[Federal Register: October 24, 2003 (Volume 68, Number 206)]
[Notices]
[Page 60970-60971]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24oc03-65]
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DEPARTMENT OF DEFENSE
Office of the Secretary
TRICARE; Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS); Fiscal Year 2004 Diagnosis-Related Group Updates
AGENCY: Office of the Secretary, DoD.
ACTION: Notice of diagnosis-related group (DRG) revised rates.
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SUMMARY: This notice describes the changes made to the TRICARE 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 and DRG relative weights to be
used for FY 2004 under the TRICARE DRG-based payment system.
EFFECTIVE DATE: The rates, weights and Medicare PPS changes which
affect the TRICARE DRG-based payment system contained in this notice
are effective for admissions occurring on or after October 1, 2003.
ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and
Reimbursement Systems, 16401 East Centretech Parkway, Aurora, CO 80011-
9066.
FOR FURTHER INFORMATION CONTACT: Marty Maxey, Medical Benefits and
Reimbursement Systems, TMA, telephone (303) 676-3627.
Questions regarding payment of specific claims under the TRICARE
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, is that the TRICARE
DRG-based payment system is modeled on the Medicare PPS, and that,
whenever practical, the TRICARE system will follow the same rules that
apply to the Medicare PPS. The Centers for Medicare and Medicaid
Services (CMS) 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 DRG-Based Payment
System
Following is a discussion of the changes CMS has made to the
Medicare PPS that affect the TRICARE DRG-based payment system.
A. DRG Classifications
Under both the Medicare PPS and the TRICARE 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 DRG-
based payment system is the same as the current Medicare Grouper with
two modifications. The TRICARE system has replaced Medicare DRG 435
with two age-based DRGs (00 and 901), and has implemented thirty-four
(34) neonatal DRGs in place of Medicare DRGs 385 through 390. For
admissions occurring on or after October 1, 2001, DRG 435 has been
replaced by DRG 523. The TRICARE system has replaced DRG 523 with the
two age-based DRGs (900 and 901). 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 MDS 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. For
admissions occurring on or after October 1, 2001, DRGs 512 and 513 were
added to the PreMDC DRGs, between DRGs 480 and 103 in the TRICARE
grouper hierarchy logic.
For FY 2004, SCMS will implement classification changes, including
surgical hierarchy changes. The TRICARE Grouper will incorporate all
changes made to the Medicare Grouper.
B. Wage Index and Medicare Geographic Classification Review Board
Guidelines
TRICARE will continue to use the same wage index amounts used for
the Medicare PPS. In addition, TRICARE 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 will update the adjusted standardized amounts according to
the final updated hospital market basket used for the Medicare PPS
according to CMS's August 1, 2003, final rule.
D. Outlier Payments
Since TRICARE does not include capital payments in our DRG-based
payments, we will use the fixed loss cost outlier threshold calculated
by CMS for paying cost outliers in the absence of capital prospective
payments. For FY 2004, the fixed loss cost outlier the absence of
capital prospective payments. For FY 2004, 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 2004, in order for a case to qualify for cost outlier payments, the
costs must exceed the TRICARE DRG base payment rate (wage adjusted) for
the DRG plus the IDME payment plus $28,365 (wage adjusted). The
marginal cost factor for cost outliers continues to be 80 percent.
E. Blood Clotting Factor
For FY 2004, the contractors shall price the blood clotting factors
using the ``J'' code pricing file provided by TRICARE Management
Activity. TRICARE uses the same ICD-9-CM diagnosis codes as CMS for
add-on payment for blood clotting factors.
F. National Operating Standard Cost as a Share of Total Costs
The FY 2004 TRICARE National Operating Standard Cost as a Share of
Total Costs used in calculating the cost outlier threshold is 0.915.
G. Expansion of the Post Acute Care Transfer Policy
For FY 2004 TRICARE is adopting CMS' expanded post acute care
transfer policy according to CMS' final rule published August 1, 2003.
II. Cost to Charge Ratio
For FY 2004, the cost-to-charge ratio used for the TRICARE DRG-
based payment system will be 0.4865, which is increased to 0.4935 to
account for bad
[[Page 60971]]
debts. This shall be used to calculate the adjusted standardized
amounts and to calculate cost outlier payments, except for children's
hospitals. For children's hospital cost outlier, the cost-to-charge
ratio used is 0.5388.
III. Updated Rates and Weights
The updated rates and weights are accessible through the Internet
at http://www.tricare.osd.mil under the sequential heading TRICARE Provider
Information, Rates and Reimbursements, and DRG Information. Table 1
provides the ASA rates and Table 2 provides the DRG weights to be used
under the TRICARE DRG-based payment system during FY 2004 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: October 16, 2003.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-26855 Filed 10-23-03; 8:45 am]
BILLING CODE 5001-08-M