80 FR 81295 - TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2016 Diagnosis Related Group (DRG) Updates
DEPARTMENT OF DEFENSE
Office of the Secretary Federal Register Volume 80, Issue 249 (December 29, 2015)
Office of the Secretary
Federal Register Volume 80, Issue 249 (December 29, 2015)
| Page Range | 81295-81296 | |
| FR Document | 2015-32655 |
[Federal Register Volume 80, Number 249 (Tuesday, December 29, 2015)] [Notices] [Pages 81295-81296] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-32655] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE Office of the Secretary TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2016 Diagnosis Related Group (DRG) Updates AGENCY: Office of the Secretary, Department of Defense, DoD. ACTION: Notice of DRG revised rates. ----------------------------------------------------------------------- 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 data necessary to update the FY 2016 rates. DATES: Effective Date: The rates, weights, and Medicare PPS changes which affect the TRICARE DRG-based payment system contained in this notice are effective for discharges occurring on or after October 1, 2015. ADDRESSES: Defense Health Agency, TRICARE, Medical Benefits and Reimbursement Section, 16401 East Centretech Parkway, Aurora, CO 80011- 9066. FOR FURTHER INFORMATION CONTACT: Sharon L. Seelmeyer, Medical Benefits and Reimbursement Section, TRICARE, telephone (303) 676-3690. 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 practicable, 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 in this notice. 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 certain modifications. For FY 2008, Medicare implemented their Medicare-Severity DRG (MS-DRG) based payment system. TRICARE, however, continued with the Centers for Medicare and Medicaid Services DRG-based (CMS-DRG) payment system for FY 2008. For FY 2009, the TRICARE/CHAMPUS DRG-based payment system shall be modeled on the MS-DRG system, with the following modifications. The MS-DRG system consolidated the 43 pediatric CMS DRGs that were defined based on age less than or equal to 17 into the most clinically similar MS-DRGs. In their Inpatient Prospective Payment System final rule for MS-DRGs, Medicare stated for their population these pediatric CMS DRGs contained a very low volume of Medicare patients. At the same time, Medicare encouraged private insurers and other non-Medicare payers to make refinements to MS-DRGs to better suit the needs of the patients they serve. Consequently, TRICARE finds it appropriate to retain the pediatric CMS-DRGs for our population. TRICARE is also retaining the TRICARE-specific DRGs for neonates and substance use. For FY09, TRICARE will use the MS-DRG v26.0 pre-MDC hierarchy, with the exception that MDC 15 is applied after DRG 011-012 and before MDC 24. For FY10, there are no additional or deleted DRGs. For FY 11, the added DRGs and deleted DRGs are the same as those included in CMS' final rule published on August 16, 2010. That is, DRG 009 is deleted; DRGs 014 and 015 are being added. For FY 12, the added DRGs and deleted DRGs are the same as those included in CMS' final rule published on August 18, 2011 (76 FR 51476- 51846). That is, DRG 015 is deleted; DRGs 016 and 017 are being added. For FY 2013 there are no new, revised, or deleted DRGs. For FY 2014 there are no new, revised, or deleted DRGs. For FY 2015 the added, deleted, and revised DRGs are the same as those included in the CMS' final rule published on August 22, 2014 (79 FR 49880) with the exception of endovascular cardiac valve replacement for which CMS added DRGs 266/267 and TRICARE added DRGs 317/318 because the TRICARE Grouper already has DRGs 266/267 assigned to pediatric procedures. For FY2016 the added, deleted, and revised DRGs are the same as those [[Page 81296]] included in the CMS' final rule published on August 17, 2015 (80 FR 49326) with the exception of cardiovascular procedure for which CMS added DRGs 268-272 and TRICARE added DRGs 275-279 because the TRICARE Grouper already has DRGs 268-271 assigned to pediatric procedures. 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. TRICARE will also duplicate all changes with regard to the wage index for specific hospitals that are redesignated 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 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 continue to equal 69.6 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' August 17, 2015, final rule. For FY 2016, the market basket is 2.4 percent. Note: Medicare's FY 2016 market basket index adjusts according to hospitals' compliance with quality data and electronic health record meaningful use submissions. These adjustments do not apply to the TRICARE Program. 