[Federal Register Volume 77, Number 123 (Tuesday, June 26, 2012)]
[Notices]
[Page 38043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15505]
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DEPARTMENT OF DEFENSE
Office of the Secretary
TRICARE; Revised Guideline for Determining the Outpatient
Prospective Payment System (OPPS) General Temporary Military
Contingency Payment Adjustment (TMCPA) Amount
AGENCY: Department of Defense (DoD).
ACTION: Notice of revised guideline for determining TRICARE's OPPS
General TMCPA amount.
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SUMMARY: This notice advises interested parties of a guideline
concerning the methodology to calculate TRICARE's OPPS General TMCPA
amount for qualifying hospitals.
DATES: The guideline for calculating TRICARE's OPPS General TMCPA
amount is effective for OPPS year 4 (May 1, 2012-April 30, 2013) and
subsequent years.
ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and
Reimbursement Branch, 16401 East Centretech Parkway, Aurora, CO 80011-
9066.
FOR FURTHER INFORMATION CONTACT: Ms. Martha M. Maxey, TMA, Medical
Benefits and Reimbursement Branch, telephone (303) 676-3627.
SUPPLEMENTARY INFORMATION: TRICARE's OPPS Final Rule that was published
in the Federal Register on December 10, 2008, states that TMCPAs are
intended to provide additional payments above the Medicare payment
level for hospitals that are ``deemed essential for military readiness
and deployment in time of contingency operations.''
The final rule stated that the procedures to be followed when
submitting a TMCPA request would be outlined in the TRICARE
Reimbursement Manual (TRM). For the first three OPPS years, (May 1,
2009-April 30, 2012), TMA implemented the criteria for General TMCPA
payments and reviewed applications for General TMCPA payments. The TRM
states that for qualifying hospitals, the General TMCPA adjustment
cannot exceed 95 percent of the amount that would have been paid prior
to implementation of OPPS.
We experienced two major problems with the approach:
1. The use of the current approach allows the payments to exceed
the average payment-to-cost ratios (PCRs) paid by other payers. When
DoD adopted the Medicare OPPS, the intent was to align our payment
structure more closely with Medicare and assist those facilities that
are ``deemed essential for military readiness and deployment in time of
contingency operations'' by giving them a reasonable adjustment. As
discussed below, paying hospitals up to 95 percent of the pre-OPPS
amounts for hospital outpatient department services could be equivalent
to reimbursing them at very high (PCRs), resulting in DoD paying higher
rates than most purchasers of care at these facilities.
2. There is also a lack of fairness in the current method of
determining General TMCPA payments for the various facilities because
it is tied to the level of pre-OPPS allowed amounts. For the most part,
pre-OPPS payments were made on the basis of the charges billed by the
facility. DoD policy at that time was to pay these ``billed charge
amounts.'' Thus, using 95 percent of pre-OPPS allowed amounts could
allow hospitals that had higher billed charges to receive higher levels
of General TMCPA payments than those that had billed at lower ``billed
charge amounts'' for the same services. This could be true even if a
lower charging facility saw the same or greater number of DoD active
duty and family members or if the facilities' percentage of revenue
received from DoD were the same. This result is inequitable to the
various facilities and inconsistent with the intent of the General
TMCPA.
In an attempt to resolve these inequities, the Department looked at
the rates paid by other private payers. A report published by the
American Hospital Association (AHA) in December 2010 indicates that the
aggregate PCRs for private payers are in the range of 1.15 to 1.35. A
ratio of 1.0 means a hospital meets their costs and a ratio of greater
than 1.0 means payments exceeds costs. Using an adjustment guideline to
allow the Department to apply General TMCPA payments so that the total
of payments to a qualifying hospital falls within these private pay
norms was chosen as a method to more equitably meet DoD's objectives in
making these payment adjustments. As a result, TRICARE is revising its
guidelines for determining the level of payment for a General TMCPA
from a maximum 95 percent of the pre-OPPS amount to a maximum PCR of
1.3 for OPPS year 4 (May 1, 2012-April 30, 2013) and subsequent years.
The ratio 1.30 was selected because this is the average level of
aggregate PCRs that AHA reports that hospitals have received from
private payers during the 2003-2009 period. The use of a PCR as a
guideline to determine the limit on the level of payment for General
TMCPA payments is simple, transparent, and will provide fair and
equitable payments to the qualifying hospitals and is supported by data
indicating it is a reasonable approach.
The procedures that are to be followed when submitting a TMCPA
request will be outlined in the TRM.
Dated: June 20, 2012.
Patricia Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2012-15505 Filed 6-25-12; 8:45 am]
BILLING CODE 5001-06-P