81 FR 59934 - TRICARE; Reimbursement of Long Term Care Hospitals and Inpatient Rehabilitation Facilities
DEPARTMENT OF DEFENSE
Office of the Secretary Federal Register Volume 81, Issue 169 (August 31, 2016)
Office of the Secretary
Federal Register Volume 81, Issue 169 (August 31, 2016)
| Page Range | 59934-59945 | |
| FR Document | 2016-20660 |
[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)] [Proposed Rules] [Pages 59934-59945] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20660] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 199 [Docket ID: DOD-2012-HA-0146] RIN 0720-AB47 TRICARE; Reimbursement of Long Term Care Hospitals and Inpatient Rehabilitation Facilities AGENCY: Office of the Secretary, Department of Defense (DoD). ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The Department of Defense, Defense Health Agency, is proposing to revise its reimbursement of Long Term Care Hospitals (LTCHs) and Inpatient Rehabilitation Facilities (IRFs). Proposed revisions are in accordance with the statutory provision at title 10, United States Code (U.S.C.), section 1079(i)(2) that requires TRICARE payment methods for institutional care 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. Our regulation includes a definition for ``Hospital, long-term (tuberculosis, chronic care, or rehabilitation).'' This rule proposes to delete this definition and create separate definitions for ``Long Term Care Hospital'' and ``Inpatient Rehabilitation Facility'' in accordance with Centers for Medicare & Medicaid Services (CMS) classification criteria. Under TRICARE, LTCHs and IRFs (both freestanding rehabilitation hospitals and rehabilitation hospital units) are currently paid the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). Although Medicare's reimbursement methods for LTCHs and IRFs are different, it is prudent to propose adopting both the Medicare LTCH and IRF Prospective Payment System (PPS) methods simultaneously to align with our statutory requirement to utilize the same reimbursement system as Medicare. This proposed rule sets forth the proposed regulation modifications necessary for TRICARE to adopt Medicare's LTCH and IRF Prospective Payment Systems and rates applicable for inpatient services provided by LTCHs and IRFs to TRICARE beneficiaries. DATES: Written comments received at the address indicated below by October 31, 2016 will be accepted. ADDRESSES: You may submit comments, identified by docket number or Regulatory Information Number (RIN) and title, by either of the following methods: The Web site: http://www.regulations.gov. Follow the instructions for submitting comments. Mail: Department of Defense, Deputy Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, ATTN: Box 24, Alexandria, VA 22350-1700. 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: Sharon Seelmeyer, Defense Health Agency (DHA), Medical Benefits and Reimbursement Section, telephone (303) 676-3690. SUPPLEMENTARY INFORMATION: I. Executive Summary A. Purpose of the Proposed Rule 1. Long Term Care Hospitals (LTCHs) This rule publishes TRICARE's proposed modifications to our regulation that are necessary to adopt the Medicare LTCH Prospective Payment System and rates. This is in accordance with the statutory requirement that for TRICARE institutional services ``payments 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].'' Medicare pays LTCHs using a LTCH Prospective Payment System (PPS) which classifies LTCH patients into distinct Diagnosis-Related Groups (DRGs). The patient classification system groupings are called Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs), which are the same DRG groupings used under the Medicare acute hospital inpatient prospective payment system (IPPS), but that have been weighted to reflect the resources required to treat the medically complex patients treated at LTCHs. On January 26, 2015, a TRICARE proposed rule was published in the Federal Register [79 FR 51127], proposing to adopt a TRICARE LTCH PPS similar to the CMS' reimbursement system for LTCHs, with the exception of not adopting Medicare's LTCH 25 percent rule. However, that proposed rule acknowledged that the Department of Health and Human Services intended to address implementation of Section 1206(a) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67) in their FY 2016 rulemaking process. As a result, the TRICARE proposed rule included a statement that DoD would ``defer action on this issue pending review of the final Medicare policy.'' This review has been completed and we have changed our approach regarding implementation of the TRICARE LTCH PPS. Consequently, we are withdrawing the proposed rule published in the Federal Register on January 26, 2015, and publishing this new proposed rule to inform the public of our intent to adopt the CMS LTCH PPS system with no modifications or exceptions. We have determined that it is practicable to adopt Medicare's LTCH [[Page 59935]] PPS reimbursement methodology in its entirety without deviations. On August 22, 2014, the CMS final rule on updating the annual payment rates for the Medicare PPS for inpatient hospital services provided by LTCHs was published in the Federal Register [79 FR 49853]. As part of its final rule, CMS discussed the need for future policy changes that would be required to carry out the provisions under section 1206 of the Pathway for SGR Reform Act of 2013, to include section 1206(a), which provides for the establishment of an alternate ``site-neutral'' payment rate for Medicare LTCH patients that fail to meet certain statutorily defined criteria, such as having been discharged by an IPPS hospital immediately preceding the LTCH admission, having 3 or more days in an ICU during the immediately preceding IPPS stay or having received at least 96 hours of respiratory ventilation services. If the above statutorily defined criteria is not met, the LTCH will receive a ``site-neutral'' payment rate. As mentioned earlier, as a result of the unspecified potential changes that might be required to Medicare's LTCH reimbursement system, a statement was added to TRICARE's proposed rule that DoD would defer action on adopting Medicare's potential changes relating to ``site- neutral'' payments until DoD could review the final Medicare policy. Upon review of Medicare's final rule published on August 17, 2015, we learned that significant changes had been made to Medicare's previous LTCH reimbursement system, specifically the precise details about the creation of Medicare's ``site-neutral'' payments beginning in FY 2016. This proposed rule explains our new reimbursement approach for LTCHs based on CMS' changes. TRICARE pays for most hospital care under the TRICARE DRG-based payment system, which is similar to Medicare's, but some hospitals are exempt from the TRICARE DRG-based payment system. LTCHs are currently exempt from the TRICARE DRG-based payment system and are paid by TRICARE at the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). Paying billed charges is fiscally imprudent and inconsistent with TRICARE's governing statute. Paying LTCHs under Medicare's methods is prudent, because it reduces government costs without affecting beneficiary access to services or quality; it is practicable, because it can be implemented without major costs; and it is harmonious with the statute because the statute states that TRICARE shall determine its payments for institutional services to the extent practicable in accordance with Medicare's payment rates. Our legal authority for this portion of the proposed rule is 10 U.S.C. 1079(i)(2). 2. Inpatient Rehabilitation Facilities (IRFs) This rule also publishes proposed TRICARE regulation modifications necessary to adopt the Medicare IRF Prospective Payment System (PPS) and rates. This is in accordance with the statutory requirement that for TRICARE institutional services ``payments 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].'' Medicare pays IRFs using an IRF Prospective Payment System (PPS) which classifies IRF patients into one of 92 case-mix groups (CMGs). Similarly to LTCHs, IRFs, (both freestanding rehabilitation hospital and rehabilitation hospital units) are currently exempt from the TRICARE DRG-based payment system and are paid by TRICARE at the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). As discussed earlier, paying billed charges is fiscally imprudent and inconsistent with TRICARE's governing statute. Paying IRFs under a method similar to Medicare's is prudent, practicable, and harmonious with the statute. Our legal authority for this portion of the proposed rule is 10 U.S.C. 1079(i)(2). B. Summary of the Major Provisions of the Proposed Rule 1. Adoption of Medicare's Prospective Payment System Methodology for LTCHs TRICARE proposes to reimburse LTCHs for inpatient care using Medicare's LTCH PPS using Medicare's MS-LTC-DRGs. Under the proposed TRICARE LTCH PPS reimbursement methodology, payment for a TRICARE patient will be made at a predetermined, per-discharge amount for each MS-LTC-DRG. The TRICARE LTCH PPS reimbursement methodology would include payment for all inpatient operating and capital costs of furnishing covered services (including routine and ancillary services), but not certain pass-through costs (e.g., bad debts, direct medical education, and blood clotting factors). When the Medicare day limit is exhausted for TRICARE beneficiaries who are also eligible for Medicare (i.e., TRICARE For Life (TFL) beneficiaries), TRICARE will be the primary payer for medically necessary services and the beneficiary will be responsible for the appropriate TRICARE inpatient cost share. We anticipate the beneficiary's out-of-pocket costs will be limited by the statutory catastrophic cap of $1,000 per family, per fiscal year for active duty family members and reserve select beneficiaries and $3,000 cap per family, per fiscal year for all other beneficiaries. 2. Transition Period The Pathway for SGR Reform Act of 2013 directed CMS to make significant changes to the payment system for LTCHs. The law directs CMS to establish two different types of LTCH PPS payment rates depending on whether or not the patient meets certain clinical criteria: (1) Standard LTCH PPS payment rates; and (2) lower site- neutral LTCH PPS payment rates that are generally based on the Medicare acute hospital IPPS rates. Site-neutral patients include LTCH patients who do not use prolonged mechanical ventilation during their LTCH stay or who did not spend three or more days in the intensive care unit (ICU) during their prior acute care hospital stay. The law transitions the payment reductions in FY16 and FY17 by requiring payment based on a 50/50 blend of the standard LTCH PPS rate and the site-neutral LTCH PPS rate for site-neutral patients. In FY17, when we anticipate implementing the TRICARE LTCH PPS payment changes, we propose that TRICARE adopt Medicare's FY17 LTCH PPS payment policies, which will include Medicare's payment of site-neutral cases with Medicare's 50/50 blended payment for site-neutral patients. Medicare has not yet set the payment for site neutral cases for FY 2018, however, we will follow that payment rate once it is determined. For example, if the blended payment rate ends by FY18, we would also follow Medicare and all TRICARE site-neutral LTCH patients would receive the site-neutral payment (without a blend with the standard LTCH PPS rate). If implementation of the TRICARE LTCH PPS is delayed beyond FY17, there will be no transition period for site-neutral patients. Rather, TRICARE will adopt the Medicare LTCH PPS methodology applicable at the time of TRICARE implementation. 3. Adoption of Medicare's Prospective Payment System Methodology for IRFs TRICARE proposes to reimburse IRFs for inpatient care using Medicare's IRF PPS which pays a prospectively-set, fixed payment per discharge based on a patient's classification into one of 92 [[Page 59936]] case-mix groups (CMGs). Each CMG has a national relative weight reflecting the expected relative costliness of treatment for patients in that category compared with that for the average Medicare inpatient rehabilitation patient. The relative weight for each CMG is multiplied by a standardized Medicare IRF base payment amount to calculate the case-mix adjusted prospective payment rate. The TRICARE IRF PPS payment rates would cover all inpatient operating and capital costs that IRFs are expected to incur in furnishing intensive rehabilitation services. When the Medicare day limit is exhausted for TRICARE beneficiaries who are also eligible for Medicare (i.e., TFL beneficiaries), TRICARE will be the primary payer for medically necessary services and the beneficiary will be responsible for the appropriate TRICARE inpatient cost share. We anticipate the beneficiary's out-of-pocket costs will be limited by the statutory catastrophic cap of $1,000 per family, per fiscal year for active duty family members and reserve select beneficiaries and $3,000 cap per family, per fiscal year for all other beneficiaries. 