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 pass through basis), 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 2016, the TRICARE fixed loss cost outlier threshold is based on the sum of the applicable DRG-based payment rate plus any amounts payable for Indirect Medical Education (IDME) plus a fixed dollar amount. Thus, for FY 2016, 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 (if applicable) plus $20,758 (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 2016 TRICARE National Operating Standard Cost as a Share of Total Costs (NOSCASTC) used in calculating the cost outlier threshold is 0.921. 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 Medical Modernization Act of 2003 modified the formula multipliers to be used in the calculation of 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 multiplier for the IDME adjustment factor for TRICARE for FY 2016 is 1.02. H. Cost to Charge Ratio TRICARE uses a national Medicare cost-to-charge ratio (CCR). For FY 2016, the Medicare CCR used for the TRICARE DRG-based payment system for acute care hospitals and neonates will be 0.2631. This is based on a weighted average of the hospital-specific Medicare CCRs (weighted by the number of Medicare discharges) after excluding hospitals not subject to the TRICARE DRG system (Sole Community Hospitals, Indian Health Service hospitals, and hospitals in Maryland). The Medicare CCR is used to calculate cost outlier payments, except for children's hospitals. The Medicare CCR has been increased by a factor of 1.0065 to include an additional allowance for bad debt. The 1.0065 factor reflects the provisions of the Middle Class Tax Relief and Job Creation Act of 2012. For children's hospital cost outliers, the CCR used is 0.2840. I. Pricing of Claims The final rule published on May 21, 2014 (79 FR 29085) set forth all final claims with discharge dates of October 1, 2014, or later and reimbursed under the TRICARE DRG-Based payment system, are to be priced using the rules, weights, and rates in effect as of the date of discharge. Prior to this, all final claims were priced using the rules, weights, and rates in effect as of the date of admission. J. Updated Rates and Weights The updated rates and weights are accessible through the Internet at http://www.health.mil/rates. The implementing regulations for the TRICARE/CHAMPUS DRG-based payment system are in 32 CFR part 199. Dated: December 22, 2015. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. 2015-32655 Filed 12-28-15; 8:45 am] BILLING CODE 5001-06-P
![Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices 81295
Authority: 16 U.S.C. 1801 et seq. DATES: Effective Date: The rates, discharge status). The Grouper used for
Dated: December 23, 2015. weights, and Medicare PPS changes the TRICARE DRG-based payment
Tracey L. Thompson, which affect the TRICARE DRG-based system is the same as the current
Acting Deputy Director, Office of Sustainable
payment system contained in this notice Medicare Grouper with certain
Fisheries, National Marine Fisheries Service. are effective for discharges occurring on modifications. For FY 2008, Medicare
or after October 1, 2015. implemented their Medicare-Severity
[FR Doc. 2015–32715 Filed 12–28–15; 8:45 am]
ADDRESSES: Defense Health Agency, DRG (MS–DRG) based payment system.
BILLING CODE 3510–22–P
TRICARE, Medical Benefits and TRICARE, however, continued with the
Reimbursement Section, 16401 East Centers for Medicare and Medicaid
Centretech Parkway, Aurora, CO 80011– Services DRG-based (CMS–DRG)
COMMISSION OF FINE ARTS 9066. payment system for FY 2008. For FY
FOR FURTHER INFORMATION CONTACT:
2009, the TRICARE/CHAMPUS DRG-
Notice of Meeting based payment system shall be modeled
Sharon L. Seelmeyer, Medical Benefits
The next meeting of the U.S. and Reimbursement Section, TRICARE, on the MS–DRG system, with the
Commission of Fine Arts is scheduled telephone (303) 676–3690. Questions following modifications.
for 21 January 2016, at 9:00 a.m. in the The MS–DRG system consolidated the
regarding payment of specific claims
Commission offices at the National 43 pediatric CMS DRGs that were
under the TRICARE DRG-based
Building Museum, Suite 312, Judiciary defined based on age less than or equal
payment system should be addressed to
Square, 401 F Street NW., Washington, to 17 into the most clinically similar
the appropriate contractor.
