82 FR 61678 - TRICARE; Reimbursement of Long Term Care Hospitals and Inpatient Rehabilitation Facilities
DEPARTMENT OF DEFENSE
Office of the Secretary Federal Register Volume 82, Issue 249 (December 29, 2017)
Office of the Secretary
Federal Register Volume 82, Issue 249 (December 29, 2017)
| Page Range | 61678-61694 | |
| FR Document | 2017-28022 |
[Federal Register Volume 82, Number 249 (Friday, December 29, 2017)] [Rules and Regulations] [Pages 61678-61694] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-28022] ======================================================================= ----------------------------------------------------------------------- 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: Final rule. ----------------------------------------------------------------------- SUMMARY: This final rule establishes reimbursement rates for Long Term Care Hospitals (LTCHs) and Inpatient Rehabilitation Facilities (IRFs) in accordance with the statutory requirement that TRICARE inpatient care ``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.'' This final rule adopts Medicare's reimbursement methodologies for inpatient services provided by LTCHs and IRFs. Each reimbursement methodology will be phased in over a 3-year period. This final rule also removes the definitions for ``hospital, long-term (tuberculosis, chronic care, or rehabilitation)'' and ``long-term hospital care,'' and creates separate definitions for ``Long Term Care Hospital'' and ``Inpatient Rehabilitation Facility'' adopting Centers for Medicare & Medicaid Services (CMS) classification criteria. This final rule also includes authority for a year-end, discretionary General Temporary Military Contingency Payment Adjustment (GTMCPA) for inpatient services in TRICARE network IRFs when deemed essential to meet military contingency requirements. DATES: This rule is effective March 5, 2018. Applicability Date: The regulations setting forth the revised reimbursement systems shall be applicable for all admissions to Long Term Care Hospitals and Inpatient Rehabilitation Facilities, respectively, commencing on or after the first day of the month which is at least 120 days after the date of publication of this rule in the Federal Register. FOR FURTHER INFORMATION CONTACT: Sharon Seelmeyer, Defense Health Agency (DHA), Medical Benefits and Reimbursement Branch, telephone (303) 676-3690. SUPPLEMENTARY INFORMATION: I. Executive Summary A. Purpose of the Final Rule 1. Long Term Care Hospitals (LTCHs) The purpose of this final rule is to establish a reimbursement system for LTCHs in accordance with the statutory provision at title 10, United States Code (U.S.C.), section 1079(i)(2). This statute requires that TRICARE payment for institutional care be determined, to the extent practicable, in accordance with the same rules as those that 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 [[Page 61679]] 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 Center for Medicare and Medicaid Service's (CMS') reimbursement system for LTCHs, with the exception of not adopting Medicare's LTCH 25 percent rule. This TRICARE proposed rule was subsequently withdrawn and replaced by the proposed rule published August 31, 2016 [81 FR 59934]. We refer the reader to the August 31, 2016, proposed rule for additional information. TRICARE pays for most hospital care under the TRICARE DRG-based payment system, which is similar to Medicare's, but some hospitals are exempt by current regulation from the TRICARE DRG-based payment system. LTCHs were exempted from the TRICARE DRG-based payment system and were paid by TRICARE at the lower of a negotiated rate or billed charges. 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. The final rule creates a gradual transition from TRICARE's current policy of authorizing LTCHs 100 percent of allowable charges (which is either the billed charge or a voluntarily negotiated rate) by phasing-in Medicare's LTCH reimbursement rates as follows: Allowing 135 percent of Medicare LTCH PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and follows Medicare policies during subsequent Fiscal Years (FY). Our legal authority for this portion of the final rule is 10 U.S.C. 1079(i)(2). 2. Inpatient Rehabilitation Facilities (IRFs) The purpose of this rule is to also adopt Medicare's reimbursement system for inpatient care for IRFs in accordance with the statutory requirement at 10 U.S.C. 1079 (i)(2) that TRICARE ``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). Similar to LTCHs, IRFs (both freestanding rehabilitation hospitals and rehabilitation hospital units) are currently exempted from the TRICARE DRG-based payment system and paid by TRICARE at the lower of a negotiated rate or billed charges. 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. The final rule creates a gradual transition from TRICARE's current policy of authorizing IRFs 100 percent of allowable charges (which is either the billed charge or a voluntarily negotiated rate) by phasing-in Medicare's IRF PPS as follows: Allowing 135 percent of Medicare IRF PPS amounts in the first 12-month period after implementation, 115 percent in the second 12- month period after implementation, and 100 percent in the third 12- month period after implementation and follow Medicare's policies during subsequent FYs. Our legal authority for this portion of the final rule is 10 U.S.C. 1079(i)(2). B. Summary of the Major Provisions of the Final Rule 1. Payment Method for LTCHs TRICARE shall reimburse LTCHs for inpatient care using Medicare's LTCH PPS using Medicare's MS-LTC-DRGs. TRICARE is creating a 3-year transition period as described below. Payment for a TRICARE patient will be made at a predetermined, per-discharge amount for each Medicare Severity (MS)-LTC-DRG under the TRICARE LTCH PPS reimbursement methodology. The TRICARE LTCH PPS reimbursement methodology includes 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 hospital day limit is exhausted for TRICARE beneficiaries, who are also eligible for Medicare (i.e., TRICARE For Life (TFL) beneficiaries), TRICARE is the primary payer for medically necessary services, the beneficiary will be responsible for the appropriate TRICARE inpatient cost share. The beneficiary's out-of-pocket costs will be limited by the respective statutory catastrophic cap. 2. LTCH Transition Period In response to public comments, we agree that a transition period is appropriate in order to prepare LTCHs for changes in reimbursement. TRICARE will allow LTCHs 135 percent of the Medicare LTCH PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and follow Medicare's policies during subsequent fiscal years. CMS has established two different types of LTCH PPS payment rates based on the Pathway for Sustainable Growth Rate Reform Act of 2013: (1) Standard LTCH PPS payment rates; and (2) lower site-neutral LTCH PPS payment rates that are paid at the lower of the IPPS comparable per diem amount, or the estimated cost of the case. 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. Medicare transitioned to the site-neutral payment rate reductions in FY 2016 and FY 2017 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 those years. Beginning at the individual hospital's cost reporting period beginning in FY 2018, all Medicare LTCH payments for site-neutral patients are calculated using the site-neutral payment methodology (without a 50/50 blend in payments). TRICARE will adopt the Medicare LTCH PPS in its entirety except for the Medicare 25 percent threshold rule, including both the full LTCH PPS Standard Federal Payment Rate and site-neutral LTCH PPS methodology for qualifying LTCH cases. TRICARE will have a 3-year transition period which will start at the applicability date of this final rule. We will apply the FY 2019 LTCH PPS for the purposes of the 12-month period beginning on October 1, 2018, and follow any changes adopted by Medicare LTCH PPS for subsequent years. For example, if FY 2019 is the first year of the TRICARE transition period, TRICARE would follow Medicare and all TRICARE LTCHs would receive 135 percent of the full site-neutral payment for TRICARE site-neutral patients. TRICARE will also consider military treatment facilities (MTF) and Veterans Administration (VA) hospitals as Subsection (d) [[Page 61680]] hospitals for the purposes of the site-neutral policy. 3. Children's Hospitals and Pediatric Patients in LTCHs Children's hospitals will be exempt from the TRICARE LTCH PPS and will be paid under the TRICARE DRG-based payment system. Pediatric patients who receive care in TRICARE authorized LTCHs will be paid under the TRICARE LTCH PPS. This final rule edits the regulatory language to include this provision. 4. Payment Method for IRFs TRICARE shall reimburse IRFs for inpatient care using Medicare's IRF PPS. TRICARE is creating a 3-year transition period as described below. Payment for a TRICARE patient will be made at a prospectively- set, fixed payment per discharge based on a patient's classification into one of 92 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 will cover all inpatient operating and capital costs that IRFs are expected to incur in furnishing inpatient rehabilitation services. When the Medicare hospital day limit is exhausted for TRICARE beneficiaries who are also eligible for Medicare (i.e., TRICARE For Life (TFL) beneficiaries), TRICARE will then be the primary payer for medically necessary services and the beneficiary will be responsible for the appropriate TRICARE inpatient cost share. The beneficiary's out-of-pocket costs will be limited by the respective statutory catastrophic cap. 5. IRF Transition Period In response to public comments, we agree that a transition period is appropriate in order to prepare IRFs for changes in reimbursement. To protect IRFs from sudden significant reductions, the final rule creates a gradual transition from TRICARE's current policy of allowing 100 percent of allowable charges (which is either the billed charge or a voluntarily negotiated rate) by phasing-in the Medicare IRF PPS rates as follows: allowing 135 percent of Medicare IRF PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12- month period after implementation. We will apply the FY 2019 IRF PPS for purposes of the 12-month period beginning on October 1, 2018, and follow any changes adopted by the Medicare IRF PPS for subsequent years. 6. Children's Hospitals and Pediatric Patients in IRFs As stated in the supplementary language of the proposed rule published on August 31, 2016, Children's hospitals will be exempt from the TRICARE IRF PPS and will be paid under the TRICARE DRG-based payment system. Pediatric patients who receive care in TRICARE authorized IRFs will be paid under the TRICARE IRF PPS. 7. IRF Low Income Payment (LIP) Adjustment TRICARE is including the LIP adjustment in the TRICARE IRF PPS. 8. Removal of Outdated Terms This final rule removes outdated definitions in Title 32, Code of Federal Regulations (CFR), Part 199.2 for ``[h]ospital, long-term (tuberculosis, chronic care, or rehabilitation)'' and ``[l]ong-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 adopt CMS' LTCH and IRF classifications. The TRICARE requirements for both LTCHs and IRFs to be authorized institutional providers have been added to 32 CFR 199.6. 9. General Temporary Military Contingency Payment Adjustment (GTMCPA) For IRFs One of the purposes of the TRICARE program is to support military members and their families during periods of war or contingency operations, when military facility capability may be diverted or insufficient to meet military readiness priorities. To preserve the availability of IRFs during such periods, the final rule includes authority for a year-end discretionary, temporary adjustment that the Director, DHA may approve in extraordinary economic circumstances for a network IRF that serves a disproportionate share of Active Duty Service members (ADSMs) and Active Duty dependents (ADDs). TRICARE is in the process of developing policy and procedural instructions for exercising the discretionary authority under the qualifying criteria for the GTMCPAs for inpatient services provided in IRFs. The policy and procedural instructions will be available within three to six months following the applicability date of the new inpatient reimbursement methodology for IRFs. Network IRFs will be able to request a GTMCPA approximately 14 months from the applicability date of the new reimbursement method as any GTMCPA will be based on twelve months of claims payment data under the new method. Once finalized, the policy and procedural instructions will be available in the TRICARE Reimbursement Manual at http://manuals.tricare.osd.mil. As with any discretionary authority exercised under the regulation, a determination approving or denying a GTMCPA for an IRF is not subject to the appeal and hearing procedures set forth in 32 CFR 199.10, and Section 199.14(a)(10) of this final rule has been revised to clarify this point. C. Costs and Benefits Consistent with OMB Circular A-4, the effect of this rule is a transfer caused by a Federal budget action; it does not impose costs, including private expenditures. The final rule is anticipated to reduce DoD allowed amounts to LTCHs by approximately $73M in the first year of the transition, if implemented in FY 2019 when TRICARE site-neutral LTCH cases will be paid at the full applicable LTCH PPS payment amount (see Table 1). DoD allowed amounts to LTCHs would be reduced by $86M in the second year, and $98M in the third and final year of the transition. This final rule is also anticipated to reduce DoD allowed amounts to IRFs by approximately $24M in FY 2019, which is anticipated to be the first year of the transition period, $41M in the second year, and $57M in the final year of transition. [[Page 61681]] [GRAPHIC] [TIFF OMITTED] TR29DE17.000 II. Discussion of Final Rule A. Introduction and Background In the Federal Register of August 31, 2016 [81 FR 59934], DoD published for public comment a rule proposing to revise its reimbursement methodologies for LTCHs and IRFs. 