4. Removal of Outdated Terms This proposed rule removes outdated definitions in 32 CFR 199.2 for ``Hospital, long-term (tuberculosis, chronic care, or rehabilitation)'' and ``Long-term hospital care'' and adds a new definition for ``Long- Term Care Hospital (LTCH)'' as well as adding a new definition for ``Inpatient Rehabilitation Facility (IRF).'' The new definitions are based on CMS' LTCH and IRF classifications. Our review of the data shows that there were no facilities reimbursed under our existing LTCH or IRF reimbursement methodologies that will not meet the new proposed definitions. The TRICARE requirements for both LTCHs and IRFs to be authorized institutional providers have been added to 32 CFR 199.6. C. Costs and Benefits The economic impact of the proposed rule is anticipated to reduce DoD allowed amounts to LTCHs by approximately $77 million during implementation if that occurs as planned in FY17, when TRICARE site- neutral cases will be paid based on a transitional 50/50 blended payment and $87 million if implemented in FY18 when site-neutral payments are fully phased-in. If implementation is delayed beyond FY17, TRICARE will use the Medicare fully phased in site-neutral payments for site-neutral patients. This proposed rule is also anticipated to reduce DoD allowed amounts to IRFs by approximately $53 million in FY17. II. Introduction and Background A. Reimbursement 1. TRICARE LTCH PPS Reimbursement Patients with clinically complex problems, such as multiple acute or chronic conditions, may need hospital care for an extended period of time. LTCHs represent a relatively small number of hospitals (approximately 424 under Medicare), which treat a critically ill population with complex needs and long lengths of stay. Per 32 Code of Federal Regulations (CFR) 199.14(a)(1)(ii)(D)(4), LTCHs are currently exempt from the TRICARE DRG-based payment system, just as they were exempt from Medicare's Inpatient Prospective Payment System (IPPS) when the CMS initially implemented its DRG-based payment system. Because there is no alternate TRICARE reimbursement mechanism in 32 CFR part 199 at this time, LTCH inpatient care provided to TRICARE beneficiaries is currently paid the lower of a negotiated rate if a network LTCH, which is usually substantially greater than what would be paid using the TRICARE DRG method, or billed charges if a non-network LTCH. Medicare created a PPS for LTCHs effective with the cost reporting period beginning on or after October 1, 2002. The MS-LTC-DRG system under Medicare's LTCH PPS classifies patients into distinct diagnostic groups based on their clinical characteristics and expected resource needs. The patient classification groupings, which are the same groupings used under the inpatient acute care hospital groupings (i.e., MS-DRGs) are weighted to reflect the resources required to treat the medically complex patients who are treated in LTCHs. By their nature, LTCHs treat patients with comorbidities requiring long-stay, hospital- level care. TRICARE often adopts Medicare's reimbursement methods but delays implementation generally until any transition phase is complete for the Medicare program. CMS included a 5-year transition period when it adopted LTCH PPS for Medicare, under which LTCHs could elect to be paid a blended rate for a set period of time. This transition period ended in 2006. Following the transition phase, in 2008 Medicare adopted an LTCH-specific DRG system, which uses MS-LTC-DRGs, as the patient classification method for LTCHs. In FY16, Medicare will begin its adoption of a site-neutral payment system for LTCHs. Beginning in FY16 and continuing in FY17, CMS is phasing in a site-neutral payment methodology; during the transition period in FY16 and FY17, for site- neutral patients, 50 percent of the allowed amount will be calculated using the site-neutral payment methodology and 50 percent will be calculated using the current full LTCH PPS standard federal payment rate methodology. Beginning in FY18, all Medicare payments for site- neutral patients will be calculated using the site-neutral payment methodology. Given TRICARE's statutory requirement to adopt Medicare's reimbursement methods when practicable, TRICARE is proposing to adopt Medicare's LTCH PPS reimbursement method for our beneficiaries, including the Medicare site-neutral payment methodology. TRICARE will adopt the Medicare payment methodology that is in place at the time of TRICARE's implementation. For example, for an FY17 implementation, we will follow Medicare and use a 50/50 blend of the site-neutral method and the full LTCH PPS payments for site-neutral patients use a 50/50 blend. If implementation is delayed beyond FY17, TRICARE will use the Medicare site-neutral payments for site-neutral patients. Under 10 U.S.C. 1079(i)(2), the amount to be paid to hospitals, skilled nursing facilities, 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].'' Based on 1079(i)(2), TRICARE is proposing to adopt Medicare's LTCH PPS as the methodology to reimburse TRICARE authorized LTCHs. A change is needed to conform to the statute. For TRICARE, we were able to identify complete claims information for 678 patients who were Active Duty Service Members (ADSMs), their dependents, or retirees and their dependents who were not eligible for the TRICARE For Life program (referred to as non-TFL), and 56 TFL LTCH admissions in FY14, for which TRICARE was the primary payer for patients with no other health insurance (referred to as non-Other Health Insurance (OHI)). We also identified 27 non-TFL and 3 TFL non- OHI LTCH admissions in FY14 with incomplete claims data, and excluded these claims from the analysis. TRICARE allowed charges for non-TFL beneficiaries were approximately $73 million in FY14. We found that the average TRICARE allowed amount for non-TFL beneficiaries was approximately $107,000 in FY14, which is significantly [[Page 59937]] more than the estimated amount that Medicare would have paid for these discharges (the average Medicare LTCH PPS payment would have been approximately $42,000). Using the Medicare LTCH PPS system would have reduced TRICARE-allowed amounts by almost $45 million in FY14 for non- TFL beneficiaries. For TFL beneficiaries for whom TRICARE was the primary payer, TRICARE paid approximately $19 million in allowed charges in FY14. In cases where TRICARE is the primary payer for LTCH care of TFL beneficiaries, such as when a Medicare beneficiary exhausts his/her day limits, TRICARE is paying billed charges. Reimbursing using methods similar to the Medicare LTCH PPS methodology would have reduced TRICARE allowed charges for TFL beneficiaries by approximately $15 million in FY14. Shifting to methods similar to the Medicare LTCH PPS methodology would have reduced TRICARE allowed charges to LTCHs for non-TFL and TFL beneficiaries by $60 million in FY14 and is expected to reduce allowed charges by $77 million in FY17, assuming that site-neutral payments will be based on a 50/50 blend of the standard LTCH PPS rate and the site-neutral LTCH PPS rate. We projected savings in FY17 by first projecting costs under TRICARE's current policy for reimbursing LTCHs. We assumed that the costs would increase by 7 percent per year from FY14 to 17 reflecting increases in both TRICARE admissions to LTCHs under current policy and increases in TRICARE billed charges. We then projected the costs under the proposed policy assuming that under the Medicare LTCH-PPS the combination of admissions and higher reimbursement rates would increase costs by 3 percent per year. This percentage annual increase in TRICARE allowed amounts using the LTCH- PPS is less than the current policy percentage increase to reflect lower rates of increases in LTCH reimbursement rates under the LTCH-PPS (in comparison to TRICARE billed charges) and fewer LTCH admissions due to the phased in implementation of the Medicare LTCH site-neutral policy. The difference between the current policy and proposed policy amounts was equal to savings of $77 million in FY17, assuming partial phase-in of site-neutral payments. As discussed above, TRICARE's current payment method results in TRICARE reimbursing LTCHs substantially more than Medicare does for equivalent inpatient care. Adopting Medicare's LTCH PPS methodology is practicable. Even though the beneficiary populations differ between Medicare and TRICARE non-TFL beneficiaries, we have found that the distribution of LTCH cases by diagnosis groups is similar between the two populations. To adjust for the differences in use by the TRICARE and Medicare populations, we considered developing TRICARE-specific weights and rates. However, TRICARE has a low volume of admissions to LTCHs, so calculating weights and rates for TRICARE admissions to LTCHs is impracticable. We are able to calculate our own weights for admissions to general hospitals on an annual basis because of the volume of TRICARE admissions to general hospitals; however, it would be difficult to determine a new set of TRICARE LTCH weights because of the small number of TRICARE admissions. For example, there were only about 700 TRICARE admissions in FY14 in the approximately 750 MS-LTC-DRG groups. Only four MS-LTC-DRGs had 25 or more TRICARE admissions in FY14 and only 14 had ten or more TRICARE admissions in that year. Approximately 600 MS-LTC-DRGs had no TRICARE LTCH admissions. Consequently, we are proposing to adopt the weights and rates used currently in Medicare's MS-LTC-DRGs. Further, TRICARE proposes to adopt Medicare's LTCH PPS to include short-stay outliers, the 25 percent threshold payment adjustment, site- neutral payments, interrupted stay policy, the method of payment for preadmission services, and high-cost outlier payments. TRICARE also proposes to incorporate Medicare's Long Term Care Hospital Quality Reporting (LTCHQR) payment adjustments for TRICARE LTCHs that reflect Medicare's annual payment update for that facility. TRICARE is not establishing a separate reporting requirement for hospitals, but will utilize Medicare's payment adjustments resulting from their LTCHQR Program. Please see Medicare's final rule [CMS-1632-F; CMS-1632-CN2] RIN 0938-AS41. 2. TRICARE IRF PPS Reimbursement IRFs are free standing rehabilitation hospitals and rehabilitation units in acute care hospitals that provide an intensive rehabilitation program. Per 32 CFR 199.14(a)(1)(ii)(D)(2) and (3), IRFs are currently exempt from the TRICARE DRG-based payment system, just as they were exempt from Medicare's IPPS when the CMS initially implemented its DRG- based payment system. Per 42 CFR 412.1(a)(1), an inpatient rehabilitation hospital or rehabilitation unit of an acute care hospital must meet the requirement for classification as an IRF stipulated in subpart B of 42 CFR part 412. One criterion specified at 42 CFR 412.29(b)(1) that Medicare uses for classifying a hospital or unit of a hospital as an IRF is that a minimum percentage (currently 60 percent) of a facility's total inpatient population must meet at least one of 13 medical conditions listed in 42 CFR 412.29(b)(2). Because there is no alternate TRICARE reimbursement mechanism in 32 CFR part 199 at this time, IRF care provided to TRICARE beneficiaries in this setting is currently paid the lower of a negotiated rate if a network IRF, or billed charges if a non-network IRF. Medicare created a PPS for IRFs effective with the cost reporting period beginning in January 2002. Section 4421 of the Balanced Budget Act of 1997 (Pub. L. 105-33) modified how Medicare payment for IRF services is to be made by creating Section 1886(j) of the Social Security Act, which authorized the implementation of a per-discharge prospective payment system for inpatient rehabilitation hospitals and rehabilitation units of acute care hospitals--referred to as IRFs. As required by Section 1886(j) of the Act, the Federal rates reflect all costs of furnishing IRF services (routine, ancillary, and capital related). CMS included a 9-month transition period when it adopted the IRF PPS for Medicare, under which IRFs could elect to be paid a blended rate. The transition period ended October 1, 2002. Following the transition period, payment to all IRFs was based entirely on the prospective payment. Under 10 U.S.C. 1079(i)(2), the amount to be paid to hospitals, skilled nursing facilities, 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].'' Based on 1079(i)(2), TRICARE is proposing to adopt Medicare's reimbursement methodology to reimburse TRICARE authorized IRFs. A change is needed to conform to the statute. For TRICARE, we were able to identify complete claims information for 2,929 TRICARE beneficiaries discharged from IRFs in FY14 where TRICARE was the primary payer. TRICARE allowed charges for these beneficiaries was approximately $121 million in FY14. These allowed amounts were equal to 74 percent of billed charges, indicating that there were significant discounts offered by IRFs. Excluding Children's and Veterans (VA) hospital claims, which are not paid under the IRF- PPS, [[Page 59938]] TRICARE allowed amounts were $89 million in FY14. We found that the average allowed amount per IRF stay (excluding Children's and VA hospital claims) was $34,300 in FY14, which is significantly more than the estimated amount that Medicare would have paid for these discharges (the average Medicare IRF PPS payment was approximately $18,600 in 2014). The 2014 Medicare payment amount per case was reported in the 2016 Medicare Payment Advisory Commission (MedPAC) report. Using the Medicare IRF PPS system would have reduced TRICARE allowed amounts by approximately $41 million in FY14. Given TRICARE's statutory requirement to adopt Medicare's reimbursement methods when practicable, TRICARE is proposing to adopt Medicare's IRF PPS reimbursement method for its beneficiaries who receive rehabilitative care in IRFs. TRICARE proposes to adopt Medicare's IRF PPS and include Medicare's adjustments for interrupted stays, short stays of less than three days, short-stays transfers (defined as transfers to another institutional setting with an IRF length of stay less than the average length for the CMG), and high-cost outliers. TRICARE proposes to not adopt Medicare's low-income payment (LIP) adjustment for IRFs, because TRICARE does not adjust for Disproportionate Share in acute care hospitals under the TRICARE DRG system. TRICARE also proposes to incorporate Medicare's Inpatient Rehabilitation Hospital Quality Reporting (IRFQR) payment adjustments for TRICARE IRFs, that reflect Medicare's annual payment update for that facility. TRICARE is not establishing a separate reporting requirement for hospitals, but will utilize Medicare's payment adjustments resulting from their IRFQR Program. Please see Medicare's final rule [CMS-1632-F; CMS-1632-CN2] RIN 0938-AS41. B. Pediatric Cases 1. LTCH Our analysis found that the TRICARE pediatric LTCH patients and Medicare populations have similar diagnoses and that the estimated TRICARE costs in each MS-LTC-DRG group are similar to those in Medicare. There are very few TRICARE LTCH cases for patients under age 17; however, these pediatric cases have similar diagnoses as other TRICARE LTCH admissions. Therefore, we propose to adopt the same LTCH PPS methodology for pediatric patients in LTCHs as we are for all other TRICARE beneficiaries. We are inviting comments on this proposal and welcome feedback on whether the MS-LTC-DRG weights are appropriate for pediatric cases. We also welcome options and alternative approaches for consideration in establishing LTCH reimbursement for pediatric beneficiaries. 2. IRF In 2014, approximately 50 patients under the age of 17 received IRF care under TRICARE. Approximately 38 percent of those TRICARE pediatric IRF cases were treated at Children's hospitals, which are exempt from Medicare's IRF PPS. TRICARE is proposing that pediatric rehabilitation cases at Children's hospitals would also be exempt under the TRICARE IRF PPS and instead paid under the TRICARE DRG system. Pediatric cases treated at TRICARE IRFs would be paid under the TRICARE IRF PPS. C. Veterans (VA) Hospitals VA hospitals specialize in treating injured veterans and provide access to rehabilitative care. VA hospitals are not Medicare authorized IRFs (because they are Federal hospitals) and they do not use Medicare's IRF PPS method. TRICARE allows VA hospitals to provide inpatient rehabilitation care to TRICARE beneficiaries, and VA hospitals provide care for over 200 TRICARE patients each year (mostly Active Duty Service Members (ADSMs)). VA hospitals will continue to be paid under existing methodologies. III. Regulatory Impact Analyses for LTCHs and IRFs A. Overall Impact DoD has examined the impacts of this proposed rule as required by Executive Orders (E.O.s) 12866 (September 1993, Regulatory Planning and Review) and 13563 (January 18, 2011, Improving Regulation and Regulatory Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and the Congressional Review Act (5 U.S.C. 804(2)). 