospitalization. - END - 1

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9 General Chapter 1 Section 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements Issue Date: July 17, 1996 Authority: 32 CFR 199.4(e)(12) and 32 CFR (b)(4)(iii) Revision: 1.0 ISSUE Reduction of payment for noncompliance with utilization review requirements. 2.0 POLICY In the case of a provider s failure to obtain a required preauthorization, the provider s payment shall be reduced by 10% of the amount otherwise allowable. Under the managed care contracts, a network provider s payment can be subject to a greater than 10% reduction or a denial if the network provider has agreed to such a reduction or denial in the agreement. 2.1 Types of Care Subject to Payment Reduction For a provider s failure to obtain a required preauthorization or preadmission authorization, the provider s payment will be reduced in connection with the following types of care: All non-emergency mental health admissions to hospitals All admissions for psychiatric residential treatment for children, and inpatient/residential Substance Use Disorder (SUD) detoxification and rehabilitation, and psychiatric partial hospitalization (Partial Hospitalization Program (PHP) care prior to June 13, 2017). None of these can be considered emergency care Psychoanalysis. It cannot be considered as an emergency service Adjunctive dental care Organ and stem cell transplants Skilled Nursing Facility (SNF) care received in the U.S. and U.S. territories for TRICARE dual eligible beneficiaries once TRICARE is primary payer Infusion drug therapy delivered in the home. 1

10 Chapter 1, Section 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements Additional procedures and services as prescribed by the contractors except when the beneficiary has other insurance as provided in the TRICARE Policy Manual (TPM), Chapter 1, Section 6.1, paragraph 1.12, Note. 2.2 Applicability of Payment Reduction This section shall apply to participating (including network providers and participating Department of Veterans Affairs (DVA) facilities) and nonparticipating providers. For a provider s failure to obtain the required preauthorization, the payment reduction shall be subject to the policy in this section In the case of an admission to a hospital, inpatient/residential Substance Use Disorder Rehabilitation Facility (SUDRF), or Residential Treatment Center (RTC), or a PHP (PHP care prior to June 13, 2017) (or a SNF) when applicable, for network providers the payment reduction shall apply to the institutional charges and any associated professional charges of the attending or admitting provider. Services of other providers shall be subject to the payment reduction as provided under the network provider agreements, but not less than 10% The amount of the reduction for non-network providers shall be 10% of the amount otherwise allowable (consistent with paragraphs 2.3, 2.4, and 2.5) for services for which preauthorization should have been obtained, but was not obtained The amount of the reduction for network providers shall be in accordance with the provider s contract with the respective contractor, but not less than 10% The payment reduction shall apply under the Point of Service (POS) option. 2.3 Diagnosis Related Group (DRG) Reimbursed Facilities In the case of admissions reimbursed under the DRG-based payment system, the reduction shall be taken against the percentage (between 0 and 100%) of the total reimbursement equal to the number of days of care provided without preauthorization, divided by the total Length-Of-Stay (LOS) for the admission. See the example in Chapter 3, Section Non-DRG Facilities/Units (Includes RTCs and Mental Health Per Diem Hospitals) In the case of admissions to non-drg facilities/units, the reduction shall be taken only against the days of care provided without preauthorization. See the example in Chapter 3, Section Care Paid on Per-Service Basis For the care for which payment is on a per-service basis, e.g., outpatient adjunctive dental care, the reduction shall be taken only against the amount that relates to the services provided without prospective authorization. See the example in Chapter 3, Section 4. 2

11 Chapter 1, Section 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements 2.6 Determination of Days/Services Subject to Payment Reduction For purposes of determining the days/services which will be subject to the payment reduction, the following shall apply: When the request for authorization is made prior to the admission but is not received by the contractor until after the admission occurred, the days for payment reduction shall be counted from the date of admission to the date of receipt of the request by the contractor (not counting the date of receipt). This includes alleged emergency care subsequently found not to meet the emergency criteria When the request for authorization is made to the contractor after the admission occurred, the days for payment reduction shall be counted from the date of admission to the date of approval of the request by the contractor (not counting the date of approval) For the care paid on a per-service basis, e.g., outpatient adjunctive dental care, payment reduction shall apply to those services/sessions provided prior to receipt of the authorization request by the contractor. 2.7 Other Health Insurance (OHI) and Beneficiary Cost-Share When a beneficiary has OHI that provides primary coverage, certain services shall not be subject to payment reduction. See paragraph The reduction of payment is calculated based on the otherwise allowable amount (consistent with paragraphs 2.3, 2.4, and 2.5) before the application of deductible, beneficiary costshare, and OHI The beneficiary is still required to pay a cost-share for the days or services for which the payment is reduced. The beneficiary cost-share shall be calculated applying the normal cost-share rules before the reduction is taken The amount applied/credited toward the deductible cannot be greater than the amount for which the beneficiary remains liable after the Government payment. 2.8 Preauthorization Process Preauthorization may be requested from a contractor in person, by telephone, fax, or mail. The date of receipt of a request shall be the date (business day) on which a contractor receives the request to authorize the medical necessity and appropriateness of care for which it has jurisdiction. Note: The date a preauthorization request is mailed to the contractor and postmarked shall determine the date the request was made (not received). If a request for preauthorization does not have a postmark, it shall be deemed made on the date received by the contractor In general, the decision regarding the preauthorization shall be issued by the contractor within one business day of the receipt of a request from the provider, and shall be followed with a written confirmation (if initial notice is verbal). 3

12 Chapter 1, Section 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements A preauthorization is valid for the period of time, appropriate to the type of care involved. It shall state the number of days/type of care for which it is valid. In general, preauthorizations will be valid for 30 days. If the services are not obtained within the number of days specified, a new preauthorization request is required. For organ and stem cell transplants the preauthorization shall remain in effect as long as the beneficiary continues to meet the specific transplant criteria set forth in the TPM, or until the approved transplant occurs. 2.9 Patient Not Liable The patient (or the patient s family) may not be billed for the amount of the payment reduction due to the provider s noncompliance with preauthorization requirements Emergency Admissions/Services Payment reductions shall not be applied in connection with bona fide emergency admissions or services. The authorization required for a continuation of services in connection with bona fide emergency admission will not be subject to payment reduction Contractor having jurisdiction for the medical review of the admission is required to review for emergency when requested by the provider. In addition to the review of alleged emergency admissions, the contractor is required to issue an initial determination providing the review decision which is appealable. Note: Psychoanalysis and all admissions for psychiatric residential treatment for children or inpatient/residential SUD detoxification and rehabilitation are the types of services/admissions requiring preauthorization that cannot be considered as emergencies Waiver of Payment Reduction The contractor may waive the payment reduction only when a provider could not have known that the patient was a TRICARE beneficiary, e.g., when there is a retroactive eligibility determination by a Uniformed Service, or when the patient does not disclose eligibility to the provider The criteria for determining when a provider could have been expected to know of the preauthorization requirements shall be the same as applied under the Waiver of Liability provisions If at any time a payment reduction is revised after claims processing, claim processors will follow existing procedures for processing any resulting payment adjustments Appeal Rights The days/services for which the provider s payment is reduced are approved days/services and not subject to appeal The denial of a waiver request and clerical/calculation errors in connection with the payment reduction are not subject to appeal but are subject to administrative review by the contractor upon request. 4

13 Chapter 1, Section 28 Reduction Of Payment For Noncompliance With Utilization Review Requirements Adverse decisions regarding alleged emergency admissions/services are appealable in cases involving payment reductions following the normal appeal procedures. 3.0 EFFECTIVE DATES 3.1 March 1, December 19, 2014, elimination of inpatient mental health and SUD day limits. 3.3 October 3, 2016, elimination of all remaining mental health and SUD quantitative treatment limitations. - END - 5

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15 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Cost-Share Amount Outpatient Care ADFM or Authorized NATO Beneficiary. The cost-share for outpatient care is 20% of the allowable amount in excess of the annual deductible amount. This includes the professional charges of an individual professional provider for services rendered in a non-tricare-approved ASC or Birthing Center Other Beneficiary. The cost-share applicable to outpatient care for other than active duty and authorized NATO family member beneficiaries is 25% of the allowable amount in excess of the annual deductible amount. This includes: partial hospitalization for alcohol rehabilitation; professional charges of an individual professional provider for services rendered in a non-tricare-approved ASC Inpatient Care ADFM: For services prior to October 3, 2016, except in the case of mental health and Substance Use Disorder (SUD) services, ADFMs or their sponsors are responsible for the payment of the first $25 of the allowable institutional costs incurred with each covered inpatient admission to a hospital or other authorized institutional provider, or the daily charge the beneficiary or sponsor would have been charged had the inpatient care been provided in a Uniformed Service hospital, whichever is greater. (Please reference daily rate chart below.) For services on or after October 3, 2016, the following applies to all services (to include mental health and SUD services) for ADFMs or their sponsors. FIGURE UNIFORMED SERVICES HOSPITAL DAILY CHARGE AMOUNTS PERIOD DAILY CHARGE October 1, September 30, 2014 (for ADFMs not enrolled in Prime) $17.65 October 1, September 30, 2015 (for ADFMs not enrolled in Prime) $17.80 October 1, September 30, 2016 (for ADFMs not enrolled in Prime) $18.00 October 1, September 30, 2017 (for ADFMs not enrolled in Prime) $18.20 Use the daily charge (per diem rate) in effect for each day of the stay to calculate a cost-share for a stay which spans periods Other Beneficiaries: For services exempt from the DRG-based payment system and the mental health per diem payment system and services provided by institutions other than hospitals (i.e., Residential Treatment Centers (RTCs)), the cost-share shall be 25% of the allowable charges Cost-Shares: Maternity Determination. Maternity care cost-share shall be determined as follows: Inpatient cost-share formula applies to maternity care ending in childbirth in, or on the way to, a hospital inpatient childbirth unit, and for maternity care ending in a non-birth outcome not otherwise excluded. 5

16 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Note: Inpatient cost-share formula applies to prenatal and postnatal care provided in the office of a civilian physician or certified nurse-midwife in connection with maternity care ending in childbirth or termination of pregnancy in, or on the way to, a Military Treatment Facility (MTF)/Enhanced Multi- Service Market (emsm) inpatient childbirth unit. ADFMs pay a per diem charge (or a $25.00 minimum charge) for an admission and there is no separate cost-share for them for separately billed professional charges or prenatal or postnatal care Ambulatory surgery cost-share formula applies to maternity care ending in childbirth in, or on the way to, a birthing center to which the beneficiary is admitted, and from which the beneficiary has received prenatal care, or a hospital-based outpatient birthing room Outpatient cost-share formula applies to maternity care which terminates in a planned childbirth at home Otherwise covered medical services and supplies directly related to complications of pregnancy, as defined in the Regulation, shall be cost-shared on the same basis as the related maternity care for a period not to exceed 42 days following termination of the pregnancy and thereafter cost-shared on the basis of the inpatient or outpatient status of the beneficiary when medically necessary services and supplies are received Otherwise authorized services and supplies related to maternity care, including maternity related prescription drugs, shall be cost-shared on the same basis as the termination of pregnancy Claims for pregnancy testing shall be cost-shared on an outpatient basis when the delivery is on an inpatient basis Where the beneficiary delivers in a professional office birthing suite located in the office of a physician or certified nurse-midwife (which is not otherwise a TRICARE-approved birthing center) the delivery shall be adjudicated as an at-home birth Claims for prescription drugs provided on an outpatient basis during the maternity episode but not directly related to the maternity care shall be cost-shared on an outpatient basis Newborn cost-share. Effective for all inpatient admissions occurring on or after October 1, 1987, separate claims must be submitted for the mother and newborn. The cost-share for inpatient claims for services rendered to a beneficiary newborn is determined as follows: In a DRG hospital: Same newborn date of birth and date of admission: For ADFMs, there shall be no cost-share during the period the newborn is deemed enrolled in Prime. For newborn family members of other than active duty members, unless the newborn is deemed enrolled in Prime, the cost-share shall be the lower of the 6

17 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries number of hospital days minus three multiplied by the per diem amount, OR 25% of the total billed charges (less duplicates and DRG non-reimbursables such as hospital-based professional charges) Different newborn date of birth and date of admission: For ADFMs, there shall be no cost-share during the period the newborn is deemed enrolled in Prime. For all other beneficiaries, the cost-share shall be applied to all days in the inpatient stay unless the newborn is deemed enrolled in Prime In DRG exempt hospital: Same newborn date of birth and date of admission: For ADFMs, there shall be no cost-share during the period the newborn is deemed enrolled in Prime. For family members of other than active duty members, the cost-share shall be calculated based on 25% of the total allowed charges unless the newborn is deemed enrolled in Prime Different newborn date of birth and date of admission: For ADFMs, there shall be no cost-share during the period the newborn is deemed enrolled in Prime. For family members of other than active duty members, the cost-share shall be calculated based on 25% of the total allowed charges unless the newborn is deemed enrolled in Prime Maternity Related Care. Medically necessary treatment rendered to a pregnant woman for a non-obstetrical medical, anatomical, or physiological illness or condition shall be cost-shared as a part of the maternity episode when: The treatment is otherwise allowable as a benefit; and Delay of the treatment until after the conclusion of the pregnancy is medically contraindicated; and The illness or condition is, or increases the likelihood of, a threat to the life of the mother; or The illness or condition will cause, or increase the likelihood of, a stillbirth or newborn injury or illness; or 7

18 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries The usual course of treatment must be altered or modified to minimize a defined risk of newborn injury or illness Cost-Shares: DRG-Based Payment System General These special cost-sharing procedures apply only to claims paid under the DRG-based payment system TRICARE Standard Cost-shares for ADFMs. ADFMs or their sponsors are responsible for the payment of the first $25 of the allowable institutional costs incurred with each covered inpatient admission to a hospital or other authorized institutional provider, or the amount the beneficiary or sponsor would have been charged had the inpatient care been provided in a Uniformed Service hospital, whichever is greater Cost-shares for beneficiaries other than ADFMs The cost-share shall be the lesser of: An amount based on a single, specific per diem amount which will not vary regardless of the DRG involved. The following is the DRG inpatient TRICARE Standard cost-sharing per diems for beneficiaries other than ADFMs. For FY 2014, the daily rate is $744. For FY 2015, the daily rate is $764. For FY 2016 and beyond, the daily rate is posted to the Defense Health Agency (DHA) web site at Rates-and-Reimbursement The per diem amount will be calculated as follows: Determine the total allowable DRG-based amounts for services subject to the DRG-based payment system and for beneficiaries other than ADFMs during the same database period used for determining the DRG weights and rates. Add in the allowance for Capital and Direct Medical Education (CAP/DME) which have been paid to hospitals during the same database period used for determining the DRG weights and rates. Divide this amount by the total number of patient days for these beneficiaries. This amount will be the average cost per day for these beneficiaries. 8

