[Federal Register Volume 61, Number 212 (Thursday, October 31, 1996)]
[Notices]
[Pages 56360-56366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27883]



[[Page 56359]]


_______________________________________________________________________

Part IV





Office of Management and Budget





_______________________________________________________________________



Cost of Hospital and Medical Care and Treatment Furnished by the United 
States; Certain Rates Regarding Recovery From Tortiously Liable Third 
Persons; Notice

  Federal Register / Vol. 61, No. 212, Thursday, October 31, 1996 / 
Notices  

[[Page 56360]]



OFFICE OF MANAGEMENT AND BUDGET


Cost of Hospital and Medical Care and Treatment Furnished by the 
United States; Certain Rates Regarding Recovery From Tortiously Liable 
Third Persons

    By virtue of the authority vested in the President by Section 2(a) 
of P.L. 87-693 (76 Stat. 593; 42 U.S.C. 2652), and delegated to the 
Director of the Office of Management and Budget by Executive Order No. 
11541 of July 1, 1970 (35 Federal Register 10737), the three sets of 
rates outlined below are hereby established. These rates are for use in 
connection with the recovery, from tortiously liable third persons, of 
the cost of hospital and medical care and treatment furnished by the 
United States (Part 43, Chapter I, Title 28, Code of Federal 
Regulations) through three separate Federal agencies. The rates have 
been established in accordance with the requirements of OMB Circular A-
25, requiring reimbursement of the full cost of all services provided. 
The rates are established as follows:
    1. Department of Defense. The FY 1997 inpatient rates are based on 
the cost per Diagnostic Related Group (DRG), which is the inpatient 
full reimbursement rate per hospital discharge, weighted to reflect the 
intensity of the principal diagnosis, secondary diagnoses, procedures, 
patient age, etc. involved. The average costs per Relative Weighted 
Product (RWP) for large urban, other urban/rural and overseas 
facilities will be published annually as an inpatient adjusted 
standardized amount (ASA).
    The ASA will be applied to the RWP for each inpatient case, 
determined from the DRG weights, outlier thresholds and payment rules 
published annually for hospital reimbursement rates under the Civilian 
Health and Medical Program of the Uniformed Services (CHAMPUS) pursuant 
to 32 CFR 199.14(a)(1) including adjustments for length of stay 
outliers. The published ASAs will be adjusted for area wage differences 
and indirect medical education (IME) for the discharging hospital.
    2. Department of Health and Human Services. The sum of obligations 
for each cost center providing medical service is broken down into 
amounts attributable to inpatient care on the basis of the proportion 
of staff devoted to each cost center. Total inpatient costs and 
outpatient costs thus determined are divided by the relevant workload 
statistic (inpatient day, outpatient visit) to produce the inpatient 
and outpatient rates. In calculation of the rates, the Department's 
unfunded retirement liability cost and capital and equipment 
depreciation cost were incorporated to conform to requirements set 
forth in OMB Circular A-25. In addition, each cost center's obligations 
include costs for certain other accounts, such as Medicare and Medicaid 
collections and Contract Health funds used to support direct program 
operation. Certain cost centers that primarily support workload outside 
of the directly operated hospitals or clinics (public health nursing, 
public health nutrition, health education) were excluded this year as 
not being a part of the traditional cost of hospital operations and not 
contributing directly to the inpatient and outpatient visit workload. 
Overall, these rates reflect a more accurate indication of the cost of 
care in HHS facilities.
    In addition, this year separate rates per inpatient day and 
outpatient visit were computed for Alaska and the rest of the United 
States. This gives proper weight to the higher cost of operating 
medical facilities in Alaska.
    3. Department of Veterans Affairs. The actual direct and indirect 
costs are compiled by type of care for the previous year, and facility 
overhead costs are added. Adjustments are made using the budgeted 
percentage changes for the current year and the budget year to compute 
the base rate for the budget year. The budget year base rate is then 
adjusted by estimated costs for depreciation of buildings and 
equipment, central office overhead, Government employee retirement 
benefits, and return on fixed assets (interest on capital for land, 
buildings, and equipment (net book value)), to compute the budget year 
tortiously liable reimbursement rates. Also shown for inpatient per 
diem rates are breakdowns into three cost components: Physician; 
Ancillary; and Nursing, Room, and Board. As with the total per diem 
rates, these breakdowns are calculated from actual data by type of 
care.
    These rates represent the reasonable cost of hospital, nursing 
home, medical, surgical, or dental care and treatment (including 
prostheses and medical appliances) furnished or to be furnished by the 
United States in Federal hospitals, nursing homes, and outpatient 
clinics administered by the Department of Defense, Department of 
Veterans Affairs, and the Department of Health and Human Services.
    For such care and treatment furnished at the expense of the United 
States in a facility not operated by the United States, the rates shall 
be the amounts expended for such care and treatment.