1. Executive Order 12866 and Executive Order 13563 E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). We estimate that the effects of the LTCH and IRF provisions that would be implemented by this rule would not result in LTCH or IRF revenue reductions exceeding $100 million in any one year individually; however, when combined, revenue reductions would exceed $100 million, making this rulemaking ``economically significant'' as measured by the $100 million threshold. We have prepared Regulatory Impact Analyses that, to the best of our ability, presents the costs and benefits of the rulemaking. This proposed rule is anticipated to reduce DoD allowed amounts to LTCHs by $77 million and to IRFs by $53 million in FY17. 2. Congressional Review Act. 5 U.S.C. 801 Under the Congressional Review Act, a major rule may not take effect until at least 60 days after submission to Congress of a report regarding the rule. A major rule is one that would have an annual effect on the economy of $100 million or more or have certain other impacts. This Notice of Proposed Rule Making is a major rule under the Congressional Review Act. 3. Regulatory Flexibility Act (RFA) The RFA requires agencies to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals are considered to be small entities, either by being nonprofit organizations or by meeting the Small Business Administration (SBA) identification of a small business (having revenues of $34.5 million or less in any one year). For purposes of the RFA, we have determined that the majority of LTCHs and all IRFs would be considered small entities according to the SBA size standards. Individuals and States are not included in the definition of a small entity. Therefore, this Rule would have a significant impact on a substantial number of small entities. The Regulatory Impact Analyses, as well as the contents contained in the preamble, also serves as the Regulatory Flexibility Analysis. [[Page 59939]] 4. Unfunded Mandates Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $140 million. This Proposed Rule will not mandate any requirements for State, local, or tribal governments or the private sector. 5. Paperwork Reduction Act This rule will not impose significant additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3502-3511). Existing information collection requirements of the TRICARE and Medicare programs will be utilized. We do not anticipate any increased costs to hospitals because of paperwork, billing, or software requirements since we are keeping TRICARE's billing/coding requirements (i.e., hospitals will be coding and filing claims in the same manner as they currently are with TRICARE). 6. Executive Order 13132, ``Federalism'' This rule has been examined for its impact under E.O. 13132, and 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. B. Hospitals Included in and Excluded From the Proposed LTCH and IRF PPS Reimbursement Methodologies The TRICARE LTCH PPS and the TRICARE IRF PPS encompass all Medicare-classified LTCHs and IRFs that are also authorized by TRICARE and that have inpatient stays for TRICARE beneficiaries, except for hospitals in States that are paid by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the CHAMPUS DRG-based payment system, respectively. Currently, only Maryland hospitals operate under such a waiver. C. Analysis of the Impact of Policy Changes on Payment for LTCH and IRF Alternatives Considered The alternatives that were considered, the changes that we are proposing, and the reasons that we have chosen these options are discussed below. 1. Alternatives Considered for Addressing Reduction in LTCH Payments Under the method discussed here, TRICARE's LTCH payments per discharge would decrease by an average of 45-75 percent for most LTCHs. Because the impact of moving from a charge-based reimbursement method to Medicare's method would produce such large reductions in the TRICARE allowed amounts for LTCH care, we considered a 4-year phase-in of this approach. Under this option, one portion of the payment would continue to be paid as the billed charge and the remaining portion would be paid under the Medicare approach. In the first year, 75 percent of the payment would be based on billed charges and in each subsequent year this portion would be reduced by 25 percentage points so that by the fourth year the billed charge portion would be zero points. For the following reasons, we have determined that a transition period is unnecessary because the Medicare-based payment amounts will have a minimal impact on overall LTCH payments and to any particular LTCH under TRICARE. First, the TRICARE payments to LTCHs will be equal to Medicare's LTCH payments. The Medicare Payment Advisory Committee (MedPAC) is an independent congressional agency which advises the U.S. Congress on issues affecting the Medicare program. MedPAC's most recent research indicates that Medicare LTCHs have a positive Medicare margin. Second, the number of TRICARE discharges from LTCHs is very small in comparison to the number of Medicare discharges in LTCHs each year. In FY14, there were 764 discharges to LTCHs in which TRICARE was the primary payer (including the 30 discharges with incomplete data). Medicare, in comparison, had approximately 138,000 discharges to LTCHs in 2013. Thus, in aggregate, the TRICARE LTCH claims are a very small percentage of the industry's claims (about one-half of one percent). Third, we found that in FY14 there were only 5 LTCHs with 15 or more TRICARE admissions. For all but two TRICARE LTCHs, we found that TRICARE admissions accounted for less than six percent of the number of Medicare discharges. Of the 212 LTCHs with TRICARE discharges, we found that 154 had 3 or fewer discharges in FY14 and that 208 Medicare LTCHs had no admissions in FY14 where TRICARE was the primary payer. Thus, the number of TRICARE discharges at any one LTCH is small and TRICARE is a small portion of LTCH revenues. Fourth, we do not think that there will be access problems for TRICARE beneficiaries. MedPAC has analyzed LTCH access for Medicare patients and concluded that Medicare beneficiaries have continued access to LTCHs under the Medicare payment methodology proposed here as evidenced by an increasing supply of providers and an increasing number of LTCH stays. Given that the TRICARE LTCH rates will equal Medicare LTCH rates and will have a limited impact on overall LTCH payments, we do not anticipate access problems for TRICARE beneficiaries. Further, by statute, hospitals that participate under Medicare are required to agree to accept TRICARE reimbursement. In summary, for these four reasons we do not think that a transition period is necessary, but we invite comments on this approach. 2. Alternatives Considered for Addressing Reduction in IRF Payments Under the method discussed here, TRICARE's IRF payments per discharge would decrease by 30-40 percent for most IRFs. Because the impact of moving from a charge-based reimbursement method to Medicare's method would produce such large reductions in the TRICARE allowed amounts for IRF care, we considered a 3-year phase-in of this approach. Under this option, one portion of the payment would continue to be paid as the billed charge and the remaining portion would be paid under the Medicare approach. In the first year, two-thirds of the payment would be based on billed charges and in each subsequent year this portion would be reduced by one-third so that by the third year the billed charge portion would be zero points. For the following reasons, we have determined that a transition period is unnecessary because the Medicare-based payment amounts will have a minimal impact on overall LTCH payments and to any particular LTCH under TRICARE. First, the TRICARE payments to IRFs will be equal to Medicare's IRF payments. The Medicare Payment Advisory Committee (MedPAC) is an independent congressional agency which advises the U.S. Congress on issues affecting the Medicare program. MedPAC's most recent research from March 2015 indicates that Medicare IRFs generally have positive Medicare margins. Thus, we think that IRFs will earn a positive margin from TRICARE. Second, the number of TRICARE discharges from IRFs is very small in comparison to the number of Medicare IRF discharges each year. In FY14, there were 2,681 IRF [[Page 59940]] discharges in which TRICARE was the primary payer (including the 78 discharges with incomplete data and excluding discharges from Children's and VA hospitals). Medicare, in comparison, had approximately 376,000 IRF stays in 2014. Thus, in aggregate, the TRICARE IRF claims account for less than one percent of the industry's claims. Third, we found that in FY14 there were only 24 IRFs with 20 or more TRICARE admissions. For all but nine TRICARE IRFs, we found that TRICARE admissions accounted for less than ten percent of the number of Medicare discharges. Of the 591 IRFs with TRICARE discharges (including the 23 with incomplete data), we found that 408 had 3 or fewer discharges in FY14 and that 771 Medicare IRFs had no TRICARE admissions in FY14 where TRICARE was the primary payer. Thus, the number of TRICARE discharges at any one IRF is small and TRICARE accounts for a small portion of IRF revenues. Fourth, we do not think that there will be access problems for TRICARE beneficiaries. MedPAC has analyzed IRF access for Medicare patients and concluded that Medicare beneficiaries have continued access to IRFs. MedPAC reports the number of providers and volume of services in IRFs has remained stable between 2012 and 2013. Because the TRICARE IRF rates will equal Medicare IRF rates and will have a limited impact on overall LTCH payments, we do not anticipate access problems for TRICARE beneficiaries. Further, by statute, hospitals that participate under Medicare are required to agree to accept TRICARE reimbursement. In summary, for these four reasons we do not think that a transition period is necessary, but we invite comments on this approach. D. Analysis of the Impact of TRICARE LTCH and IRF Payment Reform on LTCHs and IRFs 1. LTCH Methodology We analyzed the impact of TRICARE implementing a new method of payment for LTCHs. The proposed method is Medicare's LTCH payment method, which uses the Medicare MS-LTC-DRG system for cases that meet specific clinical criteria to qualify for the standard LTCH PPS payment rates and, as of FY17, the Medicare IPPS MS-DRG system for all other (site-neutral) patients. Our analysis compares the impact on allowed charges of the new methodology compared to current TRICARE methodology (where TRICARE pays billed charges or discounts off of these billed charges for all LTCH claims). The data used in developing the quantitative analyses presented below are taken from TRICARE allowed charge data from October 2013 to September 2014. We drew upon various sources for the data used to categorize hospitals in Table 1, below. We attempted to construct these variables using information from Medicare's FY14 Impact file to verify that each provider was in fact a Medicare LTCH. One limitation is that for individual hospitals, some miscategorizations are possible. We were unable to match 30 hospital claims from 6 LTCHs to the FY14 Impact file, and as a result, these claims were excluded from the analysis. All Maryland LTCHs were also excluded from the analysis. After we removed the excluded claims which we could not assign charge and hospital classification variables for, we used the remaining hospitals and claims as the basis for our analysis. Using allowed charge data from 2014, the FY14 Medicare MS-LTC-DRG and MS-DRG weights, the FY14 Medicare LTCH and IPPS national base payment rates, the FY14 Medicare high cost outlier fixed thresholds, and the FY14 wage index adjustment factors, we simulated TRICARE allowed amounts in FY14 using the proposed LTCH prospective payment method. We focused the analysis on TRICARE claims where TRICARE was the primary payer because only these TRICARE payments will be affected by the proposed reforms. 2. IRF Methodology We analyzed the impact of TRICARE implementing a new method of payment for IRFs. The proposed method is Medicare's IRF prospective payment system (PPS) method, which pays a prospectively-set fixed payment per discharge based on a patient's classification into one of 92 case-mix groups (CMGs). Our analysis compares the impact on allowed charges of the new methodology compared to current TRICARE methodology (where TRICARE pays billed charges or discounts off of these billed charges for all IRF claims). The data used in developing the quantitative analyses presented below are taken from TRICARE allowed charge data from October 2013 to September 2014. We drew upon various sources for the data used to categorize hospitals in Table 1, below. We attempted to construct these variables using information from Medicare's FY16 IRF rate setting file and the Medicare Provider file to verify that each TRICARE IRF provider was in fact a Medicare IRF. One limitation is that for individual hospitals, some miscategorizations are possible. We were unable to match 78 IRF claims from 23 IRFs to Medicare provider numbers within the FY16 IRF rate setting file or the October 2015 Medicare IRF PSF file, and as a result, these claims were excluded from the analysis. We also excluded all Children's Hospital (4 hospitals, 22 discharges) and all Veterans hospital (12 Veterans hospitals, 226 discharges) claims because these hospitals are not paid under the Medicare IRF-PPS. After we removed the excluded claims which we could not assign charge and hospital classification variables for, we used the remaining hospitals and claims as the basis for our analysis. The impact of adopting the Medicare IRF-PPS is difficult to estimate because there is insufficient diagnosis information on the TRICARE claims to classify TRICARE patients into a CMG. Because we were unable to classify TRICARE discharges into one of the 92 Medicare CMGs, we took an alternative approach to estimate the costs of adopting the Medicare IRF-PPS system. Our approach is based on first calculating the facility-specific ``Medicare'' costs for TRICARE IRF discharges at each IRF using the FY14 TRICARE billed charges at that IRF and the Medicare cost-to-charge ratio (CCR) for that IRF. We then used Medicare payment and cost data from the FY16 Medicare IRF rate setting file to calculate the Medicare margin at each IRF. In a third step of our approach we multiplied the estimated cost of each TRICARE discharge calculated in the first step by the IRF-specific margin to get an estimate of the allowed amount that would be paid by TRICARE under the Medicare IRF-PPS for each discharge. Under ``current policy'' we assumed that TRICARE IRF costs would increase by 6 percent per year from FY14 to FY17 to reflect increases in billed charges. We then projected the costs under the proposed policy, assuming that under the Medicare IRF-PPS, costs would increase by 2.5 percent per year from FY14 to FY17. Under the Medicare IRF-PPS, the percentage annual increase of 2.5 percent in TRICARE allowed amounts is less than the percentage increase under current policy due to slower increases in Medicare IRF reimbursement rates (in comparison to TRICARE billed charges). The difference between the current and the proposed policy was equal to $53 million in FY17. As a result, this approach allows us to estimate the change in allowed amounts under the Medicare method without having CMG [[Page 59941]] data on TRICARE patients. We focused the analysis on TRICARE claims where TRICARE was the primary payer because only these TRICARE payments will be affected by the proposed reforms. 