[Federal Register Volume 64, Number 216 (Tuesday, November 9, 1999)]
[Notices]
[Pages 61090-61091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29237]



[[Page 61090]]

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DEPARTMENT OF DEFENSE

Office of the Secretary


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); Fiscal Year 2000 DRG Updates

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of DRG revised rates.

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SUMMARY: This notice describes the changes made to the TRICARE/CHAMPUS 
DRG-based payment system in order to conform to changes made to the 
Medicare Prospective Payment System (PPS).
    It also provides the updated fixed loss cost outlier threshold, 
cost-to-charge ratios and the Internet address for accessing the 
updated adjusted standardized amounts, DRG relative weights, and 
beneficiary cost-share per diem rates to be used for FY 2000 under the 
TRICARE/CHAMPUS DRG-based payment system.

EFFECTIVE DATES: The rates, weights and Medicare PPS changes which 
affect the TRICARE/CHAMPUS DRG-based payment system contained in this 
notice are effective for admissions occurring on or after October 1, 
1999.

ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and 
Reimbursement Systems, 16401 East Centretech Parkway, Aurora, CO 80011-
9043.
    For copies of the Federal Register containing this notice, contact 
the Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, (202) 783-3238. The charge for the Federal 
Register is $1.50 for each issue payable by check or money order to the 
Superintendent of Documents.

FOR FURTHER INFORMATION CONTACT: Marty Maxey, Medical Benefits and 
Reimbursement Systems, TMA, telephone (303) 676-3627.
    To obtain copies of this document, see the ADDRESSES section above. 
Questions regarding payment of specific claims under the TRICARE/
CHAMPUS DRG-based payment system should be addressed to the appropriate 
contractor.

SUPPLEMENTARY INFORMATION: The final rule published on September 1, 
1987 (52 FR 32992) set forth the basic procedures used under the 
CHAMPUS DRG-based payment system. This was subsequently amended by 
final rules published August 31, 1988 (53 FR 33461), October 21, 1988 
(53 FR 41331), December 16, 1988 (53 FR 50515), May 30, 1990 (55 FR 
21863), October 22, 1990 (55 FR 42560), and September 10, 1998 (63 FR 
48439).
    An explicit tenet of these final rules, and one based on the 
statute authorizing the use of DRGs by TRICARE/CHAMPUS, is that the 
TRICARE/CHAMPUS DRG-based payment system is modeled on the Medicare 
PPS, and that, whenever practicable, the TRICARE/CHAMPUS system will 
follow the same rules that apply to the Medicare PPS. HCFA publishes 
these changes annually in the Federal Register and discusses in detail 
the impact of the changes.
    In addition, this notice updates the rates and weights in 
accordance with our previous final rules. The actual changes we are 
making, along with a description of their relationship to the Medicare 
PPS, are detailed below.

I. Medicare PPS Changes Which Affect the TRICARE/CHAMPUS DRG-Based 
Payment System

    Following is a discussion of the changes the Health Care Financing 
Administration (HCFA) has made to the Medicare PPS that affect the 
TRICARE/CHAMPUS DRG-based payment system.

A. DRG Classifications

    Under both the Medicare PPS and the TRICARE/CHAMPUS DRG-based 
payment system, cases are classified into the appropriate DRG by a 
Grouper program. The Grouper classifies each case into a DRG on the 
basis of the diagnosis and procedure codes and demographic information 
(that is, sex, age, and discharge status). The Grouper used for the 
TRICARE/CHAMPUS DRG-based payment system is the same as the current 
Medicare Grouper with two modifications. The TRICARE/CHAMPUS system has 
replaced Medicare DRG 435 with two age-based DRGs (900 and 901), and we 
have implemented thirty-four (34) neonatal DRGs in place of Medicare 
DRGs 385 through 390. For admissions occurring on or after October 1, 
1995, the CHAMPUS grouper hierarchy logic was changed so the age split 
(age <29 days) and assignments to MDC 15 occur before assignment of the 
PreMDC DRGs. This resulted in all neonate tracheostomies and organ 
transplants to be grouped to MDC 15 and not to DRGs 480-483 or 495. For 
admissions occurring on or after October 1, 1998, the CHAMPUS grouper 
hierarchy logic was changed to move DRG 103 to the PreMDC DRGs and to 
assign patients to PreMDC DRGs 480, 103 and 495 before assignment to 
MDC 15 DRGs and the neonatal DRGs. Grouping for all other DRGs under 
the TRICARE/CHAMPUS system is identical to the Medicare PPS.
    For FY 2000, HCFA will implement classification changes, including 
surgical hierarchy changes. The CHAMPUS Grouper will incorporate all 
changes made to the Medicare Grouper.

B. Wage Index and Medicare Geographic Classification Review Board 
Guidelines

    TRICARE/CHAMPUS will continue to use the same wage index amounts 
used for the Medicare PPS. In addition, TRICARE/CHAMPUS will duplicate 
all changes with regard to the wage index for specific hospitals that 
are redesignated by the Medicare Geographic Classification Review 
Board.

C. Hospital Market Basket

    TRICARE/CHAMPUS will update the adjusted standardized amounts 
according to the final updated hospital market basket used for the 
Medicare PPS according to HCFA's July 30, 1999, final rule.

D. Outlier Payments

    Since TRICARE/CHAMPUS does not include capital payments in our DRG-
based payments, we will use the fixed loss cost outlier threshold 
calculated by HCFA for paying cost outliers in the absence of capital 
prospective payments. For FY 2000, the fixed loss cost outlier 
threshold is based on the sum of the applicable DRG-based payment rate 
plus any amounts payable for IDME plus a fixed dollar amount. Thus, for 
FY 2000, in order for a case to qualify for cost outlier payments, the 
costs must exceed the TRICARE/CHAMPUS DRG base payment rate (wage 
adjusted) for the DRG plus the IDME payment plus $12,827 (wage 
adjusted). The marginal cost factor for cost outliers continues to be 
80 percent.

E. Blood Clotting Factor

    TRICARE/CHAMPUS will add HCPCS code J7191 (clotting factor, 
porcine) to the list of covered blood clotting factors for hemophilia 
patients and adopt changes to the payment rates as outlined in HCFA's 
July 30, 1999, final rule, effective for admissions on or after October 
1, 1999.

F. Hospitals Excluded From the Prospective Payment System

    TRICARE/CHAMPUS will adopt the changes outlined in HCFA's July 30, 
1999, final rule as they apply to hospitals and units excluded from the 
Medicare PPS.

II. Cost to Charge Ratio

    For FY 2000, the cost-to-charge ratio used for the TRICARE/CHAMPUS 
DRG-based payment system will be 0.5429, which is increased to 0.5489 
to account for bad debts. This shall be used to

[[Page 61091]]

calculate the adjusted standardized amounts and to calculate cost 
outlier payments, except for children's hospitals. For children's 
hospital cost outliers, the cost-to-charge ratio used is 0.6004.

III. Updated Rates and Weights

    The updated rates and weights are accessible through the Internet 
at www.tricare.osd.mil under the heading TRICARE Provider Information. 
Table 1 provides the ASA rates and Table 2 provides the DRG weights to 
be used under the TRICARE/CHAMPUS DRG-based payment system during FY 
2000 and which is a result of the changes described above. The 
implementing regulations for the TRICARE/CHAMPUS DRG-based payment 
system are in 32 CFR Part 199.

    Dated: November 3, 1999.

L.M. Bynum,

Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 99-29237 Filed 11-8-99; 8:45 am]
BILLING CODE 5001-10-P