1. Department of Defense

    For the Department of Defense (DoD), effective October 1, 1996 and 
thereafter:

Medical and Dental Services, Fiscal Year 1997

    The FY 1997 DoD reimbursement rates for inpatient, outpatient, and 
other services are provided in accordance with Title 10, United States 
Code, section 1095. Due to the voluminous nature of the High Cost Drug 
Reimbursement Rates (Section III.D) and the rates for High Cost 
Services Requested by External Providers (Section III.E), these 
sections are not included in this package. Complete listings of these 
rates, however, are available on request from the OASD (Health 
Affairs). The medical and dental service rates in this package (to 
include the rates for high cost drug reimbursement and for high cost 
services requested by external providers) are effective October 1, 
1996.

Inpatient, Outpatient and Other Rates and Charges

I. Inpatient Rates \1\ \2\

------------------------------------------------------------------------
                                                Interagency             
                                 International   and other              
                                    military      federal               
       Per inpatient day         education and     agency       Other   
                                    training     sponsored              
                                     (IMET)       patients              
------------------------------------------------------------------------
A. Burn Center.................     $2,107.00     $3,824.00    $4,086.00
B. Surgical Care Services                                               
 (Cosmetic Surgery)............        897.00      1,629.00     1,741.00
C. All Other Inpatient Services                                         
 (Based on Diagnosis Related                                            
 Groups (DRG) Charges \3\):                                             


[[Page 56361]]

1. FY 1997 Direct Care Inpatient Reimbursement Rates

------------------------------------------------------------------------
                                                             Other (full/
     Adjusted standard amount          IMET     Interagency   3rd party)
------------------------------------------------------------------------
Large Urban......................       $2,154       $4,141       $4,392
Other Urban/Rural................        2,275        4,344        4,635
Overseas.........................        2,405        5,207        5,533
------------------------------------------------------------------------

2. Overview
    The FY 1997 inpatient rates are based on the cost per DRG which is 
the inpatient full reimbursement rate per hospital discharge, weighted 
to reflect the intensity of the principal diagnosis, secondary 
diagnoses, procedures, patient age, etc. involved. The average costs 
per Relative Weighted Product (RWP) for large urban, other urban/rural 
and overseas facilities will be published annually as an inpatient 
adjusted standardized amount (ASA). (See item 1 above). The ASA will be 
applied to the RWP for each inpatient case, determined from the DRG 
weights, outlier thresholds and payment rules published annually for 
hospital reimbursement rates under the Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) pursuant to 32 CFR 
199.14(a)(1) including adjustments for length of stay outliers. The 
published ASAs will be adjusted for area wage differences and indirect 
medical education (IME) for the discharging hospital. An example of how 
to apply DoD costs to a DRG standardized weight to arrive at DoD costs 
is contained in part 3 of Section I.C., below.
3. Example of Adjusted Standardized Amounts for Inpatient Stays
    Figure 1 shows examples for a non-teaching hospital in a Large 
Urban Area.
    a. The cost to be recovered is DoD's cost for medical services 
provided in the non-teaching hospital located in a large urban area. 
Billings will be at the third party rate.
    b. DRG 020: Nervous System infection except viral meningitis. 
Relative Weighted Product (RWP) for an inlier case is the CHAMPUS 
weight of 2.9769. (DRG statistics shown are from FY96.)
    c. The DoD adjusted standardized amount to be charged is $4,392 
(i.e., the third party rate as shown in the table).
    d. DoD cost to be recovered at a non-teaching hospital with area 
wage index of 1.0 is the RWP factor (2.9769 ) in item 3.b., above, 
times the amount ($4,392) in 3.c., above.
    Cost to be recovered is $13,075.