3. Effect on Hospitals Table 1, Impact of TRICARE LTCH Rule in FY14, Assuming Full Implementation of the Medicare Site-Neutral Payment Policy, below, presents the results of our analysis of FY14 TRICARE claims data. This table categorizes LTCHs which had TRICARE inpatient stays in FY14 by various geographic and special payment consideration groups to illustrate the varying impacts on different types of LTCHs. The first column represents the number of LTCHs in FY14 in each category which had inpatient stays in which TRICARE was the primary payer. The second column shows the number of TRICARE discharges in each category. The third column shows the average TRICARE allowed amount per discharge in FY14. The fourth column shows the simulated average allowed amount per discharge under the Medicare LTCH payment method, assuming full implementation of the Medicare site-neutral payment policy. The fifth column shows the percentage reduction in the allowed amounts under the full implementation of the Medicare site-neutral method relative to the current allowed amounts. The first row in Table 1 shows the overall impact on the 222 LTCHs included in the analysis. The next three rows of the table contain hospitals categorized according to their urban/rural status in FY14 (large urban, other urban, and rural). The second major grouping is by LTCH bed-size category, followed by TRICARE network status of the LTCH. The fourth grouping shows the LTCHs by regional divisions while the final grouping is by LTCH ownership status. We estimate that in FY14, assuming full implementation of the Medicare site-neutral payment policy, TRICARE allowed amounts to LTCHs would have decreased by 67 percent in comparison to allowed amounts paid to LTCHs under the current TRICARE policy. For all groups of LTCHs, allowed amounts under the proposed payment methodology would have been reduced. The following discussion highlights some of the changes in allowed amounts among LTCH classifications. Ninety-six percent of all TRICARE LTCH admissions were to urban LTCHs. Allowed amounts would have decreased by 69 percent for large urban, 64 percent for other urban, and 71 percent for rural LTCHs. Very small LTCHs (1-24 beds) would have had the least impact; allowed amounts would have been reduced by 49 percent. The change in payment methodology would have had the greatest impact on large LTCHs (125 or more beds), where allowed amounts would have been reduced by about 72 percent. The change in LTCH payment methodology would have a larger impact on TRICARE non-network LTCHs than network LTCHs because network LTCHs currently offer a discount off billed charges while non-network LTCHs do not. Allowed charges to non-network LTCHs would have declined by 74 percent, in comparison to 64 percent for in-network hospitals. We found that network hospitals on average provide a 30 percent discount off billed charges for non-TFL TRICARE beneficiaries and that 79 percent of all TRICARE LTCH discharges were in-network in FY14. LTCHs in various geographic areas would have been affected differently due to this change in payment methodology. The two regions with the largest number of TRICARE claims, the South Atlantic and West South Central region, would have had an average decrease of 68 and 69 percent in allowed charges respectively, which are very similar to the overall average of 67 percent. LTCHs in the East North Central and West North Central regions would have had the lowest reductions in allowed charges: 59 and 45 percent, respectively. Seventy-nine percent of all TRICARE LTCH discharges in FY14 were in proprietary (for-profit) LTCHs, and these facilities would have had their allowed amounts reduced by approximately 68 percent. The decline in allowed amounts for voluntary (not-for-profit) LTCHs would have been less than for-profit hospitals (63 percent). Table 1--Impact of TRICARE LTCH Rule in FY14, Assuming Full Implementation of the Medicare Site-Neutral Payment Policy ---------------------------------------------------------------------------------------------------------------- Allowed per Allowed per Percent Number of Number of discharge discharge reduction in LTCHs with TRICARE (current (Medicare allowed TRICARE stays discharges policy) method) amounts ---------------------------------------------------------------------------------------------------------------- All LTCHs....................... 222 734 $125,235 $41,071 67 Large Urban................. 110 405 148,099 46,255 69 Other Urban................. 103 312 96,193 34,787 64 Rural....................... 9 17 113,576 32,880 71 Beds............................ 222 734 125,235 41,071 67 1-24........................ 7 13 53,921 27,635 49 25-34....................... 42 103 107,786 38,029 65 35-49....................... 55 164 114,849 39,252 66 50-74....................... 63 205 108,308 36,920 66 75-124...................... 35 151 137,763 44,779 67 125+........................ 20 98 186,523 52,064 72 Network Status.................. 222 734 125,235 41,071 67 Network..................... 160 580 110,147 39,461 64 Non-Network................. 62 154 182,062 47,133 74 Region.......................... 222 734 125,235 41,071 67 New England................. 5 15 74,012 24,186 67 Mid Atlantic................ 11 22 121,182 29,631 76 South Atlantic.............. 39 238 131,922 41,939 68 East North Central.......... 32 71 93,975 38,786 59 East South Central.......... 19 54 146,180 46,381 68 West North Central.......... 13 27 87,161 48,098 45 West South Central.......... 68 214 104,033 31,831 69 [[Page 59942]] Mountain.................... 18 56 166,254 60,533 64 Pacific..................... 17 37 223,154 64,625 71 Ownership....................... 222 734 125,235 41,071 67 Proprietary................. 175 567 127,929 40,763 68 Government Owned............ 10 29 108,139 32,452 70 Voluntary................... 37 138 117,760 44,147 63 ---------------------------------------------------------------------------------------------------------------- Source: FY14 TRICARE LTCH claims and FY14 Medicare Impact File. Excludes claims with other health insurance (OHI). Amounts adjusted for FY14 Wage Index and FY14 COLA. Note: Excludes 30 claims from 6 TRICARE LTCHs that did not have a cost-to-charge ratio (CCR) in the FY14 Medicare Impact File. Table 2, Impact of TRICARE IRF Rule in FY14, presents the results of our analysis of FY14 TRICARE claims data. This table categorizes IRFs which had TRICARE inpatient stays in FY14 by various geographic and special payment consideration groups to illustrate the varying impacts on different types of IRFs. The first column represents the number of IRFs in FY14 in each category which had inpatient stays in which TRICARE was the primary payer. The second column shows the simulated number of TRICARE discharges in each category. The third column shows the average TRICARE allowed amount per discharge in FY14. The fourth column shows the average allowed amount per discharge under the Medicare IRF payment method, excluding the LIP adjustment. The fifth column shows the percentage reduction in the allowed amounts under the Medicare payment method relative to the current TRICARE allowed amounts. The first row in Table 2 shows the overall impact on the 568 IRFs included in the analysis. The next two rows of the table categorize hospitals according to their geographic location in FY14 (urban and rural). The second major grouping is whether the IRF is a freestanding facility or a part of a hospital unit, followed by a grouping for TRICARE network status. The fourth grouping is whether the IRF is a teaching facility and the fifth groups IRFs by Census division. The final grouping is by IRF ownership status. The following discussion highlights some of the changes in allowed amounts among IRF classifications. Ninety-five percent of all TRICARE IRF admissions were to urban IRFs. Allowed amounts would have decreased by 45 percent for urban IRFs and 21 percent for rural IRFs. Table 2--Impact of TRICARE IRF Rule in FY14 ---------------------------------------------------------------------------------------------------------------- Proposed Number of IRFs Number of Allowed per policy allowed Percent with TRICARE TRICARE discharge per discharge reduction in stays discharges (current (medicare allowed policy) method) amounts ---------------------------------------------------------------------------------------------------------------- All IRFs........................ 568 2,603 $34,260 $19,129 44 Urban....................... 523 2,473 34,944 19,257 45 Rural....................... 45 130 21,248 16,687 21 Type............................ 568 2,603 34,260 19,129 44 Freestanding................ 181 1,191 26,852 19,661 27 Hospital Unit............... 387 1,412 40,508 18,680 54 Network Status.................. 568 2,603 34,260 19,129 44 Network..................... 433 2,323 32,806 19,169 42 Non-Network................. 135 280 46,318 18,800 59 Teaching Status................. 568 2,603 34,260 19,129 44 Teaching.................... 56 444 43,861 22,195 49 Non-Teaching................ 512 2,159 32,285 18,498 43 Region.......................... 568 2,603, 34,260 19,129 44 North East and Middle 78 184 27,964 22,299 20 Atlantic................... South Atlantic.............. 47 242 27,730 16,486 41 East North Central.......... 112 787 32,048 19,076 40 East South Central.......... 44 122 33,838 15,707 54 West North Central.......... 72 185 33,972 19,093 44 West South Central.......... 109 611 33,749 18,714 45 Mountain.................... 56 242 38,008 17,603 54 Pacific..................... 50 230 51,600 24,108 53 Ownership....................... 568 2,603 34,260 19,129 44 Proprietary................. 196 1,099 30,601 18,709 39 Government Owned............ 73 350 36,075 18,835 48 Voluntary................... 299 1,154 37,193 19,618 47 ---------------------------------------------------------------------------------------------------------------- Source: FY14 TRICARE IRF Claims and FY16 Medicare Rate Setting File. Excludes claims with other health insurance (OHI). Note: Excludes claims from 12 VA Hospitals (226 discharges), 4 Children's Hospitals (22 discharges), and 28 IRFs where we were unable to identify Medicare certification or sufficient Medicare data (78 discharges). We have combined the North East and Middle Atlantic states for the purpose of this impact analysis due to small sample size in the North East region. [[Page 59943]] The change in payment methodology would have resulted in a 54 percent reduction in the allowed amounts for IRFs that are part of a hospital unit. In comparison, freestanding IRF payments would have been reduced by 27 percent. The change in IRF payment methodology would have a larger impact on TRICARE non-network IRFs than network IRFs because network IRFs currently offer a discount off billed charges while non-network IRFs do not. Allowed charges to non-network IRFs would have declined by 59 percent, in comparison to 42 percent for in-network hospitals. We found that network hospitals on average provide a 32 percent discount off billed charges for non-OHI TRICARE beneficiaries and that 89 percent of all TRICARE IRF discharges were in-network in FY14. We also found that the change in IRF payment methodology would have a larger impact on teaching hospitals, where payments would have been reduced by 49 percent, in comparison to non-teaching hospitals, where payments would have been reduced by 43 percent. Approximately 83 percent of all TRICARE IRF discharges were from non-teaching IRF facilities. IRFs in various geographic areas will be affected differently due to this change in payment methodology. The two regions with the largest number of TRICARE claims, the East North Central (787 discharges) and West South Central (611 discharges), would have had an average decrease of 40 and 45 percent in allowed charges respectively. IRFs in the North East and Middle Atlantic would have had the lowest reductions in allowed charges of 20 percent. The Mountain, East South Central, and Pacific regions would have had the highest reductions of between 53 and 54 percent. Forty-two percent of all TRICARE IRF discharges in FY14 were in proprietary (for-profit) IRFs, and these facilities would have had their allowed amounts reduced by approximately 39 percent. The decline in allowed amounts for voluntary (not-for-profit) and government-owned IRFs would have been slightly more than proprietary hospitals (47 and 48 percent respectively). 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--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES (CHAMPUS) 0 1. The authority citation for part 199 continues to read as follows: Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55. 