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.'' B. TRICARE LTCH PPS Reimbursement Methodology 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 425 under Medicare), which treat a critically ill population with complex needs and long lengths of stay. Per 32 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 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 or billed charges, which is usually substantially greater than what would be paid using the TRICARE DRG method. 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 FY 2016, Medicare began its adoption of a site-neutral payment system for LTCHs. Beginning in FY 2016 and continuing in FY 2017 and 2018, CMS has been phasing in the site-neutral payment methodology; during that time, 50 percent of the allowed amount for site-neutral patients was calculated using the site- neutral payment methodology (IPPS comparable amount) and 50 percent was calculated using the current full LTCH PPS standard federal payment rate methodology. Beginning in cost reporting periods that start in FY 2018, all Medicare payments for qualifying LTCH site-neutral patients are calculated using the Medicare site-neutral payment methodology. All other LTCH patients meeting the Medicare criteria for a full LTCH PPS Standard Payment will be paid using the standard LTCH PPS payment methodology. 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 10 U.S.C. 1079(i)(2), TRICARE is adopting Medicare's LTCH PPS, to include Medicare's MS-LTC-DRG weights and rates, and Medicare's site-neutral payment methodology for TRICARE authorized LTCHs. TRICARE will adopt the Medicare payment methodology that is in place at the time of TRICARE's implementation and TRICARE will adopt any additional updates or changes to Medicare's LTCH PPS payment methodology as they are adopted by Medicare. TRICARE is also adopting Medicare's adjustments for short-stay outliers, site-neutral payments, interrupted stay policy, the method of payment for preadmission services, and high- cost outlier payments. TRICARE is not adopting Medicare's 25 percent rule because there are too few TRICARE discharges at individual LTCHs to have a threshold policy based on TRICARE admissions. In FY15, only 15 of the 200 LTCHs with TRICARE discharges had 10 or more TRICARE admissions and over 70 percent of the 200 LTCH discharges were from LTCHs with 1-3 TRICARE discharges. As a result, TRICARE has too few discharges at all but a very small number of LTCHs to calculate and apply the 25 percent test using TRICARE discharges. TRICARE could not apply the results of the Medicare 25 percent rule to TRICARE LTCH discharges [[Page 61682]] because the results of Medicare's test are not known until the LTCH's Medicare cost report is settled after the end of the year. Even if DHA knew which LTCHs had failed the 25 percent rule and could identify the specific acute care hospitals that had exceeded the 25 percent rule, it would not be appropriate to apply an adjustment to the TRICARE LTCH discharges from that acute care hospital because DHA would not know which specific TRICARE LTCH discharges from that acute care hospital should have payment reductions and it would be inconsistent with Medicare's policy to reduce the payments for all TRICARE LTCH discharges from that hospital. As a result, DoD is not adopting Medicare's 25 percent rule. TRICARE will also incorporate Medicare's LTCH Quality Reporting (QR) payment adjustments for TRICARE LTCHs that are reflected 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 LTCH QR Program. Please see Medicare's final rule published on August 22, 2016 [81 FR 56761] for more detail about that program. TRICARE will have a three-year phase-in period to prepare LTCHs for these changes in TRICARE reimbursement. TRICARE will allow LTCHs 135 percent of the Medicare LTCH PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and follow Medicare's LTCH PPS policies during subsequent FYs. C. TRICARE IRF PPS Reimbursement Methodology 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)(3), an inpatient rehabilitation hospital or rehabilitation unit of an acute care hospital must meet the requirement for classification as an IRF stipulated in 42 CFR 412.604. In order to qualify as a Medicare- certified IRF, Medicare requires that a certain percentage (currently 60 percent) of the IRF'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, or billed charges. We are adopting Medicare's 60 percent requirement for IRFs. 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. TRICARE will also have a three-year phase-in to protect IRFs from sudden significant reductions. The final rule creates a gradual transition to full implementation of the Medicare IRF PPS by allowing 135 percent of Medicare IRF PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and follow Medicare's IRF PPS policies during subsequent FYs. 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 10 U.S.C. 1079(i)(2), TRICARE is adopting Medicare's IRF reimbursement methodology for TRICARE authorized IRFs. TRICARE is also adopting Medicare's IRF adjustments for interrupted stays, short stays of less than three days, short-stay transfers (defined as transfers to another institutional setting with an IRF length of stay less than the average length for the CMG), high-cost outliers, and the LIP adjustment. Further, TRICARE is adopting Medicare's Inpatient Rehabilitation Hospital Quality Reporting (IRFQR) payment adjustments for TRICARE authorized 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. D. Pediatric Cases in TRICARE Authorized LTCHs and IRFs 1. LTCH Our analysis found that in FY 2015, there were five pediatric TRICARE patients treated at TRICARE LTCHs. We found that TRICARE LTCH patients had similar diagnoses as Medicare LTCH patients and that the few pediatric LTCH patients had similar diagnoses as TRICARE patients. Therefore, we are also adopting Medicare's LTCH PPS methodology for pediatric patients treated in TRICARE authorized LTCHs. Some TRICARE patients are treated at Children's hospitals and these hospitals will be exempt from the LTCH PPS and will be paid under the TRICARE DRG- based payment system. 2. IRF Approximately 50 TRICARE beneficiaries under the age of 17 received treatment at TRICARE IRFs in FY 2015. We are adopting Medicare's IRF PPS for pediatric patients treated at TRICARE authorized IRFs. Some TRICARE patients are treated at Children's hospitals and these hospitals will be exempt from the IRF PPS, and will be paid under the TRICARE DRG-based payment system. E. Veterans Administration (VA) Hospitals VA hospitals specialize in treating injured veterans and provide access to rehabilitative care. 1. LTCH VA hospitals are not Medicare-authorized LTCHs (because they are Federal hospitals) and they are not reimbursed using Medicare's LTCH PPS method. 2. IRF VA hospitals are not Medicare-authorized IRFs (because they are Federal hospitals) and they are not reimbursed using 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 [[Page 61683]] ADSMs). VA hospitals will continue to be paid under existing payment methodologies. F. IRF General Temporary Military Contingency Payment Adjustment (GTMCPA) In response to the public comments, the final rule includes authority for a year-end, discretionary, GTMCPA that the Director, DHA, may approve in extraordinary economic circumstances for inpatient services from TRICARE network IRFs deemed to be essential for military readiness and support during contingency operations. The Director, DHA, or designee, may approve a GTMCPA for network IRFs that serve a disproportionate share of ADSMs and ADDs. Specific procedures for requesting an IRF GTMCPA will be outlined in the TRICARE Reimbursement Manual. G. Additional Revisions to the Regulations In reviewing the proposed rule, we realized that the current regulation regarding the reimbursement of facilities and services that exempt from the DRG-based payment system (32 CFR 199.14(a)(1)(ii)(C)) contains an incorrect cross-reference to paragraph (a)(3) vice (a)(4). The new paragraph (a)(3) was added as part of TRICARE; Reimbursement of Critical Access Hospitals final rule (74 FR 44752, August 31, 2009). The old paragraph (a)(3) regarding billed charges and set rates was renumbered as (a)(4), which is now the correct reference. Consequently, we have included this correction in the final rule, III. Public Comments The TRICARE LTCH and IRF proposed rule [81 FR 59934] published on August 31, 2016, provided a 60-day comment period. Following is a summary of the public comments and our responses. A. LTCH Comment: One commenter stated that DHA should have a transition period for the LTCH rule because LTCHs are already experiencing financial instability due to the implementation of Medicare's site- neutral payments. The commenter further stated that because of this instability, LTCHs may temporarily suspend all care to TRICARE beneficiaries upon implementation of the LTCH-PPS. The commenter believes this would be less likely to occur if DHA implements a two- year transition period. Response: In response to this comment, we have considered whether we should modify our approach to include a transition period. We analyzed our options and as a result, we are including a 3-year phase in to full adoption of Medicare's LTCH PPS rates. TRICARE LTCHs will be allowed 135 percent of Medicare LTCH PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and subsequent FYs. Comment: Two commenters stated that DHA should do additional analysis on TRICARE LTCH beneficiaries to understand whether the LTCH payment reform will limit beneficiary access to needed care. These commenters believe that analyses should be done to ensure that the LTCH-PPS rates would adequately cover the cost of care for the TRICARE population. They opined that DHA should delay implementation of the LTCH-PPS to do these analyses. Response: DHA analyzed FY 2015 TRICARE LTCH claims data to understand the differences between the LTCH payment rates for TRICARE patients under the current TRICARE method and proposed adoption of Medicare methods. We note that: (1) TRICARE's proposed LTCH payment rates would be no less than Medicare rates; (2) Medicare LTCH rates are higher than LTCH costs; (3) during the transition period the TRICARE rates would be much higher than the Medicare rates; and (4) that in studying Medicare beneficiary access to LTCHs, Medicare Payment Advisory Commission (MedPAC) has found that LTCH access has been maintained for Medicare beneficiaries (MedPAC, 2016 Report to Congress, Chapter 10). Thus, for the reasons stated above, DHA believes it is reasonable to assume that TRICARE beneficiaries will not have access problems for LTCH care. Comment: One commenter stated DHA should not implement a TRICARE- specific 25-percent policy for LTCHs because the 25-percent rule would penalize many TRICARE LTCHs that admit less than four TRICARE patients annually. If implemented, the 25-percent rule would reduce TRICARE payments by far more than 67 percent. Response: We agree with the commenter that DHA should not include a TRICARE-specific 25-percent policy for LTCHs. Our intent was not to have a TRICARE-specific 25-percent policy for LTCHs. We have also decided it is not practicable for TRICARE to adopt Medicare's 25- percent policy adjustments for TRICARE LTCHs because there are too few TRICARE discharges to have a threshold policy based on TRICARE admissions, and it would be unfair to adjust all of an LTCH's payments if the LTCH failed the Medicare threshold (and this would also be inconsistent with Medicare's policy). Comment: One commenter stated that DHA should modify its LTCH-PPS short stay outlier policy for LTCHs to cap payments at the cost of the case. The commenter believed the Medicare Short Stay Outlier (SSO) policy would encourage perverse incentives for LTCHs who may discharge patients at certain points of their stay based on what outlier payment they would receive. A capped policy would also be easier to implement. Response: We disagree that the Medicare LTCH SSO policy should be modified for TRICARE. DHA aims to follow Medicare policy as closely as possible, and for this reason, using Medicare's exact outlier methodology is appropriate. Comment: Two commenters stated that TRICARE should treat military treatment facilities and VA hospitals as ``subsection (d)'' hospitals for the purposes of determining whether a case meets the clinical patient-level criteria used to determine eligibility for the LTCH-PPS standard reimbursement rate. Response: We thank the commenters for bringing to our attention that due to the site neutral criteria, patients may potentially be rejected from admission to Long Term Care Hospitals because the preceding stay was not at a subsection (d) hospital. In order to eliminate a potential rejection, DHA agrees that TRICARE should treat military treatment facilities and VA hospitals as ``subsection (d)'' hospitals for the purposes of LTCH admission and qualification for the LTCH-PPS payment. It is important to ensure that Military Treatment Facility (MTF) and VA discharged TRICARE beneficiaries do not have LTCH access issues. We would also note that this approach is consistent with the guidance issued by CMS. Specifically, for patients who may have used their VA benefit or received inpatient care at a MTF that qualified as an ``immediately preceding'' stay, applicable criteria for exclusion from the site neutral payment rate are met. (See MLN Matters[supreg] Number: SE1627 released October 18, 2016.) Comment: One commenter stated that few TRICARE patients go to LTCHs so the TRICARE LTCH payment change is irrelevant. Response: We disagree with the commenter on their statement that few TRICARE patients go to LTCHs, and that changes to the TRICARE LTCH payment system would be irrelevant. In FY 2015, [[Page 61684]] over 700 TRICARE patients were admitted to approximately 200 LTCHs, with allowed amounts of over $90M. As a result, LTCH payment changes would not be irrelevant. Comment: One commenter stated the SSO policy proposed would be different than Medicare's reimbursement system. Response: This comment was in response to the withdrawn TRICARE proposed rule published in the Federal Register on January 