                                     Figure 1.--Third Party Billing Examples                                    
----------------------------------------------------------------------------------------------------------------
                                                               Arithmetic   Geometric    Short stay   Long stay 
       DRG No.              DRG description       DRG weight    mean LOS     mean LOS    threshold    threshold 
----------------------------------------------------------------------------------------------------------------
``020''..............  Nervous System Infection       2.9769         11.2          7.8            1           30
                        Except Viral Meningitis.                                                                
----------------------------------------------------------------------------------------------------------------


                                                                                                                
                                                               Area wage       IME                              
            Hospital                       Location            rate index   adjustment   Group ASA   Applied ASA
Non-Teaching Hospital..........  Large Urban................          1.0          1.0       $4.392       $4,392
----------------------------------------------------------------------------------------------------------------


                                                                                                                
                                                                    Relative weighted product                   
           Patient              Length of stay    Days above ---------------------------------------  TPC amount
                                                  threshold     Inlier 1    Outlier 2      Total          3     
#1...........................  7 days..........            0       2.9769       0.0000       2.9769      $13,075
#2...........................  21 days.........            0       2.9769       0.0000       2.9769       13,075
#3...........................  35 days.........            5       2.9769       0.8397       3.8166       16,763
----------------------------------------------------------------------------------------------------------------
\1\ DRG Weight.                                                                                                 
\2\ Outlier calculation=44% of per diem weight x number of outlier days=.44 (DRG Weight/Geometric Mean LOS) x   
  (Patient LOS--Long Stay Threshold).                                                                           
  =.44(2.9769/7.8) x (35-30).                                                                                   
  =.44(.38165) x 5 (take out to 5 decimal places).                                                              
  =.16793 x 5 (take out to 5 decimal places).                                                                   
  =.8397 (take out to 4 decimal places).                                                                        
\3\ Applied ASA x Total RWP.                                                                                    

II. Outpatient Rates \1\ \2\

----------------------------------------------------------------------------------------------------------------
                                                                                        Interagency             
                                                                         International   and other              
                                                                            military      federal               
            MEPRS code \4\                Per visit clinical services    education and    agency-       Other   
                                                                            training     sponsored              
                                                                             (IMET)       patients              
----------------------------------------------------------------------------------------------------------------
                                                 A. Medical Care                                                
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BAA                                    Internal Medicine...............           $92          $167         $178
BAB                                    Allergy.........................            34            61           66
BAC                                    Cardiology......................            61           111          119
BAE                                    Diabetes........................            57           103          110
BAF                                    Endocrinology...................            71           130          139
BAG                                    Gastroenterology................            89           162          173

[[Page 56362]]