0 2. In Sec. 199.2, paragraph (b) is amended by: 0 a. Removing the definitions of ``Hospital, long-term (tuberculosis, chronic care, or rehabilitation)'' and ``Long-term hospital care''; and 0 b. Adding the definitions of ``Long Term Care Hospital (LTCH)'' and ``Inpatient Rehabilitation Facility (IRF) '' in alphabetical order. The additions read as follows: Sec. 199.2 Definitions. * * * * * (b) * * * Long Term Care Hospital (LTCH). A hospital that is classified by the Centers for Medicare and Medicaid Services (CMS) as a LTCH and meets the applicable requirements established by Sec. 199.6(b)(4)(v) (which includes the requirement to be a Medicare participating provider). * * * * * Inpatient Rehabilitation Facility (IRF). A facility classified by CMS as an IRF and meets the applicable requirements established by Sec 199.6(b)(4)(xviii) (which includes the requirement to be a Medicare participating provider). * * * * * 0 3. In Sec. 199.6, revise paragraphs (b)(4)(v) and (xvi), and add paragraph (xviii) to read as follows: Sec. 199.6 TRICARE--authorized providers. * * * * * (b) * * * (4) * * * (v) Long Term Care Hospital (LTCH). LTCHs must meet all the criteria for classification as an LTCH under 42 CFR part 412, subpart O, as well as all of the requirements of this Part in order to be considered an authorized LTCH under the TRICARE program. (A) In order for the services of LTCHs to be covered, the hospital must comply with the provisions outlined in paragraph (b)(4)(i) of this section. In addition, in order for services provided by such hospitals to be covered by TRICARE, they must be primarily for the treatment of the presenting illness. (B) Custodial or domiciliary care is not coverable under TRICARE, even if rendered in an otherwise authorized LTCH. (C) The controlling factor in determining whether a beneficiary's stay in a LTCH is coverable by TRICARE is the level of professional care, supervision, and skilled nursing care that the beneficiary requires, in addition to the diagnosis, type of condition, or degree of functional limitations. The type and level of medical services required or rendered is controlling for purposes of extending TRICARE benefits; not the type of provider or condition of the beneficiary. * * * * * (xvi) Critical Access Hospitals (CAHs). CAHs must meet all conditions of participation under 42 CFR 485.601 through 485.645 in relation to TRICARE beneficiaries in order to receive payment under the TRICARE program. If a CAH provides inpatient psychiatric services or inpatient rehabilitation services in a distinct part unit, the distinct part unit must meet the conditions of participation in 42 CFR 485.647, with the exception of being paid under the inpatient prospective payment system for psychiatric facilities as specified in 42 CFR 412.1(a)(2) or the inpatient prospective payment system for rehabilitation hospitals or rehabilitation units as specified in 42 CFR 412.1(a)(3). Upon implementation of TRICARE's IRF PPS in 199.14(a)(10), if a CAH provides inpatient rehabilitation services in a distinct part unit, the distinct part unit shall be paid under TRICARE's IRF PPS. * * * * * (xviii) Inpatient Rehabilitation Facility (IRF). IRFs must meet all the criteria for classification as an IRF under 42 CFR part 412, subpart B, and meet all applicable requirements established in this part in order to be considered an authorized IRF under the TRICARE program. (A) In order for the services of inpatient rehabilitation facilities to be covered, the facility must comply with the provisions outlined in paragraph (b)(4)(i) of this section. In addition, in order for services provided by these facilities to be covered by TRICARE, they must be primarily for the treatment of the presenting illness. (B) Custodial or domiciliary care is not coverable under TRICARE, even if rendered in an otherwise authorized inpatient rehabilitation facility. (C) The controlling factor in determining whether a beneficiary's stay in an inpatient rehabilitation facility is coverable by TRICARE is the level of professional care, supervision, and skilled nursing care that the beneficiary requires, in addition to the diagnosis, type of condition, or degree of functional limitations. The type and level of medical services required or [[Page 59944]] rendered is controlling for purposes of extending TRICARE benefits; not the type of provider or condition of the beneficiary. * * * * * 0 4. Section 199.14 is amended by: 0 a. Revising paragraphs (a)(1)(ii)(D)(2), (3) and (4), and (ii)(E); 0 b. Revising paragraph (a)(3)(i) introductory text; and 0 c. Adding new paragraphs (a)(9) and (10). The revisions and additions read as follows: Sec. 199.14 Provider reimbursement methods. (a) * * * (1) * * * (ii) * * * (D) * * * (2) Inpatient Rehabilitation Facilities (IRF). Prior to implementation of the IRF PPS methodology described in paragraph (a)(10) of this section, an inpatient rehabilitation facility which is exempt from the Medicare prospective payment system is also exempt from the TRICARE DRG-based payment system. (3) Psychiatric and rehabilitation units (distinct parts). Prior to implementation of the IRF PPS methodology described in paragraph (a)(10) of this section, a rehabilitation unit which is exempt from the Medicare prospective payment system is also exempt from the TRICARE DRG-based payment system. A psychiatric unit which is exempt from the Medicare prospective payment system is also exempt from the TRICARE DRG-based payment system. (4) Long Term Care Hospitals. Prior to implementation of the LTCH PPS methodology described in paragraph (a)(9) of this section, a long term care hospital which is exempt from the Medicare prospective payment system is also exempt from the CHAMPUS DRG-based payment system. * * * * * (E) Hospitals which do not participate in Medicare. With the exceptions of CAHs, in addition to LTCHs and IRFs which must be Medicare-participating providers upon implementation of TRICARE's LTCH and IRF PPS, it is not required that a hospital be a Medicare- participating provider in order to be an authorized TRICARE provider. However, any hospital which is subject to the CHAMPUS DRG-based payment system and which otherwise meets CHAMPUS requirements but which is not a Medicare-participating provider (having completed a form HCA-1514, Hospital Request for Certification in the Medicare/Medicaid Program and a form HCFA-1561, Health Insurance Benefit Agreement) must complete a participation agreement with TRICARE. By completing the participation agreement, the hospital agrees to participate on all CHAMPUS inpatient claims and to accept the CHAMPUS-determined allowable amount as payment in full for these claims. Any hospital which does not participate in Medicare and does not complete a participation agreement with TRICARE will not be authorized to provide services to TRICARE beneficiaries. * * * * * (3) * * * (i) For admissions on or after December 1, 2009, inpatient services provided by a CAH, other than services provided in psychiatric and rehabilitation distinct part units, shall be reimbursed at allowable cost (i.e., 101 percent of reasonable cost) under procedures, guidelines, and instructions issued by the DHA Director, or designee. This does not include any costs of physicians' services or other professional services provided to CAH inpatients. Inpatient services provided in psychiatric distinct part units would be subject to the TRICARE mental health payment system. Inpatient services provided in rehabilitation distinct part units would be subject to billed charges. Upon implementation of TRICARE's IRF PPS, inpatient services provided in rehabilitation distinct part units would be subject to the TRICARE IRF PPS methodology in (a)(10) of this section. * * * * * (9) Reimbursement for inpatient services provided by an LTCH. (i) In accordance with 10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional care shall 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. The TRICARE-LTC-DRG reimbursement methodology shall be in accordance with Medicare's Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs) as found in regulation at 42 CFR part 412, subpart O. Inpatient services provided in hospitals subject to the Medicare LTCH Prospective Payment System (PPS) and classified as LTCHs and also as specified in 42 CFR parts 412 and 413 will be paid in accordance with the provisions outlined in sections 1886(d)(1)(B)(IV) and 1886 (m)(6) of the Social Security Act and its implementing Medicare regulation (42 CFR parts 412, 413, and 170) to the extent practicable. Under the above governing provisions, TRICARE will recognize, to the extent practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's LTCH PPS methodology to include the relative weights, inpatient operating and capital costs of furnishing covered services (including routine and ancillary services), interrupted stay policy, short-stay and high cost outlier payments, the 25 percent threshold payment adjustment, site- neutral payments, wage adjustments for variations in labor-related costs across geographical regions, cost-of-living adjustments, payment adjustments associated with the quality reporting program, method of payment for preadmission services, and updates to the system. (ii) Exemption. The TRICARE LTCH PPS methodology under this paragraph does not apply to hospitals in States that are reimbursed by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the TRICARE DRG-based payment system, respectively. (10) Reimbursement for inpatient services provided by Inpatient Rehabilitation Facilities. (i) In accordance with 10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional care shall 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. The TRICARE IRF PPS reimbursement methodology shall be in accordance with Medicare's IRF PPS as found in 42 CFR part 412. Inpatient services provided in IRFs subject to the Medicare IRF prospective payment system (PPS) and classified as IRFs and also as specified in Subpart B of 42 CFR part 412 will be paid in accordance with the provisions outlined in section 1886(j) of the Social Security Act and its implementing Medicare regulation found at 42 CFR 412 subpart P to the extent practicable. Under the above governing provisions, TRICARE will recognize, to the extent practicable, in accordance with 10 U.S.C. 1979(i)(2), Medicare's IRF PPS methodology to include the relative weights, payment rates covering all operating and capitals costs of furnishing rehabilitative services adjusted for wage variations in labor-related costs across geographical regions, adjustments for 60 percent compliance threshold, teaching adjustment, rural adjustment, high-cost outlier payments, payment adjustments associated with the quality reporting program, and updates to the system. TRICARE will not adopt Medicare's low-income payment adjustment under TRICARE's IRF PPS. [[Page 59945]] (ii) Exemption. The TRICARE IRF PPS methodology under this paragraph does not apply to hospitals in States that are reimbursed by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the TRICARE DRG-based payment system, respectively. * * * * * Dated: August 24, 2016. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. 2016-20660 Filed 8-30-16; 8:45 am] BILLING CODE 5001-06-P
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List of Subjects in 21 CFR Part 1308 United States Code (U.S.C.), section FOR FURTHER INFORMATION CONTACT:
Administrative practice and 1079(i)(2) that requires TRICARE Sharon Seelmeyer, Defense Health
procedure, Drug traffic control, payment methods for institutional care Agency (DHA), Medical Benefits and
Reporting and recordkeeping be determined, to the extent practicable, Reimbursement Section, telephone (303)
requirements. in accordance with the same 676–3690.
reimbursement rules as apply to SUPPLEMENTARY INFORMATION:
For the reasons set out above, the DEA payments to providers of services of the
proposes to amend 21 CFR part 1308 as same type under Medicare. Our I. Executive Summary
follows: regulation includes a definition for A. Purpose of the Proposed Rule
PART 1308—SCHEDULES OF ‘‘Hospital, long-term (tuberculosis,
chronic care, or rehabilitation).’’ This 1. Long Term Care Hospitals (LTCHs)
CONTROLLED SUBSTANCES
rule proposes to delete this definition This rule publishes TRICARE’s
■ 1. The authority citation for part 1308 and create separate definitions for proposed modifications to our
continues to read as follows: ‘‘Long Term Care Hospital’’ and regulation that are necessary to adopt
Authority: 21 U.S.C. 811, 812, 871(b),
‘‘Inpatient Rehabilitation Facility’’ in the Medicare LTCH Prospective
unless otherwise noted. accordance with Centers for Medicare & Payment System and rates. This is in
Medicaid Services (CMS) classification accordance with the statutory
■ 2. In § 1308.11, add paragraphs (h)(28) criteria. Under TRICARE, LTCHs and requirement that for TRICARE
and (29) to read as follows: IRFs (both freestanding rehabilitation institutional services ‘‘payments shall
§ 1308.11 Schedule I hospitals and rehabilitation hospital be determined to the extent practicable
units) are currently paid the lower of a in accordance with the same
* * * * *
negotiated rate (if they are a network reimbursement rules as apply to
(h) * * *
provider) or billed charges (if they are payments to providers of services of the
(28) Mitragynine (to include synthetic
a non-network provider). Although same type under [Medicare].’’ Medicare
equivalents as well as mitragynine
Medicare’s reimbursement methods for pays LTCHs using a LTCH Prospective
naturally contained in the plant of the
LTCHs and IRFs are different, it is Payment System (PPS) which classifies
genus and species name: Mitragyna
prudent to propose adopting both the LTCH patients into distinct Diagnosis-
speciosa Korth, also known as kratom)
Medicare LTCH and IRF Prospective Related Groups (DRGs). The patient
its isomers, esters, ethers, salts and salts
Payment System (PPS) methods classification system groupings are
of isomers, esters and ethers . . . (9823)
simultaneously to align with our called Medicare Severity Long Term
(29) 7-Hydroxymitragynine (to
statutory requirement to utilize the same Care Diagnosis Related Groups (MS–
include synthetic equivalents as well as
reimbursement system as Medicare. LTC–DRGs), which are the same DRG
7-hydroxymitragynine naturally
This proposed rule sets forth the groupings used under the Medicare
contained in the plant of the genus and
proposed regulation modifications acute hospital inpatient prospective
species name: Mitragyna speciosa
necessary for TRICARE to adopt payment system (IPPS), but that have
Korth, also known as kratom) its
Medicare’s LTCH and IRF Prospective been weighted to reflect the resources
isomers, esters, ethers, salts and salts of
Payment Systems and rates applicable required to treat the medically complex
isomers, esters and ethers . . . (9838)
for inpatient services provided by patients treated at LTCHs.
