[Federal Register Volume 63, Number 212 (Tuesday, November 3, 1998)]
[Notices]
[Pages 59284-59290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29314]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Medical and Dental Services Fiscal Year 1999

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: Notice is hereby given that the Deputy Chief Financial Officer 
in a memorandum dated September 29, 1998 established the following 
reimbursement rates for inpatient and outpatient medical care to be 
provided in FY 1999. These rates are effective October 1, 1998.

Medical and Dental Services: Fiscal Year 1999

    The FY 1999 Department of Defense (DoD) reimbursement rates for 
inpatient, outpatient, and other services are provided in accordance 
with Title 10, United States Code, Section 1095. Due to size, the 
sections containing the Drug Reimbursement Rates (Section III.E) and 
the rates for Ancillary Services Requested by Outside Providers 
(Section III.F) are not included in this package. The Office of the 
Assistant Secretary of Defense (Health Affairs) will provide these 
rates upon request (MAJ Rose Layman, OASD(HA)--Response Management/Tri-
Care Management Activity, (703) 681-8912 or DSN 761-8912). The medical 
and dental service rates in this package (including the rates for 
ancillary services, prescription drugs or other procedures requested by 
outside providers) are effective October 1, 1998.
I. Inpatient Rates \1\ \2\

[[Page 59285]]



                                Inpatient, Outpatient and Other Rates and Charges
----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
                        Per inpatient day                          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
A. Burn Center..................................................       $2,538.00       $4,632.00       $4,952.00
B. Surgical Care Services.......................................        1,236.00        2,255.00        2,411.00
    (Cosmetic Surgery)
C. All Other Inpatient Services
    (Based on Diagnosis Related Groups (DRG) \3\)
----------------------------------------------------------------------------------------------------------------

1. FY99 Direct Care Inpatient Reimbursement Rates

----------------------------------------------------------------------------------------------------------------
                                                                                                   Other (full/
                    Adjusted standard amount                           IMET         Interagency    third party)
----------------------------------------------------------------------------------------------------------------
    Large Urban.................................................       $2,429.00       $4,552.00       $4,825.00
    Other Urban/Rural...........................................        2,642.00        5,413.00        5,760.00
    Overseas....................................................        2,989.00        6,823.00        7,234.00
----------------------------------------------------------------------------------------------------------------

2. Overview
    The FY 1999 inpatient rates are based on the cost per Diagnosis 
Related Groups (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 cost 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 paragraph I.C.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 (LOS) 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 paragraph I.C.3., below.
3. Example of Adjusted Standardized Amounts for Inpatient Stays
    Figure 1 shows examples for a nonteaching hospital in a Large Urban 
Area.
    a. The cost to be recovered is DoD's cost for medical services 
provided in the nonteaching hospital located in a large urban area. 
Billings will be at the third party rate.
    b. DRG 020: Nervous System Infection Except Viral Meningitis. The 
RWP for an inlier case is the CHAMPUS weight of 2.9769. (DRG statistics 
shown are from FY 1997).
    c. The DoD adjusted standardized amount to be charged is $4,825 
(i.e., the third party rate as shown in the table).
    d. DoD cost to be recovered at a nonteaching hospital with area 
wage index of 1.0 is the RWP factor (2.9769) in 3.b., above, multiplied 
by the amount ($4,825) in 3.c., above.
    e. Cost to be recovered is $14,364.