DC 20001–2728. Items of discussion MS–DRGs. In their Inpatient Prospective
SUPPLEMENTARY INFORMATION: The final Payment System final rule for MS–
may include buildings, parks and rule published on September 1, 1987 (52
memorials. DRGs, Medicare stated for their
FR 32992) set forth the basic procedures population these pediatric CMS DRGs
Draft agendas and additional used under the CHAMPUS DRG-based
information regarding the Commission contained a very low volume of
payment system. This was subsequently Medicare patients. At the same time,
are available on our Web site: amended by final rules published
www.cfa.gov. Inquiries regarding the Medicare encouraged private insurers
August 31, 1988 (53 FR 33461); October and other non-Medicare payers to make
agenda and requests to submit written 21, 1988 (53 FR 41331); December 16,
or oral statements should be addressed refinements to MS–DRGs to better suit
1988 (53 FR 50515); May 30, 1990 (55 the needs of the patients they serve.
to Thomas Luebke, Secretary, U.S. FR 21863); October 22, 1990 (55 FR
Commission of Fine Arts, at the above Consequently, TRICARE finds it
42560); and September 10, 1998 (63 FR appropriate to retain the pediatric CMS–
address; by emailing cfastaff@cfa.gov; or 48439).
by calling 202–504–2200. Individuals DRGs for our population. TRICARE is
An explicit tenet of these final rules, also retaining the TRICARE-specific
requiring sign language interpretation and one based on the statute authorizing
for the hearing impaired should contact DRGs for neonates and substance use.
the use of DRGs by TRICARE, is that the For FY09, TRICARE will use the MS–
the Secretary at least 10 days before the TRICARE DRG-based payment system is
meeting date. DRG v26.0 pre-MDC hierarchy, with the
modeled on the Medicare PPS, and that, exception that MDC 15 is applied after
Dated: December 18, 2015 in Washington, whenever practicable, the TRICARE DRG 011–012 and before MDC 24.
DC. system will follow the same rules that For FY10, there are no additional or
Thomas Luebke, apply to the Medicare PPS. The Centers deleted DRGs.
Secretary. for Medicare and Medicaid Services For FY 11, the added DRGs and
[FR Doc. 2015–32419 Filed 12–28–15; 8:45 am] (CMS) publishes these changes annually deleted DRGs are the same as those
BILLING CODE 6330–01–M
in the Federal Register and discusses in included in CMS’ final rule published
detail the impact of the changes. on August 16, 2010. That is, DRG 009
In addition, this notice updates the is deleted; DRGs 014 and 015 are being
rates and weights in accordance with added.
DEPARTMENT OF DEFENSE our previous final rules. The actual For FY 12, the added DRGs and
Office of the Secretary changes we are making, along with a deleted DRGs are the same as those
description of their relationship to the included in CMS’ final rule published
TRICARE; Civilian Health and Medical Medicare PPS, are detailed in this on August 18, 2011 (76 FR 51476–
Program of the Uniformed Services notice. 51846). That is, DRG 015 is deleted;
(CHAMPUS); Fiscal Year 2016 I. Medicare PPS Changes Which Affect DRGs 016 and 017 are being added.
Diagnosis Related Group (DRG) For FY 2013 there are no new,
the TRICARE DRG-Based Payment
Updates revised, or deleted DRGs.
System For FY 2014 there are no new,
AGENCY: Office of the Secretary, Following is a discussion of the revised, or deleted DRGs.