26, 2015 [79 FR 51127]. The proposed rule has since been withdrawn. We published a new proposed rule in the Federal Register on August 31, 2016 [81 FR 59934], stating we would adopt Medicare's short stay outlier policy in its entirety. Comment: One commenter agreed with our proposed definition changes. Response: We thank the commenter for their review and observations. B. IRF Comment: One commenter stated the proposed timeline date of the beginning FY 2017 for implementation was incorrect. Response: We agree that the timeline cannot begin at the beginning of FY 2017 and have modified the projected implementation date to FY 2019 for both LTCHs and IRFs. Comment: One commenter stated that DHA should reduce IRF administrative burdens such as the repetitive authorization process. Response: This comment does not appear to be contingent on the proposed rule, and is instead commenting on TRICARE IRF current practice. We invite the commenter to contact their regional Managed Care Support Contractor to work with them and make them aware of the issue. Comment: Two commenters stated that TRICARE should have a transition period for the IRF rule. Providers should be given adequate advance notice of any changes to their reimbursement and should have the flexibility to transition to the new system. Response: In response to this comment, we have considered whether we should modify our approach to include a transition period. We are including a 3-year transition period for adopting Medicare's IRF PPS rates. TRICARE will allow 135 percent of Medicare IRF PPS amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation, and follow Medicare's IRF PPS policies during subsequent FYs. Comment: One commenter, noting that TRICARE beneficiaries are substantially younger than Medicare beneficiaries, stated Medicare's CMG system and weights are not appropriate for TRICARE patients because TRICARE IRF patient characteristics are much different than Medicare IRF patient characteristics. This commenter also suggested that TRICARE should increase CMG weights for key TRICARE categories in order to account for TRICARE patients' different needs. Response: We believe that the Medicare CMG system and weight structure is appropriate for TRICARE patients because although TRICARE may have a different case mix of IRF patients than Medicare, TRICARE IRF patients require similar rehabilitation services in IRFs as Medicare patients. Although in aggregate TRICARE patients do stay longer in the IRF setting (15 days in FY 2015, in comparison to the Medicare average length-of-stay of 13 days in FY 2014 (MedPAC, March 2016 Report to Congress, Table 9-5, Chapter 9)), we think the factors that are built into the Medicare CMGs are appropriate for TRICARE patients because they require similar rehabilitation services. IRF patients are grouped into one of 92 CMGs based on a number of characteristics such as the diagnosis requiring rehabilitation, functional status, cognitive status, age, and comorbidities. We think CMGs are appropriate for both Medicare and TRICARE patients. With respect to the age difference between Medicare and TRICARE beneficiaries, the Medicare CMG system is also currently used for the reimbursement of patients under the age of 65 who are entitled to Medicare. Further, in examining FY 2015 TRICARE IRF claims, three- quarters of IRF claims and about half of all allowed amounts were for retirees and their dependents. Comment: One commenter suggested that a closer review of the legislative history shows that Congress did not intend to require DoD to adopt Medicare reimbursement rules for IRF care. Response: We disagree. The pertinent statutory provision (10 U.S.C. 1079(i)(2)) states, ``payments may 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 Title XVIII of the Social Security Act.'' The commenter argues that it was not Congress' intent to adopt Medicare rates to TRICARE IRF beneficiaries because the above statutory language was enacted before Medicare's PPS reimbursement system for IRFs went into effect. The commenter would like to read this statutory authority as being limited to only those types of care for which Medicare had a reimbursement methodology in place at the time of enactment of the statute. We see no justification that allows DoD to disregard the unambiguous requirement in the statute to adopt Medicare reimbursement methodologies to the extent practicable. We believe for the reasons stated in the proposed rule that using the IRF-PPS for TRICARE patients is practicable, and therefore, is in accordance with DoD's statutory obligation. Comment: One commenter stated that if TRICARE implements the Medicare IRF-PPS, more TRICARE patients will be discharged from IRFs to other post-acute care settings (like Skilled Nursing Facilities (SNFs)). Because TRICARE does not have a limit on the number of medically necessary SNF days, the commenter opines that TRICARE patients may stay indefinitely at SNFs. The commenter asserted that TRICARE's projected savings from adopting the Medicare IRF PPS would be reduced because of the increased use of post-acute care. Response: First, we would note that the commenter assumes there will be a reduction in the amount of care provided in an IRF setting which will then cause TRICARE beneficiaries to take greater advantage of other post-acute care. We do not believe this will occur. We agree with the commenter that if there is an increase in the number of TRICARE patients who are discharged from IRFs and then admitted to SNFs, it would reduce the estimated level of TRICARE savings. However, we think that the impact of this effect would be small. For example, even under the very unrealistic assumption that every TRICARE patient discharged from an IRF would have an additional 7-day stay at a SNF that otherwise would not occur, it would increase TRICARE costs by less than $10M, which is much less than the anticipated TRICARE payment reduction of almost $60M in FY 2020. Further, we disagree with the commenter that TRICARE patients who transfer to SNFs would stay at SNFs indefinitely. Only patients who require medically necessary care will be admitted to SNFs, and the stays must continue to be medically necessary. Based upon the experience of other TRICARE SNF patients who have an average length of stay of 22 days, we do not think that TRICARE SNF stays will be indefinite. Comment: One commenter stated that TRICARE can retain contractual relationships with in-network providers, and negotiate with out-of- network providers on a case by case basis. [[Page 61685]] Response: The managed care support contractors are responsible for negotiating discounts from providers, and have strong incentives to do this today. We found that about 37 percent of out-of-network TRICARE IRFs were reimbursed at a discount off of billed charges in FY 2015 and that over 60 percent were paid at 100 percent of billed charges. Relying on the managed care support contractors to negotiate rates with network providers, however, is not a substitute for establishing an applicable reimbursement methodology. Further, negotiating rates with out-of-network providers on a case-by-case basis does not ensure compliance with statutory obligations not to pay more than Medicare rates when practicable. Comment: One commenter stated that TRICARE could adopt Medicare rules for certain TRICARE patients like retirees who may have more similar characteristics to Medicare beneficiaries, and maintain current payment policy for other family members and active duty service members. This will ensure that ADSMs and their families will continue to receive the full scope of IRF services. Response: We have reviewed the beneficiary population data, and we agree that a discretionary adjustment should be considered to ensure that there is sufficient access for ADSMs and their families. Those network IRFs with a high proportion of ADSM/ADD admissions may be eligible to receive a GTMCPA. Comment: One commenter stated that TRICARE should make outlier payments based on a marginal cost factor equal to 100% of the costs in excess of the fixed-loss threshold, rather than 80% as provided by Medicare, since this practice is inconsistent with the ordinary practices of the insurance industry. TRICARE should use individual hospital cost-to-charge ratios rather than a national cost-to-charge ratio. This will help ensure payment for care provided to Service members and their families. Response: We disagree that using Medicare's outlier methodology would be inappropriate for TRICARE 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].'' Given the statutory language, TRICARE is adopting Medicare's IRF PPS reimbursement method for our beneficiaries. Medicare does use facility-specific cost-to-charge ratios (please see Medicare's final rule published on August 6, 2015 [80 FR 47036]), and DHA plans on doing the same. Comment: One commenter stated that DHA should do additional analysis on TRICARE IRF beneficiaries to understand whether the IRF payment reform will limit beneficiary access to needed care. Additionally, analyses should be done to ensure that the IRF-PPS rates would adequately cover the cost of care for the TRICARE population. Response: DHA disagrees that there will be access problems because TRICARE will pay no less than Medicare does for IRF care and because MedPAC has found that there do not appear to be capacity constraints on IRF care for Medicare patients (MedPAC, 2016 Report to Congress, Chapter 9). MedPAC has also found that Medicare IRF payments exceed IRF costs. Comment: One commenter stated that they do not agree that the agency is compelled to adopt the Medicare IRF PPS. Response: 10 U.S.C. 1079(i)(2) states that ``payments may 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 Title XVIII of the Social Security Act.'' We believe that it is practicable to adopt the Medicare system, and that adopting the IRF-PPS more closely aligns TRICARE to Medicare payment methods and rules. Comment: One commenter stated that DHA should implement the LIP adjustment in IRF-PPS method, and revert back to policy from the original proposed rule because it is a fundamental part of the Medicare program and critical to providers serving vulnerable populations, and should not be excluded from the TRICARE rate. Response: We agree with the commenter that the LIP adjustment should be included in the TRICARE IRF PPS. This will allow for the same payment to LIP adjusted hospitals as Medicare, and will also provide additional reimbursement to IRFs serving vulnerable TRICARE populations. Comment: One commenter stated that TRICARE patients to IRFs should not complicate the compliance methodology for satisfying the 60 Percent Rule and that the 60 Percent Rule is not a component of payment policy. Response: We believe that the statement in the proposed rule has confused the commenter regarding TRICARE and Medicare's 60 percent rule. It was the intent of the policy to note that TRICARE would honor the Medicare adjustments based on fulfilling the criteria of the 60 percent rule with Medicare patients, and not that TRICARE would require a 60 percent rule for its own patients. In other words, if Medicare penalizes an IRF because the IRF did not meet the 60 percent rule criteria with Medicare patients, TRICARE would also penalize the hospital. This is because TRICARE would use the same grouping software as Medicare, which already includes the 60-percent rule adjustments. Comment: One commenter requested that we confirm that the majority of out-of-network IRF reimbursement is being reimbursed at 100 percent of billed charges. Response: Using FY 2015 data, we found that about 63 percent of TRICARE non-network IRFs were reimbursed at 100 percent of billed charges. On average, out-of-network providers were reimbursed at 87 percent of billed charges. IV. Regulatory Impact Analyses for LTCHs and IRFs A. Overall Impact DoD has examined the impacts of this final 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), the Congressional Review Act (5 U.S.C. 804(2)), and E.O. 13771, Reducing Regulation and Controlling Regulatory Costs (January 30, 2017). 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 ($100M 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 [[Page 61686]] 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 a Regulatory Impact Analyses that, to the best of our ability, presents the costs and benefits of the rulemaking. This final rule is anticipated to reduce DoD allowed amounts to LTCHs by $73M and to IRFs by $24M in FY 2019 during the first year of transition. 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 $100M or more or have certain other impacts. This final rule is a major rule under the Congressional Review Act. 3. Regulatory Flexibility Act 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 $34.5M or less in any one year). For purposes of the RFA, we have determined that the majority of LTCHs and 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. 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 $100M in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $140M. This final 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. 7. Executive Order (E.O.) 13771, ``Reducing Regulation and Controlling Regulatory Costs'' E.O. 13771 seeks to control costs associated with the government imposition of private expenditures required to comply with Federal regulations and to reduce regulations that impose such costs. This rule is not subject to the requirements of E.O. 13771 because this rule results in no more than de minimis costs. 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 Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) DRG-based payment system, respectively. Neoplastic Disease Care Hospitals would also be exempt from the TRICARE LTCH PPS, while Veterans Administration (VA) hospitals would be exempt from the TRICARE IRF PPS. Children's hospitals would be exempt from the TRICARE LTCH PPS and IRF PPS. 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 50-80 percent for most LTCHs once the LTCH PPS rates were adopted. 