Dated: August 25, 2016. LTCHs and IRFs to TRICARE On January 26, 2015, a TRICARE
Chuck Rosenberg, beneficiaries. proposed rule was published in the
Acting Administrator. DATES: Written comments received at Federal Register [79 FR 51127],
[FR Doc. 2016–20803 Filed 8–30–16; 8:45 am] the address indicated below by October proposing to adopt a TRICARE LTCH
BILLING CODE 4410–09–P 31, 2016 will be accepted. PPS similar to the CMS’ reimbursement
ADDRESSES: You may submit comments, system for LTCHs, with the exception of
identified by docket number or not adopting Medicare’s LTCH 25
DEPARTMENT OF DEFENSE Regulatory Information Number (RIN) percent rule. However, that proposed
and title, by either of the following rule acknowledged that the Department
Office of the Secretary methods: of Health and Human Services intended
The Web site: http:// to address implementation of Section
32 CFR Part 199 www.regulations.gov. Follow the 1206(a) of the Pathway for Sustainable
[Docket ID: DOD–2012–HA–0146] instructions for submitting comments. Growth Rate (SGR) Reform Act of 2013
Mail: Department of Defense, Deputy (Pub. L. 113–67) in their FY 2016
RIN 0720–AB47 Chief Management Officer, Directorate rulemaking process. As a result, the
for Oversight and Compliance, 4800 TRICARE proposed rule included a
TRICARE; Reimbursement of Long
Mark Center Drive, ATTN: Box 24, statement that DoD would ‘‘defer action
Term Care Hospitals and Inpatient
Alexandria, VA 22350–1700. on this issue pending review of the final
Rehabilitation Facilities
Instructions: All submissions received Medicare policy.’’ This review has been
AGENCY: Office of the Secretary, must include the agency name and completed and we have changed our
Department of Defense (DoD). docket number or RIN for this Federal approach regarding implementation of
ACTION: Proposed rule. Register document. The general policy the TRICARE LTCH PPS. Consequently,
for comments and other submissions we are withdrawing the proposed rule
ehiers on DSK5VPTVN1PROD with PROPOSALS
SUMMARY: The Department of Defense, from members of the public is to make published in the Federal Register on
Defense Health Agency, is proposing to these submissions available for public January 26, 2015, and publishing this
revise its reimbursement of Long Term viewing on the Internet at http:// new proposed rule to inform the public
Care Hospitals (LTCHs) and Inpatient www.regulations.gov as they are of our intent to adopt the CMS LTCH
Rehabilitation Facilities (IRFs). received without change, including any PPS system with no modifications or
Proposed revisions are in accordance personal identifiers or contact exceptions. We have determined that it
with the statutory provision at title 10, information. is practicable to adopt Medicare’s LTCH
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PPS reimbursement methodology in its determine its payments for institutional TRICARE will be the primary payer for
entirety without deviations. services to the extent practicable in medically necessary services and the
On August 22, 2014, the CMS final accordance with Medicare’s payment beneficiary will be responsible for the
rule on updating the annual payment rates. Our legal authority for this portion appropriate TRICARE inpatient cost
rates for the Medicare PPS for inpatient of the proposed rule is 10 U.S.C. share. We anticipate the beneficiary’s
hospital services provided by LTCHs 1079(i)(2). out-of-pocket costs will be limited by
was published in the Federal Register the statutory catastrophic cap of $1,000
[79 FR 49853]. As part of its final rule, 2. Inpatient Rehabilitation Facilities per family, per fiscal year for active duty
CMS discussed the need for future (IRFs) family members and reserve select
policy changes that would be required This rule also publishes proposed beneficiaries and $3,000 cap per family,
to carry out the provisions under section TRICARE regulation modifications per fiscal year for all other beneficiaries.
1206 of the Pathway for SGR Reform Act necessary to adopt the Medicare IRF
of 2013, to include section 1206(a), 2. Transition Period
Prospective Payment System (PPS) and
which provides for the establishment of rates. This is in accordance with the The Pathway for SGR Reform Act of
an alternate ‘‘site-neutral’’ payment rate statutory requirement that for TRICARE 2013 directed CMS to make significant
for Medicare LTCH patients that fail to institutional services ‘‘payments shall changes to the payment system for
meet certain statutorily defined criteria, be determined to the extent practicable LTCHs. The law directs CMS to
such as having been discharged by an in accordance with the same establish two different types of LTCH
IPPS hospital immediately preceding reimbursement rules as apply to PPS payment rates depending on
the LTCH admission, having 3 or more payments to providers of services of the whether or not the patient meets certain
days in an ICU during the immediately same type under [Medicare].’’ Medicare clinical criteria: (1) Standard LTCH PPS
preceding IPPS stay or having received pays IRFs using an IRF Prospective payment rates; and (2) lower site-neutral
at least 96 hours of respiratory Payment System (PPS) which classifies LTCH PPS payment rates that are
ventilation services. If the above IRF patients into one of 92 case-mix generally based on the Medicare acute
statutorily defined criteria is not met, groups (CMGs). hospital IPPS rates. Site-neutral patients
the LTCH will receive a ‘‘site-neutral’’ Similarly to LTCHs, IRFs, (both include LTCH patients who do not use
payment rate. As mentioned earlier, as freestanding rehabilitation hospital and prolonged mechanical ventilation
a result of the unspecified potential rehabilitation hospital units) are during their LTCH stay or who did not
changes that might be required to currently exempt from the TRICARE spend three or more days in the
Medicare’s LTCH reimbursement DRG-based payment system and are intensive care unit (ICU) during their
system, a statement was added to paid by TRICARE at the lower of a prior acute care hospital stay. The law
TRICARE’s proposed rule that DoD negotiated rate (if they are a network transitions the payment reductions in
would defer action on adopting provider) or billed charges (if they are FY16 and FY17 by requiring payment
Medicare’s potential changes relating to a non-network provider). As discussed based on a 50/50 blend of the standard
‘‘site-neutral’’ payments until DoD earlier, paying billed charges is fiscally LTCH PPS rate and the site-neutral
could review the final Medicare policy. imprudent and inconsistent with LTCH PPS rate for site-neutral patients.
Upon review of Medicare’s final rule TRICARE’s governing statute. Paying In FY17, when we anticipate
published on August 17, 2015, we IRFs under a method similar to implementing the TRICARE LTCH PPS
learned that significant changes had Medicare’s is prudent, practicable, and payment changes, we propose that
been made to Medicare’s previous LTCH harmonious with the statute. Our legal TRICARE adopt Medicare’s FY17 LTCH
reimbursement system, specifically the authority for this portion of the PPS payment policies, which will
precise details about the creation of proposed rule is 10 U.S.C. 1079(i)(2). include Medicare’s payment of site-
Medicare’s ‘‘site-neutral’’ payments neutral cases with Medicare’s 50/50
beginning in FY 2016. This proposed B. Summary of the Major Provisions of blended payment for site-neutral
rule explains our new reimbursement the Proposed Rule patients. Medicare has not yet set the
approach for LTCHs based on CMS’ 1. Adoption of Medicare’s Prospective payment for site neutral cases for FY
changes. Payment System Methodology for 2018, however, we will follow that
TRICARE pays for most hospital care LTCHs payment rate once it is determined. For
under the TRICARE DRG-based example, if the blended payment rate
payment system, which is similar to TRICARE proposes to reimburse ends by FY18, we would also follow
Medicare’s, but some hospitals are LTCHs for inpatient care using Medicare and all TRICARE site-neutral
exempt from the TRICARE DRG-based Medicare’s LTCH PPS using Medicare’s LTCH patients would receive the site-
payment system. LTCHs are currently MS–LTC–DRGs. Under the proposed neutral payment (without a blend with
exempt from the TRICARE DRG-based TRICARE LTCH PPS reimbursement the standard LTCH PPS rate). If
payment system and are paid by methodology, payment for a TRICARE implementation of the TRICARE LTCH
TRICARE at the lower of a negotiated patient will be made at a predetermined, PPS is delayed beyond FY17, there will
rate (if they are a network provider) or per-discharge amount for each MS– be no transition period for site-neutral
billed charges (if they are a non-network LTC–DRG. The TRICARE LTCH PPS patients. Rather, TRICARE will adopt
provider). Paying billed charges is reimbursement methodology would the Medicare LTCH PPS methodology
fiscally imprudent and inconsistent include payment for all inpatient applicable at the time of TRICARE
with TRICARE’s governing statute. operating and capital costs of furnishing implementation.
covered services (including routine and
ehiers on DSK5VPTVN1PROD with PROPOSALS
Paying LTCHs under Medicare’s
methods is prudent, because it reduces ancillary services), but not certain pass- 3. Adoption of Medicare’s Prospective
government costs without affecting through costs (e.g., bad debts, direct Payment System Methodology for IRFs
beneficiary access to services or quality; medical education, and blood clotting TRICARE proposes to reimburse IRFs
it is practicable, because it can be factors). When the Medicare day limit is for inpatient care using Medicare’s IRF
implemented without major costs; and it exhausted for TRICARE beneficiaries PPS which pays a prospectively-set,
is harmonious with the statute because who are also eligible for Medicare (i.e., fixed payment per discharge based on a
the statute states that TRICARE shall TRICARE For Life (TFL) beneficiaries), patient’s classification into one of 92
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case-mix groups (CMGs). Each CMG has reduce DoD allowed amounts to IRFs by is phasing in a site-neutral payment
a national relative weight reflecting the approximately $53 million in FY17. methodology; during the transition
expected relative costliness of treatment period in FY16 and FY17, for site-
II. Introduction and Background
for patients in that category compared neutral patients, 50 percent of the
with that for the average Medicare A. Reimbursement allowed amount will be calculated using
inpatient rehabilitation patient. The the site-neutral payment methodology
1. TRICARE LTCH PPS Reimbursement
relative weight for each CMG is and 50 percent will be calculated using
multiplied by a standardized Medicare Patients with clinically complex the current full LTCH PPS standard
IRF base payment amount to calculate problems, such as multiple acute or federal payment rate methodology.
the case-mix adjusted prospective chronic conditions, may need hospital Beginning in FY18, all Medicare
payment rate. The TRICARE IRF PPS care for an extended period of time. payments for site-neutral patients will
payment rates would cover all inpatient LTCHs represent a relatively small be calculated using the site-neutral
operating and capital costs that IRFs are number of hospitals (approximately 424 payment methodology. Given
expected to incur in furnishing under Medicare), which treat a critically TRICARE’s statutory requirement to
intensive rehabilitation services. When ill population with complex needs and adopt Medicare’s reimbursement
the Medicare day limit is exhausted for long lengths of stay. Per 32 Code of methods when practicable, TRICARE is
TRICARE beneficiaries who are also Federal Regulations (CFR) proposing to adopt Medicare’s LTCH
eligible for Medicare (i.e., TFL 199.14(a)(1)(ii)(D)(4), LTCHs are PPS reimbursement method for our
beneficiaries), TRICARE will be the currently exempt from the TRICARE beneficiaries, including the Medicare
primary payer for medically necessary DRG-based payment system, just as they site-neutral payment methodology.
