[Federal Register: May 5, 2008 (Volume 73, Number 87)]
[Proposed Rules]
[Page 24509-24510]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05my08-5]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 24509]]
DEPARTMENT OF DEFENSE
Office of the Secretary
[DoD-2008-HA-0007; 0720-AB21]
32 CFR Part 199
TRICARE; Reimbursement of Critical Access Hospitals (CAHs)
AGENCY: Office of the Secretary, Department of Defense.
ACTION: Proposed rule.
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SUMMARY: This rule is being published to implement the statutory
provision in 10 United States Code (U.S.C.) 1079(j)(2) that TRICARE
payment methods for institutional care be determined to the extent
practicable in accordance with the same reimbursement rules as those
that apply to payments to providers of services of the same type under
Medicare. This proposed rule implements a reimbursement methodology
similar to that furnished to Medicare beneficiaries for services
provided by critical access hospitals (CAHs).
DATES: Written comments received at the address indicated below by June
4, 2008 will be accepted.
ADDRESS: You may submit comments, identified by docket number and/or
Regulatory Information Number (RIN) number and title, by either of the
following methods:
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Federal Docket Management System Office, 1160
Defense Pentagon, Washington, DC 20301-1160.
Instructions: All submissions received must include the agency name
and docket number or RIN for this Federal Register document. The
general policy for comments and other submissions from members of the
public is to make these submissions available for public viewing on the
Internet at http://www.regulations.gov as they are received without
change, including any personal identifiers or contact information.
FOR FURTHER INFORMATION CONTACT: Ms. Martha M. Maxey, TRICARE
Management Activity, Medical Benefits and Reimbursement Systems,
telephone (303) 676-3627.
SUPPLEMENTARY INFORMATION:
I. Introduction and Background
Hospitals are authorized TRICARE institutional providers under 10
U.S. Code 1079(j)(2) and (4). Under 10 U.S.C. 1079(j)(2), the amount to
be paid to hospitals, skilled nursing facilities (SNFs), and other
institutional providers under TRICARE, ``shall be determined to the
extent practicable in accordance with the same reimbursement rules as
apply to payments to providers of services of the same type under
Medicare.'' Under 32 CFR 199.14(a)(1)(ii)(D)(1) through (9) it
specifically lists those hospitals that are exempt from the DRG-based
payment system. CAHs are not listed as exempt, thereby making them
subject to the DRG-based payment system. CAHs are not listed as
excluded, because at the time this regulatory provision was written,
CAHs were not a recognized entity.
Legislation enacted as part of the Balanced Budget Act (BBA) of
1997 authorized states to establish State Medicare Rural Hospital
Flexibility Programs, under which certain facilities participating in
Medicare could become CAHs. CAHs represent a separate provider type
with their own Medicare conditions of participation as well as a
separate payment method of 101 percent of reasonable costs. Since that
time, a number of hospitals have taken the necessary steps to be
designated as CAHs by the Centers for Medicare & Medicaid Services
(CMS). The statutory authority requires TRICARE to apply the same
reimbursement rules as apply to payments to providers of services of
the same type under Medicare to the extent practicable. Therefore, if
practicable, TRICARE has the requirement through the publication of a
proposed and final rule to exempt critical access hospitals from the
DRG-based payment system and adopt a reimbursement method similar to
Medicare principles for these hospitals. Until now, we have not amended
32 CFR 199.14(a)(1)(ii)(D) to exempt CAHs from the DRG-based payment
system as it was deemed impracticable to replicate CMS' reimbursement
methodology for CAHs because of a lack of access to facility-specific
cost data. CMS has data on the costs at each of the CAHs and has
indicated that it would provide whatever data TMA needed on these costs
reports.
Currently under TRICARE, with the exception of Alaska, CAHs are
subject to the TRICARE DRG-based payment system for inpatient care. For
outpatient care, CAHs are reimbursed based on billed charges for
facility charges. In Alaska, under a demonstration project, CAHs are
reimbursed under a method similar to Medicare principles. They are
reimbursed the lesser of the billed charge or 101 percent of reasonable
costs for inpatient and outpatient care. The 101 percent of reasonable
costs is calculated by multiplying the billed charge of each claim by
the hospital's cost-to-charge ratio, and then adding 1 percent to that
amount. The demonstration project in Alaska is working well. There have
been no complaints since the new reimbursement methodology was
implemented and it has resolved access to care issues in that State.
Based on the above statutory mandate, TRICARE is proposing to adopt
this same reimbursement methodology for all CAHs.
II. Regulatory Procedures
Executive Order 12866, ``Regulatory Planning and Review''
Section 801 of Title 5, U.S.C., and Executive Order (E.O.) 12866
requires certain regulatory assessments and procedures for any major
rule or significant regulatory action, defined as one that would result
in an annual effect of $100 million or more on the national economy or
which would have other substantial impacts. It has been certified that
this rule is not an economically significant rule; however, it is a
regulatory action which has been reviewed by the Office of Management
and Budget as required under the provisions of E.O. 12866.
Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''
It has been certified that this rule does not contain a Federal
mandate that may result in the expenditure by State, local and tribal
governments, in aggregate, or
[[Page 24510]]
by the private sector, of $100 million or more in any one year.
Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
The Regulatory Flexibility Act (RFA) requires each Federal agency
prepare, and make available for public comment, a regulatory
flexibility analysis when the agency issues a regulation which would
have a significant impact on a substantial number of small entities.
This rule will not significantly affect a substantial number of small
entities.
Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)
This rule will not impose any additional information collection
requirements on the public under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3511). Existing information collection requirements of
the TRICARE and Medicare programs will be utilized.
Executive Order 13132, ``Federalism''
This proposed rule has been examined for its impact under E.O.
13132. It does not contain policies that have federalism implications
that would have substantial direct effects on the States, on the
relationship between the national Government and the States, or on the
distribution of power and responsibilities among the various levels of
government; therefore, consultation with State and local officials is
not required.
List of Subjects in 32 CFR Part 199
Claims, dental health, health care, health insurance, individuals
with disabilities, Military personnel.
Accordingly, 32 CFR part 199 is proposed to be amended as follows:
PART 199--[AMENDED]
1. The authority citation for part 199 continues to read as
follows:
Authority: 5 U.S.C. 301; 10 U.S.C. Chapter 55.
2. Paragraph 199.2(b) is amended by adding a definition for CAHs
and placing it in alphabetical order to read as follows:
Sec. 199.2 Definitions.
* * * * *
(b) * * *
CAHs. A small facility that provides limited inpatient and
outpatient hospital services primarily in rural areas and meets the
applicable requirements established by Sec. 199.6(b)(4)(xvi).
* * * * *
3. Section 199.6 is amended by adding new paragraph (b)(4)(xvi).
Sec. 199.6 TRICARE-authorized providers.
* * * * *
(b) * * *
(4) * * *
(xvi) CAHs. CAHs must meet all conditions of participation under 42
CFR part 485.601-485.645 in relation to TRICARE beneficiaries in order
to receive payment under the TRICARE program. If CAH provides inpatient
psychiatric services or inpatient rehabilitation services in a distinct
part unit, these distinct part units must meet the conditions of
participation in 42 CFR part 485.647, with the exception of being paid
under the inpatient prospective payment system for psychiatric
facilities as specified in 42 CFR part 412.1(a)(2) or the inpatient
prospective payment system for rehabilitation hospitals or
rehabilitation units as specified in 42 CFR part section 412(a)(3).
* * * * *
4. Section 199.14 is amended by redesignating paragraphs (a)(3)
through (a)(5) as (a)(4) through (a)(6); revising newly redesignated
paragraph (a)(4) introductory text, paragraphs (a)(6)(xi) and (xii),
and the first sentence of paragraph (d)(1); and adding new paragraphs
(a)(1)(ii)(D)(10), (a)(3), and (a)(6)(xiii) to read as follows:
Sec. 199.14 Provider reimbursement methods.
(a) * * *
(1) * * *
(ii) * * *
(D) * * *
(10) CAHs. Any facility which has been designated and certified as
CAH as contained in 42 CFR part 485.606.
* * * * *
(3) Reimbursement for inpatient services provided by CAH. Inpatient
services provided by CAH, other than services provided in psychiatric
and rehabilitation distinct part units, shall be reimbursed at the
lesser of the billed charge or 101 percent of reasonable costs. This
does not include any costs of physician services or other professional
services provided to CAH inpatients. Inpatient services provided in
psychiatric distinct part units would be subject to the CHAMPUS mental
health per diem payment system. Inpatient services provided in
rehabilitation distinct part units would be subject to billed charges
or set rates.
(4) Billed charges and set rates. The allowable costs for
authorized care in all hospitals not subject to the CHAMPUS Diagnosis
Related Group-based payment system, the CHAMPUS mental health per diem
system, or the reasonable cost method for critical access hospitals,
shall be determined on the basis of billed charges or set rates. Under
this procedure the allowable costs may not exceed the lower of:
* * * * *
(6) * * *
(xi) Facility charges. TRICARE payments for hospital outpatient
facility charges that would include the overhead costs of providing the
outpatient service, with the exception of critical access hospitals,
would be paid as billed. For the definition of facility charge, see
Sec. 199.2(b).
(xii) Ambulatory surgery services. Hospital outpatient ambulatory
surgery services, with the exception of CAHs, shall be paid in
accordance with Sec. 199.14(d).
(xiii) Outpatient services provided by CAH. Outpatient services
provided by CAH, to include ambulatory surgery services, shall be
reimbursed at the lesser of the billed charge or 101 percent of
reasonable costs. This does not include any costs of physician services
or other professional services provided to CAH outpatients.
* * * * *
(d) * * *
(1) In general. CHAMPUS pays institutional facility costs for
ambulatory surgery on the basis of prospectively determined amounts, as
provided in this paragraph, with the exception of ambulatory surgery
procedures performed in CAHs, which are to be reimbursed in accordance
with the provisions of paragraph (a)(6)(xiii) of this section. * * *
* * * * *
Dated: April 28, 2008.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. E8-9800 Filed 5-2-08; 8:45 am]
BILLING CODE 5001-06-P