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 initially 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 not be used. As stated in our proposed rule, we believed this transition approach was not appropriate for four main reasons: (1) Medicare-based payments for TRICARE patients would have a minimal impact on overall LTCH payments, (2) LTCHs admit few TRICARE patients each year, (3) TRICARE payments would be equal to Medicare payments, and (4) there are not likely to be access issues as a result of the reimbursement change (MedPAC, 2015 Report to Congress, Chapter 11). After careful review of the comments on the proposed rule, however, we agree that TRICARE should adopt a transition. During the transition, TRICARE would pay more than Medicare (135 percent of Medicare LTCH PPS payments in year 1 and 115 percent of Medicare LTCH PPS payments in year 2), and 100 percent of Medicare LTCH PPS payments in the final year of the transition. This transition will offer a gradual transition to full Medicare rates. Given that the TRICARE LTCH rates will equal Medicare LTCH rates in the final year of the transition, and because TRICARE payments will have a limited impact on overall LTCH payments, we do not anticipate access problems for TRICARE beneficiaries under this transition. Further, by statute, hospitals that [[Page 61687]] participate under Medicare are required to agree to accept TRICARE reimbursement. 2. Alternatives Considered for Addressing Reduction in IRF Payments Under the method discussed here, TRICARE's IRF payments per discharge would decrease by almost 30 percent for the median TRICARE IRF and about one-third of TRICARE IRFs would have a reduction of 50 percent or more in allowed amounts. 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 while 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 not be used. As stated in our proposed rule, we believed this transition approach was not appropriate for four main reasons: (1) Medicare payments for TRICARE patients would have a minimal impact on overall IRF payments, (2) IRFs admit few TRICARE patients each year, (3) TRICARE payments will be equal to Medicare payments, and (4) access issues as a result of the reimbursement change are unlikely because MedPAC reports IRFs paid by Medicare have positive margins (MedPAC, 2015 Report to Congress, Chapter 10). After careful review of the comments on the proposed rule, however, we agree that TRICARE should adopt a transition that allows a percentage of Medicare payments in the first two years (135 percent of Medicare IRF PPS payments in year 1 and 115 percent of Medicare IRF PPS payments in year 2), and 100 percent of Medicare IRF PPS payments in the final year of the transition. This transition will protect IRFs from sudden significant reductions, offering a gradual transition to full Medicare rates. Given that the TRICARE IRF rates will equal Medicare IRF rates in the final year of the transition and will have a limited impact on overall IRF payments, we do not anticipate access problems for TRICARE beneficiaries using the 3-year transition period. Further, by statute, hospitals that participate under Medicare are required to agree to accept TRICARE reimbursement. D. Analysis of the Impact of TRICARE LTCH and IRF Payment Reform 1. LTCH Methodology We analyzed the impact of TRICARE implementing a new method of payment for LTCHs. The proposed method is Medicare's LTCH PPS 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 FY 2018, the Medicare IPPS MS-DRG system for all non- standard payment (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 2014 to September 2015. We drew upon various sources for the data used to categorize hospitals in Table 2, below. We attempted to construct these variables using information from Medicare's FY 2015 Impact file to verify that each provider was in fact a Medicare LTCH. One limitation is that for individual hospitals, some mis-categorizations are possible. We were unable to match 3 LTCHs with 4 hospital claims to the FY 2015 Impact file, and as a result, these 4 claims were excluded from the analysis. We also excluded 32 hospital claims where the DRG on the claim was unclassifiable. All Neoplastic Disease Care Hospitals (1 hospital, 1 claim) and Children's Hospital claims (2 hospitals, 46 claims) were also excluded from the analysis, and there were no TRICARE beneficiaries who were treated in Maryland LTCHs in FY 2015. After we removed the excluded claims for which we could not assign charge and hospital classification variables, we used the remaining hospitals and claims as the basis for our analysis. 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. Using allowed charge data from FY 2015, the FY 2015 Medicare MS- LTC-DRG and MS-DRG weights, the FY 2015 Medicare LTCH and IPPS national base payment rates, the FY 2015 Medicare high cost outlier fixed thresholds, and the FY 2015 wage index adjustment factors, we simulated TRICARE allowed amounts in FY 2015 using the proposed LTCH prospective payment method. Under ``current policy'' we assumed that TRICARE LTCH costs would increase by 7 percent per year from FY 2015 to FY 2020 to reflect increases in billed charges. We then projected the costs under the proposed policy, assuming that under the Medicare LTCH-PPS, costs would increase by 3 percent per year from FY 2015 to FY 2020. Under the Medicare LTCH-PPS, the percentage annual increase of 3 percent in TRICARE allowed amounts is less than the percentage increase under current policy due to slower increases in Medicare LTCH reimbursement rates (in comparison to TRICARE billed charges). The difference between the current and the proposed policy assuming full implementation of the transition period would have been $65M if fully implemented in FY 2015. 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 2014 to September 2015. We drew upon various sources for the data used to categorize hospitals in Table 3, below. We attempted to construct these variables using information from Medicare's FY 2016 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 mis-categorizations are possible. We were unable to match 8 IRF claims from 4 IRFs to Medicare provider numbers within the FY 2016 IRF rate setting file, and therefore had to exclude them from the analysis, even though these 4 IRFs were confirmed to be Medicare-certified IRFs in the October 2016 Medicare IRF Provider Specific file. We also excluded all Children's Hospital (2 hospitals, 11 discharges) and all Veterans hospital (12 hospitals, 239 discharges) claims because these hospitals are not paid under the Medicare IRF PPS. After we removed the excluded claims for which we could not assign charge and hospital classification variables, we used the remaining hospitals and claims as the [[Page 61688]] basis for our analysis. 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. 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 FY 2015 TRICARE billed charges at that IRF and the 2015 Medicare cost-to-charge ratio (CCR) for that IRF. We then used Medicare payment and cost data from the FY 2016 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 FY 2015 to FY 2020 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 FY 2015 to FY 2020. 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). As a result, this approach allows us to estimate the change in allowed amounts under the Medicare method without having CMG data on TRICARE patients. The difference between the current and the proposed policy, assuming full implementation of the transition period would have been $33M if fully implemented in FY 2015. 3. Effect of Payment Policy Change on LTCHs Table 2, Impact of TRICARE LTCH Rule in FY 2015, presents the results of our analysis of FY 2015 TRICARE claims data. This table categorizes LTCHs which had TRICARE inpatient stays in FY 2015 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 FY 2015 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 FY 2015. The fourth column shows the simulated average allowed amount per discharge under the Medicare LTCH payment method, assuming full implementation of both the TRICARE transition and 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 2 shows the overall impact on the 207 LTCHs included in the analysis. The next three rows of the table contain hospitals categorized according to their urban/rural status in FY 2015 (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. Upon full implementation of the Medicare site-neutral payment policy and after the TRICARE transition is complete, TRICARE allowed amounts to LTCHs would have decreased by 70 percent in comparison to allowed amounts paid to LTCHs under the current TRICARE policy (in FY 2015 dollars). For all the LTCH groups shown in Table 2, allowed amounts under the proposed payment methodology would be reduced. The following discussion highlights some of the changes in allowed amounts among LTCH classifications. 99 percent of all TRICARE LTCH admissions were to urban LTCHs. Allowed amounts would have decreased by 69 percent for large urban, 71 percent for other urban and 67 percent for rural LTCHs. Very small LTCHs (1-24 beds) would have had the least impact; allowed amounts would have been reduced by 53 percent. The change in payment methodology would have had the greatest impacts on large LTCHs (125 or more beds), where allowed amounts would have been reduced by about 73 percent. The change in LTCH payment methodology would have a larger impact on TRICARE non-network LTCHs than network LTCHs because almost all network LTCHs currently offer a discount off billed charges while the majority of non-network LTCHs do not. Allowed charges to non-network LTCHs would have declined by 74 percent, in comparison to 67 percent for in-network hospitals. We found that network hospitals on average provide a 32 percent discount off billed charges for non-TFL TRICARE beneficiaries and that 70 percent of all TRICARE LTCH discharges were in-network in FY 2015. 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 69 and 71 percent in allowed charges respectively, which are very similar to the overall average of 70 percent. LTCHs in the New England and West North Central regions would have had the lowest reductions in allowed charges: 39 and 50 percent, respectively. 77 percent of all TRICARE LTCH discharges in FY 2015 were in proprietary (for-profit) LTCHs, and these facilities would have had their allowed amounts reduced by approximately 71 percent. The decline in allowed amounts for voluntary (not-for-profit) LTCHs would have been less than for-profit hospitals (61 percent). BILLING CODE 5001-06-P [[Page 61689]] [GRAPHIC] [TIFF OMITTED] TR29DE17.001 [[Page 61690]] BILLING CODE 5001-06-C 4. Effect of Payment Policy Change on IRFs Table 3, Impact of TRICARE IRF Rule in FY 2015, presents the results of our analysis of FY 2015 TRICARE claims data. This table categorizes IRFs which had TRICARE inpatient stays in FY 2015 by various geographic and special payment consideration groups to illustrate the varying impacts of different types of IRFs. The first column represents the number of IRFs in FY 2015 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 FY 2015. The fourth column shows the average allowed amount per discharge under the Medicare IRF payment method, assuming full implementation of the TRICARE transition, and including 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 3 shows the overall impact on the 493 IRFs included in the analysis. The next two rows of the table categorize hospitals according to their geographic location in FY 2015 (urban and rural). The second major grouping is by IRF bed-size category, followed by whether the IRF is a freestanding facility or a part of a hospital unit. The fourth grouping shows IRFs by TRICARE network status and fifth by teaching status. The sixth grouping is by regional divisions and the final grouping is by IRF ownership status. The following discussion highlights some of the changes in allowed amounts among IRF classifications. 96 percent of all TRICARE IRF admissions were to urban IRFs. Allowed amounts would have decreased by 36 percent for urban IRFs and 11 percent for rural IRFs. Very small IRFs (1-24 beds) would have had the most impact; allowed amounts would have been reduced by 50 percent. The change in payment methodology would have had the least impact on medium to large IRFs (75 to 124 beds), where allowed amounts would have been reduced by about 8 percent. The change in IRF payment methodology would have resulted in a 49 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 18 percent. The change in IRF payment methodology would have also had 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 typically do not. Allowed charges to non-network IRFs would have declined by 55 percent, in comparison to 30 percent for in-network hospitals. We found that network hospitals on average provide a 34 percent discount off billed charges for TRICARE beneficiaries without other health insurance, and that 85 percent of all TRICARE IRF discharges were in-network in FY 2015. 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 41 percent, in comparison to non-teaching hospitals, where payments would have been reduced by 34 percent. Approximately 81 percent of all TRICARE IRF discharges were from non-teaching IRF facilities. IRFs in various geographic areas will be affected differently by this change in payment methodology. The two regions with the largest number of TRICARE IRF claims, the South Atlantic (803 discharges) and West South Central (668 discharges), would have had an average decrease of 35 and 33 percent in allowed charges respectively. IRFs in New England and the Middle Atlantic would have had the lowest reductions in allowed charges of 13 percent. The Mountain, West South Central, and Pacific regions would have had the highest reductions (between 33 and 49 percent). BILLING CODE 5001-06-P [[Page 61691]] [GRAPHIC] [TIFF OMITTED] TR29DE17.002 [[Page 61692]] BILLING CODE 5001-06-C 46 percent of all TRICARE IRF discharges in FY 2015 were in proprietary (for-profit) IRFs, and these facilities would have had their allowed amounts reduced by approximately 29 percent. The decline in allowed amounts for voluntary (not-for-profit) and government-owned IRFs would have been slightly more than proprietary hospitals (41 and 38 percent). 