                                                                                                                
BAH                                    Hematology......................            89           162          173
BAI                                    Hypertension....................            60           108          116
BAJ                                    Nephrology......................           114           207          221
BAK                                    Neurology.......................            86           156          167
BAL                                    Nutrition.......................            24            43           46
BAM                                    Oncology........................            81           148          158
BAN                                    Pulmonary Disease...............            97           175          187
BAO                                    Rheumatology....................            73           133          142
BAP                                    Dermatology.....................            54            98          105
BAQ                                    Infectious Disease..............            76           139          148
BAR                                    Physical Medicine...............            73           132          141
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                B. Surgical Care                                                
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BBA                                    General Surgery.................           107           193          207
BBB                                    Cardiovascular/Thoracic Surgery.            92           167          178
BBC                                    Neurosurgery....................           108           197          210
BBD                                    Ophthalmology...................            72           131          140
BBE                                    Organ Transplant................           109           199          212
BBF                                    Otolaryngology..................            83           150          160
BBG                                    Plastic Surgery.................            87           158          169
BBH                                    Proctology......................            63           114          122
BBI                                    Urology.........................            93           169          180
BBJ                                    Pediatric Surgery...............            53            97          103
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                    C. Obstetrical and Gynecological (OB-GYN)                                   
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BCA                                    Family Planning.................            59           108          115
BCB                                    Gynecology......................            67           121          129
BCC                                    Obstetrics......................            63           114          121
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                D. Pediatric Care                                               
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BDA                                    Pediatric.......................            51            93          100
BDB                                    Adolescent......................            49            89           95
BDC                                    Well Baby.......................            30            54           58
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                               E. Orthopaedic Care                                              
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BEA                                    Orthopaedic.....................            74           135          144
BEB                                    Cast Clinic.....................            34            63           67
BEC                                    Hand Surgery....................            37            67           72
BEE                                    Orthopaedic Appliance...........            53            95          102
BEF                                    Podiatry........................            44            80           86
BEZ                                    Chiropractic Clinic.............            24            44           47
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                    F. Psychiatric and/or Mental Health Care                                    
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BFA                                    Psychiatry......................            79           144          154
BFB                                    Psychology......................            75           137          146
BFC                                    Child Guidance..................            46            83           89
BFD                                    Mental Health...................            71           129          138
BFE                                    Social Work.....................            60           109          117
BFF                                    Substance Abuse Rehabilitation..            60           110          117
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             G. Primary Medical Care                                            
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BGA                                    Family Practice.................            58           106          113
BHA                                    Primary Care....................            56           102          109
BHB                                    Medical Examination.............            50            91           97
BHC                                    Optometry.......................            37            68           73
BHD                                    Audiology Clinic................            27            48           52
BHE                                    Speech Pathology................            60           108          116
BHF                                    Community Health................            39            70           75
BHG                                    Occupational Health.............            51            92           98

[[Page 56363]]

                                                                                                                
BHI                                    Immediate Care Clinic...........            75           137          146
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                            H. Emergency Medical Care                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BIA                                    Emergency Care Clinic...........            91           164          176
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                            I. Flight Medicine Clinic                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BJA                                    Flight Medicine.................            85           154          164
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                           J. Underseas Medicine Care                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BKA                                    Underseas Medicine Clinic.......            26            46           50
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                           K. Rehabilitative Services                                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
BLA                                    Physical Therapy................            24            44           47
BLB                                    Occupational Therapy............            32            58           62
BLC                                    Neuromuscularskeletal screening.            20            37           39
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                          L. Ambulatory Procedure Visit                                         
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                                                  413           746          797
----------------------------------------------------------------------------------------------------------------

III. Other Rates and Charges

----------------------------------------------------------------------------------------------------------------
                                                                                        Interagency             
                                                                         International   and other              
                                                                            military      federal               
            MEPRS code \4\                Per visit clinical service     education and     agency       Other   
                                                                            training     sponsored              
                                                                             (IMET)       patients              
----------------------------------------------------------------------------------------------------------------
FBI                                    A. Immunizations................         $8.00        $15.00       $16.00
DGC                                    B. Hyperbaric Services \5\ per          110.00        201.00       214.00
                                        hour.                                                                   
                                       C. Family Member Rate (formerly           9.90                           
                                        Military Dependents Rate).                                              
                                                                                                                