services and the beneficiary will be were exempt from Medicare’s Inpatient TRICARE will adopt the Medicare
responsible for the appropriate Prospective Payment System (IPPS) payment methodology that is in place at
TRICARE inpatient cost share. We when the CMS initially implemented its the time of TRICARE’s implementation.
anticipate the beneficiary’s out-of- DRG-based payment system. Because For example, for an FY17
pocket costs will be limited by the there is no alternate TRICARE implementation, we will follow
statutory catastrophic cap of $1,000 per reimbursement mechanism in 32 CFR Medicare and use a 50/50 blend of the
family, per fiscal year for active duty part 199 at this time, LTCH inpatient site-neutral method and the full LTCH
family members and reserve select care provided to TRICARE beneficiaries PPS payments for site-neutral patients
beneficiaries and $3,000 cap per family, is currently paid the lower of a use a 50/50 blend. If implementation is
per fiscal year for all other beneficiaries. negotiated rate if a network LTCH, delayed beyond FY17, TRICARE will
which is usually substantially greater use the Medicare site-neutral payments
4. Removal of Outdated Terms than what would be paid using the for site-neutral patients.
This proposed rule removes outdated TRICARE DRG method, or billed Under 10 U.S.C. 1079(i)(2), the
definitions in 32 CFR 199.2 for charges if a non-network LTCH. amount to be paid to hospitals, skilled
‘‘Hospital, long-term (tuberculosis, Medicare created a PPS for LTCHs nursing facilities, and other institutional
chronic care, or rehabilitation)’’ and effective with the cost reporting period providers under TRICARE, ‘‘shall be
‘‘Long-term hospital care’’ and adds a beginning on or after October 1, 2002. determined to the extent practicable in
new definition for ‘‘Long-Term Care The MS–LTC–DRG system under accordance with the same
Hospital (LTCH)’’ as well as adding a Medicare’s LTCH PPS classifies patients reimbursement rules as apply to
new definition for ‘‘Inpatient into distinct diagnostic groups based on payments to providers of services of the
Rehabilitation Facility (IRF).’’ The new their clinical characteristics and same type under [Medicare].’’ Based on
definitions are based on CMS’ LTCH expected resource needs. The patient 1079(i)(2), TRICARE is proposing to
and IRF classifications. Our review of classification groupings, which are the adopt Medicare’s LTCH PPS as the
the data shows that there were no same groupings used under the methodology to reimburse TRICARE
facilities reimbursed under our existing inpatient acute care hospital groupings authorized LTCHs. A change is needed
LTCH or IRF reimbursement (i.e., MS–DRGs) are weighted to reflect to conform to the statute.
methodologies that will not meet the the resources required to treat the For TRICARE, we were able to
new proposed definitions. The medically complex patients who are identify complete claims information for
TRICARE requirements for both LTCHs treated in LTCHs. By their nature, 678 patients who were Active Duty
and IRFs to be authorized institutional LTCHs treat patients with comorbidities Service Members (ADSMs), their
providers have been added to 32 CFR requiring long-stay, hospital-level care. dependents, or retirees and their
199.6. TRICARE often adopts Medicare’s dependents who were not eligible for
reimbursement methods but delays the TRICARE For Life program (referred
C. Costs and Benefits implementation generally until any to as non-TFL), and 56 TFL LTCH
The economic impact of the proposed transition phase is complete for the admissions in FY14, for which
rule is anticipated to reduce DoD Medicare program. CMS included a 5- TRICARE was the primary payer for
allowed amounts to LTCHs by year transition period when it adopted patients with no other health insurance
approximately $77 million during LTCH PPS for Medicare, under which (referred to as non-Other Health
implementation if that occurs as LTCHs could elect to be paid a blended Insurance (OHI)). We also identified 27
planned in FY17, when TRICARE site- rate for a set period of time. This non-TFL and 3 TFL non-OHI LTCH
neutral cases will be paid based on a transition period ended in 2006. admissions in FY14 with incomplete
transitional 50/50 blended payment and Following the transition phase, in 2008
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claims data, and excluded these claims
$87 million if implemented in FY18 Medicare adopted an LTCH-specific from the analysis. TRICARE allowed
when site-neutral payments are fully DRG system, which uses MS–LTC– charges for non-TFL beneficiaries were
phased-in. If implementation is delayed DRGs, as the patient classification approximately $73 million in FY14. We
beyond FY17, TRICARE will use the method for LTCHs. In FY16, Medicare found that the average TRICARE
Medicare fully phased in site-neutral will begin its adoption of a site-neutral allowed amount for non-TFL
payments for site-neutral patients. This payment system for LTCHs. Beginning beneficiaries was approximately
proposed rule is also anticipated to in FY16 and continuing in FY17, CMS $107,000 in FY14, which is significantly
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more than the estimated amount that practicable. Even though the beneficiary requirement for classification as an IRF
Medicare would have paid for these populations differ between Medicare stipulated in subpart B of 42 CFR part
discharges (the average Medicare LTCH and TRICARE non-TFL beneficiaries, we 412. One criterion specified at 42 CFR
PPS payment would have been have found that the distribution of 412.29(b)(1) that Medicare uses for
approximately $42,000). Using the LTCH cases by diagnosis groups is classifying a hospital or unit of a
Medicare LTCH PPS system would have similar between the two populations. To hospital as an IRF is that a minimum
reduced TRICARE-allowed amounts by adjust for the differences in use by the percentage (currently 60 percent) of a
almost $45 million in FY14 for non-TFL TRICARE and Medicare populations, we facility’s total inpatient population must
beneficiaries. considered developing TRICARE- meet at least one of 13 medical
For TFL beneficiaries for whom specific weights and rates. However, conditions listed in 42 CFR 412.29(b)(2).
TRICARE was the primary payer, TRICARE has a low volume of Because there is no alternate TRICARE
TRICARE paid approximately $19 admissions to LTCHs, so calculating reimbursement mechanism in 32 CFR
million in allowed charges in FY14. In weights and rates for TRICARE part 199 at this time, IRF care provided
cases where TRICARE is the primary admissions to LTCHs is impracticable. to TRICARE beneficiaries in this setting
payer for LTCH care of TFL We are able to calculate our own is currently paid the lower of a
beneficiaries, such as when a Medicare weights for admissions to general negotiated rate if a network IRF, or
beneficiary exhausts his/her day limits, hospitals on an annual basis because of billed charges if a non-network IRF.
TRICARE is paying billed charges. the volume of TRICARE admissions to Medicare created a PPS for IRFs
Reimbursing using methods similar to general hospitals; however, it would be effective with the cost reporting period
the Medicare LTCH PPS methodology difficult to determine a new set of beginning in January 2002. Section 4421
would have reduced TRICARE allowed TRICARE LTCH weights because of the of the Balanced Budget Act of 1997
charges for TFL beneficiaries by small number of TRICARE admissions. (Pub. L. 105–33) modified how
approximately $15 million in FY14. For example, there were only about 700 Medicare payment for IRF services is to
Shifting to methods similar to the TRICARE admissions in FY14 in the be made by creating Section 1886(j) of
Medicare LTCH PPS methodology approximately 750 MS–LTC–DRG the Social Security Act, which
would have reduced TRICARE allowed groups. Only four MS–LTC–DRGs had authorized the implementation of a per-
charges to LTCHs for non-TFL and TFL 25 or more TRICARE admissions in discharge prospective payment system
beneficiaries by $60 million in FY14 FY14 and only 14 had ten or more for inpatient rehabilitation hospitals and
and is expected to reduce allowed TRICARE admissions in that year. rehabilitation units of acute care
charges by $77 million in FY17, Approximately 600 MS–LTC–DRGs had hospitals—referred to as IRFs. As
assuming that site-neutral payments no TRICARE LTCH admissions. required by Section 1886(j) of the Act,
will be based on a 50/50 blend of the Consequently, we are proposing to the Federal rates reflect all costs of
standard LTCH PPS rate and the site- adopt the weights and rates used furnishing IRF services (routine,
neutral LTCH PPS rate. We projected currently in Medicare’s MS–LTC–DRGs. ancillary, and capital related). CMS
savings in FY17 by first projecting costs Further, TRICARE proposes to adopt included a 9-month transition period
under TRICARE’s current policy for Medicare’s LTCH PPS to include short- when it adopted the IRF PPS for
reimbursing LTCHs. We assumed that stay outliers, the 25 percent threshold Medicare, under which IRFs could elect
the costs would increase by 7 percent payment adjustment, site-neutral to be paid a blended rate. The transition
per year from FY14 to 17 reflecting payments, interrupted stay policy, the period ended October 1, 2002.
increases in both TRICARE admissions method of payment for preadmission Following the transition period,
to LTCHs under current policy and services, and high-cost outlier payment to all IRFs was based entirely
increases in TRICARE billed charges. payments. TRICARE also proposes to on the prospective payment.
We then projected the costs under the incorporate Medicare’s Long Term Care Under 10 U.S.C. 1079(i)(2), the
proposed policy assuming that under Hospital Quality Reporting (LTCHQR) amount to be paid to hospitals, skilled
the Medicare LTCH–PPS the payment adjustments for TRICARE nursing facilities, and other institutional
combination of admissions and higher LTCHs that reflect Medicare’s annual providers under TRICARE, ‘‘shall be
reimbursement rates would increase payment update for that facility. determined to the extent practicable in
costs by 3 percent per year. This TRICARE is not establishing a separate accordance with the same
percentage annual increase in TRICARE reporting requirement for hospitals, but reimbursement rules as apply to
allowed amounts using the LTCH–PPS will utilize Medicare’s payment payments to providers of services of the
is less than the current policy adjustments resulting from their same type under [Medicare].’’ Based on
percentage increase to reflect lower rates LTCHQR Program. Please see 1079(i)(2), TRICARE is proposing to
of increases in LTCH reimbursement Medicare’s final rule [CMS–1632–F; adopt Medicare’s reimbursement
rates under the LTCH–PPS (in CMS–1632–CN2] RIN 0938–AS41. methodology to reimburse TRICARE
comparison to TRICARE billed charges) authorized IRFs. A change is needed to
and fewer LTCH admissions due to the 2. TRICARE IRF PPS Reimbursement conform to the statute.
phased in implementation of the IRFs are free standing rehabilitation For TRICARE, we were able to
Medicare LTCH site-neutral policy. The hospitals and rehabilitation units in identify complete claims information for
difference between the current policy acute care hospitals that provide an 2,929 TRICARE beneficiaries discharged
and proposed policy amounts was equal intensive rehabilitation program. Per 32 from IRFs in FY14 where TRICARE was
to savings of $77 million in FY17, CFR 199.14(a)(1)(ii)(D)(2) and (3), IRFs the primary payer. TRICARE allowed
are currently exempt from the TRICARE charges for these beneficiaries was
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assuming partial phase-in of site-neutral
payments. DRG-based payment system, just as they approximately $121 million in FY14.
As discussed above, TRICARE’s were exempt from Medicare’s IPPS These allowed amounts were equal to
current payment method results in when the CMS initially implemented its 74 percent of billed charges, indicating
TRICARE reimbursing LTCHs DRG-based payment system. Per 42 CFR that there were significant discounts
substantially more than Medicare does 412.1(a)(1), an inpatient rehabilitation offered by IRFs. Excluding Children’s
for equivalent inpatient care. Adopting hospital or rehabilitation unit of an and Veterans (VA) hospital claims,
Medicare’s LTCH PPS methodology is acute care hospital must meet the which are not paid under the IRF–PPS,
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TRICARE allowed amounts were $89 in LTCHs as we are for all other and equity). E.O. 13563 emphasizes the
million in FY14. We found that the TRICARE beneficiaries. importance of quantifying both costs
average allowed amount per IRF stay We are inviting comments on this and benefits, of reducing costs, of
(excluding Children’s and VA hospital proposal and welcome feedback on harmonizing rules, and of promoting
claims) was $34,300 in FY14, which is whether the MS–LTC–DRG weights are flexibility. A regulatory impact analysis
significantly more than the estimated appropriate for pediatric cases. We also (RIA) must be prepared for major rules
amount that Medicare would have paid welcome options and alternative with economically significant effects
for these discharges (the average approaches for consideration in ($100 million or more in any one year).