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 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 definition of ``Hospital, long-term (tuberculosis, chronic care, or rehabilitation).'' 0 b. Adding the definition of ``Inpatient Rehabilitation Facility (IRF)'' in alphabetical order. 0 c. Adding the definition of ``Long Term Care Hospital (LTCH)'' in alphabetical order. 0 d. Removing the definition of ``Long-term hospital care.'' The additions read as follows: Sec. 199.2 Definitions. * * * * * (b) * * * Inpatient Rehabilitation Facility (IRF). A facility classified by CMS as an IRF and meets the applicable requirements established by Sec. 199.6(b)(4)(xx) (which includes the requirement to be a Medicare participating provider). * * * * * Long Term Care Hospital (LTCH). A hospital that is classified by the Centers for Medicare and Medicaid Services (CMS) as an LTCH and meets the applicable requirements established by Sec. 199.6(b)(4)(v) (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 (b)(4)(xx) 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 hospitals 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 Sec. 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. * * * * * (xx) 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 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 paragraph (a)(1)(ii)(C) introductory text; 0 b. Revising paragraphs (a)(1)(ii)(D)(2), (3) and (4), and (a)(1)(ii)(E); 0 c. Revising paragraph (a)(3)(i); 0 d. Revising paragraph (a)(4) introductory text; and 0 e. Adding paragraphs (a)(9) and (10). The revisions read as follows: Sec. 199.14 Provider reimbursement methods. (a) * * * (1) * * * (ii) * * * (C) Services exempt from the DRG-based payment system. The following hospital services, even when provided in a hospital subject to the CHAMPUS DRG-based payment system, are exempt from the CHAMPUS DRG-based payment system. The services in paragraphs (a)(1)(ii)(C)(1) through (a)(1)(ii)(C)(4) and (a)(1)(ii)(C)(7) through (a)(1)(ii)(C)(9) of this section shall be reimbursed under the procedures in paragraph (a)(4) of this section, and the services in paragraphs (a)(1)(ii)(C)(5) and (a)(1)(ii)(C)(6) of this section shall be reimbursed under the procedures in paragraph (j) of this section. * * * * * (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 [[Page 61693]] 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. 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 Director, DHA, 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 paragraph (a)(10) of this section. * * * * * (4) The allowable cost for authorized care in all hospitals not subject to the TRICARE DRG-based payment system, the TRICARE mental health per-diem system, the TRICARE reasonable cost method for CAHs, the TRICARE reimbursement rules for SCHs, the TRICARE LTCH-PPS, or the TRICARE IRF PPS shall be determined on the basis of billed charges or set rates. * * * * * (9) Reimbursement for inpatient services provided by a Long Term Care Hospital (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, 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. TRICARE will not be adopting Medicare's 25 percent threshold payment adjustment. (ii) Implementation of the TRICARE LTCH PPS will include a gradual transition to full implementation of the Medicare LTCH PPS rates as follows: (A) For the first 12 months following implementation, the TRICARE LTCH PPS allowable cost will be 135 percent of Medicare LTCH PPS amounts. (B) For the second 12 months of implementation, TRICARE LTCH PPS allowable cost will be 115 percent of the Medicare LTCH PPS amounts. (C) For the third 12 months of implementation, and subsequent years, TRICARE LTCH PPS allowable cost will be 100 percent of the Medicare LTCH PPS amounts. (iii) 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, to Children's Hospitals, or to Neoplastic Disease Care Hospitals, respectively. (10) Reimbursement for inpatient services provided by Inpatient Rehabilitation Facilities (IRF). (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 42 CFR 412.604 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 part 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. 1079(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 the 60 percent compliance threshold, teaching adjustment, rural adjustment, high-cost outlier payments, low income payment adjustment, payment adjustments associated with the quality reporting program, and updates to the system. (ii) Implementation of the TRICARE IRF PPS will include a gradual transition to full implementation of the Medicare IRF PPS rates as follows: [[Page 61694]] (A) For the first 12 months of implementation, the TRICARE IRF PPS allowable cost will be 135 percent of Medicare IRF PPS amounts. (B) For the second 12 months of implementation, the TRICARE IRF PPS allowable cost will be 115 percent of the Medicare IRF PPS amounts. (C) For the third 12 months of implementation, and subsequent years, the TRICARE IRF PPS allowable cost will be 100 percent of the Medicare IRF PPS amounts. (iii) The IRF PPS allowable cost in paragraph (a)(10)(ii) of this section may be supplemented by an inpatient general temporary military contingency payment adjustment (GTMCPA) for TRICARE authorized IRFs. (A) This is a year-end discretionary, temporary adjustment that the Director, DHA (or designee) may approve based on the following criteria: (1) The IRF serves a disproportionate share of ADSMs and ADDs; (2) The IRF is a TRICARE network hospital; (3) The IRF's actual costs for inpatient services exceed TRICARE payments or other extraordinary economic circumstance exists; and (4) Without the GTMCPA, DoD's ability to meet military contingency mission requirements will be significantly compromised. (B) Policy and procedural instructions implementing the GTMCPA will be issued as deemed appropriate by the Director, DHA (or designee). As with other discretionary authority under this part, a decision to allow or deny a GTMCPA to an IRF is not subject to the appeal and hearing procedures of Sec. 199.10. (iv) 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, to Children's hospitals, or to VA hospitals, respectively. * * * * * Dated: December 22, 2017. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. 2017-28022 Filed 12-28-17; 8:45 am] BILLING CODE 5001-06-P
![61678 Federal Register / Vol. 82, No. 249 / Friday, December 29, 2017 / Rules and Regulations
Accomplishment Instructions of Boeing Alert Lakewood, CA 90712–4137; phone: 562–627– services of the same type under
Service Bulletin 757–27A0157, dated 5316; fax: 562–627–5210; email: Medicare.’’ This final rule adopts
December 18, 2017. Myra.J.Kuck@faa.gov. Medicare’s reimbursement
(2) For airplanes in Configuration 2 in
(k) Material Incorporated by Reference methodologies for inpatient services
Groups 1, 2, and 3, as defined in Boeing Alert
Service Bulletin 757–27A0157, dated (1) The Director of the Federal Register provided by LTCHs and IRFs. Each
December 18, 2017: No work is required by approved the incorporation by reference reimbursement methodology will be
this paragraph. (IBR) of the service information listed in this phased in over a 3-year period. This
paragraph under 5 U.S.C. 552(a) and 1 CFR final rule also removes the definitions
(h) Prohibited Modification
part 51. for ‘‘hospital, long-term (tuberculosis,
As of the effective date of this AD, do not (2) You must use this service information chronic care, or rehabilitation)’’ and
accomplish the actions specified in Boeing as applicable to do the actions required by ‘‘long-term hospital care,’’ and creates
Service Bulletin 757–27A0152 on any this AD, unless the AD specifies otherwise.
airplane. separate definitions for ‘‘Long Term
(i) Boeing Alert Service Bulletin 757–
27A0157, dated December 18, 2017.
Care Hospital’’ and ‘‘Inpatient
(i) Alternative Methods of Compliance Rehabilitation Facility’’ adopting
(AMOCs) (ii) Reserved.
(3) For service information identified in Centers for Medicare & Medicaid
(1) The Manager, Los Angeles ACO Branch, this AD, contact Boeing Commercial Services (CMS) classification criteria.
FAA, has the authority to approve AMOCs Airplanes, Attention: Contractual & Data This final rule also includes authority
for this AD, if requested using the procedures Services (C&DS), 2600 Westminster Blvd., for a year-end, discretionary General
found in 14 CFR 39.19. In accordance with MC 110–SK57, Seal Beach, CA 90740–5600;
14 CFR 39.19, send your request to your Temporary Military Contingency
telephone 562–797–1717; internet https:// Payment Adjustment (GTMCPA) for
principal inspector or local Flight Standards www.myboeingfleet.com.
District Office, as appropriate. If sending inpatient services in TRICARE network
(4) You may view this service information
information directly to the manager of the at the FAA, Transport Standards Branch,
IRFs when deemed essential to meet
certification office, send it to the attention of 1601 Lind Avenue SW, Renton, WA. For military contingency requirements.
the person identified in paragraph (j) of this DATES: This rule is effective March 5,
information on the availability of this
AD. Information may be emailed to 9-ANM- 2018.
material at the FAA, call 425–227–1221.
LAACO-AMOC-Requests@faa.gov.
(5) You may view this service information Applicability Date: The regulations
(2) Before using any approved AMOC,
that is incorporated by reference at the setting forth the revised reimbursement
notify your appropriate principal inspector,
National Archives and Records systems shall be applicable for all
or lacking a principal inspector, the manager
Administration (NARA). For information on admissions to Long Term Care Hospitals
of the local flight standards district office/
the availability of this material at NARA, call and Inpatient Rehabilitation Facilities,
certificate holding district office.
202–741–6030, or go to: http://
(3) An AMOC that provides an acceptable respectively, commencing on or after
www.archives.gov/federal-register/cfr/ibr-
level of safety may be used for any repair, the first day of the month which is at
modification, or alteration required by this locations.html.
least 120 days after the date of
AD if it is approved by the Boeing Issued in Renton, Washington, on publication of this rule in the Federal
Commercial Airplanes Organization December 22, 2017.
Designation Authorization (ODA) that has Register.
John P. Piccola, Jr.,
been authorized by the Manager, Los Angeles FOR FURTHER INFORMATION CONTACT:
Acting Director, System Oversight Division,
ACO Branch, to make those findings. To be Sharon Seelmeyer, Defense Health
Aircraft Certification Service.
approved, the repair method, modification Agency (DHA), Medical Benefits and
deviation, or alteration deviation must meet [FR Doc. 2017–28158 Filed 12–28–17; 8:45 am]
Reimbursement Branch, telephone (303)
the certification basis of the airplane, and the BILLING CODE 4910–13–P
approval must specifically refer to this AD. 676–3690.
(4) AMOCs approved previously for AD SUPPLEMENTARY INFORMATION:
2015–08–01 are not approved as AMOCs for
DEPARTMENT OF DEFENSE I. Executive Summary
any provision in this AD.
(5) For service information that contains A. Purpose of the Final Rule
steps that are labeled as RC, the provisions Office of the Secretary
of paragraphs (i)(5)(i) and (i)(5)(ii) of this AD 1. Long Term Care Hospitals (LTCHs)
apply. 32 CFR Part 199 The purpose of this final rule is to
(i) The steps labeled as RC, including establish a reimbursement system for
substeps under an RC step and any figures [Docket ID: DOD–2012–HA–0146]
identified in an RC step, must be done to
LTCHs in accordance with the statutory
RIN 0720–AB47 provision at title 10, United States Code
comply with the AD. If a step or substep is
labeled ‘‘RC Exempt,’’ then the RC (U.S.C.), section 1079(i)(2). This statute
TRICARE; Reimbursement of Long
requirement is removed from that step or requires that TRICARE payment for
Term Care Hospitals and Inpatient
substep. An AMOC is required for any institutional care be determined, to the
deviations to RC steps, including substeps Rehabilitation Facilities
extent practicable, in accordance with
and identified figures. AGENCY: Office of the Secretary, the same rules as those that apply to
(ii) Steps not labeled as RC may be payments to providers of services of the
Department of Defense (DoD).
deviated from using accepted methods in
accordance with the operator’s maintenance ACTION: Final rule. same type under Medicare. Medicare
or inspection program without obtaining pays LTCHs using a LTCH Prospective
approval of an AMOC, provided the RC steps, SUMMARY: This final rule establishes Payment System (PPS) which classifies
including substeps and identified figures, can reimbursement rates for Long Term Care LTCH patients into distinct Diagnosis-
still be done as specified, and the airplane Hospitals (LTCHs) and Inpatient Related Groups (DRGs). The patient
nshattuck on DSK9F9SC42PROD with RULES
can be put back in an airworthy condition. Rehabilitation Facilities (IRFs) in classification system groupings are
(j) Related Information accordance with the statutory called Medicare Severity Long Term
For more information about this AD,
requirement that TRICARE inpatient Care Diagnosis Related Groups (MS–
contact Myra Kuck, Aerospace Engineer, care ‘‘payments shall be determined to LTC–DRGs), which are the same DRG
Cabin Safety, Mechanical & Environmental the extent practicable in accordance groupings used under the Medicare
Systems Section, FAA, Los Angeles ACO with the same reimbursement rules as acute hospital inpatient prospective
Branch, 3960 Paramount Boulevard, apply to payments to providers of payment system (IPPS), but that have
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![Federal Register / Vol. 82, No. 249 / Friday, December 29, 2017 / Rules and Regulations 61679
been weighted to reflect the resources extent practicable in accordance with costs will be limited by the respective
required to treat the medically complex the same reimbursement rules as apply statutory catastrophic cap.