19 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Multiply this amount by In this way total cost-sharing amounts will continue to be 25% of the allowable amount. Determine any cost-sharing amounts which exceed 25% of the billed charge (see paragraph ) and divide this amount by the total number of patient days in paragraph ). Add this amount to the amount in paragraph This is the per diem cost-share to be used for these beneficiaries The per diem amount shall be required for each actual day of the beneficiary s hospital stay which the DRG-based payment covers except for the day of discharge. When the payment ends on a specific day because eligibility ends on a short-stay outlier day, the last day of eligibility is to be counted for determining the per diem cost-sharing amount. For claims involving a same-day discharge which qualify as an inpatient stay (e.g., the patient was admitted with the expectation of a stay of several days, but died the same day) the cost-share is to be based on a one-day stay. (The number of hospital days must contain one day in this situation.) Twenty-five percent (25%) of the billed charge. The billed charge to be used includes all inpatient institutional line items billed by the hospital minus any duplicate charges and any charges which can be billed separately (e.g., hospital-based professional services, outpatient services, etc.). The net billed charges for the cost-share computation include comfort and convenience items Under no circumstances can the cost-share exceed the DRG-based amount Where the dates of service span different fiscal years, the per diem cost-share amount for each year is to be applied to the appropriate days of the stay TRICARE Extra Cost-shares for ADFMs. The cost-sharing provisions for ADFMs are the same as those for TRICARE Standard Cost-shares for beneficiaries other than ADFMs. The cost-sharing provisions for beneficiaries other than ADFMs is the same as those for TRICARE Standard, except the per diem copayment is $ TRICARE Prime There is no cost-share for ADFMs. For beneficiaries other than ADFMs, the cost-sharing provision is the first $25 of the allowable institutional costs incurred with each covered inpatient admission to a hospital or other authorized institutional provider, or a per diem rate of $11, whichever is greater Maternity Services See paragraph , for the cost-sharing provisions for maternity services. 9

20 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Cost-Shares: Inpatient Mental Health Per Diem Payment System General. These special cost-sharing procedures apply only to claims paid under the inpatient mental health per diem payment system. For inpatient claims exempt from this system, the procedures in paragraph or are to be followed Cost-shares for ADFMs. For dates of service prior to October 3, 2016, inpatient costsharing for mental health services is $20 per day for each day of the inpatient admission. This $20 per day cost-share applies to admissions to any hospital for mental health services, any RTC, any Substance Use Disorder Rehabilitation Facility (SUDRF), and any PHP providing mental health or SUD rehabilitation services. For Prime ADFMs cost-share is $0 per day. See Addendum A for further information For dates of service on or after October 3, 2016, the inpatient cost-sharing for mental health services is that described in paragraph The cost-share applies to admissions to any hospital for mental health services, any RTC, and any inpatient/residential SUD detoxification and rehabilitation program. For Prime ADFMs, the cost-share is $0 per day. See Addendum A for further information Cost-shares for beneficiaries other than ADFMs Higher volume hospitals and units. With respect to care paid for on the basis of a hospital specific per diem, the cost-share shall be 25% of the hospital specific per diem amount Lower volume hospitals and units. For care paid for on the basis of a regional per diem, the cost-share shall be the lower of paragraphs or : A fixed daily amount multiplied by the number of covered days. The fixed daily amount shall be 25% of the per diem adjusted so that total beneficiary cost-shares will equal 25% of total payments under the inpatient mental health per diem payment system. This fixed daily amount shall be updated annually and on the DHA website at This fixed daily amount will also be furnished to contractors by the DHA. The following fixed daily amounts are effective for services rendered on or after October 1 of each fiscal year. FY $218 per day. FY $224 per day. FY $229 per day. FY $235 per day Twenty-five percent (25%) of the hospital s billed charges (less any duplicates) Claims which span a period in which two separate per diems exist. A claim subject to the inpatient mental health per diem payment system which spans a period in which two separate per diems exist shall have the cost-share computed on the actual per diem in effect for each day of care Cost-share whenever leave days are involved. There is no patient cost-share for leave days when such days are included in a hospital stay. 10

21 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Claims for services that are provided during an inpatient admission which are not included in the per diem rate shall be cost-shared as an inpatient claim if the contractor cannot determine where the service was rendered and the status of the patient when the service was provided. The contractor shall examine the claim for place of service and type of service to determine if the care was rendered in the hospital while the beneficiary was an inpatient of the hospital. This would include non-mental health claims and mental health claims submitted by individual professional providers rendering medically necessary services during the inpatient admission Cost-Shares: PHPs And Intensive Outpatient Program (IOPs) For care rendered prior to October 3, 2016, cost-sharing for partial hospitalization is on an inpatient basis. The inpatient cost-share also applies to the associated psychotherapy billed separately by the individual professional provider. These providers shall identify on the claim form that the psychotherapy is related to a partial hospitalization stay so the proper inpatient cost-sharing can be applied. The cost-share for ADFMs enrolled in Prime for inpatient mental health services is $0. For retirees and their family members, the cost-share is 25% of the allowed amount. Since inpatient costsharing is being applied, no deductible shall be taken for partial hospitalization regardless of sponsor status. The cost-share for ADFMs shall be taken from the PHP claim For care rendered on or after October 3, 2016, cost-sharing for PHPs and IOPs is on an outpatient basis. The outpatient cost-share also applies to the associated psychotherapy billed separately by the individual professional provider. These providers shall identify on the claim form that the psychotherapy is related to PHP or IOP care so the proper outpatient cost-sharing can be applied. Cost-shares for standard beneficiaries can be found in paragraph 1.3; cost-sharing requirements for prime beneficiaries can be found in paragraph Cost-Shares: Ambulatory Surgery Non-Prime ADFMs or Authorized NATO Beneficiary. For all services reimbursed as ambulatory surgery, the cost-share shall be $25 and shall be assessed on the facility claim. No costshare shall be deducted from a claim for professional services related to ambulatory surgery. This applies whether the services are provided in a freestanding ASC, a hospital outpatient department or a hospital emergency room. So long as at least one procedure on the claim is reimbursed as ambulatory surgery, the claim shall be cost-shared as ambulatory surgery as required by this section Other Beneficiaries. Since the cost-share for other beneficiaries is based on a percentage rather than a set amount, the cost-share shall be taken from all ambulatory surgery claims. For professional services, the cost-share is 25% of the allowed amount. For the facility claim, the costshare is the lesser of: Twenty-five percent (25%) of the applicable group payment rate (see Chapter 9, Section 1); or Twenty-five percent (25%) of the billed charges; or Twenty-five percent (25%) of the allowed amount as determined by the contractor. 11

22 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries The special cost-sharing provisions for beneficiaries other than ADFMs will ensure that these beneficiaries are not disadvantaged by these procedures. In most cases, 25% of the group payment rate will be less, but because there is some variation within each group, 25% of billed charges could be less in some cases. This will ensure that the beneficiaries get the benefit of the group payment rates when they are more advantageous, but they will never be disadvantaged by them. If there is no group payment rate for a procedure, the cost-share shall simply be 25% of the allowed amount Cost-Shares and Deductible: Former Spouses Deductible. In accordance with the FY 1991 Appropriations and Authorization Acts, Sections 8064 and 712 respectively, beginning April 1, 1991, an eligible former spouse is responsible for payment of the first one hundred and fifty dollars ($150.00) of the reasonable costs/charges for otherwise covered outpatient services and/or supplies provided in any one fiscal year. Although the law defines former spouses as family members of the member or former member, there is no legal familial relationship between the former spouse and the member or former member. Moreover, any TRICARE-eligible children of the former spouse will retain a legal familial relationship with the member or former member and shall be included in the member s or former member s family deductible. The former spouse cannot contribute to, nor benefit from, any family deductible of the member or former member to whom the former spouse was married or of that of any TRICARE-eligible children. In other words, a former spouse must independently meet the $ deductible in any fiscal year Cost-Share. An eligible former spouse is responsible for payment of cost-sharing amounts identical to those required for beneficiaries other than ADFMs Cost-Share Amount: Under Discounted Rate Agreements Under managed care, where there is a negotiated (discounted) rate agreed to by the network provider, the cost-share shall be based on the following: For non-institutional providers providing outpatient care, and for institution-based professional providers rendering both inpatient and outpatient care; the cost-share (20%) for outpatient care to ADFMs, 25% for care to all others) shall be applied to (after duplicates and noncovered charges are eliminated), the lowest of the billed charge, the prevailing charge, the maximum allowable prevailing charge (the Medicare Economic Index (MEI) adjusted prevailing), or the negotiated (discounted) charge For institutional providers subject to the DRG-based reimbursement methodology, the cost-share for beneficiaries other than ADFMs shall be the LOWER OF EITHER: The single, specific per diem supplied by DHA after the application of the agreed upon discount rate; OR Twenty-five percent (25%) of the billed charge For institutional providers subject to the Mental Health Per Diem Payment System (high volume hospitals and units), the cost-share for beneficiaries other than ADFMs shall be 25% of the hospital per diem amount after it has been adjusted by the discount. 12

23 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries For institutional providers subject to the Mental Health per diem payment system (low volume hospitals and units), the cost-share for beneficiaries other than ADFMs shall be the LOWER OF EITHER: The fixed daily amount supplied by DHA after the application of the agreed upon discount rate; OR Twenty-five percent (25%) of the billed charge For RTCs, the cost-share for other than ADFMs shall be 25% of the TRICARE rate after it has been adjusted by the discount For institutions and for institutional services being reimbursed on the basis of the TRICARE-determined reasonable costs, the cost-share for beneficiaries other than ADFMs shall be 25% of the allowable billed charges after it has been adjusted by the discount. Note: For all inpatient care for ADFMs, the cost-share shall continue to be either the daily charge or $25 per stay, whichever is higher. There is no change to the requirement for the ADFM s cost-share to be applied to the institutional charges for inpatient services. If the contractor learns that the participating provider has billed a beneficiary for a greater cost-share amount, based on the provider s usual billed charges, the contractor shall notify the provider that such an action is a violation of the provider s signed agreement. (Also see paragraph ) For Prime ADFMs, the cost-share is $0 for care provided on or after April 1, Preventive Services No copayments or authorizations are required for the following preventive services as described in the TPM, Chapter 7, Sections 2.1 and 2.5: Colorectal cancer screening Breast cancer screening Cervical cancer screening Prostate cancer screening Immunizations Well-child visits for children under six years of age Visits for all other beneficiaries over age six when the purpose of the visit is for one or more of the covered benefits listed in paragraphs through If one or more of the procedure codes described in the TPM, Chapter 7, Section 2.1 for those preventive services listed in paragraphs through is billed on a claim, then the cost-share shall be waived for the visit. 13

24 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries In addition to the services listed in paragraph , effective January 1, 2017, costshares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraphs and through Effective January 1, 2018, cost-shares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraph A beneficiary is not required to pay any portion of the cost of these preventive services even if the beneficiary has not satisfied the deductible for that year This waiver does not apply to any TRICARE beneficiary who is a Medicare-eligible beneficiary Appropriate cost-sharing and deductibles shall apply for all other preventive services described in the TPM, Chapter 7, Section 2.1, paragraphs 3.2 and TRICARE Extra For Extra deductibles and cost-shares, see Addendum A If non-enrolled TRICARE beneficiary receives care from a network provider out of the region of residence, and if the beneficiary has not met the fiscal year catastrophic cap, the beneficiary shall pay the Extra cost-share to the provider. The contractor for the beneficiary s residence shall process the claim under TRICARE Extra claims processing procedures if the TRICARE Encounter Provider Record (TEPRV) shows the provider to be contracted Preventive Services No copayments or authorizations are required for the following preventive services as described in the TPM, Chapter 7, Sections 2.1 and 2.5: Colorectal cancer screening Breast cancer screening Cervical cancer screening Prostate cancer screening Immunizations Well-child visits for children under six years of age Visits for all other beneficiaries over age six when the purpose of the visit is for one or more of the covered benefits listed in paragraphs through If one or more of the procedure codes described in the TPM, Chapter 7, Section 2.1 for those preventive services listed in paragraphs through are billed on a claim, then the cost-share shall be waived for the visit. 14

25 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries In addition to the services listed in paragraph , effective January 1, 2017, cost-shares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraphs and through Effective January 1, 2018, cost-shares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraph A beneficiary is not required to pay any portion of the cost of these preventive services even if the beneficiary has not satisfied the deductible for that year This waiver does not apply to any TRICARE beneficiary who is a Medicare-eligible beneficiary Appropriate cost-sharing and deductibles shall apply for all other preventive services described in the TPM, Chapter 7, Section 2.1, paragraph 3.2 and Section Cost-Shares: Ambulance Services For the basis of payment of ambulance services, see Chapter 1, Section Outpatient. The following are beneficiary copayment/cost-sharing requirements for medically necessary ambulance services when paid on an outpatient basis: TRICARE Prime For care provided for pay grades E-1 through E-4, $0. See Addendum A for further information For care provided for pay grades E-5 and above, $0. See Addendum A for further information For retirees and their family members, $ TRICARE Extra A cost-share of 15% of the fee negotiated by the contractor for ADFMs A cost-share of 20% of the fee negotiated by the contractor for retirees, their family members, and survivors TRICARE Standard A cost-share of 20% of the allowable charge for ADFMs A cost-share of 25% of the allowable charge for retirees, their family members, and survivors. 15

26 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries Inpatient: Non-Network Providers ADFMs. No cost-share is taken for ambulance services (transfers) rendered in conjunction with an inpatient stay Other Beneficiary. The cost-share applicable to inpatient care for beneficiaries other than ADFMs is 25% of the allowable amount. 1.6 Exceptions Inpatient Cost-Share Applicable To Each Separate Admission A separate cost-share amount is applicable to each separate beneficiary for each inpatient admission EXCEPT: Any admission which is not more than 60 days from the date of the last inpatient discharge shall be treated as one inpatient confinement with the last admission for cost-share amount determination Certain heart and lung hospitals are excepted from cost-share requirements. See Chapter 1, Section 27, entitled Legal Obligation To Pay Inpatient Cost-Share: Maternity Care See paragraph All admissions related to a single maternity episode shall be considered one confinement regardless of the number of days between admissions. For ADFMs, the cost-share shall be applied to the first institutional claim received Special Cost-Share Provisions For services provided prior to International Classification of Diseases, 10th Revision (ICD-10) implementation. Effective October 1, 1987, the inpatient cost-share amount from DRG-exempt institutional provider claims in the following categories cannot exceed that which would have been imposed if the service were subject to the DRG-based payment system. This shall not affect ADFMs. For all other beneficiaries, the cost-share shall be the lesser of: That calculated according to paragraph ; or That calculated according to paragraph Child Bone Marrow Transplant (BMT) All services related to discharges involving BMT for a beneficiary less than 18 years old as classified in International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) Child Human Immunodeficiency Virus (HIV) Seropositivity All services related to discharges involving HIV seropositive beneficiary less than 18 16

