[Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
[Proposed Rules]
[Pages 39285-39287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18961]



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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 220


Collection From Third Party Payers of Reasonable Costs of 
Healthcare Services

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish a new rule under the Third 
Party Collection program for determining the reasonable costs of health 
care services provided by facilities of the uniformed services in cases 
in which care is provided under TRICARE Resource Sharing Agreements. 
For purposes of the Third Party Collection program such services will 
be treated the same as other services provided by facilities of the 
uniformed services. The proposed rule also lowers the high cost 
ancillary threshold value from $60 to $25 for patients that come to the 
uniformed services facility for ancillary services requested by a 
source other than a uniformed services facility provider. The 
reasonable costs of such services will be accumulated on a daily basis.

DATES: Written comments on this proposed rule must be received on or 
before October 2, 1995.

ADDRESSES: LCDR Pat Kelly, Office of the Assistant Secretary of Defense 


[[Page 39286]]
(Health Affairs), Health Services Operations and Readiness, Pentagon 
Room 3E343, Washington, D.C. 20301-1200.

FOR FURTHER INFORMATION CONTACT:
LCDR Patrick Kelly, (703) 756-8910.

SUPPLEMENTARY INFORMATION: Currently, the Third Party Collection 
program regulation includes a special rule for Partnership Program 
providers. The Partnership Program allows civilian health care 
providers authorized to provide care under the CHAMPUS program to 
provide services to CHAMPUS beneficiaries in military hospitals and to 
receive payment from the CHAMPUS program. Pursuant to CHAMPUS payment 
rules, CHAMPUS is always the secondary payer to other health insurance 
plans; Thus, CHAMPUS may not make payment to the Partnership Program 
provider in cases in which the beneficiary has other health insurance. 
To accommodate this CHAMPUS requirement, the third Party Collection 
program currently excludes Partnership Program provider services from 
the military hospital claims. Thus, for example, for inpatient hospital 
care, the Third Party Payer now receives two claims, one from the 
military facility for the hospital and ancillary costs, and a separate 
claim from the provider for the professional services.
    The current practice has produced some confusion in that it is a 
departure from the normal procedure for claims arising from care 
provided by military hospitals. In addition, because the Partnership 
Program providers function independently from the military hospital's 
management system, there are no DoD standards that govern the amounts 
claimed by various Partnership Program providers.
    DoD is now proceeding with implementation of a major managed care 
program, called TRICARE, in its military medical treatment facilities 
and CHAMPUS. Under TRICARE, regional managed care support contractors 
will work with military treatment facilities on a wide range of managed 
care activities. Among the activities of the managed care contractors 
is the Resource Sharing Program. Under this program, the contractor 
makes agreements with military hospitals in the region under which the 
contractor will supply personnel and other resources in order to allow 
the facility to increase the services it can make available to DoD 
health care beneficiaries. The TRICARE program is now the subject of a 
separate rulemaking proceeding, which will result in comprehensive 
regulations codified at 32 CFR 199.17.
    TRICARE Resource Sharing Agreements are similar to Partnership 
Program payment arrangements in that both result in civilian providers 
coming into the military facility and providing care in that facility. 
However, a significant difference exists in the method of payment. 
Under the Partnership Program, payment is on a fee-for-service basis 
under the normal operation of the CHAMPUS program. Under Resource 
Sharing, the method of payment may be on a salary basis or other 
arrangement made by the managed care support contractor. Under the 
Partnership Program, the CHAMPUS second payer requirement applies. 
Under Resource Sharing Agreements, the overall managed care contract 
separates the financing from the normal CHAMPUS payment rules and 
allows for special payment rules.
    Based on this, we are establishing a special rule for Resource 
Sharing Agreements. Or, more accurately, we are establishing the normal 
rule for Resource Sharing Agreements. That is to say that care provided 
in whole or in part through TRICARE Resource Sharing Agreements will be 
handled for purposes of third party billings just like all other 
services provided in the military facility, and will be billed at the 
same rates. The special rule applicable to the Partnership Program 
providers, under which two claims are made to the third party payer, 
will not apply under TRICARE Resource Sharing Agreements. As a result, 
care provided in military facilities will be billed to third party 
payers in the same manner and same amount, regardless of whether the 
professional services were provided by a military physician or Resource 
Sharing Agreement provider.
    The TRICARE program is being phased in region-by-region throughout 
the United States. As it takes hold, we expect the Partnership Program 
to be phased out and be replaced by TRICARE Resource Sharing 
Agreements. Thus, in several years, the special Partnerhship Program 
rule will no longer be needed, and the simpler, single-claim rule for 
TRICARE Resource Sharing Agreements will apply. We view this as both a 
simplification and an improvement in the Third Party Collection 
program.
    With respect to regulatory procedures, this proposed rule is not a 
significant regulatory action under Executive Order 12866, nor does it 
significantly affect a substantial number of small entities under the 
Regulatory Flexibility Act, nor impose new information collection 
requirements under the Paperwork Reduction Act. This is a proposed 
rule. All public comments are invited. We expect to proceed with 
promulgation of a final rule within approximately 60 days after close 
of the comment period.