patients treated at LTCHs. to payments to providers of services of
On January 26, 2015, a TRICARE 2. LTCH Transition Period
the same type under [Medicare].’’
proposed rule was published in the Medicare pays IRFs using an IRF In response to public comments, we
Federal Register [79 FR 51127], Prospective Payment System (PPS) agree that a transition period is
proposing to adopt a TRICARE LTCH which classifies IRF patients into one of appropriate in order to prepare LTCHs
PPS similar to the Center for Medicare 92 case-mix groups (CMGs). for changes in reimbursement. TRICARE
and Medicaid Service’s (CMS’) Similar to LTCHs, IRFs (both will allow LTCHs 135 percent of the
reimbursement system for LTCHs, with freestanding rehabilitation hospitals and Medicare LTCH PPS amounts in the first
the exception of not adopting rehabilitation hospital units) are 12-month period after implementation,
Medicare’s LTCH 25 percent rule. This currently exempted from the TRICARE 115 percent in the second 12-month
TRICARE proposed rule was DRG-based payment system and paid by period after implementation, and 100
subsequently withdrawn and replaced TRICARE at the lower of a negotiated percent in the third 12-month period
by the proposed rule published August rate or billed charges. As discussed after implementation and follow
31, 2016 [81 FR 59934]. We refer the earlier, paying billed charges is fiscally Medicare’s policies during subsequent
reader to the August 31, 2016, proposed imprudent and inconsistent with fiscal years.
rule for additional information. TRICARE’s governing statute. Paying CMS has established two different
TRICARE pays for most hospital care IRFs under a method similar to types of LTCH PPS payment rates based
under the TRICARE DRG-based Medicare’s is prudent, practicable, and on the Pathway for Sustainable Growth
payment system, which is similar to harmonious with the statute. The final Rate Reform Act of 2013: (1) Standard
Medicare’s, but some hospitals are rule creates a gradual transition from LTCH PPS payment rates; and (2) lower
exempt by current regulation from the TRICARE’s current policy of authorizing site-neutral LTCH PPS payment rates
TRICARE DRG-based payment system. IRFs 100 percent of allowable charges that are paid at the lower of the IPPS
LTCHs were exempted from the (which is either the billed charge or a comparable per diem amount, or the
TRICARE DRG-based payment system voluntarily negotiated rate) by phasing- estimated cost of the case. Site-neutral
and were paid by TRICARE at the lower in Medicare’s IRF PPS as follows: patients include LTCH patients who do
of a negotiated rate or billed charges. Allowing 135 percent of Medicare IRF not use prolonged mechanical
Paying billed charges is fiscally PPS amounts in the first 12-month ventilation during their LTCH stay or
imprudent and inconsistent with period after implementation, 115 who did not spend three or more days
TRICARE’s governing statute. Paying percent in the second 12-month period in the intensive care unit (ICU) during
LTCHs under Medicare’s methods is after implementation, and 100 percent
prudent, because it reduces government their prior acute care hospital stay.
in the third 12-month period after Medicare transitioned to the site-neutral
costs without affecting beneficiary implementation and follow Medicare’s
access to services or quality; it is payment rate reductions in FY 2016 and
policies during subsequent FYs. Our FY 2017 by requiring payment based on
practicable, because it can be legal authority for this portion of the
implemented without major costs; and, a 50/50 blend of the standard LTCH PPS
final rule is 10 U.S.C. 1079(i)(2). rate and the site-neutral LTCH PPS rate
it is harmonious with the statute
because the statute states that TRICARE B. Summary of the Major Provisions of for site-neutral patients in those years.
shall determine its payments for the Final Rule Beginning at the individual hospital’s
institutional services to the extent cost reporting period beginning in FY
1. Payment Method for LTCHs 2018, all Medicare LTCH payments for
practicable in accordance with
Medicare’s payment rates. The final rule TRICARE shall reimburse LTCHs for site-neutral patients are calculated using
creates a gradual transition from inpatient care using Medicare’s LTCH the site-neutral payment methodology
TRICARE’s current policy of authorizing PPS using Medicare’s MS–LTC–DRGs. (without a 50/50 blend in payments).
LTCHs 100 percent of allowable charges TRICARE is creating a 3-year transition TRICARE will adopt the Medicare
(which is either the billed charge or a period as described below. Payment for LTCH PPS in its entirety except for the
voluntarily negotiated rate) by phasing- a TRICARE patient will be made at a Medicare 25 percent threshold rule,
in Medicare’s LTCH reimbursement predetermined, per-discharge amount including both the full LTCH PPS
rates as follows: Allowing 135 percent for each Medicare Severity (MS)-LTC– Standard Federal Payment Rate and site-
of Medicare LTCH PPS amounts in the DRG under the TRICARE LTCH PPS neutral LTCH PPS methodology for
first 12-month period after reimbursement methodology. The qualifying LTCH cases. TRICARE will
implementation, 115 percent in the TRICARE LTCH PPS reimbursement have a 3-year transition period which
second 12-month period after methodology includes payment for all will start at the applicability date of this
implementation, and 100 percent in the inpatient operating and capital costs of final rule. We will apply the FY 2019
third 12-month period after furnishing covered services (including LTCH PPS for the purposes of the 12-
implementation and follows Medicare routine and ancillary services), but not month period beginning on October 1,
policies during subsequent Fiscal Years certain pass-through costs (e.g., bad 2018, and follow any changes adopted
(FY). Our legal authority for this portion debts, direct medical education, and by Medicare LTCH PPS for subsequent
of the final rule is 10 U.S.C. 1079(i)(2). blood clotting factors). When the years. For example, if FY 2019 is the
Medicare hospital day limit is first year of the TRICARE transition
2. Inpatient Rehabilitation Facilities exhausted for TRICARE beneficiaries, period, TRICARE would follow
(IRFs)
nshattuck on DSK9F9SC42PROD with RULES
who are also eligible for Medicare (i.e., Medicare and all TRICARE LTCHs
The purpose of this rule is to also TRICARE For Life (TFL) beneficiaries), would receive 135 percent of the full
adopt Medicare’s reimbursement system TRICARE is the primary payer for site-neutral payment for TRICARE site-
for inpatient care for IRFs in accordance medically necessary services, the neutral patients. TRICARE will also
with the statutory requirement at 10 beneficiary will be responsible for the consider military treatment facilities
U.S.C. 1079 (i)(2) that TRICARE appropriate TRICARE inpatient cost (MTF) and Veterans Administration
‘‘payments shall be determined to the share. The beneficiary’s out-of-pocket (VA) hospitals as Subsection (d)
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![61680 Federal Register / Vol. 82, No. 249 / Friday, December 29, 2017 / Rules and Regulations
hospitals for the purposes of the site- billed charge or a voluntarily negotiated year-end discretionary, temporary
neutral policy. rate) by phasing-in the Medicare IRF adjustment that the Director, DHA may
PPS rates as follows: allowing 135 approve in extraordinary economic
3. Children’s Hospitals and Pediatric
percent of Medicare IRF PPS amounts in circumstances for a network IRF that
Patients in LTCHs
the first 12-month period after serves a disproportionate share of
Children’s hospitals will be exempt implementation, 115 percent in the Active Duty Service members (ADSMs)
from the TRICARE LTCH PPS and will second 12-month period after and Active Duty dependents (ADDs).
be paid under the TRICARE DRG-based implementation, and 100 percent in the TRICARE is in the process of developing
payment system. Pediatric patients who third 12-month period after policy and procedural instructions for
receive care in TRICARE authorized implementation. We will apply the FY exercising the discretionary authority
LTCHs will be paid under the TRICARE 2019 IRF PPS for purposes of the 12- under the qualifying criteria for the
LTCH PPS. This final rule edits the month period beginning on October 1, GTMCPAs for inpatient services
regulatory language to include this 2018, and follow any changes adopted provided in IRFs. The policy and
provision. by the Medicare IRF PPS for subsequent procedural instructions will be available
years. within three to six months following the
4. Payment Method for IRFs
6. Children’s Hospitals and Pediatric applicability date of the new inpatient
TRICARE shall reimburse IRFs for reimbursement methodology for IRFs.
Patients in IRFs
inpatient care using Medicare’s IRF PPS. Network IRFs will be able to request a
TRICARE is creating a 3-year transition As stated in the supplementary
GTMCPA approximately 14 months
period as described below. Payment for language of the proposed rule published
from the applicability date of the new
a TRICARE patient will be made at a on August 31, 2016, Children’s hospitals
reimbursement method as any GTMCPA
prospectively-set, fixed payment per will be exempt from the TRICARE IRF
will be based on twelve months of
discharge based on a patient’s PPS and will be paid under the
claims payment data under the new
classification into one of 92 CMGs. Each TRICARE DRG-based payment system.
method. Once finalized, the policy and
CMG has a national relative weight Pediatric patients who receive care in
procedural instructions will be available
reflecting the expected relative TRICARE authorized IRFs will be paid
in the TRICARE Reimbursement Manual
costliness of treatment for patients in under the TRICARE IRF PPS.
at http://manuals.tricare.osd.mil. As
that category compared with that for the 7. IRF Low Income Payment (LIP) with any discretionary authority
average Medicare inpatient Adjustment exercised under the regulation, a
rehabilitation patient. The relative determination approving or denying a
TRICARE is including the LIP
weight for each CMG is multiplied by a GTMCPA for an IRF is not subject to the
adjustment in the TRICARE IRF PPS.
standardized Medicare IRF base appeal and hearing procedures set forth
payment amount to calculate the case- 8. Removal of Outdated Terms in 32 CFR 199.10, and Section
mix adjusted prospective payment rate. This final rule removes outdated 199.14(a)(10) of this final rule has been
The TRICARE IRF PPS payment rates definitions in Title 32, Code of Federal revised to clarify this point.
will cover all inpatient operating and Regulations (CFR), Part 199.2 for
capital costs that IRFs are expected to ‘‘[h]ospital, long-term (tuberculosis, C. Costs and Benefits
incur in furnishing inpatient chronic care, or rehabilitation)’’ and
rehabilitation services. When the Consistent with OMB Circular A–4,
‘‘[l]ong-term hospital care’’ and adds a the effect of this rule is a transfer caused
Medicare hospital day limit is new definition for ‘‘Long-Term Care
exhausted for TRICARE beneficiaries by a Federal budget action; it does not
Hospital (LTCH)’’ as well as adding a impose costs, including private
who are also eligible for Medicare (i.e., new definition for ‘‘Inpatient
TRICARE For Life (TFL) beneficiaries), expenditures. The final rule is
Rehabilitation Facility (IRF).’’ The new anticipated to reduce DoD allowed
TRICARE will then be the primary payer definitions adopt CMS’ LTCH and IRF
for medically necessary services and the amounts to LTCHs by approximately
classifications. The TRICARE $73M in the first year of the transition,
beneficiary will be responsible for the requirements for both LTCHs and IRFs
appropriate TRICARE inpatient cost if implemented in FY 2019 when
to be authorized institutional providers TRICARE site-neutral LTCH cases will
share. The beneficiary’s out-of-pocket have been added to 32 CFR 199.6.
costs will be limited by the respective be paid at the full applicable LTCH PPS
statutory catastrophic cap. 9. General Temporary Military payment amount (see Table 1). DoD
Contingency Payment Adjustment allowed amounts to LTCHs would be
5. IRF Transition Period (GTMCPA) For IRFs reduced by $86M in the second year,
In response to public comments, we One of the purposes of the TRICARE and $98M in the third and final year of
agree that a transition period is program is to support military members the transition.
appropriate in order to prepare IRFs for and their families during periods of war This final rule is also anticipated to
changes in reimbursement. To protect or contingency operations, when reduce DoD allowed amounts to IRFs by
IRFs from sudden significant military facility capability may be approximately $24M in FY 2019, which
reductions, the final rule creates a diverted or insufficient to meet military is anticipated to be the first year of the
gradual transition from TRICARE’s readiness priorities. To preserve the transition period, $41M in the second
current policy of allowing 100 percent availability of IRFs during such periods, year, and $57M in the final year of
of allowable charges (which is either the the final rule includes authority for a transition.