Department of Defense, DoD. changes CMS has made to the Medicare For FY 2015 the added, deleted, and
ACTION: Notice of DRG revised rates. PPS that affect the TRICARE DRG-based revised DRGs are the same as those
payment system. included in the CMS’ final rule
SUMMARY: This notice describes the published on August 22, 2014 (79 FR
changes made to the TRICARE DRG- A. DRG Classifications
49880) with the exception of
asabaliauskas on DSK5VPTVN1PROD with NOTICES
based payment system in order to Under both the Medicare PPS and the endovascular cardiac valve replacement
conform to changes made to the TRICARE DRG-based payment system, for which CMS added DRGs 266/267
Medicare Prospective Payment System cases are classified into the appropriate and TRICARE added DRGs 317/318
(PPS). DRG by a Grouper program. The because the TRICARE Grouper already
It also provides the updated fixed loss Grouper classifies each case into a DRG has DRGs 266/267 assigned to pediatric
cost outlier threshold, cost-to-charge on the basis of the diagnosis and procedures.
ratios, and the data necessary to update procedure codes and demographic For FY2016 the added, deleted, and
the FY 2016 rates. information (that is, sex, age, and revised DRGs are the same as those
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81544/page/1.svg)
![81296 Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices
included in the CMS’ final rule dollar amount. Thus, for FY 2016, in claims with discharge dates of October
published on August 17, 2015 (80 FR order for a case to qualify for cost outlier 1, 2014, or later and reimbursed under
49326) with the exception of payments, the costs must exceed the the TRICARE DRG-Based payment
cardiovascular procedure for which TRICARE DRG base payment rate (wage system, are to be priced using the rules,
CMS added DRGs 268–272 and adjusted) for the DRG plus the IDME weights, and rates in effect as of the date
TRICARE added DRGs 275–279 because payment (if applicable) plus $20,758 of discharge. Prior to this, all final
the TRICARE Grouper already has DRGs (wage adjusted). The marginal cost claims were priced using the rules,
268–271 assigned to pediatric factor for cost outliers continues to be weights, and rates in effect as of the date
procedures. 80 percent. of admission.
B. Wage Index and Medicare F. National Operating Standard Cost as J. Updated Rates and Weights
Geographic Classification Review Board a Share of Total Costs The updated rates and weights are
Guidelines The FY 2016 TRICARE National accessible through the Internet at
TRICARE will continue to use the Operating Standard Cost as a Share of http://www.health.mil/rates. The
same wage index amounts used for the Total Costs (NOSCASTC) used in implementing regulations for the
Medicare PPS. TRICARE will also calculating the cost outlier threshold is TRICARE/CHAMPUS DRG-based
duplicate all changes with regard to the 0.921. TRICARE uses the same payment system are in 32 CFR part 199.
wage index for specific hospitals that methodology as CMS for calculating the Dated: December 22, 2015.
are redesignated by the Medicare NOSCASTC; however, the variables are Aaron Siegel,
Geographic Classification Review Board. different because TRICARE uses Alternate OSD Federal Register Liaison
In addition, TRICARE will continue to national cost-to-charge ratios while CMS Officer, Department of Defense.
utilize the out-commuting wage index uses hospital specific cost-to-charge [FR Doc. 2015–32655 Filed 12–28–15; 8:45 am]
adjustment. ratios. BILLING CODE 5001–06–P
C. Revision of the Labor-Related Share G. Indirect Medical Education (IDME)
of the Wage Index Adjustment
DEPARTMENT OF DEFENSE
TRICARE is adopting CMS’ Passage of the Medical Modernization
percentage of labor related share of the Act of 2003 modified the formula Office of the Secretary
standardized amount. For wage index multipliers to be used in the calculation
values greater than 1.0, the labor related of IDME adjustment factor. Since the National Commission on the Future of
portion of the Adjusted Standardized IDME formula used by TRICARE does the Army; Notice of Federal Advisory
Amount (ASA) shall continue to equal not include disproportionate share Committee Meeting
69.6 percent. For wage index values less hospitals (DSHs), the variables in the
AGENCY: Deputy Chief Management
than or equal to 1.0 the labor related formula are different than Medicare’s, Officer, Department of Defense (DoD).
portion of the ASA shall continue to however; the percentage reductions that
ACTION: Notice of Federal Advisory
equal 62 percent. will be applied to Medicare’s formula
will also be applied to the TRICARE Committee Meeting.