                                     Figure 1.--Third Party Billing Examples
----------------------------------------------------------------------------------------------------------------
                                                           Arithmetic     Geometric    Short stay     Long stay
     DRG No.           DRG description       DRG weight     mean LOS      mean LOS      threshold     threshold
----------------------------------------------------------------------------------------------------------------
010.............  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
----------------------------------------------------------------------------------------------------------------
Nonteaching Hospital..............  Large Urban.........          1.0           1.0     $4,825.00      4,825.00
----------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Relative weighted product
              Patient                           Length of stay              Days above   ------------------------------------------------  TPC amount***
                                                                             threshold        Inlier*        Outlier**         Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
#1.................................  7 days.............................               0          2.9769          0.0000          2.9769         $14,364
#2.................................  21 days............................               0          2.9769          0.0000          2.9769          14,364
#3.................................  35 days............................               5          2.9769          0.6297          3.6066          17,402
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DRG Weight.
** Outlier calculation = 33 percent of per diem weight  x  number of outlier days.
  = .33 (DRG Weight/Geometric Mean LOS)  x  (Patient LOS--Long Stay Threshold).
  = .33 (2.9769/7.8)  x  35-30).
  = .33 (.38165  x  5 (take out to five decimal places).
  = .12594  x  5 (take out to five decimal places).
  = .6297 (take out to four decimal places).
*** Applied ASA  x  Total RWP.


[[Page 59286]]

II. Outpatient Rates \1\ \2\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
                                                 A. Medical Care
----------------------------------------------------------------------------------------------------------------
BAA............................  Internal Medicine..............         $104.00         $186.00         $198.00
BAB............................  Allergy........................           48.00           86.00           92.00
BAC............................  Cardiology.....................           78.00          140.00          149.00
BAE............................  Diabetic.......................           57.00          102.00          108.00
BAF............................  Endocrinology (Metabolism).....           90.00          162.00          173.00
BAG............................  Gastroenterology...............          114.00          205.00          219.00
BAH............................  Hematology.....................          145.00          260.00          277.00
BAI............................  Hypertension...................           89.00          160.00          170.00
BAJ............................  Nephrology.....................          138.00          245.00          261.00
BAK............................  Neurology......................          112.00          200.00          213.00
BAL............................  Outpatient Nutrition...........           33.00           59.00           63.00
BAM............................  Oncology.......................          132.00          236.00          251.00
BAN............................  Pulmonary Disease..............          118.00          211.00          225.00
BAO............................  Rheumatology...................           84.00          151.00          160.00
BAP............................  Dermatology....................           68.00          122.00          130.00
BAQ............................  Infectious Disease.............          126.00          225.00          240.00
BAR............................  Physical Medicine..............           74.00          133.00          142.00
BAS............................  Radiation Therapy..............           91.00          164.00          174.00
----------------------------------------------------------------------------------------------------------------
                                                B. Surgical Care
----------------------------------------------------------------------------------------------------------------
BBA............................  General Surgery................          164.00          295.00          314.00
BBB............................  Cardiovascular and Thoracic              132.00          237.00          252.00
                                  Surgery.
BBC............................  Neurosurgery...................          188.00          337.00          359.00
BBD............................  Ophthalmology..................          102.00          183.00          194.00
BBE............................  Organ Transplant...............          239.00          429.00          457.00
BBF............................  Otolaryngology.................          124.00          222.00          237.00
BBG............................  Plastic Surgery................          129.00          231.00          247.00
BBH............................  Proctology.....................           65.00          117.00          124.00
BBI............................  Urology........................          125.00          224.00          239.00
BBJ............................  Pediatric Surgery..............           91.00          163.00          174.00
----------------------------------------------------------------------------------------------------------------
                                 C. Obstetrical and Gynecological (OB-GYN) Care
----------------------------------------------------------------------------------------------------------------
BCA............................  Family Planning................           45.00           81.00           87.00
BCB............................  Gynecology.....................          101.00          181.00          193.00
BCC............................  Obstetrics.....................           72.00          129.00          137.00
BCD............................  Breast Cancer Clinic...........          171.00          307.00          327.00
----------------------------------------------------------------------------------------------------------------
                                               D. Pediatric Care
----------------------------------------------------------------------------------------------------------------
BDA............................  Pediatric......................           63.00          113.00          120.00
BDB............................  Adolescent.....................           60.00          108.00          115.00
BDC............................  Well Baby......................           40.00           71.00           75.00
----------------------------------------------------------------------------------------------------------------
                                              E. Orthopaedic Care
----------------------------------------------------------------------------------------------------------------
BEA............................  Orthopaedic....................          118.00          212.00          226.00
BEB............................  Cast...........................           50.00           90.00           96.00
BEC............................  Hand Surgery...................           61.00          109.00          116.00
BEE............................  Orthotic Laboratory............           60.00          108.00          115.00
BEF............................  Podiatry.......................           67.00          119.00          127.00
BEZ............................  Chiropractic...................           24.00           42.00           45.00
----------------------------------------------------------------------------------------------------------------
                                    F. Psychiatric and/or Mental Health Care
----------------------------------------------------------------------------------------------------------------
BFA............................  Psychiatry.....................           97.00          174.00          186.00
BFB............................  Psychology.....................           79.00          141.00          150.00
BFC............................  Child Guidance.................           52.00           93.00           99.00
BFD............................  Mental Health..................          105.00          188.00          201.00
BFE............................  Social Work....................           77.00          137.00          146.00
BFF............................  Substance Abuse................           82.00          147.00          156.00
----------------------------------------------------------------------------------------------------------------
                                    G. Family Practice/Primary Medical Care
----------------------------------------------------------------------------------------------------------------
BGA............................  Family Practice................           74.00          133.00          141.00