List of Subjects in 32 CFR Part 220

    Claims, Health care, Health insurance.

    For the reasons stated in the preamble, 32 CFR part 220 is proposed 
to be amended as follows:

PART 220--COLLECTION FROM THIRD PARTY PAYERS OF REASONABLE COSTS OF 
HEALTHCARE SERVICES

    1. The authority citation for part 220 continues to read as 
follows:
    Authority: 5 U.S.C 301; 10 U.S.C. 1095.

    2. Section 220.8 is amended by revising paragraphs (h) and (k) to 
read as follows:


Sec. 220.8  Reasonable costs.

* * * * *
    (h) Special rule for certain ancillary services ordered by outside 
providers and provided by a facility of the Uniformed Services. If a 
Uniformed Services facility provides certain ancillary services, 
prescription drugs or other procedures requested by a source other than 
a Uniformed Services facility and are not incident to any outpatient 
visit or inpatient services, the reasonable cost will not be based on 
the usual DRG or per visit rate. Rather, a separate standard rate shall 
be established based on the accumulated cost of the particular 
services, drugs, or procedures provided during one day. The billing 
threshold shall be published annually. For fiscal year 1996 that 
threshold limit shall be $25. The reasonable cost for the services, 
drugs or procedures to which this special rule applies shall be 
calculated and made available to the public annually.
* * * * *
    (k) Special rules for TRICARE Resource Sharing Agreements and 
Partnership Program providers.
    (1) In general. This paragraph (k) establishes special Third Party 
Collection program rules for TRICARE Resource Sharing Agreements and 
Partnership Program providers.
    (i) TRICARE Resource Sharing Agreements are agreements under the 
authority of 10 U.S.C. 1096 and 1097 between uniformed services 
treatment facilities and TRICARE managed care support contractors under 
which the TRICARE managed care support contractor provides personnel 
and other resources to the uniformed services treatment facility 
concerned in order to help the facility increase the availability of 
health care services for beneficiaries. TRICARE is the managed care 
program authorized by 10 U.S.C. 1097 (and 

[[Page 39287]]
several other statutory provisions) and established by regulation at 32 
CFR 199.17.
    (ii) Partnership Program providers provide services in facilities 
of the uniformed services under the authority of 10 U.S.C. 1096 and the 
CHAMPUS program. They are similar to providers providing services under 
TRICARE Resource Sharing Agreements, except that payment arrangements 
are different. Those functioning under TRICARE Resource Sharing 
Agreements are under special payment arrangements with the TRICARE 
managed care contractor; those under the Partnership Program file 
claims under the standard CHAMPUS program on a fee-for-service basis.
    (2) Special rule for TRICARE Resource Sharing Agreements. Services 
provided in facilities of the uniformed services in whole or in part 
through personnel or other resources supplied under a TRICARE Resource 
Sharing Agreement are considered for purposes of this Part as services 
provided by the facility of the uniformed services. Thus, third party 
payers will receive a claim for such services in the same manner and 
for the same costs as any similar services provided by a facility of 
the uniformed services.
    (3) Special rule for Partnership Program providers. For inpatient 
services for which the professional provider services were provided by 
a Partnership Program provider, the professional charges component of 
the total inpatient DRG rate will be deleted from the claim from the 
facility of the uniformed services. The third party payer will receive 
a separate claim for professional services directly from the individual 
health care provider. The same is true for the professional services 
provided on an outpatient basis under the Partnership Program. Claims 
from Partnership Program providers are not covered by 10 U.S.C. 1095 or 
this part, but are governed by statutory and regulatory requirements of 
the CHAMPUS program.
* * * * *
    July 28, 1995.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 95-18961 Filed 8-1-95; 8:45 am]
BILLING CODE 5000-04-M