27 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries years old with ICD-9-CM principal or secondary diagnosis codes 042, , and Child Cystic Fibrosis All services related to discharges involving beneficiary less than 18 years old with ICD- 9-CM principal or secondary diagnosis code (cystic fibrosis) For services provided on or after the date specified by the Centers for Medicare and Medicaid Services (CMS) in the Final Rule as published in the Federal Register. Effective October 1,1987, the inpatient cost-share amount from DRG-exempt institutional provider claims in the following categories cannot exceed that which would have been imposed if the service were subject to the DRG-based payment system. This shall not affect ADFMs. For all other beneficiaries, the cost-share shall be the lesser of: That calculated according to paragraph ; or That calculated according to paragraph Child BMT All services related to discharges involving BMT for a beneficiary less than 18 years old as classified in International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) HIV Seropositivity All services related to discharges involving HIV seropositive beneficiary less than 18 years old with ICD-10-CM principal or secondary diagnosis codes B20, B97.35, and R Child Cystic Fibrosis All services related to discharges involving beneficiary less than 18 years old with ICD- 10-CM principal or secondary diagnosis code E84 (cystic fibrosis) Cost-Sharing for Family Members of a Member who Dies While on Active Duty Those in Transitional Survivor status, are not distinguished from other ADFMs for costsharing purposes. After the Transitional Survivor status ends, eligible TRICARE beneficiaries may be placed in Survivor status and will be responsible for retiree cost-shares. See the Transitional Survivor Status policy in the TPM, Chapter 10, Section See Section 4 for waivers of cost-shares and deductibles. 1.7 Catastrophic Loss Protection See Section 3. 17

28 Chapter 2, Section 1 Cost-Shares And Deductibles For TRICARE Services Received Prior To January 1, 2018 And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 2.0 EFFECTIVE DATE October 3, 2016, PHP and IOP as outpatient mental health and SUD services. - END - 18

29 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 3.0 OUTPATIENT SERVICES BENEFICIARY COPAYMENT/COST-SHARE (SEE POS OPTION) (SEE NOTE 4) TRICARE BENEFITS TRICARE PRIME PROGRAM (SEE NOTE 1) ADFMS RETIREES, THEIR FAMILY MEMBERS, & TYPE OF SERVICE E1 - E4 E5 & ABOVE SURVIVORS INDIVIDUAL PROVIDER SERVICES Office visits; urgent care; outpatient office-based medical and surgical care; consultation, diagnosis and treatment by a specialist; allergy tests and treatment; osteopathic manipulation; medical supplies used within the office including casts, dressings, and splints. OUTPATIENT HOSPITAL DEPARTMENTS Clinics visits; urgent care; therapy visits; medical supplies; consultations; treatment room; etc. Note: Use other parts of this table for cost-sharing of ASC services, ER services, DME, etc. ANCILLARY SERVICES Refer to Section 1 for specific services considered as ancillary services. OTHER RADIOLOGY SERVICES Not considered as ancillary services. ROUTINE PAP SMEARS Frequency to depend on physician recommendations based on the published guidelines of the American Academy of Obstetrics and Gynecology (see Note 1). $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. No copayment. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. No copayment. $12 copayment per visit. $12 copayment per visit. No separate copayment/costshare for separately billed professional charges. No copayment (see Note 3). $12 copayment per visit. TRICARE EXTRA PROGRAM ADFMs: Cost-share--15% of the fee negotiated by the contractor. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor. ADFMs: Cost-share--15% of the fee negotiated by the contractor. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor. TRICARE STANDARD PROGRAM ADFMs: Cost-share--20% of the allowable charge. Retirees, their Family Members, & Survivors: Cost-share--25% of the allowable charge. ADFMs: Cost-share--20% of the allowable charge. Retirees, their Family Members, & Survivors: Cost-share--25% of the allowable charge. No copayment. $0 cost-share. $0 cost-share. 3

30 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 3.0 OUTPATIENT SERVICES (CONTINUED) AMBULANCE SERVICES When medically necessary as defined in the TRICARE Policy Manual (TPM) and the service is a covered benefit. EMERGENCY SERVICES Emergency care obtained on an outpatient basis, both network and non-network, and in and out of the Region. DME, HEARING AIDS FOR ADFMs, AND MEDICAL SUPPLIES PRESCRIBED BY AN AUTHORIZED PROVIDER WHICH ARE COVERED BENEFITS (If dispensed for use outside of the office or after the home visit.) HOME HEALTH CARE Part-time or intermittent skilled nursing and home health aide services, physical, speech, & occupational therapy, medical social services, routine and nonroutine medical services. Note: DME, osteoporosis drugs, pneumoccocal pneumonia, influenza virus and hepatitis B vaccines, oral cancer drugs, antiemetic drugs, orthotics, prosthetics, enteral and parenteral nutritional therapy and drugs/biologicals administered by other than oral methods are services that can be paid in addition to the prospective payment amount subject to applicable copayment/cost-sharing and deductible amounts. BENEFICIARY COPAYMENT/COST-SHARE (SEE POS OPTION) (SEE NOTE 4) TRICARE BENEFITS TRICARE PRIME PROGRAM (SEE NOTE 1) ADFMS TYPE OF SERVICE E1 - E4 $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment. E5 & ABOVE $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment. RETIREES, THEIR FAMILY MEMBERS, & SURVIVORS $20 copayment per occurrence. $30 copayment per emergency room visit. Cost-share - 20% of the fee negotiated by the contractor. TRICARE EXTRA PROGRAM ADFMs: Cost-share--15% of the fee negotiated by contractor. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor. TRICARE STANDARD PROGRAM ADFMs: Cost-share--20% of the allowable charge. Retirees, their Family Members, & Survivors: Cost-share--25% of the allowable charge. $0 copayment. $0 cost-share. $0 cost-share. 4

31 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 3.0 OUTPATIENT SERVICES (CONTINUED) HOSPICE CARE Note: A separate cost-share may be (optional) collected by the individual hospice for outpatient drugs and biologicals and inpatient respite care. WELL CHILD CARE Up to the age of six. FAMILY HEALTH SERVICES Family planning. The exclusions listed in the TPM will apply. OUTPATIENT MENTAL HEALTH TO INCLUDE HOME CARE, PARTIAL HOSPITALIZATION, INTENSIVE OUTPATIENT PROGRAMS (IOPs), AND OPIOD TREATMENT PROGRAMS (OTPs) AMBULATORY SURGERY (same day) Authorized hospital-based or freestanding Ambulatory Surgical Center (ASC) that is TRICARE certified. ALL SURGICAL PROCEDURES REGARDLESS OF WHERE THEY ARE PERFORMED With the exclusion of those surgical procedures referenced Section 1, paragraphs and BIRTHING CENTER Prenatal care, outpatient delivery, and postnatal care provided by TRICARE authorized birthing center. BENEFICIARY COPAYMENT/COST-SHARE (SEE POS OPTION) (SEE NOTE 4) TRICARE BENEFITS TRICARE PRIME PROGRAM (SEE NOTE 1) ADFMS RETIREES, THEIR FAMILY TRICARE MEMBERS, & TRICARE EXTRA STANDARD TYPE OF SERVICE E1 - E4 E5 & ABOVE SURVIVORS PROGRAM PROGRAM $0 copayment. $0 cost-share. $0 cost-share. $0 copayment. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $0 copayment per visit. $12 copayment per visit (see Note 1). $12 copayment for visits (see Note 2). ADFMs: Cost-share--15% of the fee negotiated by contractor. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor. $25 copayment. ADFMs: Cost-share--$25. for ASC. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor. ADFMs: Cost-share--20% of the allowable charge (see Note 10). Retirees, their Family Members, & Survivors: Cost-share--25% of the allowable charge. ADFMs: $25. Retirees, their Family Members, & Survivors: Lesser of 25% of group rate or 25% of billed charge. 5

32 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 3.0 OUTPATIENT SERVICES (CONTINUED) BENEFICIARY COPAYMENT/COST-SHARE (SEE POS OPTION) (SEE NOTE 4) TRICARE BENEFITS TRICARE PRIME PROGRAM (SEE NOTE 1) ADFMS RETIREES, THEIR FAMILY MEMBERS, & TRICARE EXTRA TYPE OF SERVICE E1 - E4 E5 & ABOVE SURVIVORS PROGRAM $0 copayment per visit. $0 copayment per visit. N/A ADFMs: $0 cost-share. IMMUNIZATIONS Immunizations required for active duty family members whose sponsors have permanent change of station orders to overseas locations. Note: Immunizations provided in accordance with TPM, Chapter 7, Sections 2.1, 2.2, and 2.5 are also covered as a clinical preventive service (see below). EYE EXAMINATIONS (See Note 5) One routine examination per year for family members of active duty sponsors. Note: Routine eye examinations once every two years provided in accordance with TPM, Chapter 7, Section 2.2, are covered as a clinical preventive service (see below) for Prime enrollees. CLINICAL PREVENTIVE SERVICES Includes those services listed in the TPM, Chapter 7, Sections 2.1, 2.2, and 2.5. $0 copayment per visit. $0 copayment. $0 copayment per visit. $0 copayment. N/A Retirees, their Family Members, & Survivors: N/A. ADFMs: Cost-share--15% of the fee negotiated by the contractor. Retirees, their Family Members, & Survivors: N/A. $0 copayment. ADFMs: Cost-share--15% of the fee negotiated by contractor. Retirees, their Family Members, & Survivors: Cost-share--20% of the fee negotiated by the contractor (see Note 1). TRICARE STANDARD PROGRAM ADFMs: $0 cost-share. Retirees, their Family Members, & Survivors: N/A. ADFMs: Cost-share--20% of the allowable charge. Retirees, their Family Members, & Survivors: N/A. ADFMs: Cost-share--20% of the allowable charge. Retirees, their Family Members, & Survivors: Cost-share--25% of the allowable charge (see Note 1). 6

33 TRICARE Reimbursement Manual M, April 1, 2015 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 4.0 INPATIENT SERVICES TRICARE BENEFITS TYPE OF SERVICE HOSPITALIZATION Semiprivate room (and when medically necessary, special care units), general nursing, and hospital service. Includes inpatient physician and their surgical services, meals including special diets, drugs and medications while an inpatient, operating and recovery room, anesthesia, laboratory tests, x-ray and other radiology services, necessary medical supplies and appliances, blood and blood products. MATERNITY Hospital and professional services (prenatal, delivery, postnatal). NEWBORN/ADOPTEE CARE (See Note 6) Hospital and professional services. BENEFICIARY COPAYMENT/COST-SHARE (SEE NOTE 4) TRICARE PRIME PROGRAM RETIREES, THEIR FAMILY MEMBERS, ADFMs & SURVIVORS $0 copayment per visit. $0 copayment. No separate copayment/ cost-share for separately billed professional charges. $11 per diem charge ($25 minimum charge per admission). No separate copayment/costshare for separately billed professional charges. Same newborn date of birth and date of admission: $11 per day ($25 minimum charge) applies to the fourth and subsequent days of the newborn s inpatient stay. TRICARE EXTRA PROGRAM ADFMs: Per diem charge ($25 minimum charge per admission). No separate cost-share for separately billed professional charges. Retirees, their Family Members, & Survivors: $250 per diem copayment or 25% costshare of total charges (based on the fee schedule negotiated by the contractor), whichever is less, for institutional services, whichever is less, plus 20% cost-share of separately billed professional charges (based on the fee schedule negotiated by the contractor). ADFMs: $0 as newborn is deemed enrolled in Prime for up to 60 days for cost-sharing purposes. No separate cost-share for separately billed professional charges. TRICARE STANDARD PROGRAM ADFMs: Per diem charge ($25 minimum charge per admission). No separate cost-share for separately billed professional charges. Retirees, their Family Members, & Survivors: DRG per diem copayment or 25% cost-share of billed charges for institutional services, whichever is less, plus 25% cost-share of allowable for separately billed professional charges. ADFMs: $0 as newborn is deemed enrolled in Prime for up to 60 days for cost-sharing purposes. No separate cost-share for separately billed professional charges. 7

34 TRICARE Reimbursement Manual M, April 1, 2015 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 4.0 INPATIENT SERVICES (CONTINUED) TRICARE BENEFITS TYPE OF SERVICE BENEFICIARY COPAYMENT/COST-SHARE (SEE NOTE 4) TRICARE PRIME PROGRAM RETIREES, THEIR FAMILY MEMBERS, ADFMs & SURVIVORS TRICARE EXTRA PROGRAM Retirees, their Family Members, & Survivors: Same newborn date of birth and date of admission: Unless the newborn is deemed enrolled in Prime, the cost-share will be the lower of the number of hospital days minus three multiplied by $250 OR 25% of TRICARE contractor negotiated charges for institutional services, plus 20% cost-share of separately billed contractor negotiated professional charges. TRICARE STANDARD PROGRAM Retirees, their Family Members, & Survivors: DRG Hospital: Same newborn date of birth and date of admission: Unless the newborn is deemed enrolled in Prime, the cost-share will be the lower of the number of hospital days minus three multiplied by DRG per diem copayment OR 25% of billed charges for institutional services, plus 25% cost-share of allowable separately billed professional charges. Different newborn date of birth and date of admission: $11 per day ($25 minimum charge) applies to all days of the newborn s inpatient stay. Different newborn date of birth and date of admission: Unless the newborn is deemed enrolled in Prime, the cost-share will be the lower of hospital days for the newborn multiplied by $250 or 25% of TRICARE contractor negotiated charges for institutional services, plus 20% costshare of separately billed contractor negotiated professional charges. Different newborn date of birth and date of admission: Unless the newborn is deemed enrolled in Prime, the cost-share will be the lower of hospital days for the newborn multiplied by DRG per diem copayment OR 25% of billed charges for institutional services, plus 25% cost-share of allowable separately billed professional charges. 8