[[Page 59287]]

BHA............................  Primary Care...................           75.00          134.00          143.00
BHB............................  Medical Examination............           66.00          118.00          126.00
BHC............................  Optometry......................           48.00           86.00           91.00
BHD............................  Audiology......................           27.00           49.00           52.00
BHE............................  Speech Pathology...............           69.00          123.00          131.00
BHF............................  Community Health...............           48.00           87.00           92.00
BHG............................  Occupational Health............           78.00          141.00          150.00
BHH............................  TRICARE Outpatient.............           44.00           79.00           84.00
BHI............................  Immediate Care.................          108.00          193.00          206.00
----------------------------------------------------------------------------------------------------------------
                                           H. Emergency Medical Care
----------------------------------------------------------------------------------------------------------------
BIA............................  Emergency Medical..............          114.00          205.00          218.00
----------------------------------------------------------------------------------------------------------------
                                             I. Flight Medical Care
----------------------------------------------------------------------------------------------------------------
BJA............................  Flight Medicine................          103.00          185.00          197.00
----------------------------------------------------------------------------------------------------------------
                                           J. Underseas Medical Care
----------------------------------------------------------------------------------------------------------------
BKA............................  Underseas Medicine.............           35.00           63.00           67.00
----------------------------------------------------------------------------------------------------------------
                                           K. Rehabilitative Services
----------------------------------------------------------------------------------------------------------------
BLA............................  Physical Therapy...............           34.00           60.00           64.00
BLB............................  Occupational Therapy...........           48.00           86.00           91.00
----------------------------------------------------------------------------------------------------------------

III. Other Rates and Charges1,2 Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
          MEPRS code 4                   Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
FBI............................  A. Immunization................          $13.00          $22.00          $24.00
DGC............................  B. Hyperbaric Chamber 5........          191.00          343.00          366.00
                                 C. Ambulatory Procedure Visit            926.00        1,657.00        1,765.00
                                  (APV) 6.
                                 D. Family Member Rate (formerly           10.45  ..............  ..............
                                  Military Dependents Rate).
----------------------------------------------------------------------------------------------------------------