D. Hospital Market Basket
IDME formula. The multiplier for the SUMMARY: The DoD is publishing this
TRICARE will update the adjusted IDME adjustment factor for TRICARE for notice to announce a meeting of the
standardized amounts according to the FY 2016 is 1.02. National Commission on the Future of
final updated hospital market basket the Army (‘‘the Commission’’). The
used for the Medicare PPS for all H. Cost to Charge Ratio
meeting will be closed to the public.
hospitals subject to the TRICARE DRG- TRICARE uses a national Medicare
DATES: Date of the Closed Meeting:
based payment system according to cost-to-charge ratio (CCR). For FY 2016,
Wednesday, January 13, 2016, from 8:00
CMS’ August 17, 2015, final rule. For the Medicare CCR used for the TRICARE
a.m. to 5:00 p.m.
FY 2016, the market basket is 2.4 DRG-based payment system for acute
ADDRESSES: Address of Closed Meeting,
percent. Note: Medicare’s FY 2016 care hospitals and neonates will be
market basket index adjusts according to 0.2631. This is based on a weighted January 13, 2016: Rm 12110, 12th Floor,
average of the hospital-specific Zachary Taylor Building, 2530 Crystal
hospitals’ compliance with quality data
Dr., Arlington, VA 22202.
and electronic health record meaningful Medicare CCRs (weighted by the
use submissions. These adjustments do number of Medicare discharges) after FOR FURTHER INFORMATION CONTACT: Mr.
not apply to the TRICARE Program. excluding hospitals not subject to the Don Tison, Designated Federal Officer,
TRICARE DRG system (Sole Community National Commission on the Future of
E. Outlier Payments the Army, 700 Army Pentagon, Room
Hospitals, Indian Health Service
Since TRICARE does not include hospitals, and hospitals in Maryland). 3E406, Washington, DC 20310–0700,
capital payments in our DRG-based The Medicare CCR is used to calculate Email: dfo.public@ncfa.ncr.gov. Desk
payments (TRICARE reimburses cost outlier payments, except for (703) 692–9099. Facsimile (703) 697–
hospitals for their capital costs as children’s hospitals. The Medicare CCR 8242.
reported annually to the contractor on a has been increased by a factor of 1.0065 SUPPLEMENTARY INFORMATION: This
pass through basis), we will use the to include an additional allowance for meeting will be held under the
fixed loss cost outlier threshold
asabaliauskas on DSK5VPTVN1PROD with NOTICES
bad debt. The 1.0065 factor reflects the provisions of the Federal Advisory
calculated by CMS for paying cost provisions of the Middle Class Tax Committee Act (FACA) of 1972 (5
outliers in the absence of capital Relief and Job Creation Act of 2012. For U.S.C., Appendix, as amended), the
prospective payments. For FY 2016, the children’s hospital cost outliers, the Government in the Sunshine Act of
TRICARE fixed loss cost outlier CCR used is 0.2840. 1976 (5 U.S.C. 552b, as amended), and
threshold is based on the sum of the 41 CFR 102–3.150.
applicable DRG-based payment rate plus I. Pricing of Claims Purpose of Meetings:
any amounts payable for Indirect The final rule published on May 21, During the closed meeting on
Medical Education (IDME) plus a fixed 2014 (79 FR 29085) set forth all final Wednesday, January 13, 2016, the
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81544/page/2.svg)
Document Created: 2015-12-29 10:15:35
Document Modified: 2015-12-29 10:15:35
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of DRG revised rates. | |
| Contact | Sharon L. Seelmeyer, Medical Benefits and Reimbursement Section, TRICARE, telephone (303) 676-3690. Questions regarding payment of specific claims under the TRICARE DRG-based | |
| FR Citation | 80 FR 81295 |
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