35 TRICARE Reimbursement Manual M, April 1, 2015 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 4.0 INPATIENT SERVICES (CONTINUED) TRICARE BENEFITS TYPE OF SERVICE SKILLED NURSING FACILITY (SNF) CARE Same benefit as Medicare except that there is no limitation to the number of days of coverage. Benefit includes semiprivate room, regular nursing services, meals including special diets, physical, occupational and speech therapy, drugs furnished by the facility, necessary medical supplies, and appliances. BENEFICIARY COPAYMENT/COST-SHARE (SEE NOTE 4) TRICARE PRIME PROGRAM RETIREES, THEIR FAMILY MEMBERS, ADFMs & SURVIVORS $0 copayment per visit. $11 per diem charge ($25 minimum charge per admission). No separate copayment/costshare for separately billed professional charges. TRICARE EXTRA PROGRAM ADFMs: Per diem charge ($25 minimum charge per admission). Retirees, their Family Members, & Survivors: $250 per diem copayment or 20% costshare of total charges (based on the fee schedule negotiated by the contractor), whichever is less, for institutional services, plus 20% cost-share of separately billed professional charges (based on the fee schedule negotiated by the contractor). TRICARE STANDARD PROGRAM DRG Exempt Hospital: Unless the newborn is deemed enrolled in Prime, the cost-share will be 25% of allowed charges for institutional services, plus 25% cost-share of allowable separately billed professional charges. ADFMs: Per diem charge ($25 minimum charge per admission). Retirees, their Family Members, & Survivors: 25% cost-share of allowed charges for institutional services, plus 25% cost-share of allowable for separately billed professional charges. 9

36 TRICARE Reimbursement Manual M, April 1, 2015 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 4.0 INPATIENT SERVICES (CONTINUED) TRICARE BENEFITS TYPE OF SERVICE FOR MENTAL HEALTH TREATMENT Including residential treatment for children and adolescents (See Note 8). INPATIENT SUBSTANCE USE TREATMENT BENEFICIARY COPAYMENT/COST-SHARE (SEE NOTE 4) TRICARE PRIME PROGRAM ADFMs $0 copayment per visit. RETIREES, THEIR FAMILY MEMBERS, & SURVIVORS $11 per diem charge ($25 minimum charge per admission). TRICARE EXTRA PROGRAM ADFMs: Per diem charge ($25 minimum charge per admission). No separate cost-share for separately billed professional charges. TRICARE STANDARD PROGRAM ADFMs: $20 per diem charge ($25 minimum charge per admission). No separate cost-share for separately billed professional charges. No separate copayment/costshare for separately billed professional charges. See Note 9. Retirees, their Family Members, & Survivors: Cost-share--20% of total charges (based on the fee schedule negotiated by the contractor) for institutional services, plus 20% cost-share of separately billed professional charges (based on the fee schedule negotiated by the contractor). Retirees, their Family Members, & Survivors: Inpatient High Volume Hospital: Cost-share--25% hospital specific per diem. Inpatient Low Volume Hospital: Lower of fixed daily amount or 25% hospital billed charges. RTC: Cost-share--25% of the TRICARE allowed amount. 10

37 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January 1, 2018; And For TRICARE Services Received On Or After January 1, 2018 By TRICARE For Life (TFL) Beneficiaries 5.0 POINT OF SERVICE (POS) TRICARE BENEFITS TYPE OF SERVICE A Prime enrollee may receive services under the Point of Service option by self-referring for non-emergency care. Refer to Section 5, for policy on the POS option. BENEFICIARY COPAYMENT/COST-SHARE (SEE NOTE 4) TRICARE PRIME PROGRAM ADFMs Outpatient Deductible: $ individual $ family. Inpatient and Outpatient Cost-Share: 50% of the allowed charges (see Note 7). RETIREES, THEIR FAMILY MEMBERS, & SURVIVORS Outpatient Deductible: $ individual $ family. Inpatient and Outpatient Cost-Share: 50% of the allowed charges (see Note 7). TRICARE EXTRA PROGRAM POS option does NOT apply to TRICARE Extra beneficiaries. TRICARE STANDARD PROGRAM POS option does NOT apply to TRICARE Standard beneficiaries. Refer to Sections 2 and 3 for information on catastrophic loss protection. Note 1: As indicated in the TPM, Chapter 7, Section 2.2, there are no copayments associated with covered preventive services for TRICARE Prime beneficiaries. Effective for dates of service on or after October 14, 2008, cost-shares are eliminated for certain preventive services for TRICARE Standard and Extra beneficiaries, as described in Section 1, paragraphs and Effective January 1, 2017, cost-shares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraphs and through Effective January 1, 2018, cost-shares are eliminated for the services listed in the TPM, Chapter 7, Section 2.1, paragraph Note 2: For services rendered prior to October 3, 2016, Prime retirees, their family members, and survivors are subject to a $25 copayment for individual visits and a $17 copayment for group visits. For services rendered on or after October 3, 2016, a $12 copayment per visit applies (the $12 copayment is applied per day of services for Partial Hospitalization Program (PHP) or IOP services). For methadone OTPs, cost-sharing is on a weekly basis (e.g., for Prime retirees, only one $12 cost-share will be assessed per week of OTP treatment). See Chapter 7, Section 5. Note 3: For dates of service on or after March 26, 1998, under TRICARE Prime, services defined as ancillary services in Section 1 require no copayment. Note 4: An eligible former spouse is responsible for payment of copayment/cost-sharing amounts identical to those required for beneficiaries other than family members of active duty members. Note 5: Eye examinations are covered under the TRICARE Prime Program s clinical preventive services. See the TPM, Chapter 7, Section 2.2. Note 6: The Director, TRICARE Regional Offices (TROs) and the Director of each TRICARE Area Office (TAO) shall be granted the authority to extend the deemed period up to 120 days, on a case-by-case or regional basis. 11

38 Chapter 2, Addendum A Benefits And Beneficiary Payments Under The TRICARE Program For Services Received Prior To January Note 7: TRICARE reimbursement will be limited to 50% of the billed/allowed charges. Note 8: For dates of service prior to October 3, 2016, PHPs are cost-shared as inpatient services, and the same cost-sharing requirements as those for inpatient admissions for mental health treatment apply. Note 9: For dates of service prior to October 3, 2016, Prime retirees, dependents, and survivors are subject to a $40 per diem charge, with no separate copayment/cost-share for separately billed professional charges. For dates of service prior to October 3, 2016, these cost-sharing requirements also apply to PHP. Note 10: For dates of service prior to October 3, 2016, TRICARE Standard ADFMs are subject to a $20 per diem charge ($25 minimum charge per admission). For dates of service prior to October 3, 2016, PHP care is cost-shared on an inpatient basis. The cost-share for PHP is 25% of the TRICARE allowed amount, plus 25% cost-share of allowable charges for separately billed professional charges. - END - 12

39 Chapter 2 TRICARE Reimbursement Manual M, April 1, 2015 Beneficiary Liability Addendum B Pharmacy Benefits Program - Cost-Shares Revision: PHARMACY PAYMENT MATRIX TRICARE Pharmacy (TPharm) Copayments/Cost-Shares In The United States (U.S.) (Including Puerto Rico, Guam, The U.S. Virgin Islands, American Samoa, and The Northern Marianna Islands) FORMULARY NON-FORMULARY PLACE OF SERVICE GENERIC (TIER 1) - END - BRAND NAME (TIER 2) (TIER 3) Military Treatment Facility (MTF)/ Enhanced Multi-Service Market (emsm) Pharmacy (up to a 90-day supply) $0 $0 Not Applicable TRICARE Mail Order Pharmacy (TMOP) (up to a 90-day supply) $0 $20 $49 TRICARE Retail Pharmacy Network (up to a 30-day supply) $10 $24 $50 Retail Non-Network Pharmacy (up to a 30-day supply) Note: Beneficiaries using nonnetwork pharmacies may have to pay the total amount of their prescription first and then file a claim to receive partial reimbursement. TRICARE Prime: 50% cost-share after Point of Service (POS) deductibles ($300 per person, $600 per family deductible) For those who are not enrolled in TRICARE Prime: $24 or 20% of total cost, whichever is greater, after annual deductible is met (E1-E4: $50/person; $100/family; all others, including retirees, $150/person, $300/family) TRICARE Prime: 50% cost-share after POS deductibles ($300 per person, $600 per family deductible) For those who are not enrolled in TRICARE Prime: $50 or 20% of total cost, whichever is greater, after annual deductible is met (E1-E4: $50/person; $100/family; all others, including retirees, $150/person, $300/family) Note: If medical necessity is established for a non-formulary drug, patients may qualify for the $24 copayment for up to a 30-day supply at the retail POS or a $20 copayment for a 90-day supply at the mail POS. Generic copayments apply to approved Over-the-Counter (OTC) medications at retail network pharmacies and TMOP. Approved vaccines will be available at participating network retail pharmacies at $0 copayment for beneficiaries eligible to use the TPharm benefit. Approved medications for smoking cessation will be available at the TMOP for up to a 60-day supply per fill, at $0 copayment. 1

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41 Example 2: TRICARE Reimbursement Manual M, April 1, 2015 Chapter 3, Section 4 Payment Reduction Claims Paid Under Mental Health Per Diem Payment Methodology (Includes RTCs, Mental Health Per Diem Hospitals, Partial Hospitalization Programs (PHPs), and Intensive Outpatient Programs (IOPs)) Step 1: Determine full per diem payment and the number of days subject to payment reduction. Billed Amount: $12, Daily per diem*: $ Number of authorized days: 25 days Allowable amount (per diem methodology): $10, Days without preauthorization subject to payment reduction: 9 days *See Chapter 7, Addendum A. Step 2: Multiply the daily per diem by the number of days without preauthorization and calculate the amount for payment reduction. $ x 9 $3, This is the target amount for calculation of reduction. x Multiply by 10% for calculation of 10% reduction. $ Amount of payment reduction. Step 3: Calculate the total Government payment. Total Government payment to the facility will be the allowable amount minus beneficiary cost-share (e.g., for a retiree s family member for high volume hospital, PHP, IOP, or RTC care, cost-share in this example is 25% of the allowable amount) less the amount of payment reduction as illustrated below: Allowable amount (per diem methodology): $10, Minus beneficiary cost-share (0.25 x $10,000): -2, $7, Less the amount of payment reduction: Total Government payment (in the absence of OHI): $7,

42 Example 3: TRICARE Reimbursement Manual M, April 1, 2015 Chapter 3, Section 4 Payment Reduction Claims Paid On Per-Service Basis Following is an example of an active duty family member claim for three visits for outpatient adjunctive dental care with the first visit without preauthorization. The payment reduction shall be applied to the first visit only (i.e., the visit without the preauthorization). Step 1: Determine the allowable charge for the visit/service that was provided without obtaining the preauthorization. Billed Charge: $75.00 Allowable Charge (CMAC): $60.00 Step 2: Calculate the amount of payment reduction. $ Target amount for calculation of reduction. x Multiply by 10% for calculation of 10% reduction. $ Amount of payment reduction. Step 3: Calculate the Government payment for the visit/service that was provided without obtaining preauthorization. The Government payment to the provider will be the allowable charge minus beneficiary cost-share (e.g., for an active duty family member, the outpatient cost-share in this example is (20% of the allowable charge) less the amount of payment reduction as illustrated below: Allowable charge (CMAC): $60.00 Minus beneficiary cost-share (0.20 x $60): $48.00 Less the amount of payment reduction: Government payment for the visit/service (in the absence of OHI): $42.00 In this example, payment reduction shall not apply to the second and third visits as preauthorization was obtained for those visits. Normal rules will apply for calculation of the Government payment for the second and third visits. - END - 4

43 Chapter 4, Section 3 Coordination Of Benefits (COB) Example 9: The bill for inpatient mental health care for a retiree is $32, This includes $28, for daily room charges for 75 consecutive days (at $375.00/day). The provider is a higher volume hospital with a TRICARE per diem rate of $330, and it submitted the claim on a participating basis along with an EOB from the double coverage plan indicating it had paid $23, The OHI payment consisted of $19, (at $264.00/day for all 75 days) and $3,348.00, which is 80% of the ancillary charges of $4, The provider submitted a claim for $9, Step 1: $ 28, Allowable amount ($330/day for all 75 days plus $4,185 for ancillary charges) x 75% - TRICARE portion for retirees $ 21, Amount payable by TRICARE in the absence of other coverage Step 2: $ 28, Allowable amount - 23, OHI payments $ 5, Step 3: $ 32, Billed charges - 23, OHI payments $ 9, Step 4: $ 32, Billed charges x 75% - TRICARE portion for retirees $4, Step 5: TRICARE pays $5, since this is the lowest amount in Steps 1 through 4. The beneficiary owes nothing for the admission, since the provider is participating and has received the entire TRICARE maximum allowed amount. Example 10: The billed charge for inpatient care for a retiree is $ per day. The claim is subject to the TRICARE Inpatient Mental Health Per Diem Payment System, and the regional per diem is $ per day. (The retiree per diem cost-share under the per diem-based payment system is $ ) The double coverage plan paid $ The provider submits a claim for $ along with an EOB from the double coverage plan. Step 1: $ Per diem amount Cost-share $ Amount payable by TRICARE in the absence of other coverage Step 2: $ Per diem amount OHI payment $

44 Chapter 4, Section 3 Coordination Of Benefits (COB) Step 3: $ Billed charge OHI payment $ Step 4: $ Billed charges Cost-share $ Step 5: TRICARE pays $275, since it is the lowest amount of Steps 1 through 4. The beneficiary owes nothing, since the full per diem amount has been paid. Example 11: The billed charge for inpatient care for a retiree is $ per day. The claim is subject to the TRICARE Inpatient Mental Health Per Diem Payment System, and the regional per diem amount is $ per day. (The retiree per diem cost-share under the per diem payment system is $ ) The double coverage plan paid $ The provider submits a claim to the contractor along with an EOB from the double coverage plan. Step 1: $ Per diem Cost-share (25% of $300.00) $ Amount payable by TRICARE in the absence of other coverage Step 2: $ Per diem OHI payment $ Unpaid balance Step 3: $ Billed charge OHI payment $ 0.00 Step 4: $ Billed charge Cost-share $ Step 5: TRICARE pays nothing since the full billed charge has been paid to the provider. The beneficiary owes nothing. 12