E. Reimbursement Rates for Drugs Requested By Outside Providers 
7
    The FY 1999 drug reimbursement rates for drugs are for 
prescriptions requested by outside providers and obtained at a Military 
Treatment Facility. The rates are established based on the cost of the 
particular drugs provided. Final rule 32 CFR part 200 eliminates the 
high cost ancillary services' dollar threshold and the associated term 
``high cost ancillary service.'' The phrase ``high cost ancillary 
service'' will be replaced with the phrase ``ancillary services 
requested by an outside provider'' on publication of final rule 32 CFR 
Part 220. The list of drug reimbursement rates is too large to include 
here. These rates are available on request from OASD (Health Affairs)--
MAJ Rose Layman, OASD(HA)-Resource Management/Tri-Care Management 
Activity, (703) 681-8912 or DSN 761-8912.
F. Reimbursement Rates for Ancillary Services Requested By Outside 
Providers 8
    Final rule 32 CFR part 220 eliminates the high cost ancillary 
services' dollar threshold and the associated term ``high cost 
ancillary service.'' The phrase ``high cost ancillary service'' will be 
replaced with the phrase ``ancillary services requested by an outside 
provider'' on publication of final rule 32 CFR part 220.
    The list of FY 1999 rates for ancillary services requested by 
outside providers and obtained at a Military Treatment Facility is too 
large to include here. These rates are available on request from 
OASD(Health Affairs)--MAJ Rose Layman, OASD(HA)-Resource Management/
Tri-Care Management Activity, (703) 681-8912 or DSN 761-8912.
G. Elective Cosmetic Surgery Procedures and Rates

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           International      Current
                                          classification    procedural
       Cosmetic surgery procedure         diseases (ICD-    terminology                     FY 1999 charge 10                       Amount of charge
                                                9)            (CPT) 9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mammaplasty.............................           85.50           19325  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                   85.32           19324   applicable Outpatient Clinic Rate.
                                                   85.31           19318
Mastopexy...............................           85.60           19316  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.

[[Page 59288]]

Facial Rhytidectomy.....................           86.82           15824  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                   86.22                   applicable Outpatient Clinic Rate.
Blepharoplasty..........................           08.70           15820  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                   08.44           15821   applicable Outpatient Clinic Rate.
                                                                   15822
                                                                   15823
Mentoplasty (Augmentation/Reduction)....           76.68           21208  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                   76.67           21209   applicable Outpatient Clinic Rate.
Abdominoplasty..........................           86.83           15831  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Lipectomy suction per region 11.........           86.83           15876  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                   15877   applicable Outpatient Clinic Rate.
                                                                   15878
                                                                   15879
Rhinoplasty.............................           21.87           30400  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                   21.86           30410   applicable Outpatient Clinic Rate.
Scar Revisions beyond CHAMPUS...........           86.84          1578__  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Mandibular or Maxillary Repositioning...           76.41           21194  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Minor Skin Lesions 12...................           86.30          1578__  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Dermabrasion............................           86.25           15780  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Hair Restoration........................           86.64           15775  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Removing Tattoos........................           86.25           15780  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Chemical Peel...........................           86.24           15790  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Arm/Thigh Dermolipectomy................           86.83          1583__  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
Brow Lift...............................            86.3           15839  Inpatient Surgical Care Per Diem or APV or            (a b c)
                                                                           applicable Outpatient Clinic Rate.
--------------------------------------------------------------------------------------------------------------------------------------------------------

H. Dental Rate \13\ Per Procedure

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
                                 Dental Services................          $56.00         $101.00         $108.00
                                 ADA Code and DoD established
                                  weight
----------------------------------------------------------------------------------------------------------------

I. Ambulance Rage \14\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
FEA............................  Ambulance......................          $56.00         $101.00         $107.00
----------------------------------------------------------------------------------------------------------------

J. Ancillary Services Requested by an Outside Provider \8\ Per 
Procedure

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
                                 Laboratory procedures requested          $10.00          $17.00          $18.00
                                  by an outside provider CPT `98
                                  Weight Multiplier.
                                 Radiology procedures requested            25.00           45.00           48.00
                                  by an outside provider CPT `98
                                  Weight Multiplier.
                                 Cardiology procedures requested           17.00           31.00           33.00
                                  by an outside provider CPT `98
                                  Weight Multiplier.
----------------------------------------------------------------------------------------------------------------


[[Page 59289]]