(3)D. Reimbursement Rates For High                                                                              
 Cost Drugs Requested By External                                                                               
 Providers \6\                                                                                                  
                                                                                                                
                                                                                                                
(3)The FY 1997 high cost drug                                                                                   
 reimbursement rates are for                                                                                    
 prescriptions requested by external                                                                            
 providers and obtained at the                                                                                  
 Military Treatment Facility. The                                                                               
 high cost drug reimbursement rates                                                                             
 are too voluminous to include in                                                                               
 this package. A complete listing of                                                                            
 these rates is available on request                                                                            
 from the OASD (Health Affairs).                                                                                
                                                                                                                
                                                                                                                
(3)E. Reimbursement Rates for High                                                                              
 Cost Services Requested By External                                                                            
 Providers \7\                                                                                                  
                                                                                                                
                                                                                                                
(3)The FY 1997 high cost services                                                                               
 requested by external providers and                                                                            
 obtained at the Military Treatment                                                                             
 Facility are too voluminous to                                                                                 
 include in this package. A complete                                                                            
 listing of these rates is available                                                                            
 on request from the OASD (Health                                                                               
 Affairs).                                                                                                      
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                    International    Current                                                    
                                   classification   procedural                                        Amount of 
    Cosmetic surgery procedure     diseases (ICD-  terminology             FY 97 charge 9               charge  
                                         9)         (CPT) \8\                                                   
----------------------------------------------------------------------------------------------------------------
                                F. Elective Cosmetic Surgery Procedures and Rates                               
                                                                                                                
  Mammaplasty....................          85.50         19325  Surgical Care Services or..........          (a)
                                           85.32         19324  Ambulatory Procedure Visit.........          (b)
                                           85.31         19318                                                  
  Mastopexy......................          85.60         19316  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
  Facial Rhytidectomy............          86.82         15824  Surgical Care Services or..........        ( a )
                                           86.22                Ambulatory Procedure Visit.........        ( b )
  Blepharoplasty.................          08.70         15820  Surgical Care Services or..........        ( a )
                                           08.44         15821  Ambulatory Procedure Visit.........        ( b )
                                                         15822                                                  
                                                         15823                                                  
Mentoplasty (Augmentation                  76.68         21208  Surgical Care Services or..........          (a)
 Reduction).                               76.67         21209  Ambulatory Procedure Visit.........          (b)

[[Page 56364]]

                                                                                                                
Abdominoplasty...................          86.83         15831  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Lipectomy, suction per region              86.83         15876  Surgical Care Services or..........        ( a )
 \10\.                                                   15877  Ambulatory Procedure Visit.........        ( b )
                                                         15878                                                  
                                                         15879                                                  
Rhinoplasty......................          21.87         30400  Surgical Care Services or..........        ( a )
                                           21.86         30410  Ambulatory Procedure Visit.........        ( b )
Scar revisions beyond CHAMPUS....          86.84        1578__  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Mandibular or Maxillary                    76.41         21194  Surgical Care Services or..........        ( a )
 Repositioning.                                                 Ambulatory Procedure Visit.........        ( b )
Minor Skin Lesions \11\..........          86.30        1578__  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Dermabrasion.....................          86.25         15780  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Hair Restoration.................          86.64         15775  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Removing Tattoos.................          86.25         15780  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Chemical Peel....................          86.24         15790  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Arm/Thigh Dermolipectomy.........          86.83        1583__  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
Brow Lift........................           86.3         15839  Surgical Care Services or..........        ( a )
                                                                Ambulatory Procedure Visit.........        ( b )
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                                        Interagency             
                                                                         International   and other              
                                                                            military      federal               
            MEPRS code \4\              Per visit clinical service \12\  education and     agency       Other   
                                                                            training     sponsored              
                                                                             (IMET)       patients              
----------------------------------------------------------------------------------------------------------------
                                                 G. Dental Rate                                                 
                                                                                                                