45 Diagnosis Related Groups (DRGs) Chapter 6 Section 10 Hospital Reimbursement - TRICARE Diagnosis Related Group (DRG)-Based Payment System (Charges To Beneficiaries) Issue Date: October 8, 1988 Authority: 32 CFR (a)(1) Revision: 1.0 ISSUE What charges are the responsibility of the beneficiary? 2.0 POLICY 2.1 Cost-Shares Reference Chapter 2, Section Services or Supplies Specifically Excluded from Payment Non-Covered DRGs The contractor must ensure that TRICARE coverage requirements are met Services and Supplies Not Related to the Treatment Regimen Charges for services and supplies specifically excluded from TRICARE payment and which are not related to the treatment regimen (e.g., private room accommodation differential if the private room was not medically necessary and was requested by the beneficiary, or television/telephone charges) will be the responsibility of the beneficiary. The contractor is not to reduce the DRG-based allowance for these items, since the DRG-based payment is the same whether or not the items are provided. However, the hospital is permitted to bill the beneficiary for the items. 2.3 Hospital Days Beyond that Deemed Medically Necessary Under the TRICARE DRG-based payment system, the DRG amount is considered full payment for any hospital stay, regardless of length. If any days of a stay are subsequently determined to be medically unnecessary, the following actions are to be taken: Medically unnecessary days which are the hospital s responsibility. If it is determined that certain days of care were medically unnecessary and the days are the fault of the hospital--that is, the hospital/physician made no attempt to discharge the patient--the unnecessary days shall be included 1

46 Chapter 6, Section 10 Hospital Reimbursement - TRICARE Diagnosis Related Group (DRG)-Based Payment System (Charges To Beneficiaries) in the DRG-based amount, and no additional payment can be made. Nor is the contractor to recoup any amount. However, if elimination of the unnecessary days causes the stay to become a short-stay outlier, the contractor is to recoup any excess amounts over the appropriate short-stay outlier payment Medically unnecessary days which are the beneficiary s responsibility. If medically unnecessary days of care were provided at the insistence of the beneficiary (or sponsor)--that is, the hospital/physician attempted to discharge the beneficiary, but the beneficiary insisted on remaining in the hospital--any charges for those days will be the responsibility of the beneficiary. This applies to all such days, and to the difference between the normal DRG-based payment and the short-stay outlier payment if it is determined the stay should have been a short-stay outlier. - END - 2

47 Chapter 7 Mental Health Revision: Section/Addendum Subject/Addendum Title 1 Hospital Reimbursement - TRICARE Inpatient Mental Health Per Diem Payment System 2 Partial Hospitalization Program (PHP) And Intensive Outpatient Program (IOP) Reimbursement: Mental Health And Substance Use Disorder (SUD) Treatment 3 Inpatient/Residential Substance Use Disorder Rehabilitation Facilities (SUDRFs) Reimbursement 4 Psychiatric Residential Treatment Center (RTC) Reimbursement 5 Opioid Treatment Programs (OTPs) Reimbursement A B Table Of Regional Specific Rates For Psychiatric Hospitals And Units With Low TRICARE Volume - FY FY 2017 Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Figure 7.B-1 TMA Form 771 1

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49 Chapter 7, Section 1 Hospital Reimbursement - TRICARE Inpatient Mental Health Per Diem Payment System CAP PER DIEM AMOUNT FOR SERVICES RENDERED 1,040 October 1, 2013 through September 30, ,070 October 1, 2014 through September 30, ,096 October 1, 2015 through September 30, ,126 October 1, 2016 through September 30, Request for Recalculation of Per Diem Amount Any psychiatric hospital or unit which has determined DHA calculated a hospital-specific per diem which differs by more than five ($5) dollars from that calculated by the hospital or unit, may apply to the appropriate contractor for a recalculation unless the calculated rate has exceeded the cap amount described in the previous paragraph. The recalculation does not constitute an appeal, as the per diem rates are not appealable. Unless the provider can prove that the contractor calculation is incorrect, the contractor s calculation is final. The burden of proof shall be on the hospital or unit. 3.4 Regional Per Diems for Lower Volume Psychiatric Hospitals and Units Regional Per Diem Hospitals and units with a lower volume of TRICARE patients shall be paid on the basis of a regional per diem amount, adjusted for area wages and IDME. Base period regional per diems shall be calculated based upon all TRICARE/ lower volume hospitals and units claims paid (processed) during the base period. Each regional per diem amount shall be the quotient of all covered charges (without consideration of other health insurance payments) divided by all covered days of care, reported on all TRICARE claims from lower volume hospitals and units in the region paid (processed) during the base period, after having been standardized for IDME costs, and area wage indexes. Direct medical education costs shall be subtracted from the calculation. The regions shall be the same as the federal census regions. See Addendum A, for the regional per diems used for hospitals and units with a lower volume of TRICARE patients Adjustments to Regional Per Diem Rates Two adjustments shall be made to the regional per diem rates when applicable Wage Portion or Labor-Related Share The wage portion or labor-related share is adjusted by the DRG-based area wage adjustment. See Addendum A, for area wage adjustment rates. The calculated adjusted regional per diem is not to be rounded up to the next whole dollar IDME Adjustment The IDME adjustment factors shall be calculated for teaching hospitals in the same manner as in the DRG-based payment system and applied to the applicable regional per diem rate for each day of the admission. For an exempt psychiatric unit in a teaching hospital, there should be a separate IDME adjustment factor for the unit (separate from the rest of the hospital) when medical education applies to the unit. 3

50 Chapter 7, Section 1 Hospital Reimbursement - TRICARE Inpatient Mental Health Per Diem Payment System Reimbursement of Direct Medical Education Costs In addition to payments made to lower volume hospitals and units, the Government shall annually reimburse hospitals for actual direct medical education costs associated with TRICARE beneficiaries. This reimbursement shall be done pursuant to the same procedures as are applicable to the DRG-based payment system. Note: No additional payment is to be made for capital costs. Such costs have been covered in the regional per diem rates which are based on charges. 3.5 Base Period and Update Factors Hospital-Specific Per Diem Calculated Using Date of Payment The base period for calculating the hospital-specific and regional per diems, as described above is federal FY The base period calculations shall be based on actual claims paid (processed) during the period July 1, 2017 through May 31, 2018, trended forward to September 30, 2018, using a factor of 1.1% Hospital-Specific Per Diem Calculated Using Date of Discharge Upon application by a higher volume hospital or unit to the appropriate contractor, the hospital or unit may have its hospital-specific base period calculations based on TRICARE claims with a date of discharge (rather than date of payment) between July 1, 2017 through May 31, 2018, if it has generally experienced unusual delays in TRICARE 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 with the revised per diem not exceeding the cap amount. For this purpose, the unusual delays mean that the hospital s or unit s average time period between date of discharge and date of payment is more than two standard deviations (204 days) longer than the national average (94 days). The burden of proof shall be on the hospital Updating Hospital-Specific and Regional Per Diems Per diems shall be updated by the Medicare Inpatient Prospective Payment System (IPPS) update factor. Hospitals and units with hospital-specific rates shall be notified of their respective rates prior to the beginning of each federal fiscal year by the contractors. New hospitals shall be notified by the contractor 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 prior to the start of that fiscal year. Medicare has determined a market basket and subsequent update factor specific to psychiatric facilities. Beginning in Fiscal Year (FY) 2017, the update factor shall be published on the TRICARE web site at prior to the start of the fiscal year. The rates will no longer be published in the Federal Register. FISCAL YEAR UPDATE FACTOR % % % 4

51 Chapter 7, Section 1 Hospital Reimbursement - TRICARE Inpatient Mental Health Per Diem Payment System FISCAL YEAR UPDATE FACTOR % 3.6 Higher Volume Hospitals and Units Higher Volume of TRICARE Mental Health Discharges and Hospital-Specific Per Diem Calculation In any federal fiscal year in which a hospital or unit not previously classified as a higher volume hospital or unit has 25 or more TRICARE mental health discharges, that hospital or unit shall be considered to be a higher volume hospital or unit during the next federal fiscal year and all subsequent fiscal years. All other hospitals and units covered by the TRICARE inpatient mental health per diem payment system shall be considered lower volume hospitals and units The hospital-specific per diem amount shall be calculated in accordance with the above provisions, except that the base period average daily charge shall be deemed to be the hospital s or unit s average daily charge in the year in which the hospital or unit had 25 or more TRICARE mental health discharges, adjusted by the percentage change in average daily charges for all higher volume hospitals and units between the year in which the hospital or unit had 25 or more TRICARE mental health discharges and the base period. The base period amount, however, cannot exceed the cap described in this section. Once a statistically valid rate is established based on a year in which the hospital or unit had at least 25 mental health discharges, it becomes the basis for all future rates. The number of mental health discharges thereafter have no bearing on the hospital-specific per diem The TRICARE contractor shall be requested at least annually to submit to the DHA Office of Medical Benefits and Reimbursement Section (MB&RS) a listing of high volume providers Percent of change and Deflator Factor (DF). FOR 12 MONTHS ENDED: PERCENT OF CHANGE DF September 30, % September 30, % September 30, % September 30, % New Hospitals and Units The inpatient mental health per diem payment system has a special retrospective payment provision for new hospitals and units. A new hospital is one which meets the Medicare requirements under Tax Equity and Fiscal Responsibility Act (TEFRA) rules. Such hospitals qualify for the Medicare exemption from the rate of increase ceiling applicable to new hospitals which are DRG-exempt psychiatric hospitals. Any new hospital or unit that becomes a higher volume hospital or unit may additionally, upon application to the TRICARE contractor, receive a retrospective adjustment. The retrospective adjustment shall be calculated so that the hospital or unit receives the same Government share payments it would have received had it been designated a higher volume hospital or unit for the federal fiscal year in which it first had 25 or more TRICARE mental health discharges. This provision also 5

52 Chapter 7, Section 1 Hospital Reimbursement - TRICARE Inpatient Mental Health Per Diem Payment System applies to the preceding fiscal year (if it had any TRICARE patients during the preceding fiscal year). A retrospective payment shall be required if payments were originally made at a lower regional per diem. This payment will be the result of an adjustment based upon each claim processed during the retrospective period for which an adjustment is needed, and will be subject to the claims processing standards By definition, a new hospital is an institution that has operated as the type of facility (or the equivalent thereof) for which it is certified in the Medicare and or TRICARE programs under the present and previous ownership for less than three full years. A change in ownership in itself does not constitute a new hospital Such new hospitals must agree not to bill beneficiaries for any additional cost-share beyond that determined initially based on the regional rate Request for a Review of Higher or Lower Volume Classification Any hospital or unit which DHA improperly fails to classify as a higher or lower volume hospital or unit may apply to the appropriate contractor for such a classification. The hospital or unit shall have the burden of proof. 3.7 Payment for Hospital Based Professional Services Lower Volume Hospitals and Units Lower volume hospitals and units may not bill separately for hospital based professional services; payment for those services is included in the per diems Higher Volume Hospitals and Units Higher volume hospitals and units, whether they billed separately for hospital based professional services or included those services in the hospital s or unit s charges, shall continue the practice in effect during the 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 the appropriate contractor notice of its request to change its billing procedures for hospital-based professional services. 3.8 Leave Days No Payment The Government shall not pay (including holding charges) for days where the patient is absent on leave (including therapeutic absences) from the specialty psychiatric hospital or unit. The hospital must identify these days when claiming reimbursement Does Not Constitute a Discharge The Government shall not count a patient s departure for a leave of absence as a discharge in determining whether a facility should be classified as a higher volume hospital. 6

53 Mental Health Chapter 7 Section 2 Partial Hospitalization Program (PHP) And Intensive Outpatient Program (IOP) Reimbursement: Mental Health And Substance Use Disorder (SUD) Treatment Issue Date: July 14, 1993 Authority: 32 CFR (a)(2)(ix) Revision: 1.0 APPLICABILITY 1.1 This policy is mandatory for reimbursement of services provided by either network or nonnetwork providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 1.2 Reimbursement of PHPs prior to implementation of the reasonable cost method for Critical Access Hospitals (CAHs) and implementation of Outpatient Prospective Payment System (OPPS), and thereafter, freestanding PHPs and other providers who are exempt from the TRICARE OPPS and provider PHP services. 1.3 Effective for dates of service on or after October 3, 2016, this reimbursement system applies to IOPs for mental health and SUD treatment, authorized under 32 CFR 199.6(b)(4)(xviii). 2.0 POLICY 2.1 Per Diem Payment For PHPs Or IOPs PHPs authorized and provided under 32 CFR 199.4(b)(10) and provided by psychiatric PHPs authorized under 32 CFR 199.6(b)(4)(xii) are reimbursed on the basis of prospectively determined, allinclusive per diem rates. The per diem payment amount must be accepted as payment in full for all PHP services provided. Effective on May 1, 2009 (implementation of OPPS), hospital-based PHP services are reimbursed under the hospital OPPS as described in Chapter 13, Section 2, paragraph 3.7. Effective for dates of service on or after October 3, 2016, per diem payment for IOP services provided by PHPs or IOPs authorized under 32 CFR 199.4(b)(9) and (b)(10), and provided by PHPs and IOPs authorized under 32 CFR 199.6(b)(4)(xii) and (b)(4)(xviii) are reimbursed on the basis of prospectively-determined, allinclusive per diem rates. The per diem payment amount must be accepted as payment in full for all PHP or IOP services provided. The following services and supplies are included in the per diem rate approved for authorized PHPs and IOPs and are not covered even if separately billed by an individual provider. 1

54 Chapter 7, Section 2 Partial Hospitalization Program (PHP) And Intensive Outpatient Program (IOP) Reimbursement: Mental Health And Substance Use Disorder (SUD) Treatment Board. Includes use of the partial hospital facilities such as food service, supervised therapeutically constructed recreational and social activities, etc Patient assessment. Includes the assessment of each individual accepted by the facility, and must, at a minimum, consist of a physical examination; psychiatric examination; psychological assessment; assessment of physiological, biological and cognitive processes; developmental assessment; family history and assessment; social history and assessment; educational or vocational history and assessment; environmental assessment; and recreational/activities assessment. Assessments conducted within 30 days prior to admission to a partial program may be used if approved and deemed adequate to permit treatment planning by the PHP Psychological testing and assessment Treatment services. All services including routine nursing services, group therapy, supplies, equipment and space necessary to fulfill the requirements of each patient s individualized diagnosis and treatment plan (with the exception of the psychotherapy as indicated in paragraph 2.2.1). All mental health services must be provided by an authorized individual professional provider of mental health services. [Exception: PHPs or IOPs that employ individuals with master s or doctoral level degrees in a mental health discipline who do not meet the licensure, certification and experience requirements for a qualified mental health provider but are actively working toward licensure or certification, may provide services within the all-inclusive per diem rate but the individual must work under the clinical supervision of a fully qualified mental health provider employed by the PHP or IOP.] Ancillary therapies. Includes art, music, dance, occupational, and other such therapies Overhead and any other services for which the customary practice among similar providers is included as part of the institutional charges. 2.2 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 individual professional provider: Psychotherapy Sessions Professional services provided by an authorized individual professional provider (who is not employed by or under contract with the PHP or IOP) for purposes of providing clinical patient care to a patient in the PHP or IOP may be cost-shared when billed by the individual professional provider. Any obligation of a professional provider to provide services through employment or contract in a facility or distinct program of a facility would preclude that professional provider from receiving separate TRICARE reimbursement on a fee-for-service basis to the extent that those services are covered by the employment or contract arrangement. Psychotherapy services provided outside of the employment/contract arrangement can be reimbursed separately from the PHPs or IOPs per diem. Note: For dates of service prior to October 3, 2016, 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 in any combination of individual and family 2