K. AirEvac Rate \15\ Per visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
                                 AirEvac Services--Ambulatory...          $90.00         $161.00         $172.00
                                 AirEvac Services--Litter.......          256.00          459.00          489.00
----------------------------------------------------------------------------------------------------------------

L. Observation Rate \16\ Per hour

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency
                                                                     military        and other
         MEPRS code \4\                  Clinical service          education and  Federal agency   Other (full/
                                                                     training        sponsored     third party)
                                                                      (IMET)         patients
----------------------------------------------------------------------------------------------------------------
                                 Observation Services--Hour.....          $14.50          $25.83          $27.50
----------------------------------------------------------------------------------------------------------------

Notes on Cosmetic Surgery Charges

    a Per diem charges for inpatient surgical care 
services are listed in Section I.B. (See notes 9 through 11, below, 
for further details on reimbursable rates.)
    b Charges for ambulatory procedure visits (formerly 
same day surgery) are listed in Section III.C. (See notes 9 through 
11, below, for further details on reimbursable rates.) The 
ambulatory procedure visit (APV) rate is used if the elective 
cosmetic surgery is performed in an ambulatory procedure unit (APU).
    c Charges for outpatient clinic visits are listed in 
Sections II.A-K. The outpatient clinic rate is not used for services 
provided in an APU. The APV rate should be used in these cases.

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 charges. The outpatient per visit percentages are 89 
percent outpatient services and 11 percent professional charges.
    \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 Diagnosis Related Group (DRG) 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 is comparable to procedures used 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 
sub account within a functional category in the DoD medical system. 
MEPRS codes are used to ensure that consistent expense and operating 
performance data is reported in the DoD military medical system. An 
example of the MEPRS hierarchical arrangement follows:


Outpatient Care (Functional Category)..........  B
Medical Care (Summary Account).................  BA
Internal Medicine (Subaccount).................  BAA


    \5\ Hyperbaric services charges shall be based on hours of 
service in 15 minute increments. The rates listed in Section III.B. 
are for 60 minutes or 1 hour of service. Providers shall calculate 
the charges based on the number of hours (and/or fractions of an 
hour) of service. Fractions of an hour shall be rounded to the next 
15 minute increment (e.g., 31 minutes shall be charged as 45 
minutes).
    \6\ Ambulatory procedure visit is defined in DOD Instruction 
6025.8, ``Ambulatory Procedure Visit (APV),'' dated September 23, 
1996, as immediate (day of procedure) pre-procedure and immediate 
post-procedure care requiring an unusual degree of intensity and 
provided in an ambulatory procedure unit (APU). Care is required in 
the facility for less than 24 hours. This rate is also used for 
elective cosmetic surgery performed in an APU.
    \7\ Prescription services requested by outside providers (e.g., 
physicians or dentists) are relevant to the Third Party Collection 
Program. Third party payers (such as insurance companies) shall be 
billed for prescription services when beneficiaries who have medical 
insurance obtain medications from a Military Treatment Facility 
(MTF) that are prescribed by providers external to the 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 Service 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 only 
come to the MTF for prescription services. The standard cost of 
medications ordered by an outside provider includes the cost of the 
drugs plus a dispensing fee per prescription. The prescription cost 
is calculated by multiplying the number of units (e.g., tablets or 
capsules) by the unit cost and adding a $5.00 dispensing fee per 
prescription. Final rule 32 CFR part 220 eliminates the high cost 
ancillary services' dollar threshold and the associated term ``high 
cost ancillary service.'' The phrase ``high cost ancillary service'' 
will be replaced with the phrase ``ancillary services requested by 
an outside provider'' on publication of final rule 32 CFR part 220. 
The elimination of the threshold also eliminates the need to bundle 
costs whereby a patient is billed if the total cost of ancillary 
services in a day (defined as 0001 hours to 2400 hours) exceeded 
$25.00. The elimination of the threshold is effective as per date 
stated in final rule 32 CFR part 220.
    \8\ Charges for ancillary services requested by an outside 
provider (physicians, dentists, etc.) are relevant to the Third 
Party Collection Program. Third party payers (such as insurance 
companies) shall be billed for ancillary services when beneficiaries 
who have medical