CA                                     Dental Services (CTV 1).........         $9.00        $25.00       $26.00
CA                                     Dental Services (CTV 2).........          7.00         20.00        21.00
CB                                     Dental Prosthetics Laboratory             2.00          6.00         6.00
                                        (CLV).                                                                  
                                                                                                                
                                             H. Ambulance Rate \13\                                             
                                                                                                                
FEA                                    Ambulance Service...............         57.00        103.00       110.00
                                                                                                                
                               I. High Cost Laboratory and Radiology Services \7\                               
                                                                                                                
                                       High Cost Laboratory............          6.00         10.00        11.00
CPT-4 Multiplier                       High Cost Radiology.............         20.00         36.00        38.00
CPT-4 Multiplier                                                                                                
                                                                                                                
                                              J. AirEvac Rate \14\                                              
                                                                                                                
                                       AirEvac Services (Ambulatory)...         89.00        162.00       173.00
                                       AirEvac Services (Litter).......        265.00        481.00       513.00
----------------------------------------------------------------------------------------------------------------

Notes on Cosmetic Surgery Charges

    a Charges for inpatient Surgical Care Services are 
contained in Section I.B. (See Notes 9 through 11 on reimbursable 
rates for further details.)
    b Charges for Ambulatory Procedure Visits (formerly Same 
Day Surgery) are contained in Section II.L. (See Notes 9 through 11 
on reimbursable rates for further details.)

Notes on Reimbursable Rates

    1 Percentages can be applied when preparing bills for both 
inpatient and outpatient services. Pursuant to the provisions of 10 
U.S.C. 1095, the inpatient Diagnosis Related Groups and inpatient 
per diem percentages are 96 percent hospital and 4 percent 
professional fee. The outpatient per visit percentages are 58 
percent hospital, 30 percent ancillary, and 12 percent professional.
    2 DoD civilian employees located in overseas areas shall be 
rendered a bill when services are performed. Payment is due 60 days 
from the date of the bill.
    3 The cost per DRG (Diagnosis Related Groups) is based on 
the inpatient full reimbursement rate per hospital discharge, 
weighted to reflect the intensity of the principal and secondary 
diagnoses, surgical procedures, and patient demographics involved. 
The adjusted standardized amounts (ASA) per Relative Weighted 
Product (RWP) for use in the Direct Care System will be comparable 
to procedures utilized by the Health Care Financing Administration 
(HCFA) and the Civilian Health and Medical Program for the Uniformed 
Services (CHAMPUS). These expenses include all direct care expenses 
associated with direct patient care. The average cost per RWP for 
large urban, other urban/rural, and overseas will be published 
annually as an adjusted standardized amount (ASA) and will include 
the cost of inpatient professional services. The DRG rates will 
apply to reimbursement from all sources, not just third party 
payers.
    4 The Medical Expense and Performance Reporting System 
(MEPRS) code is a three digit code which defines the summary account 
and the subaccount within a functional category in the DoD medical 
system. An example of this hierarchical arrangement is as follows:

[[Page 56365]]



                  Outpatient Care (Functional Category)                 
------------------------------------------------------------------------
                     Code                                MEPRS          
------------------------------------------------------------------------
Medical Care (Summary Account)...............  BA                       
Internal Medicine (Subaccount)...............  BAA                      
------------------------------------------------------------------------
MEPRS codes are used to ensure that consistent expense and operating    
  performance data is reported in the DoD military medical system.      