55 Chapter 7, Section 2 Partial Hospitalization Program (PHP) And Intensive Outpatient Program (IOP) Reimbursement: Mental Health And Substance Use Disorder (SUD) Treatment therapy. For dates of service prior to October 3, 2016, five sessions per week is an absolute limit, and additional sessions are not covered. Note: Group therapy is strictly included in the per diem and cannot be paid separately even if billed by an individual professional provider Primary/Attending Provider When a patient is approved for admission to a PHP or IOP, the primary or attending provider (if not contracted or employed by the partial program) may provide psychotherapy only when the care is part of the treatment environment which is the therapeutic partial program. That is why the patient is there--because that level of care and that program have been determined as medically necessary. The therapy must be adapted toward the events and interactions outlined in the treatment plan and be part of the overall partial treatment plan. Involvement as the primary or attending is allowed and covered only if he is part of the coherent and specific plan of treatment arranged in the partial setting. The treatment program must be under the general direction of the psychiatrist employed by the program to ensure medication and physical needs of the patients are met and the therapist must be part of the treatment team and treatment plan. An attending provider must come to the treatment plan meetings and his/her care must be coordinated with the treatment team and as part of the treatment plan. Care given independent of this is not covered Non-Mental Health Related Medical Services Those services not normally included in the evaluation and assessment of a partial hospitalization patient and not related to care in the PHP or IOP. These medical services are those services medically necessary to treat a broken leg, appendicitis, heart attack, etc., which may necessitate emergency transport to a nearby hospital for medical attention. Ambulance services may be cost-shared when billed for by an authorized provider if determined medically necessary for emergency transport. 2.3 Per Diem Rate For any full-day PHP (minimum of six hours), the maximum per diem payment amount is 40% of the average inpatient per diem amount per case paid to both high and low volume psychiatric hospitals and units established under the mental health per diem reimbursement system. The rates shall be updated to the current year using the same factors as used under the TRICARE mental health per diem reimbursement system A PHP of less than six hours (with a minimum of three hours) will be paid a per diem rate of 75% of the rate for full-day PHP For dates of services on or after October 3, 2016, IOP services, lasting less than six hours, with a minimum of two hours, shall be reimbursed a per diem rate of 75% of the rate for full-day PHP. Note: PHPs that provide services that are less than six hours, with a minimum of two hours, are reimbursed in accordance with the provisions of paragraph

56 Chapter 7, Section 2 Partial Hospitalization Program (PHP) And Intensive Outpatient Program (IOP) Reimbursement: Mental Health And Substance Use Disorder (SUD) Treatment TRICARE will not fund the cost of educational services separately from the per diem rate. The hours devoted to education do not count toward the therapeutic half- or full-day program. See the DHA web site at for the current maximum rate limits which are to be used as is for PHP and IOP care. 2.4 Other Requirements No payment is due for leave days, for days in which treatment is not provided, for days in which the patient does not keep an appointment, or for days in which the duration of the program services was less than three hours. 2.5 CAHs Effective December 1, 2009, PHPs in CAHs shall be reimbursed under the reasonable cost method, (see Chapter 15, Section 1). 2.6 IOPs Prior To October 3, 2016 For dates of service prior to October 3, 2016, PHPs may provide services they call Intensive Outpatient Program, or IOP. PHPs may provide partial hospitalization services, also referred to as IOP, provided less than five days per week, but at least three hours per day but less than six hours per day. Freestanding PHPs providing IOP services may submit reimbursement for Healthcare Common Procedure Coding System (HCPCS) codes S9480 or H0015 to represent these services; the contractor shall reimburse the provider the half-day PHP rate (i.e., three to five hours), in accordance with this section. See the TRICARE Policy Manual (TPM), Chapter 7, Sections 3.4 and 3.5; and Chapter 13, Section 2, paragraph for reimbursement in hospital-based PHPs. 2.7 Cost-Sharing For dates of service prior to October 3, 2016, cost-sharing for PHP services is made on an inpatient basis. For dates of service on or after October 3, 2016, outpatient cost-sharing is applied to PHP and IOP services. See Chapter 2, Addendum A. - END - 4

57 Mental Health Chapter 7 Section 3 Inpatient/Residential Substance Use Disorder Rehabilitation Facilities (SUDRFs) Reimbursement Issue Date: June 26, 1995 Authority: 32 CFR (a)(1)(ii)(E) and (a)(2)(ix) Revision: 1.0 APPLICABILITY 1.1 This policy is mandatory for reimbursement of services provided by either network or nonnetwork providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 1.2 The following reimbursement methodology will be used for payment of all SUDRFs prior to implementation of the reasonable cost method for Critical Access Hospitals (CAHs) and implementation of Outpatient Prospective Payment System (OPPS). Thereafter, this methodology will only be used in the reimbursement of freestanding SUDRFs and other providers who are exempt from the TRICARE OPPS and provide SUDRF services. 2.0 ISSUE Reimbursement of SUDRFs. This includes reimbursement for both inpatient and residential treatment of Substance Use Disorder (SUD) rehabilitation care. 3.0 POLICY 3.1 Inpatient/Residential SUDRFs Admissions to authorized SUDRFs are subject to the Diagnosis Related Group (DRG)-based payment system. 3.2 Partial Hospitalization For The Treatment Of SUDs SUD rehabilitation partial hospitalization services are reimbursed on the basis of prospectively determined all-inclusive per diem rates. The per diem payment amount must be accepted as payment in full for all institutional services provided, including board, routine nursing services, ancillary services (includes art, music, dance, occupational and other such therapies), psychological testing and assessments, overhead and any other services for the customary practice among similar providers is included as part of the institutional charges. 1

58 Chapter 7, Section 3 Inpatient/Residential Substance Use Disorder Rehabilitation Facilities (SUDRFs) Reimbursement SUD PHP and IOP services shall be reimbursed in accordance with Section 2, paragraph Outpatient professional services shall be reimbursed using the appropriate Healthcare Common Procedure Coding System (HCPCS) code or Current Procedural Terminology (CPT) code. Payment is the lesser of the billed charge or the CHAMPUS Maximum Allowable Charge (CMAC). 3.4 Family therapy provided on an inpatient or outpatient basis shall be reimbursed under the CMAC for the procedure code(s) billed. 3.5 Cost-Sharing For date of service prior to October 3, 2016, the cost-share for Active Duty Dependents (ADDs) for inpatient SUD services is $20.00 per day for each day of the inpatient admission. The $20.00 cost-share amount also applies to SUD rehabilitation care provided in a partial hospitalization setting. The inpatient cost-share applies to the associated services billed separately by the individual professional providers. For retirees and their dependents, the cost-share is 25% of the allowed amount. Since inpatient cost-sharing is being applied, no deductible is to be taken for partial hospitalization regardless of sponsor status. The cost-share for ADDs is to be taken from the partial hospitalization facility claim For dates of service on or after October 3, 2016, see Chapter 2, Addendum A for costsharing requirements. - END - 2

59 Mental Health Chapter 7 Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement Issue Date: August 26, 1985 Authority: 32 CFR 199.4(b)(4) and 32 CFR (f) Revision: 1.0 APPLICABILITY This policy is mandatory for reimbursement of services provided by either network or nonnetwork providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 2.0 ISSUE How are psychiatric RTCs to be reimbursed under TRICARE? 3.0 POLICY 3.1 Rate Structure: Facility Rates and Cap Amount The rate is the per diem rate authorized for all mental health services rendered to a patient and the patient s family as part of the total treatment plan submitted by an approved RTC, and approved by the contractor Individual Facility Rates For RTCs new to the program, one of the following two alternative methods will be used in determining their individual rates: The all-inclusive per diem rate for RTCs operating or participating in the program during the base period of July 1, 1987, through June 30, 1988, will be the lowest of the following conditions: The rate paid to the RTC for all-inclusive services as of June 30, 1988, adjusted to include an increase reflecting appropriate annual CPI-U (Consumer Price Index-Urban) update factors up through Fiscal Year (FY) 1997, and Medicare update factors for fiscal years after FY 1997; or 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 appropriate annual CPI-U update factors up through FY 1997, and Medicare update factors for fiscal years after FY 1997; 1

60 or TRICARE Reimbursement Manual M, April 1, 2015 Chapter 7, Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement The RTC cap amount 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 following conditions: 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 adjusted by appropriate annual CPI-U inflation factors up through FY 1997, and Medicare update factors for fiscal years after FY 1997; or The RTC cap amount. Note: 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. However, no retroactive adjustments will be made if the recalculated rate (based on 12 months of data) is higher than the initial rate (based on less than 12 months of data). The recalculated rate will become effective upon the date both parties sign off on a revised participation agreement. Until such time, the facility will be subject to the provisions and established rate set under the previous agreement Cap Amount The cap amount will be adjusted by the Medicare update factor for hospitals and units exempt from the Medicare prospective payment for fiscal years after FY Note: For detailed guidelines on calculation of individual RTC per diem rates and cap amounts, refer to Addendum B. 3.2 All-inclusive Rate Concept The all-inclusive per diem rate encompasses the RTC s daily charge for all RTC inpatient care and all mental health treatment including: Individual and group psychotherapy. Family therapy rendered to the parents of the RTC patient within 250 miles of the facility. Collateral visits with individuals other than the RTC patient determined necessary in order to gather information or implement treatment goals for the patient. Other ancillary services provided by the RTC. 2

61 Chapter 7, Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement The following are charges for services allowed outside the all-inclusive RTC rate: Geographically Distant Family Therapy. The family therapist may bill and be reimbursed separately from the RTC if the therapy is provided to one or both of the parents residing a minimum of 250 miles from the RTC. Payment for geographically distant family therapy will be cost-shared on an inpatient basis RTC Educational Services. The RTC may request approval for payment of educational costs on an individual case basis from the contractor when appropriate education is not available from, or not payable by, a cognizant public entity 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. There must be documentation in the beneficiary s record to substantiate this intake procedure The RTC must document any reasons why an individual beneficiary cannot attend public educational facilities and, in such case, why alternative educational arrangements have not been provided by the cognizant public entity. Upon request, the RTC should be able to produce a copy of all pertinent correspondence with state or local educational agencies If reimbursement of educational costs is approved for an individual beneficiary, such educational costs shall be shown separately from the RTC s daily costs on the claim form Reimbursement of educational costs shall not exceed the RTC s most-favorable rate to any other patient, agency, or organization for special or general education services, whichever is appropriate When a local school district reimburses authorized educational costs, but its payment does not completely cover the RTC s most-favorable rate, TRICARE shall cover the remaining amount Approval for educational services will be valid during the entire residential treatment center stay; i.e., from admission through discharge or denial of continued stay, whichever occurs first If the RTC fails to request approval of educational costs on an individual case, the RTC may not bill the beneficiary nor the beneficiary s family for amounts disallowed by contractor Non-Mental Health Services. Otherwise covered medical services related to a non-mental health condition and rendered by an independent provider outside the RTC are payable in addition to the all-inclusive per diem rate. Claims for non-mental health services are to be cost-shared as inpatient if the contractor cannot determine where the services were rendered and the status of the patient when the services were provided The all-inclusive rate includes charges for the routine medical management of a beneficiary while residing in an RTC. Services provided by medical professionals employed by or contracted with the RTC are part of the all-inclusive per diem rate and cannot be billed separately. These routine 3

62 Chapter 7, Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement medical services are made available to all children entering the facility and are designed to maintain the general health and welfare of the patient population. Examples of this type of care are: Routine health and physical examinations provided by RTC medical staff; In-house pharmaceutical services; and Other ancillary medical services routinely provided to the RTC population Claims submitted by the RTC for residential treatment care will be paid based upon the rate established by the Participation Agreement. All other mental health claims submitted by other providers for services rendered to an RTC patient (except for those services allowed outside the allinclusive rate in paragraph 3.2.2) will be denied. Other mental health providers may continue to render services to RTC patients under this payment system; however, such providers must look to the RTC for their payment. Noncovered charges for personal items (toiletries and clothing) are excluded Since the reimbursement methodology does not provide a direct payment mechanism for professional providers, except as prescribed in paragraph 3.2.2, coverage cannot be extended for professional services rendered in a non-authorized RTC. 3.3 Authorization Requirements The contractors will provide the following types of preauthorization for all admissions to RTCs Preauthorization and Concurrent Review The contractor shall obtain information necessary for review for residential treatment to assure that the level of care is medically necessary and appropriate. A written decision will be sent to the facility, and parent or guardian If a patient is Absent Without Leave (AWOL) for a period not to exceed 10 days, the facility must submit a staffing report If the period of time away from the facility is more than 10 days, admission approval is required including an updated treatment plan and progress report Authorization for Geographically Distant Family Therapy All geographically distant family therapy shall be authorized and approved by the contractor at the time the treatment plan is submitted. The RTC is required to submit a detailed treatment plan for each TRICARE patient within 30 days of admission. The authorization shall be on file with the contractor before coverage can be extended. (Refer to the TRICARE Policy Manual (TPM), Chapter 7, Section 3.12.) Cost-Share. Payment for geographically distant family therapy shall be cost-shared on an inpatient basis Authorization for Coverage of Educational Services A Public Official s Statement (POS) shall be submitted to the contractor demonstrating that the school district in which the TRICARE beneficiary was last enrolled refuses to pay for the educational 4

63 Chapter 7, Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement component of the child s RTC care. The contractor shall review the POSs on a case-by-case basis and make a decision on whether they meet the exception for coverage under the program. The authorization for educational services shall be on file before coverage can be extended. 3.4 Reimbursement of Therapeutic Absences Therapeutic leave of absence days are not reimbursed by TRICARE. 3.5 RTC Participation In order for the services of an RTC to be authorized, the RTC shall sign a Participation Agreement (see TPM, Chapter 11, Addendum E) The agreement requires the RTC to accept the TRICARE determined rate as payment in full and collect from the beneficiary or the family of the beneficiary those amounts that represent the beneficiary s liability, as defined by 32 CFR 199, and charges for services and supplies that are not a benefit Participation Agreements include the specific rate, established by the TRICARE Quality Monitoring Contractor (TQMC), for each RTC, and the billing number that must be used for claims submission. 3.6 Termination of Participation by RTC The RTC Participation Agreement sets forth the following provisions for termination of participation under the program (see TPM, Chapter 11, Addendum E) Changes or modifications resulting from amendments to 32 CFR 199 will become effective on the date the CFR amendment is effective or the date the agreement is amended, whichever date is earlier If the RTC does not wish to accept the proposed changes, it may terminate its participation by giving the agency written notice of such intent to terminate at least 60 calendar days in advance of the effective date of termination If the RTC s notice of intent to terminate its participation is not given at least 60 days prior to the effective date of the proposed changes/modifications, then the proposed changes/modifications will be incorporated into its agreement for care furnished between the effective date of the changes/ modifications and the effective date of the termination of this agreement. 3.7 Payment for RTC care shall be made by the contractors only for claims from authorized RTCs. 3.8 Annual Updating of RTC Rates Once a valid rate is established for each RTC from the base year data it becomes the basis for all future rates. The change in mix of third party payor days thereafter will have no bearing on the TRICARE RTC per diem. 5