[[Page 59290]]

insurance obtain services from the MTF that are prescribed by 
providers external to the MTF. Laboratory and Radiology procedure 
costs are calculated by multiplying the DoD established weight for 
the Physicians' Current Procedural Terminology (CPT) `98) code by 
either the cardiology, laboratory or radiology multiplier (Section 
III.J). Eligible beneficiaries (family members or retirees with 
medical insurance) are not personally liable for this cost an 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 only come to the 
MTF for ancillary services. Final rule 32 CFR part 220 eliminates 
the high cost ancillary services' dollar threshold and the 
associated term ``high cost ancillary service.'' The phrase ``high 
cost ancillary service'' will be replaced with the phrase 
``ancillary services requested by an outside provider'' on 
publication of final rule 32 CFR part 220. The elimination of the 
threshold also eliminates the need to bundle costs whereby a patient 
is billed if the total cost of ancillary services in a day (defined 
as 0001 hours to 2400 hours) exceeded $25.00. The elimination of the 
threshold is effective as per date stated in final rule 32 CFR part 
220.
    \9\ The attending physician is to complete the CPT `98 code to 
indicate the appropriate procedure followed during cosmetic surgery. 
The appropriate rate will be applied depending on the treatment 
modality of the patient: ambulatory procedure visit, outpatient 
clinic visit or inpatient surgical care services.
    \10\ Family members of active duty personnel, retirees and their 
family members, and survivors shall be charged elective cosmetic 
surgery rates. Elective cosmetic surgery procedure information is 
contained in Section III.G. The patient shall be charged the rate as 
specified in the FY 1999 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 inpatient 
per diem surgical care services in Section I.B., ambulatory 
procedure visits as contained in Section III.C, or the appropriate 
outpatient clinic rate in Sections II.A-K. The patient is 
responsible for the cost of the implant(s) and the prescribed 
cosmetic surgery rate. (Note: The implants and procedures used for 
the augmentation mammaplasty are in compliance with Federal Drug 
Administration guidelines.)
    \11\ Each regional lipectomy shall carry a separate charge. 
Regions include head and neck, abdomen, flanks, and hips.
    \12\ These procedures are inclusive in the minor skin lesions. 
However, CHAMPUS separates them as noted here. All charges shall be 
for the entire treatment, regardless of the number of visits 
required.
    \13\ Dental service rates are based on a dental rate multiplier 
times the American Dental Association (ADA) code and the DoD 
established weight for that code.
    \14\ Ambulance charges shall be based on hours of service in 15 
minute increments. The rates listed in Section III.I are for 60 
minutes or 1 hour of service. Providers shall calculate the charges 
based on the number of hours (and/or fractions of an hour) that the 
ambulance is logged out on a patient run. Fractions of an hour shall 
be rounded to the next 15 minute increment (e.g., 31 minutes shall 
be charged as 45 minutes).
    \15\ Air in-flight medical care reimbursement charges are 
determined by the status of the patient (ambulatory or litter) and 
are per patient. The appropriate charges are billed only by the Air 
Force Global Patient Movement Requirement Center (GPMRC).
    \16\ Observation Services are billed at either the hourly or 
daily charge. Begin counting when the patient is placed in the 
observation bed, and round to the nearest hour. The daily rate for 
full/third party, for example, would be $660 based on 24 hours of 
service. If a patient status changes to inpatient, the charges for 
observation services are added to the DRG assigned to the case and 
not billed separately. If a patient is released from Observation 
status and is sent to an APV, the charges for Observation services 
are not billed separately, but are added to the APV rate in order to 
recover all expenses.
    Dated: October 27, 1998.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 98-29314 Filed 11-2-98; 8:45 am]
BILLING CODE 5000-04-M