Medicare IRF PPS payment was establishing LTCH reimbursement for
We estimate that the effects of the
approximately $18,600 in 2014). The pediatric beneficiaries.
LTCH and IRF provisions that would be
2014 Medicare payment amount per 2. IRF implemented by this rule would not
case was reported in the 2016 Medicare result in LTCH or IRF revenue
Payment Advisory Commission In 2014, approximately 50 patients
under the age of 17 received IRF care reductions exceeding $100 million in
(MedPAC) report. Using the Medicare any one year individually; however,
IRF PPS system would have reduced under TRICARE. Approximately 38
percent of those TRICARE pediatric IRF when combined, revenue reductions
TRICARE allowed amounts by
cases were treated at Children’s would exceed $100 million, making this
approximately $41 million in FY14.
hospitals, which are exempt from rulemaking ‘‘economically significant’’
Given TRICARE’s statutory Medicare’s IRF PPS. TRICARE is as measured by the $100 million
requirement to adopt Medicare’s proposing that pediatric rehabilitation threshold. We have prepared Regulatory
reimbursement methods when cases at Children’s hospitals would also Impact Analyses that, to the best of our
practicable, TRICARE is proposing to be exempt under the TRICARE IRF PPS ability, presents the costs and benefits of
adopt Medicare’s IRF PPS and instead paid under the TRICARE the rulemaking. This proposed rule is
reimbursement method for its DRG system. Pediatric cases treated at anticipated to reduce DoD allowed
beneficiaries who receive rehabilitative TRICARE IRFs would be paid under the amounts to LTCHs by $77 million and
care in IRFs. TRICARE proposes to TRICARE IRF PPS. to IRFs by $53 million in FY17.
adopt Medicare’s IRF PPS and include
Medicare’s adjustments for interrupted C. Veterans (VA) Hospitals 2. Congressional Review Act. 5 U.S.C.
stays, short stays of less than three days, VA hospitals specialize in treating 801
short-stays transfers (defined as injured veterans and provide access to
rehabilitative care. VA hospitals are not Under the Congressional Review Act,
transfers to another institutional setting
Medicare authorized IRFs (because they a major rule may not take effect until at
with an IRF length of stay less than the
average length for the CMG), and high- are Federal hospitals) and they do not least 60 days after submission to
cost outliers. TRICARE proposes to not use Medicare’s IRF PPS method. Congress of a report regarding the rule.
adopt Medicare’s low-income payment TRICARE allows VA hospitals to A major rule is one that would have an
(LIP) adjustment for IRFs, because provide inpatient rehabilitation care to annual effect on the economy of $100
TRICARE does not adjust for TRICARE beneficiaries, and VA million or more or have certain other
Disproportionate Share in acute care hospitals provide care for over 200 impacts. This Notice of Proposed Rule
hospitals under the TRICARE DRG TRICARE patients each year (mostly Making is a major rule under the
system. TRICARE also proposes to Active Duty Service Members Congressional Review Act.
incorporate Medicare’s Inpatient (ADSMs)). VA hospitals will continue to 3. Regulatory Flexibility Act (RFA)
Rehabilitation Hospital Quality be paid under existing methodologies.
Reporting (IRFQR) payment adjustments The RFA requires agencies to analyze
III. Regulatory Impact Analyses for
for TRICARE IRFs, that reflect options for regulatory relief of small
LTCHs and IRFs
Medicare’s annual payment update for businesses if a rule has a significant
that facility. TRICARE is not A. Overall Impact impact on a substantial number of small
establishing a separate reporting DoD has examined the impacts of this entities. For purposes of the RFA, small
requirement for hospitals, but will proposed rule as required by Executive entities include small businesses,
utilize Medicare’s payment adjustments Orders (E.O.s) 12866 (September 1993, nonprofit organizations, and small
resulting from their IRFQR Program. Regulatory Planning and Review) and governmental jurisdictions. Most
Please see Medicare’s final rule [CMS– 13563 (January 18, 2011, Improving hospitals are considered to be small
1632–F; CMS–1632–CN2] RIN 0938– Regulation and Regulatory Review), the entities, either by being nonprofit
AS41. Regulatory Flexibility Act (RFA) organizations or by meeting the Small
(September 19, 1980, Pub. L. 96–354), Business Administration (SBA)
B. Pediatric Cases identification of a small business
the Unfunded Mandates Reform Act of
1. LTCH 1995 (Pub. L. 104–4), and the (having revenues of $34.5 million or less
Congressional Review Act (5 U.S.C. in any one year). For purposes of the
Our analysis found that the TRICARE 804(2)). RFA, we have determined that the
pediatric LTCH patients and Medicare majority of LTCHs and all IRFs would
populations have similar diagnoses and 1. Executive Order 12866 and Executive be considered small entities according
that the estimated TRICARE costs in Order 13563 to the SBA size standards. Individuals
each MS–LTC–DRG group are similar to E.O.s 12866 and 13563 direct agencies and States are not included in the
ehiers on DSK5VPTVN1PROD with PROPOSALS
those in Medicare. There are very few to assess all costs and benefits of definition of a small entity. Therefore,
TRICARE LTCH cases for patients under available regulatory alternatives and, if this Rule would have a significant
age 17; however, these pediatric cases regulation is necessary, to select impact on a substantial number of small
have similar diagnoses as other regulatory approaches that maximize entities. The Regulatory Impact
TRICARE LTCH admissions. Therefore, net benefits (including potential Analyses, as well as the contents
we propose to adopt the same LTCH economic, environmental, public health contained in the preamble, also serves
PPS methodology for pediatric patients and safety effects, distributive impacts, as the Regulatory Flexibility Analysis.
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![Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Proposed Rules 59945
(ii) Exemption. The TRICARE IRF PPS rulemaking, call or email MST1 Thomas in the Delaware River within 500 yards
methodology under this paragraph does Simkins, Sector Delaware Bay of vessels and machinery being used by
not apply to hospitals in States that are Waterways Management Division, U.S. personnel to conduct rock blasting,
reimbursed by Medicare and TRICARE Coast Guard; telephone 215–271–4889, dredging, and rock removal. The
under a waiver that exempts them from email Tom.J.Simkins@uscg.mil. duration of the zone is intended to
Medicare’s inpatient prospective SUPPLEMENTARY INFORMATION: protect personnel, vessels, and the
payment system or the TRICARE DRG- marine environment in these navigable
based payment system, respectively. I. Table of Abbreviations waters while operations are being
* * * * * CFR Code of Federal Regulations conducted.
DHS Department of Homeland Security For the duration of the project, in the
Dated: August 24, 2016. FR Federal Register vicinity of the rock blasting, rock
Aaron Siegel, NPRM Notice of proposed rulemaking removal, and dredging operation, one
Alternate OSD Federal Register Liaison § Section side of the main navigational channel
Officer, Department of Defense. U.S.C. United States Code will be closed due to the drill boat
[FR Doc. 2016–20660 Filed 8–30–16; 8:45 am] COTP Captain of the Port APACHE being unable to relocate for
BILLING CODE 5001–06–P II. Background, Purpose, and Legal vessel traffic while conducting rock
Basis blasting and removal operations.
Additionally there is a potential for
The Army Corps of Engineers (ACOE) blasted rock to be within the
DEPARTMENT OF HOMELAND
is sponsoring a project, termed ‘‘The navigational channel causing a
SECURITY
Deepening,’’ in which dredging navigational safety hazard for vessels
Coast Guard operations are taking place in the transiting the safety zone. Vessels
Delaware River and Bay navigational wishing to transit the safety zone in the
33 CFR Part 165 channel deepening the channel to 45 main navigational channel may do so if
feet. The project goal is to maintain a they can make satisfactory passing
[Docket Number USCG–2016–0715] minimum depth of 45 feet to arrangements with drill boat APACHE,
RIN 1625–AA00 accommodate larger vessel traffic dredge TEXAS, or dredge NEW YORK
entering the Sector Delaware Bay Zone. in accordance with the navigational
Safety Zone; Blasting, Delaware River The upcoming portion of the project rules in 33 CFR subchapter E via VHF–
requires the deepening of the Delaware FM channel 13 at least 30 minutes prior
AGENCY: Coast Guard, DHS.
River from Tiniucm Range, south, to arrival. If vessels are unable to make
ACTION: Notice of proposed rulemaking. through Marcus Hook Rang, in which satisfactory passing arrangements with
SUMMARY: The Coast Guard proposes to the topography consist of mostly rock the drill boat APACHE, dredge TEXAS,
establish a temporary safety zone on the bottom. To satisfy the minimum project or dredge NEW YORK they may request
waters of the Tinicum Range, Eddystone depth of 45 feet the ACOE has hired permission from the Captain of the Port,
Range, Chester Range, and Marcus Hook Great Lakes Dredging Company to or his designated representative, on
Range, in the Delaware River from perform rock blasting operations, VHF–FM channel 16. All vessels must
December 1, 2016 to March 15, 2016. dredging, and removal of rock in operate at the minimum safe speed
The safety zone would temporarily Tinicum Range, Eddystone Range, necessary to maintain steerage and
restrict vessel traffic from transiting or Chester Range, and Marcus Hook Range, reduce wake.
anchoring in a portion of the Delaware in the Delaware River from December 1, No vessels may transit through the
River while rock blasting, dredging, and 2016, to March 15, 2017. The Captain of safety zone during times of explosives
rock removal operations are being the Port, Delaware Bay, has determined detonation. During rock blasting
conducted to facilitate the Delaware that potential hazards associated with detonation, vessels would be required to
River Main Channel Deepening project rock blasting, dredging, and rock maintain a 500 yard distance from the
for the main navigational channel of the removal operations, will be a safety drill boat APACHE. The drill boat
Delaware River. This action is needed to concern for anyone within 500 yards of APACHE will make broadcasts, via
protect personnel, vessels, and the rock blasting, dredging, and rock VHF–FM channels 13 and 16, at 15
marine environment from potential removal operations. This proposed rule minutes, 5 minutes, and 1 minute prior
hazards created by rock blasting, is needed to protect personnel, vessels, to detonation, as well as a countdown
dredging, and rock removal operations. and the marine environment in the to detonation on VHF–FM channel 16.
We invite your comments on this navigable waters within the operational The drill boat APACHE will also raise
proposed rulemaking. area. a red flag signifying when a detonation
DATES: Comments and related material
The purpose of this rulemaking is to is occurring. The 500 yard radius will be
must be received by the Coast Guard on ensure the safety of vessels and the secured by a contracted security vessel
navigable waters within a 500-yard on either side of the blast area. Security
or before September 30, 2016.
radius of rock blasting, dredging, and vessels will ensure the blasting area is
ADDRESSES: You may submit comments
rock removal operations. The Coast clear prior to explosive detonation.
identified by docket number USCG– Guard proposes this rulemaking under Sector Delaware Bay will ensure
2016–0715 using the Federal authority in 33 U.S.C. 1231; 33 CFR significant notice is given to the
eRulemaking Portal at http:// 1.05–1 and 160.5; and Department of maritime community of dates and times
www.regulations.gov. See the ‘‘Public
ehiers on DSK5VPTVN1PROD with PROPOSALS
Homeland Security Delegation No. of blasting via broadcast notice to
Participation and Request for 0170.1. mariners on VHF–FM channel 16. After
Comments’’ portion of the every explosive detonation, a survey
SUPPLEMENTARY INFORMATION section for III. Discussion of Proposed Rule will be conducted to ensure the
further instructions on submitting This proposed rule would establish a navigational channel is clear for vessels
comments. safety zone from December 1, 2016, to transit. The drill boat APACHE will
FOR FURTHER INFORMATION CONTACT: If through March 15, 2017. The safety broadcast, via VHF–FM channels 13 and
you have questions about this zone would cover all navigable waters 16, when the survey has been completed
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Document Created: 2018-02-02 12:15:01
Document Modified: 2018-02-02 12:15:01
| 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 | Proposed Rules | |
| Action | Proposed rule. | |
| Contact | Sharon Seelmeyer, Defense Health Agency (DHA), Medical Benefits and Reimbursement Section, telephone (303) 676-3690. | |
| FR Citation | 81 FR 59934 | |
| RIN Number | 0720-AB47 | |
| CFR Associated | Claims; Dental Health; Health Care; Health Insurance; Individuals with Disabilities and Military Personnel |
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