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because the results of Medicare’s test are Because there is no alternate TRICARE Inpatient Rehabilitation Hospital
not known until the LTCH’s Medicare reimbursement mechanism in 32 CFR Quality Reporting (IRFQR) payment
cost report is settled after the end of the part 199 at this time, IRF care provided adjustments for TRICARE authorized
year. Even if DHA knew which LTCHs to TRICARE beneficiaries in this setting IRFs that reflect Medicare’s annual
had failed the 25 percent rule and could is currently paid the lower of a payment update for that facility.
identify the specific acute care hospitals negotiated rate, or billed charges. We are TRICARE is not establishing a separate
that had exceeded the 25 percent rule, adopting Medicare’s 60 percent reporting requirement for hospitals, but
it would not be appropriate to apply an requirement for IRFs. will utilize Medicare’s payment
adjustment to the TRICARE LTCH Medicare created a PPS for IRFs adjustments resulting from their IRFQR
discharges from that acute care hospital effective with the cost reporting period Program. Please see Medicare’s final
because DHA would not know which beginning in January 2002. Section 4421 rule [CMS–1632–F; CMS–1632–CN2]
specific TRICARE LTCH discharges of the Balanced Budget Act of 1997 RIN 0938–AS41.
from that acute care hospital should (Pub. L. 105–33) modified how
Medicare payment for IRF services is to D. Pediatric Cases in TRICARE
have payment reductions and it would
be made by creating Section 1886(j) of Authorized LTCHs and IRFs
be inconsistent with Medicare’s policy
to reduce the payments for all TRICARE the Social Security Act, which 1. LTCH
LTCH discharges from that hospital. As authorized the implementation of a per- Our analysis found that in FY 2015,
a result, DoD is not adopting Medicare’s discharge prospective payment system there were five pediatric TRICARE
25 percent rule. TRICARE will also for inpatient rehabilitation hospitals and patients treated at TRICARE LTCHs. We
incorporate Medicare’s LTCH Quality rehabilitation units of acute care found that TRICARE LTCH patients had
Reporting (QR) payment adjustments for hospitals—referred to as IRFs. As similar diagnoses as Medicare LTCH
TRICARE LTCHs that are reflected required by Section 1886(j) of the Act, patients and that the few pediatric
Medicare’s annual payment update for the Federal rates reflect all costs of LTCH patients had similar diagnoses as
that facility. TRICARE is not furnishing IRF services (routine, TRICARE patients. Therefore, we are
establishing a separate reporting ancillary, and capital related). CMS also adopting Medicare’s LTCH PPS
requirement for hospitals, but will included a 9-month transition period methodology for pediatric patients
utilize Medicare’s payment adjustments when it adopted the IRF PPS for treated in TRICARE authorized LTCHs.
resulting from their LTCH QR Program. Medicare, under which IRFs could elect Some TRICARE patients are treated at
Please see Medicare’s final rule to be paid a blended rate. The transition Children’s hospitals and these hospitals
published on August 22, 2016 [81 FR period ended October 1, 2002. will be exempt from the LTCH PPS and
56761] for more detail about that Following the transition period, will be paid under the TRICARE DRG-
program. payment to all IRFs was based entirely based payment system.
TRICARE will have a three-year on the prospective payment.
phase-in period to prepare LTCHs for TRICARE will also have a three-year 2. IRF
these changes in TRICARE phase-in to protect IRFs from sudden Approximately 50 TRICARE
reimbursement. TRICARE will allow significant reductions. The final rule beneficiaries under the age of 17
LTCHs 135 percent of the Medicare creates a gradual transition to full received treatment at TRICARE IRFs in
LTCH PPS amounts in the first 12- implementation of the Medicare IRF FY 2015. We are adopting Medicare’s
month period after implementation, 115 PPS by allowing 135 percent of IRF PPS for pediatric patients treated at
percent in the second 12-month period Medicare IRF PPS amounts in the first TRICARE authorized IRFs. Some
after implementation, and 100 percent 12-month period after implementation, TRICARE patients are treated at
in the third 12-month period after 115 percent in the second 12-month Children’s hospitals and these hospitals
implementation and follow Medicare’s period after implementation, and 100 will be exempt from the IRF PPS, and
LTCH PPS policies during subsequent percent in the third 12-month period will be paid under the TRICARE DRG-
FYs. after implementation and follow based payment system.
Medicare’s IRF PPS policies during
C. TRICARE IRF PPS Reimbursement subsequent FYs. E. Veterans Administration (VA)
Methodology Under 10 U.S.C. 1079(i)(2), the Hospitals
IRFs are free standing rehabilitation amount to be paid to hospitals, skilled VA hospitals specialize in treating
hospitals and rehabilitation units in nursing facilities, and other institutional injured veterans and provide access to
acute care hospitals that provide an providers under TRICARE, ‘‘shall be rehabilitative care.
intensive rehabilitation program. Per 32 determined to the extent practicable in
CFR 199.14(a)(1)(ii)(D)(2) and (3), IRFs accordance with the same 1. LTCH
are currently exempt from the TRICARE reimbursement rules as apply to VA hospitals are not Medicare-
DRG-based payment system, just as they payments to providers of services of the authorized LTCHs (because they are
were exempt from Medicare’s IPPS same type under [Medicare].’’ Based on Federal hospitals) and they are not
when the CMS initially implemented its 10 U.S.C. 1079(i)(2), TRICARE is reimbursed using Medicare’s LTCH PPS
DRG-based payment system. Per 42 CFR adopting Medicare’s IRF reimbursement method.
412.1(a)(3), an inpatient rehabilitation methodology for TRICARE authorized
hospital or rehabilitation unit of an IRFs. 2. IRF
acute care hospital must meet the TRICARE is also adopting Medicare’s VA hospitals are not Medicare-
requirement for classification as an IRF IRF adjustments for interrupted stays, authorized IRFs (because they are
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stipulated in 42 CFR 412.604. In order short stays of less than three days, short- Federal hospitals) and they are not
to qualify as a Medicare-certified IRF, stay transfers (defined as transfers to reimbursed using Medicare’s IRF PPS
Medicare requires that a certain another institutional setting with an IRF method. TRICARE allows VA hospitals
percentage (currently 60 percent) of the length of stay less than the average to provide inpatient rehabilitation care
IRF’s total inpatient population must length for the CMG), high-cost outliers, to TRICARE beneficiaries, and VA
meet at least one of 13 medical and the LIP adjustment. Further, hospitals provide care for over 200
conditions listed in 42 CFR 412.29(b)(2). TRICARE is adopting Medicare’s TRICARE patients each year (mostly
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ADSMs). VA hospitals will continue to we should modify our approach to based on TRICARE admissions, and it
be paid under existing payment include a transition period. We would be unfair to adjust all of an
methodologies. analyzed our options and as a result, we LTCH’s payments if the LTCH failed the
are including a 3-year phase in to full Medicare threshold (and this would also
F. IRF General Temporary Military
adoption of Medicare’s LTCH PPS rates. be inconsistent with Medicare’s policy).
Contingency Payment Adjustment TRICARE LTCHs will be allowed 135 Comment: One commenter stated that
(GTMCPA) percent of Medicare LTCH PPS amounts DHA should modify its LTCH–PPS short
In response to the public comments, in the first 12-month period after stay outlier policy for LTCHs to cap
the final rule includes authority for a implementation, 115 percent in the payments at the cost of the case. The
year-end, discretionary, GTMCPA that second 12-month period after commenter believed the Medicare Short
the Director, DHA, may approve in implementation, and 100 percent in the Stay Outlier (SSO) policy would
extraordinary economic circumstances third 12-month period after encourage perverse incentives for
for inpatient services from TRICARE implementation and subsequent FYs. LTCHs who may discharge patients at
network IRFs deemed to be essential for Comment: Two commenters stated certain points of their stay based on
military readiness and support during that DHA should do additional analysis what outlier payment they would
contingency operations. The Director, on TRICARE LTCH beneficiaries to receive. A capped policy would also be
DHA, or designee, may approve a understand whether the LTCH payment easier to implement.
GTMCPA for network IRFs that serve a reform will limit beneficiary access to Response: We disagree that the
disproportionate share of ADSMs and needed care. These commenters believe Medicare LTCH SSO policy should be
ADDs. Specific procedures for that analyses should be done to ensure modified for TRICARE. DHA aims to
requesting an IRF GTMCPA will be that the LTCH–PPS rates would follow Medicare policy as closely as
outlined in the TRICARE adequately cover the cost of care for the possible, and for this reason, using
Reimbursement Manual. TRICARE population. They opined that Medicare’s exact outlier methodology is
DHA should delay implementation of appropriate.
G. Additional Revisions to the the LTCH–PPS to do these analyses. Comment: Two commenters stated
Regulations Response: DHA analyzed FY 2015 that TRICARE should treat military
In reviewing the proposed rule, we TRICARE LTCH claims data to treatment facilities and VA hospitals as
realized that the current regulation understand the differences between the ‘‘subsection (d)’’ hospitals for the
regarding the reimbursement of facilities LTCH payment rates for TRICARE purposes of determining whether a case
and services that exempt from the DRG- patients under the current TRICARE meets the clinical patient-level criteria
based payment system (32 CFR method and proposed adoption of used to determine eligibility for the
199.14(a)(1)(ii)(C)) contains an incorrect Medicare methods. We note that: (1) LTCH–PPS standard reimbursement
cross-reference to paragraph (a)(3) vice TRICARE’s proposed LTCH payment rate.
(a)(4). The new paragraph (a)(3) was rates would be no less than Medicare Response: We thank the commenters
added as part of TRICARE; rates; (2) Medicare LTCH rates are for bringing to our attention that due to
Reimbursement of Critical Access higher than LTCH costs; (3) during the the site neutral criteria, patients may
Hospitals final rule (74 FR 44752, transition period the TRICARE rates potentially be rejected from admission
August 31, 2009). The old paragraph would be much higher than the to Long Term Care Hospitals because
(a)(3) regarding billed charges and set Medicare rates; and (4) that in studying the preceding stay was not at a
rates was renumbered as (a)(4), which is Medicare beneficiary access to LTCHs, subsection (d) hospital. In order to
now the correct reference. Medicare Payment Advisory eliminate a potential rejection, DHA
Consequently, we have included this Commission (MedPAC) has found that agrees that TRICARE should treat
correction in the final rule, LTCH access has been maintained for military treatment facilities and VA
Medicare beneficiaries (MedPAC, 2016 hospitals as ‘‘subsection (d)’’ hospitals
III. Public Comments Report to Congress, Chapter 10). Thus, for the purposes of LTCH admission and
The TRICARE LTCH and IRF for the reasons stated above, DHA qualification for the LTCH–PPS
proposed rule [81 FR 59934] published believes it is reasonable to assume that payment. It is important to ensure that
on August 31, 2016, provided a 60-day TRICARE beneficiaries will not have Military Treatment Facility (MTF) and
comment period. Following is a access problems for LTCH care. VA discharged TRICARE beneficiaries
summary of the public comments and Comment: One commenter stated do not have LTCH access issues. We
our responses. DHA should not implement a TRICARE- would also note that this approach is
specific 25-percent policy for LTCHs consistent with the guidance issued by
A. LTCH because the 25-percent rule would CMS. Specifically, for patients who may
Comment: One commenter stated that penalize many TRICARE LTCHs that have used their VA benefit or received
DHA should have a transition period for admit less than four TRICARE patients inpatient care at a MTF that qualified as
the LTCH rule because LTCHs are annually. If implemented, the 25- an ‘‘immediately preceding’’ stay,
already experiencing financial percent rule would reduce TRICARE applicable criteria for exclusion from
instability due to the implementation of payments by far more than 67 percent. the site neutral payment rate are met.
