Federal Register, Volume 63 Issue 212 (Tuesday, November 3, 1998)

[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.

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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
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Arithmetic Geometric Short stay Long stay
DRG No. DRG description DRG weight mean LOS mean LOS threshold threshold
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010............. Nervous System Infection 2.9769 11.2 7.8 1 30
Except Viral Meningitis.
----------------------------------------------------------------------------------------------------------------

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

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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

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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
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B. Surgical Care
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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
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C. Obstetrical and Gynecological (OB-GYN) Care
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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
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D. Pediatric Care
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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
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E. Orthopaedic Care
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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
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F. Psychiatric and/or Mental Health Care
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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
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G. Family Practice/Primary Medical Care
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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
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H. Emergency Medical Care
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BIA............................ Emergency Medical.............. 114.00 205.00 218.00
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I. Flight Medical Care
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BJA............................ Flight Medicine................ 103.00 185.00 197.00
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J. Underseas Medical Care
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BKA............................ Underseas Medicine............. 35.00 63.00 67.00
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K. Rehabilitative Services
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BLA............................ Physical Therapy............... 34.00 60.00 64.00
BLB............................ Occupational Therapy........... 48.00 86.00 91.00
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III. Other Rates and Charges^1,² Per Visit

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

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International Current
classification procedural
Cosmetic surgery procedure diseases (ICD- terminology FY 1999 charge ^{10 Amount of charge
9) (CPT) ^{9
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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.
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H. Dental Rate \13\ Per Procedure

I. Ambulance Rage \14\ Per Visit

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

[[Page 59289]]

K. AirEvac Rate \15\ Per visit

L. Observation Rate \16\ Per hour

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}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}