64 Chapter 7, Section 4 Psychiatric Residential Treatment Center (RTC) Reimbursement RTC rates will be updated by the Medicare inflation factor for hospitals and units exempt from the Medicare Prospective Payment System (PPS) Contractors will be provided with the rate updates prior to October 1 of each year (i.e., the start of the new federal fiscal year) All claims reimbursed under the TRICARE RTC per diem payment system are to be priced for each day of service (using the rate in effect on the day of service) regardless of when the claim is submitted. Any adjustments to such claims will also be priced as of the day of service. In order to do this, at least three iterations of per diem rates shall be maintained on the contractor s on-line system. If the claims filing deadline has been waived and the day of service is more than three years before the reprocessing date, the affected claim or adjustment is to be priced using the earliest per diem rate on the contractor s system The last three iterations of per diem rates, along with the corresponding cap amounts, will be maintained in on the DHA web site at Rates-and-Reimbursement. The rates are updated by the Medicare update factor as noted in Chapter 7, Section 1, paragraph The rates are effective on October 1 of each year. - END - 6

65 Mental Health Chapter 7 Section 5 Opioid Treatment Programs (OTPs) Reimbursement Issue Date: November 15, 2017 Authority: 32 CFR 199.4(b)(11), 32 CFR 199.6(b)(4)(xix), and 32 CFR (a)(2)(ix) Copyright: CPT only 2006 American Medical Association (or such other date of publication of CPT). All Rights Reserved. Revision: 1.0 APPLICABILITY 1.1 This policy is mandatory for reimbursement of services provided by either network or nonnetwork providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement. 1.2 The following reimbursement methodology shall be used for payment of freestanding OTPs and other providers who are exempt from the TRICARE Outpatient Prospective Payment System (OPPS) and provide OTP services. 2.0 ISSUE Reimbursement of freestanding OTPs. Freestanding OTPs shall be reimbursed based on the variability in the dosage and frequency of the drug being administered and on related supportive services. 3.0 POLICY 3.1 Freestanding methadone OTPs (which also provide opioid partial agonists and antagonists) shall be reimbursed the lower of the billed charge or a weekly all-inclusive rate The weekly all-inclusive rate shall include the cost of the drug and all related services (i.e., the costs related to initial intake/assessment, drug dispensing and screening, and integrated psychosocial and medical treatment and support services) The weekly all-inclusive rate shall be accepted as payment-in-full The weekly all-inclusive rate is subject to the outpatient cost-sharing provisions in 32 CFR 199.4(f). Services shall be cost-shared on a weekly basis (e.g., one $12 cost-share applies to a full week of methadone OTP services for a Prime retiree). 1

66 Chapter 7, Section 5 Opioid Treatment Programs (OTPs) Reimbursement The initial Fiscal Year (FY) 2017 national weekly all-inclusive rate is $126. This rate is based upon an estimated drug cost of $3 per day, and $15 per day for medical services. The national rate was determined to be $126 after an analysis of the payments made by other payers The weekly all-inclusive rate shall be wage-adjusted by the CHAMPUS Maximum Allowable Charge (CMAC) locality adjustment factors The national weekly all-inclusive rate shall be updated annually, on October 1 of each year, by the Medicare update factor used for the Medicare Inpatient Prospective Payment System (IPPS) (see Section 1, paragraph for the list of update factors) The weekly all-inclusive rate shall be posted to the DHA website by October 1 of each year. DHA shall retain three years of reimbursement rates for methadone OTPs on the DHA website The weekly all-inclusive set of services shall be billed utilizing Healthcare Common Procedure Coding System (HCPCS) code H0020 [Alcohol and/or drug services]. Only one occurrence of this code shall be reimbursed in a given week (seven day period). Services that are incorporated into the weekly all-inclusive rate (e.g., HCPCS code J1230 for the methadone) shall not be separately reimbursed Psychotherapy sessions and non-mental health related medical services not normally included in the evaluation and assessment for OTPs, provided by authorized independent providers who are not employed by, or under contract with, the OTP for the purposes of providing clinical patient care are not included in the weekly bundled rate and may be billed separately. This includes ambulance services when medically necessary for emergency transport. 3.2 OTP reimbursement of other medications (e.g., buprenorphine and naltrexone) provided in freestanding OTPs shall be made on a fee-for-service basis (i.e., separate payments will be allowed for both the medication and accompanying support services) Buprenorphine. HCPCS code H0047 shall be utilized to reflect the medical intake and assessment, drug dispensing and monitoring, and counseling services. H0047 shall be reimbursed in accordance with the CMAC methodology; see Chapter 5, Section 3. The appropriate HCPCS code shall be utilized to bill for the medication. The National Drug Code (NDC) shall be reported to the contractor, along with the dosage and acquisition cost. The drug shall be reimbursed in accordance with the Chapter 1, Section Naltrexone. HCPCS code H0047 shall be utilized to reflect the medical intake and assessment, monitoring and counseling services. Current Procedural Terminology (CPT) code shall be utilized to report the administration fee. H0047 and shall be reimbursed in accordance with the CMAC methodology; see Chapter 5, Section 3. HCPCS code J2315 shall be utilized for the prescribed medication, along with the number of milligrams used. The drug shall be reimbursed in accordance with Chapter 1, Section 15. In general, naltrexone is provided as an injection every four weeks. Contractors shall review more frequent administration to ensure services are medically necessary and appropriate. 2

67 3.2.3 Participation Agreement TRICARE Reimbursement Manual M, April 1, 2015 Chapter 7, Section 5 Opioid Treatment Programs (OTPs) Reimbursement In order for the services of an OTP to be authorized, the OTP must sign a Participation Agreement. See the TRICARE Policy Manual (TPM), Chapter 11, Addendum H The agreement requires the OTP to accept the TRICARE determined rate as payment in full and collect from the beneficiary or the family of the beneficiary those amounts that represent the beneficiary s liability, as defined by 32 CFR 199, and charges for services and supplies that are not a benefit Cost-Sharing Services provided under paragraph 3.2 are subject to the outpatient cost-sharing provisions in 32 CFR 199.4(f). Cost-sharing shall be applied on a per-visit basis. 4.0 EFFECTIVE DATE October 3, END - 3

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69 Chapter 7 TRICARE Reimbursement Manual M, April 1, 2015 Mental Health Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Revision: 1.0 DATA COLLECTION FORM 1.1 The TRICARE Management Activity (TMA) Form 771 is designed for the collection of reimbursement data used in the calculation of prospective all-inclusive per diem rates for RTCs seeking certification under the TRICARE RTC program. The form will be sent out as part of the RTC certification package encouraging the facility to conduct a preliminary review of the reimbursement methodology prior to completion of the program certification portion of the application. Refer to attached TMA Form The TMA Form 771 is divided into two distinct data collection areas, one dealing with administrative information and the other with reimbursement information Administrative Information. Items 1 through 8 of the form identify the facility and establish the base year period over which the reimbursement data was collected. The Employer Identification Number (EIN) is of particular importance since it identifies the RTC for payment Reimbursement Information. Items 9 through 11 provide the reimbursement data necessary to calculate an all-inclusive prospective per diem rate for applying RTCs. The data represents those reimbursement levels that the RTC was willing to accept from other third-party payers during its base period. This allows the establishment of a per diem rate which reflects a reasonable amount consistent with rates charged by its peers nationally and with reimbursement it is accepting from other third-party payers. 2.0 ADMINISTRATIVE SUPPORT 2.1 The reviewer will provide the name and telephone number of a contact person that can provide additional help and instruction in filling out the data request form. 2.2 Examples of rate calculations are useful in establishing a conceptual understanding of the per diem methodology and for allowing the RTC to approximate its rates. These examples should include, but not be limited to, the following reimbursement concepts/issues: 33-1/3% rule. All-inclusive rate. Charges allowed outside all-inclusive rate. Rate updates. 1

70 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Open vs. closed staffing models. 3.0 REVIEW AND ANALYSIS OF SUBMITTED INFORMATION 3.1 Conduct a preliminary review of the information/data submitted on the TMA Form 771 paying particular attention to the opening and data collection start dates. The data collection start date for RTCs which were in operation during the entire base period (July 1, June 30, 1988) will be July 1, The data collection start date should be the same as the opening date for facilities who began operation after June 30, 1988, or began operation before July 1, 1988, but had less than six months of operation by July 1, 1988, since the RTC s base period would be its first 12 months of operation. If the dates are not the same, follow the guidelines below: Contact the person designated in Item #4 of TMA Form 771 for clarification regarding the discrepancy If the discrepancy resulted from a transcription error, correct the error and proceed with the review If the discrepancy did not result from a transcription error, have the RTC submit revised data encompassing the correct data collection period (i.e., data collected over the first 12 months of operation). 3.2 The reimbursement sections (Items 9 through 10) should be reviewed to make sure the submitted information is complete and correctly formatted. The data contained in these sections will be used to figure the RTC s prospective all-inclusive per diem rate and will be the basis for all future rates. The following are the data element requirements under each of these sections: Item #9. This section requests information on all third-party payers establishing or affecting an RTC s rates during its specified base period. It includes the following reimbursement information: Name, address and telephone number of each payer for whom a rate was established/ accepted. This information is important for verification of rates under Items 9 through 11, especially in the case of state patients where there is often a negotiated contract. If the state rate represents 33-1/ 3% of total patient days, it might be advisable for the reviewer to request copies of these contracts in order to verify the negotiated rates in effect during the RTCs base period. However, the reviewer will be given discretion in setting its own review parameters for requesting supporting documentation The rates accepted from each third-party payer during the RTC s designated base period. The accepted rates should not be confused with actual charged amounts. It is not uncommon to bill third-party payers amounts in excess of their allowed charges knowing payment will be less than the charged amounts. The allowed charge represents the amount the facility is willing to accept from a payor for RTC care. A determination will have to be made whether the listed facility rates represent total daily charges (i.e., represent an all-inclusive rate) or only the institutional component of the accepted rate using the following guidelines: 2

71 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates If there are no additional charges listed under Item #10, the facility rates appearing in Item #9 are to be determined as all-inclusive, and as such, represent payment in full for all mental health services provided within the RTC (both professional and institutional) If additional charges are listed under Item #10, a determination must be made on whether they apply to all of the third-party payers appearing in Item #9; i.e., whether all of the thirdparty payers allow payment of additional services above the facility rates listed in Item #9. The reviewer should note that where state or local agencies are involved most of their reimbursement is based on flat per diem rates. The reviewer should contact the RTC if there is any question regarding the applicability of Item #10 charges to any one of the listed third-party payers The number of patient days provided/paid at each accepted rate. Cumulative patient days will be used in determining the rate high enough to cover at least one-third of the total patient days subject to the cap amount Item #10. This section requests information on the payment of any additional services allowed outside the facility rates recorded under Item #9. The sum of these charges will be added to the facility rate in calculating the TRICARE all-inclusive per diem rate. The RTC must provide the methodology (the actual calculations) used in establishing the charge Per Patient Day (PPD) for each of the services listed in this section Required data elements: The service for which additional payment is allowed. The frequency of the service. The accepted charge/rate per service. The accepted charge/rate PPD The following are examples of services which might be allowed for payment outside the facility rates reflected in Item #9: Admission history and physical. Medical visits for physical illness or injury. Lab drug testing. EKG. Family therapy. Pharmaceuticals. Individual and group psychotherapy Item #11. This section pertains to the payment of educational services in an RTC. Educational charges are excluded from payment under the prospective per diem system. If the RTC indicates that educational charges are included within the facility rate, they must be removed prior to establishing the TRICARE all-inclusive rate. The educational rate/charge per patient per day reported in Item #11.b will be subtracted from the overall facility rate. Payment of educational services may be paid 3

72 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates apart from the facility per diem as long as the services have been authorized by the reviewer. The RTC may provide educational services to its children under the following arrangements: The RTC has its own educational program whereby it bills for the entire educational component, incorporating facility and professional costs (i.e., bills for teachers, books, supplies, classroom facilities, etc.). The RTC has an agreement with its local school district to share in the education of its children. In most cases the local school district agrees to supply the teachers while the RTC provides the classrooms. The RTC only bills for the facilities charges. The local school district accepts total responsibility for educating the RTC children. No educational charges are billed since the children attend public school during the day. 3.3 The data collected and used to establish RTC per diem rates will be retained indefinitely. 4.0 BASE YEAR CALCULATIONS 4.1 For RTCs new to the TRICARE program, one of the following two alternative methods will be used in determining their individual rates: The rates for an RTC which was in operation during the base period (July 1, 1987 through June 30, 1988) will be calculated based on the actual charging practices of the RTC during the 12 months ending July 1, The individual RTC rate will be the lower of either the TRICARE rate in effect on June 30, 1988, or the rate high enough to cover at least one-third of the total patient days of care provided by the RTC during the 12 months ending July 1, 1988 subject to a maximum cap The rates for an RTC which began operation after June 30, 1988, or began operation before July 1, 1988, but had less than six months of operation by July 1, 1988, will be based on the actual charging practices during its first six to 12 consecutive months, with six months being the minimum time in operation for certification under the TRICARE program. A period of less than 12 months will be used only when the RTC has been in operation for less than 12 months. Once a full 12 months is available, the rate should be recalculated using the additional reimbursement data. The rates would be calculated the same as in paragraph 4.1.1, except a different base period would be used. 4.2 The following methods are used in establishing the maximum capped per diem amounts: Prior to April 6, 1995, the capped per diem amount was set at the 75th percentile of all established TRICARE RTC rates nationally and weighted by total TRICARE days provided at each rate during the base period (July 1, 1987, through June 30, 1988). The capped amount was adjusted annually by the designated update factor (currently the Medicare update factor as noted in Chapter 7, Section 1). The following are the capped amounts in effect since December 1, 1988: RTC CAPPED AMOUNTS DATES OF SERVICE CAPPED AMOUNTS October 1, September 30,