    5 Hyperbaric services are to be charged based on full hours 
and 15 minute increments of service. Providers should calculate the 
charges based on the number of hours (or fraction thereof) of 
service. Fractions of hours should be rounded to the next 15 minute 
increment (e.g. 31 minutes becomes 45 minutes).
    6 High cost prescription services requested by external 
providers (Physicians, Dentists, etc.) are relevant to the Third 
Party Collection Program. Third party payers (such as insurance 
companies) shall be billed for high cost prescriptions in those 
instances in which beneficiaries who have medical insurance, seen by 
providers external to a Military Medical Treatment Facility (MTF), 
obtain the prescribed medication from an MTF. Eligible beneficiaries 
(family members or retirees with medical insurance) are not 
personally liable for this cost and shall not be billed by the MTF. 
Medical Services Account (MSA) patients, who are not beneficiaries 
as defined in 10 U.S.C. 1074 and 1076, are charged at the ``Other'' 
rate if they are seen by an outside provider and come to the MTF for 
prescription services. A bill will be produced if the total 
prescription costs in a day (defined as 0001 hours to 2400 hours) 
exceeds $25.00 when bundled together. Bundling refers to the 
accumulation of a patient's bills during the previously defined 24 
hour period. The standard cost of high cost medications includes the 
cost of the drugs plus a dispensing fee, per prescription. The 
prescription cost is calculated by multiplying the number of units 
(tablets, capsules, etc.) times the unit cost and adding a $5.00 
dispensing fee per prescription.
    7 Charges for high cost ancillary services requested by 
external providers (Physicians, Dentists, etc.) are relevant to the 
Third Party Collection Program. Third party payers (such as 
insurance companies) shall be billed for high cost services in those 
instances in which beneficiaries who have medical insurance, are 
seen by providers external to a Military Medical Treatment Facility 
(MTF), and obtain the prescribed service from an MTF. Laboratory and 
Radiology procedure costs are calculated using the CPT-4 weight 
multiplied by either the high cost laboratory or radiology 
multiplier (Section III.I). Eligible beneficiaries (family members 
or retirees with medical insurance) are not personally liable for 
this cost and shall not be billed by the MTF. MSA patients, who are 
not beneficiaries as defined by 10 U.S.C 1074 and 1076, are charged 
at the ``Other'' rate if they are seen by an outside provider and 
come to the MTF for high cost services. A bill will be produced if 
the total ancillary services costs in a day (defined as 0001 hours 
to 2400 hours) exceed $25.00 when bundled together. Bundling refers 
to the accumulation of a patient's bills during the previously 
defined 24 hour period.
    8 The attending physician is to complete the Physicians' 
Current Procedural Terminology code to indicate the appropriate 
procedure followed during cosmetic surgery. The appropriate rate 
will be applied depending on the admission type of the patient, 
e.g., ambulatory procedure visit or inpatient surgical care 
services.
    9 Family members of active duty personnel, retirees and 
their family members, and survivors will be charged cosmetic surgery 
rates. The patient shall be charged the rate as specified in the FY 
1997 reimbursable rates for an episode of care. The charges for 
elective cosmetic surgery are at the full reimbursement rate 
(designated as the ``Other'' rate) for Surgical Care Services in 
Section I.B., or Ambulatory Procedure Visits as contained in Section 
II.L of this attachment. The patient will be responsible for both 
the cost of the implant(s) in addition to the prescribed cosmetic 
surgery rates.

    Note: The implants and procedures used for the augmentation 
mammaplasty are in compliance with Food and Drug Administration 
guidelines.

    10 Each regional lipectomy will carry a separate charge. 
Regions include head and neck, abdomen, flanks, and hips.
    \11\ These procedures are inclusive in the minor skin lesions. 
However, CHAMPUS separates them as noted here. All charges are for 
the entire treatment regardless of the number of visits required.
    \12\ Dental services are based on a Composite Time Value (CTV). 
Charges should be calculated based on the time value of the 
procedure times the CTV rate. The first CTV (1.0 value) shall be 
calculated using the CTV 1 rate. Any subsequent CTVs and portions 
thereof shall be calculated using the CTV 2 rate. The Composite Lab 
Value (CLV) should be used to calculate charges for dental 
appliances and prostheses.
    \13\ Ambulance charges are based on full hours and 15 minute 
increments of service. Providers should calculate the charges based 
on the number of hours (or fraction thereof) that the ambulance is 
logged out on a patient run. Fractions of hours should be rounded to 
the next 15 minute increment (e.g. 31 minutes becomes 45 minutes).
    \14\ Air in-flight medical care reimbursement charges are 
determined by the status of the patient (Litter or Ambulatory) and 
are per patient.

