[Federal Register: October 25, 2007 (Volume 72, Number 206)]
[Notices]
[Page 60659-60660]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc07-61]
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DEPARTMENT OF DEFENSE
Office of the Secretary
TRICARE; Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS); Fiscal Year (FY) 2008 Diagnosis-Related Group (DRG)
Updates
AGENCY: Office of the Secretary, Department of Defense (DoD).
ACTION: Notice.
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SUMMARY: This notice describes the changes made to the TRICARE DRG-
based payment system. It also provides the updated fixed loss cost
outlier threshold, cost-to-charge ratios, and the Internet address for
accessing the updated adjusted standardized amount and DRG relative
weights to be used for FY 2008 under the TRICARE DRG-based payment
system.
DATES: Effective Dates: This FY 2008 DRG update is effective for
admissions occurring on or after October 1.
ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and
Reimbursement Systems, 16401 East Centretech Parkway, Aurora, CO 80011-
9066.
FOR FURTHER INFORMATION CONTACT: Ann N. Fazzini, Medical Benefits and
Reimbursement Systems, TMA, telephone (303) 676-3803.
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).
This notice updates the TRICARE rates and weights in accordance
with our previous final rules. The actual changes we are making are
detailed below.
I. Changes Which Affect the TRICARE DRG-Based Payment System
A. Under 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, 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 FY 2007 Medicare Grouper with two modifications. The TRICARE
system has replaced Medicare DRG 435 with two age-based DRGs (900 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 Major Diagnostic Category (MDC) 15 occur before
assignment of the Pre-MDC DRGs. This resulted in all neonate
tracheotomies 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
[[Page 60660]]
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
admissions occurring on or after October 1, 2004, DRG 483 was deleted
and replaced with DRGs 541 and 542, splitting the assignment of cases
on the basis of the performance of a major operating room procedure.
The description for DRG 480 was changed to ``Liver Transplant and/or
Intestinal Transplant,'' and the description for DRG 103 was changed to
``Heart/Heart Lung Transplant or Implant of Heart Assist System.''
B. Wage Index and Medicare Geographic Classification Review Board
Guidelines
TRICARE will continue to use the same wage index amounts used for
the Medicare Prospective Payment System (PPS). TRICARE will also
duplicate all changes with regard to the wage index for specific
hospitals that are re-designated by the Medicare Geographic
Classification Review Board. In addition, TRICARE will continue to
utilize the out commuting wage index adjustment.
C. Revision of the Labor-Related Share of the Wage Index
TRICARE is adopting the Centers for Medicare and Medicaid Services'
(CMS) percentage of labor related share of the standardized amount. For
wage index values greater than 1.0, the labor related portion of the
Adjusted Standardized Amount (ASA) shall equal 69.7 percent. For wage
index values less than or equal to 1.0 the labor related portion of the
ASA shall continue to equal 62 percent.
D. Hospital Market Basket
TRICARE will update the adjusted standardized amounts according to
the final updated hospital market basket used for the Medicare PPS for
all hospitals subject to the TRICARE DRG-based payment system according
to CMS's August 22, 2007, final rule.
E. Outlier Payments
Since TRICARE does not include capital payments in our DRG-based
payments (TRICARE reimburses hospitals for their capital costs as
reported annually to the contractor on a passthrough basis), we will
use the FY 2007 (published in CMS' August 18, 2006) fixed loss cost
outlier threshold calculated by CMS for paying cost outliers in the
absence of capital prospective payments. For TRICARE's FY 2008 update,
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 2008, 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 $22,649 (wage adjusted). The marginal cost factor for cost
outliers continues to be 80 percent.
F. National Operating Standard Cost as a Share of Total Costs
The FY 2008 TRICARE National Operating Standard Cost as a Share of
Total Costs (NOSCASTC) used in calculating the cost outlier threshold
is 0.925. TRICARE uses the same methodology as CMS for calculating the
NOSCASTC; however, the variables are different because TRICARE uses
national cost-to-charge ratios while CMS uses hospital specific cost-
to-charge ratios.
G. Indirect Medical Education (IDME) Adjustment
Passage of the MMA of 2003 modified the formula multipliers to be
used in the calculation of the indirect medical education IDME
adjustment factor. Since the IDME formula used by TRICARE does not
include disproportionate share hospitals (DSHs), the variables in the
formula are different than Medicare's, however; the percentage
reductions that will be applied to Medicare's formula will also be
applied to the TRICARE IDME formula. The new multiplier for the IDME
adjustment factor for TRICARE for FY 2008 is 1.02.
H. Expansion of the Post-Acute Care Transfer Policy
For FY 2008, TRICARE continues to use the post-acute care transfer
policy that was published in CMS' final rule on August 18, 2006.
I. Blood Clotting Factor
For FY 2008, TRICARE is adopting CMS' payment methodology for blood
clotting factor according to CMS' final rule published August 18, 2006.
II. Cost-to-Charge Ratio
While CMS uses hospital-specific cost-to-charge ratios, TRICARE
uses a national cost-to-charge ratio. For FY 2008, the cost-to-charge
ratio used for the TRICARE DRG-based payment system for acute care
hospitals and neonates will be 0.3818 which is increased to 0.3888 to
account for bad 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 outliers, the cost-
to-charge ratio used is 0.4198.
III. Updated Rates and Weights
The updated rates and weights are accessible through the Internet
at http://www.tricare.osd.mil under the sequential headings 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 2008 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 19, 2007.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. E7-21014 Filed 10-24-07; 8:45 am]
BILLING CODE 5001-06-P