73 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates DATES OF SERVICE October 1, September 30, October 1, September 30, October 1, September 30, The 70th percentile of the day-weighted current (Fiscal Year (FY) 1995) per diems was used in establishing a new cap amount for services rendered on or after April 6, The following methodology was used in establishing the RTC cap and floor amounts: RTC institutional claims data from the period October 1, 1993 to March 31, 1994 were used (the first half of FY 1994) The FY 1994 per diems were merged onto the claims (from the RTC per diem list in the TRICARE Policy Manual (TPM)) and updated by (the CPI-U) to represent FY 1995 per diems The 30th and 70th percentiles of the day-weighted FY 1995 per diems were calculated as $429 and $515. Any RTC per diem above $515 was cut to $515 as of April 6, ADJUSTMENT OF BASE YEAR RATE 5.1 The base year rate is adjusted by the following annual inflation factors to bring it forward to the current fiscal year. See Section 1, paragraph for the update factors for FY 2006 and forward. TIME PERIOD RTC CAPPED AMOUNTS (CONTINUED) UPDATE FACTORS FOR RTC PER DIEM RATES CAPPED AMOUNTS CPI-U INFLATION FACTORS July 1, November 30, % December 1, July 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, Note: The FY 1997 CPI-U for medical care is 2.6%. This inflation will be used in adjusting FY 1995 RTC rates falling below the 30th percentile of all established FY 1995 rates ($429.00). See also Chapter 7, Section 1, for FY 2006 and forward. 5

74 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates UPDATE FACTORS FOR RTC PER DIEM RATES (CONTINUED) TIME PERIOD MEDICARE UPDATE FACTOR October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, October 1, September 30, Note: The FY 1997 CPI-U for medical care is 2.6%. This inflation will be used in adjusting FY 1995 RTC rates falling below the 30th percentile of all established FY 1995 rates ($429.00). See also Chapter 7, Section 1, for FY 2006 and forward. 5.2 If the RTC s base year falls within the previous year s reporting period, the inflation factor is prorated for the remaining time in that period. The updating process can best be demonstrated through the following example: Example: RTC E is submitting reimbursement information as a final step in its certification process. The data was collected over the facility s first 12 months of operation (April 1, March 31, 2014). Since the RTC s base period extended six months (or 180 days, based on 30-day months and a 360-day year) into the inflation reporting period, the inflation factor for the subsequent update year (October 1 - September 30) was prorated for the remaining time period of April 1, September 30, 2014 (six months or 180 days). The following are the calculations used in updating the RTC s allinclusive base year per diem to FY 2015 (current year per diem amount): ADJUSTMENT OF BASE YEAR PER DIEM RATE Derived rate at 33.33% of total patient days during base period of April 1, 2013 through $ March 31, Plus: An adjustment for the annual update factor, as listed in Chapter 7, Section 1, paragraph For 6-month period ending September 30, 2014 (2.5% x 6/12 = 1.25%) 6.25 Adjusted Rate $ For 12-month period ending September 30, 2015 (2.9%) Adjusted Rate $ TRICARE all-inclusive per diem rate for services on or after October 1, 2015 $

75 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates 5.3 In a Final Rule published in the Federal Register (60 FR 12419) on March 7, 1995, TRICARE imposed a two-year moratorium on the annual updating of RTC per diems rates subject to the following provisions: TRICARE payments will remain at FY 1995 rates for a two-year period beginning in FY 1996, for any RTC whose 1995 rate was at or above the 30th percentile of all established FY 1995 rates ($429) For any RTC whose FY 1995 rate was below that of the 30th percentile, the rate will be adjusted by the lesser of the CPI-U, or the amount that brings the rate up to the 30th percentile level For fiscal years after FY 1997, the individual facility rates and cap amount will be adjusted by the Medicare update factor for hospitals and units exempt from the Medicare prospective payment system at the discretion of the Director, DHA or designee. Note: The above provisions will lead to aggregate expenditures which approximate average facility costs. The 4.4% update factor was used in the RTC rate computation since its FY 1995 rate ($368) was below the 30th percentile level ($429). 6.0 CALCULATION OF RTC PER DIEM RATE 6.1 Array the rates accepted by other third-party payers (Item #9) in descending order from lowest to highest in the first column of the Reimbursement Information Work Sheet (see Attachment). 6.2 Place the number of days paid at each of the rates listed above in the second column of the work sheet If there is more than one rate with an individual third-party payer during the base period, the RTC must provide the total number of patient days paid by the payer at each rate. Total patient days will be used in determining the most favored rate for the facility. The following is an example of multiple rates paid by an individual payer during the RTC s base period: Example: RTC F has negotiated three separate rates with a third-party payer over its base period. The three rates were reported as follows: 1. $295/day from July 2013, through October 31, ,000 patient days; 2. $315/day from November 1, 2013, through February 29, ,000 patient days; 3. $330/day from March 1, 2014, through June 30, ,000 patient days Each of the above negotiated rates would be reported separately in Item #9 of the TMA Form 771 representing a blending of payments made by a particular payor over a facility s base period Patient days would be combined in those situations where third-party payers were paying the same rate for RTC care. This would represent the cumulative frequency of payments made at each reported reimbursement level in Item #9 of the data collection form. 7

76 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates The following examples represent the methodology used in calculating the TRICARE base year facility rate from data provided under Item #9 of the TMA Form 771: Example: RTC G provided the following third-party reimbursement data under Item #9 of the TMA Form 771 as part of the certification process: ITEM #9 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) THIRD-PARTY PAYERS RATE ACCEPTED PATIENT DAYS AA $ BB CC DD *** EE FF GG HH II JJ *** - State or local Government agency. Step 1: Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate: (1) RATES (2) PATIENT DAYS (3) CUMULATIVE PATIENT DAYS (4) PERCENT CUMULATIVE PATIENT DAYS $ % , , , , , , , Total 2,804 Patient Days 8

77 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Step 2: Step 3: Sum the patient days in column 2, which in this particular example equals 2,804 patient days. Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by (2,804 patient days x = patient days) Step 4: Step 5: Example: Go down in the cumulative patient day column (column 3) to where 33-1/3% of the patient days lie (934.57). Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period rate in this example would be $317 (refer to table above). RTC H provided the following third-party reimbursement data under Item #9 of the TMA Form 771 as part of the certification process: ITEM #9 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) THIRD-PARTY PAYERS RATE ACCEPTED PATIENT DAYS AA $ BB *** CC *** DD *** 215 1,040 EE FF GG *** HH II JJ *** - State or local Government agency. 9

78 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Step 1: Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate: (1) RATES (2) PATIENT DAYS (3) CUMULATIVE PATIENT DAYS (4) PERCENT CUMULATIVE PATIENT DAYS $215 1,040 1, % , , , , , , , Total 3,683 Patient Days Step 2: Sum the patient days in column 2, which in this particular example equals 3,683 patient days. Step 3: Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by (3,683 patient days x = 1, patient days) Step 4: Step 5: Go down in the cumulative patient day column (column 3) to where 33-1/3% of the patient days lie (1,227.54). Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period rate in this example would be $288 (refer to table above). 6.3 The above methodology for deriving the rate at 33-1/3 of the total patient days would only be applicable under the following conditions: If the rates in Item #9 were all-inclusive for payment of RTC care (i.e., included all payments for institutional and professional services), no additional charges would be added on to the facility rates from Item #10 of the data collection form. The rate established in Step 5 of the above examples would represent the all-inclusive base year rate prior to the inflationary adjustment If the charges for additional services listed in Item #10 applied to all of the third-party payers identified in Item #9 (i.e., all of the third-party payers listed in Item #9 allowed payment for additional services outside the facility rate- rate derived at 33-1/3% of total RTC patient days during the base period-- at the charges PPD established in Item #10), the sum of these charges are added to the facility rate prior to inflationary adjustment. 10

79 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates 6.4 In cases where payment of additional services listed in Item #10 do not apply to all of the thirdparty payers listed in Item #9, or payments vary among the payers for the same services, the sum of the charges PPD for additional services (reported in the last column of Item #10) must be added to the facility rate prior to establishing the rate derived at 33-1/3% of the total patient days. The following example provides the methodology for incorporating these additional charges into the base year rate computations: Example: RTC I has provided a revised TMA Form 771 indicating that payments for additional services had been overlooked in completing its initial form. The following service charges PPD were provided under Item #10 with the proviso that the additional payments were not allowed by the three state agencies and two private third-party providers. The payers were identified in Item #9 of the form. ITEM #10 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) PATIENT SERVICE FREQUENCY OF SERVICE CHARGE PER SERVICE CHARGE PER DAY (PPD) Individual Therapy 1/week $ $17.14 Group Therapy 2/week Admission History and Physical 1/stay Pharmacy ($10,438/2,498 days) 4.18 Psych. Testing Total $42.90 Note: The RTC s Average Length-Of-Stay (ALOS) was 105 days during its base period. ITEM #9 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) THIRD-PARTY PAYERS RATE ACCEPTED PATIENT DAYS AA $ BB ** 165 *** 313 CC ** DD ** 204 *** 485 EE FF 471 *** 117 GG ** 265 *** 346 HH II 425 *** 319 JJ ** - State or local Government agency. *** - Rates represent entire payment for RTC services. Charges for additional services reported in Item #10 not applied to these designated third-party payor rates. 11

80 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates (1) RATES (2) ADDITIONAL PAYMENTS (3) PATIENT DAYS (4) CUMULATIVE PATIENT DAYS (5) PERCENT CUMULATIVE PATIENT DAYS $165 $N.A % 204 N.A N.A , , , N.A , , , N.A , , Total 2,498 Patient Days Step 1: Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate. Step 2: Sum the patient days in column 3, which in this particular example equals 2,498 patient days. Step 3: Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by (2,498 patient days x = patient days) Step 4: Step 5: Go down in the cumulative patient day column (column 4) to where 33-1/3% of the patient days lie (832.48). Go across to the rates in column 1 and 2 in which 33-1/3 of the accumulative patient days fall. This represents the TRICARE all-inclusive base year/period rate. The base year/period rate in this example would be $265 (refer to table above). 6.5 If the RTC answers no to Item #11.a., the educational rate/charge PPD reported in Item #11.b must be subtracted from the overall facility base year/period rate. 6.6 Personal item charges must also be subtracted from the all-inclusive base year/period prior to inflationary adjustment. 12

81 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Example: RTC J checked no in Item #11.a. of the TMA Form 771 reporting an educational rate/ charge PPD in Item #11.b. The RTC also reported a $1 PPD charge for personal items. Accepted Rate at 1/3 of Patient Day $350 Plus: Other Service Charges 45 Less: Personal Items 1 Education 20 All-Inclusive Base Period Rate Prior to Inflationary Adjustment $374/day 6.7 The following is a detailed example of an RTC per diem calculation incorporating all of the data elements reported on the TMA Form 771 including inflationary adjustments: Example: RTC K submitted the following reimbursement information as part of the certification process: DATA REVIEW & ANALYSIS ITEM DATA REQUESTED DATA REPORTED 2 EIN Opening Date June 1, Joint Commission Accreditation October 31, Data Collection Dates June 1, May 31, 2011 ITEM #9 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) THIRD-PARTY PAYORS RATE ACCEPTED PATIENT DAYS AA $ BB CC DD EE FF GG HH

82 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Item #11. EDUCATIONAL CHARGES: Are educational charges excluded from the daily rate when billing TRICARE? YES X NO What is the educational rate/charge per patient per day in your facility? $37.00 PPD BASE YEAR/PERIOD RATE CALCULATION ITEM #10 OF TMA FORM 771 (MODIFIED FOR EXAMPLE) PATIENT SERVICE FREQUENCY OF SERVICE CHARGE PER SERVICE CHARGE PER DAY (PPD) Individual Therapy 1/week $90.00 $12.86 Group Therapy 1/week Family Therapy 1/2 weeks Admission History and Physical 1/stay ($175/120) (ALOS) 1.46 Pharmacy ($5,638/1,671 days) 3.38 Psych. Testing Total $35.05 Step 1: Array the rates in descending order from lowest to highest with corresponding patient days paid at each rate: (1) RATES (2) PATIENT DAYS (3) CUMULATIVE PATIENT DAYS (4) PERCENT CUMULATIVE PATIENT DAYS $ % , , , , Total 1,671 Patient Days Step 2: Sum the patient days in column 2, which in this particular example equals 1,671 patient days. 14

83 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates Step 3: Calculate 33-1/3% of the total patient days by multiplying total patient days figured in Step 2 by (1,671 patient days x = patient days) Step 4: Step 5: Step 6: Step 7: Go down in the cumulative day column (column 3) to where 33-1/3% of the patient days lie (556.94). Go across to the rate in column 1 in which 33-1/3 of the cumulative patient days fall. This represents the base year/period facility rate. The base year/period facility rate in this example would be $314 (refer to table above). Add the sum of the charges PPD reported in Item #10 of the Form 771 ($35.05/patient day) to the base year/period facility rate figured in Step 5 since additional payments are allowed for all the listed third party payers in Item #9. The base year/period all-inclusive per diem rate is $ Subtract any educational and/or personal item charges which are included in the allinclusive base year/period rate calculated in Step 6. This does not apply in this particular example since there are no personal item and/or educational charges included in the base year/period facility rate. INFLATIONARY ADJUSTMENTS Step 1: Adjust the base year rate by the annual inflation factors to bring it forward to the current fiscal year as follows: ADJUSTMENT OF BASE YEAR PER DIEM RATE Derived rate at 33.33% of total patient days during base period of June 1, May 31, $ Plus: Update Factors: For 4-month period ending September 30, 2011 (0.87%) (2.6% x 4/12 = 8.7%) 3.04 Adjusted Rate $ For 12-month period ending September 30, 2012 (3.0%) Adjusted Rate $ For 12-month period ending September 30, 2013 (2.6%) 9.43 Adjusted Rate $ For 12-month period ending September 30, 2014 (2.5%) 9.30 Adjusted Rate $

84 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates ADJUSTMENT OF BASE YEAR PER DIEM RATE For 12-month period ending September 30, 2015 (2.9%) Adjusted Rate $ TRICARE all-inclusive per diem rate for services on or after October 1, $ Note: The rate is the lessor of the calculated per diem or the capped per diem rate, as noted in paragraph ATTACHMENT: TMA Form

85 Chapter 7, Addendum B Guidelines For The Calculation Of Individual Psychiatric Residential Treatment Center (RTC) Per Diem Rates FIGURE 7.B-1 TMA FORM

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE HEALTH AFFAIRS EAST CENTRETECH PARKWAY AURORA, COLORADO

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