2. Department of Health and Human Services

    For the Department of Health and Human Services, Indian Health 
Service, effective October 1, 1996 and thereafter:

------------------------------------------------------------------------
                                                                 HHS    
------------------------------------------------------------------------
Hospital Care Inpatient Day:                                            
    General Medical Care.........  Alaska..................       $1,696
                                   Rest of the United              1,037
                                    States.                             
Outpatient Medical Treatment:                                           
    Outpatient Visit.............  Alaska..................          339
                                   Rest of the United                207
                                    States.                             
------------------------------------------------------------------------

3. Department of Veterans Affairs

    Actual direct and indirect costs are compiled by type of care for 
the previous year, and facility overhead costs are added. Adjustments 
are made using the budgeted percentage changes for the current year and 
the budget year to compute the base rate for the budget year. The 
budget year base rate is then adjusted by estimated costs for the 
depreciation of buildings and equipment, central office overhead, 
Government employee retirement benefits, and return on fixed assets 
(interest on capital for land, buildings, and equipment (net book 
value)), to compute the budget year tortiously liable reimbursement 
rates. Also shown for inpatient per diem rates are breakdowns into 
three cost components: Physician; Ancillary; and Nursing, Room, and 
Board. As with the total per diem rates, these breakdowns are 
calculated from actual data by type of care.
    Effective October 1, 1996, and thereafter:

[[Page 56366]]



                 Hospital Care, Rates Per Inpatient Day                 
                                                                        
General Medicine...........................................        $1046
    Physician..............................................          125
    Ancillary..............................................          273
    Nursing, Room, and Board...............................          648
Neurology..................................................         1014
    Physician..............................................          148
    Ancillary..............................................          268
    Nursing, Room, and Board...............................          598
Rehabilitation Medicine....................................          822
    Physician..............................................           93
    Ancillary..............................................          251
    Nursing, Room, and Board...............................          478
Blind Rehabilitation.......................................          973
    Physician..............................................           78
    Ancillary..............................................          483
    Nursing, Room, and Board...............................          412
Spinal Cord Injury.........................................          977
    Physician..............................................          121
    Ancillary..............................................          246
    Nursing, Room, and Board...............................          610
Surgery....................................................         1923
    Physician..............................................          212
    Ancillary..............................................          583
    Nursing, Room, and Board...............................         1128
General Psychiatry.........................................          501
    Physician..............................................           47
    Ancillary..............................................           79
    Nursing, Room, and Board...............................          375
Substance Abuse (Alcohol and Drug Treatment)...............          330
    Physician..............................................           31
    Ancillary..............................................           76
    Nursing, Room, and Board...............................          223
Intermediate Medicine......................................          428
    Physician..............................................           21
    Ancillary..............................................           63
    Nursing, Room, and Board...............................          344
                                                                        
                    Nursing Home Care, Rates Per Day                    
                                                                        
Nursing Home Care..........................................          288
    Physician..............................................            9
    Ancillary..............................................           39
    Nursing, Room, and Board...............................          240
                                                                        
                 Outpatient Medical and Dental Treatment                
                                                                        
Outpatient Visit...........................................          194
Emergency Dental Outpatient Visit..........................          121
Prescription Filled........................................           20
                                                                        

    For the period beginning October 1, 1996, the rates prescribed 
herein superseded those established by the Director of the Office of 
Management and Budget November 29, 1995 (60 FR 61450).
Franklin D. Raines,
Director, Office of Management and Budget.
[FR Doc. 96-27883 Filed 10-30-96; 8:45 am]
BILLING CODE 3110-01-P