Medicare’s site-neutral payments. The Response: We agree with the (See MLN Matters® Number: SE1627
commenter further stated that because commenter that DHA should not released October 18, 2016.)
of this instability, LTCHs may include a TRICARE-specific 25-percent Comment: One commenter stated that
temporarily suspend all care to policy for LTCHs. Our intent was not to few TRICARE patients go to LTCHs so
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TRICARE beneficiaries upon have a TRICARE-specific 25-percent the TRICARE LTCH payment change is
implementation of the LTCH–PPS. The policy for LTCHs. We have also decided irrelevant.
commenter believes this would be less it is not practicable for TRICARE to Response: We disagree with the
likely to occur if DHA implements a adopt Medicare’s 25-percent policy commenter on their statement that few
two-year transition period. adjustments for TRICARE LTCHs TRICARE patients go to LTCHs, and that
Response: In response to this because there are too few TRICARE changes to the TRICARE LTCH payment
comment, we have considered whether discharges to have a threshold policy system would be irrelevant. In FY 2015,
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over 700 TRICARE patients were substantially younger than Medicare which Medicare had a reimbursement
admitted to approximately 200 LTCHs, beneficiaries, stated Medicare’s CMG methodology in place at the time of
with allowed amounts of over $90M. As system and weights are not appropriate enactment of the statute. We see no
a result, LTCH payment changes would for TRICARE patients because TRICARE justification that allows DoD to
not be irrelevant. IRF patient characteristics are much disregard the unambiguous requirement
Comment: One commenter stated the different than Medicare IRF patient in the statute to adopt Medicare
SSO policy proposed would be different characteristics. This commenter also reimbursement methodologies to the
than Medicare’s reimbursement system. suggested that TRICARE should increase extent practicable. We believe for the
Response: This comment was in CMG weights for key TRICARE reasons stated in the proposed rule that
response to the withdrawn TRICARE categories in order to account for using the IRF–PPS for TRICARE patients
proposed rule published in the Federal TRICARE patients’ different needs. is practicable, and therefore, is in
Register on January 26, 2015 [79 FR Response: We believe that the accordance with DoD’s statutory
51127]. The proposed rule has since Medicare CMG system and weight obligation.
been withdrawn. We published a new structure is appropriate for TRICARE Comment: One commenter stated that
proposed rule in the Federal Register on patients because although TRICARE if TRICARE implements the Medicare
August 31, 2016 [81 FR 59934], stating may have a different case mix of IRF IRF–PPS, more TRICARE patients will
we would adopt Medicare’s short stay patients than Medicare, TRICARE IRF be discharged from IRFs to other post-
outlier policy in its entirety. patients require similar rehabilitation acute care settings (like Skilled Nursing
Comment: One commenter agreed services in IRFs as Medicare patients. Facilities (SNFs)). Because TRICARE
with our proposed definition changes. Although in aggregate TRICARE patients does not have a limit on the number of
Response: We thank the commenter do stay longer in the IRF setting (15 medically necessary SNF days, the
for their review and observations. days in FY 2015, in comparison to the commenter opines that TRICARE
Medicare average length-of-stay of 13 patients may stay indefinitely at SNFs.
B. IRF
days in FY 2014 (MedPAC, March 2016 The commenter asserted that TRICARE’s
Comment: One commenter stated the Report to Congress, Table 9–5, Chapter projected savings from adopting the
proposed timeline date of the beginning 9)), we think the factors that are built Medicare IRF PPS would be reduced
FY 2017 for implementation was into the Medicare CMGs are appropriate because of the increased use of post-
incorrect. for TRICARE patients because they
Response: We agree that the timeline acute care.
require similar rehabilitation services.
cannot begin at the beginning of FY Response: First, we would note that
IRF patients are grouped into one of 92
2017 and have modified the projected the commenter assumes there will be a
CMGs based on a number of
implementation date to FY 2019 for reduction in the amount of care
characteristics such as the diagnosis
both LTCHs and IRFs. provided in an IRF setting which will
requiring rehabilitation, functional
Comment: One commenter stated that then cause TRICARE beneficiaries to
status, cognitive status, age, and
DHA should reduce IRF administrative take greater advantage of other post-
comorbidities. We think CMGs are
burdens such as the repetitive appropriate for both Medicare and acute care. We do not believe this will
authorization process. TRICARE patients. With respect to the occur. We agree with the commenter
Response: This comment does not age difference between Medicare and that if there is an increase in the number
appear to be contingent on the proposed TRICARE beneficiaries, the Medicare of TRICARE patients who are
rule, and is instead commenting on CMG system is also currently used for discharged from IRFs and then admitted
TRICARE IRF current practice. We the reimbursement of patients under the to SNFs, it would reduce the estimated
invite the commenter to contact their age of 65 who are entitled to Medicare. level of TRICARE savings. However, we
regional Managed Care Support Further, in examining FY 2015 think that the impact of this effect
Contractor to work with them and make TRICARE IRF claims, three-quarters of would be small. For example, even
them aware of the issue. IRF claims and about half of all allowed under the very unrealistic assumption
Comment: Two commenters stated amounts were for retirees and their that every TRICARE patient discharged
that TRICARE should have a transition dependents. from an IRF would have an additional
period for the IRF rule. Providers should Comment: One commenter suggested 7-day stay at a SNF that otherwise
be given adequate advance notice of any that a closer review of the legislative would not occur, it would increase
changes to their reimbursement and history shows that Congress did not TRICARE costs by less than $10M,
should have the flexibility to transition intend to require DoD to adopt Medicare which is much less than the anticipated
to the new system. reimbursement rules for IRF care. TRICARE payment reduction of almost
Response: In response to this Response: We disagree. The pertinent $60M in FY 2020. Further, we disagree
comment, we have considered whether statutory provision (10 U.S.C. 1079(i)(2)) with the commenter that TRICARE
we should modify our approach to states, ‘‘payments may be determined to patients who transfer to SNFs would
include a transition period. We are the extent practicable in accordance stay at SNFs indefinitely. Only patients
including a 3-year transition period for with the same reimbursement rules as who require medically necessary care
adopting Medicare’s IRF PPS rates. apply to payments to providers of will be admitted to SNFs, and the stays
TRICARE will allow 135 percent of services of the same type under Title must continue to be medically
Medicare IRF PPS amounts in the first XVIII of the Social Security Act.’’ The necessary. Based upon the experience of
12-month period after implementation, commenter argues that it was not other TRICARE SNF patients who have
115 percent in the second 12-month Congress’ intent to adopt Medicare rates an average length of stay of 22 days, we
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period after implementation, and 100 to TRICARE IRF beneficiaries because do not think that TRICARE SNF stays
percent in the third 12-month period the above statutory language was will be indefinite.
after implementation, and follow enacted before Medicare’s PPS Comment: One commenter stated that
Medicare’s IRF PPS policies during reimbursement system for IRFs went TRICARE can retain contractual
subsequent FYs. into effect. The commenter would like relationships with in-network providers,
Comment: One commenter, noting to read this statutory authority as being and negotiate with out-of-network
that TRICARE beneficiaries are limited to only those types of care for providers on a case by case basis.
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Response: The managed care support facility-specific cost-to-charge ratios TRICARE and Medicare’s 60 percent
contractors are responsible for (please see Medicare’s final rule rule. It was the intent of the policy to
negotiating discounts from providers, published on August 6, 2015 [80 FR note that TRICARE would honor the
and have strong incentives to do this 47036]), and DHA plans on doing the Medicare adjustments based on
today. We found that about 37 percent same. fulfilling the criteria of the 60 percent
of out-of-network TRICARE IRFs were Comment: One commenter stated that rule with Medicare patients, and not
reimbursed at a discount off of billed DHA should do additional analysis on that TRICARE would require a 60
charges in FY 2015 and that over 60 TRICARE IRF beneficiaries to percent rule for its own patients. In
percent were paid at 100 percent of understand whether the IRF payment other words, if Medicare penalizes an
billed charges. Relying on the managed reform will limit beneficiary access to IRF because the IRF did not meet the 60
care support contractors to negotiate needed care. Additionally, analyses percent rule criteria with Medicare
rates with network providers, however, should be done to ensure that the IRF– patients, TRICARE would also penalize
is not a substitute for establishing an PPS rates would adequately cover the the hospital. This is because TRICARE
applicable reimbursement methodology. cost of care for the TRICARE would use the same grouping software
Further, negotiating rates with out-of- population. as Medicare, which already includes the
network providers on a case-by-case Response: DHA disagrees that there 60-percent rule adjustments.
basis does not ensure compliance with will be access problems because Comment: One commenter requested
statutory obligations not to pay more TRICARE will pay no less than that we confirm that the majority of out-
than Medicare rates when practicable. Medicare does for IRF care and because of-network IRF reimbursement is being
Comment: One commenter stated that MedPAC has found that there do not reimbursed at 100 percent of billed
TRICARE could adopt Medicare rules appear to be capacity constraints on IRF charges.
for certain TRICARE patients like care for Medicare patients (MedPAC, Response: Using FY 2015 data, we
retirees who may have more similar 2016 Report to Congress, Chapter 9). found that about 63 percent of TRICARE
characteristics to Medicare MedPAC has also found that Medicare non-network IRFs were reimbursed at
beneficiaries, and maintain current IRF payments exceed IRF costs. 100 percent of billed charges. On
payment policy for other family Comment: One commenter stated that average, out-of-network providers were
members and active duty service they do not agree that the agency is reimbursed at 87 percent of billed
members. This will ensure that ADSMs compelled to adopt the Medicare IRF charges.
and their families will continue to PPS.
receive the full scope of IRF services. Response: 10 U.S.C. 1079(i)(2) states IV. Regulatory Impact Analyses for
Response: We have reviewed the that ‘‘payments may be determined to LTCHs and IRFs
beneficiary population data, and we the extent practicable in accordance A. Overall Impact
agree that a discretionary adjustment with the same reimbursement rules as
should be considered to ensure that apply to payments to providers of DoD has examined the impacts of this
there is sufficient access for ADSMs and services of the same type under Title final rule as required by Executive
their families. Those network IRFs with XVIII of the Social Security Act.’’ We Orders (E.O.s) 12866 (September 1993,
a high proportion of ADSM/ADD believe that it is practicable to adopt the Regulatory Planning and Review) and
admissions may be eligible to receive a Medicare system, and that adopting the 13563 (January 18, 2011, Improving
GTMCPA. IRF–PPS more closely aligns TRICARE Regulation and Regulatory Review), the
Comment: One commenter stated that to Medicare payment methods and Regulatory Flexibility Act (RFA)
TRICARE should make outlier payments rules. (September 19, 1980, Pub. L. 96–354),
based on a marginal cost factor equal to Comment: One commenter stated that the Unfunded Mandates Reform Act of
100% of the costs in excess of the fixed- DHA should implement the LIP 1995 (Pub. L. 104–4), the Congressional
loss threshold, rather than 80% as adjustment in IRF–PPS method, and Review Act (5 U.S.C. 804(2)), and E.O.
provided by Medicare, since this revert back to policy from the original 13771, Reducing Regulation and
practice is inconsistent with the proposed rule because it is a Controlling Regulatory Costs (January
ordinary practices of the insurance fundamental part of the Medicare 30, 2017).
industry. TRICARE should use program and critical to providers 1. Executive Order 12866 and Executive
individual hospital cost-to-charge ratios serving vulnerable populations, and Order 13563
rather than a national cost-to-charge should not be excluded from the
ratio. This will help ensure payment for TRICARE rate. E.O.s 12866 and 13563 direct agencies
care provided to Service members and Response: We agree with the to assess all costs and benefits of
their families. commenter that the LIP adjustment available regulatory alternatives and, if
Response: We disagree that using should be included in the TRICARE IRF regulation is necessary, to select
Medicare’s outlier methodology would PPS. This will allow for the same regulatory approaches that maximize
be inappropriate for TRICARE patients. payment to LIP adjusted hospitals as net benefits (including potential
Under 10 U.S.C. 1079(i)(2), the amount Medicare, and will also provide economic, environmental, public health
to be paid to hospitals, skilled nursing additional reimbursement to IRFs and safety effects, distributive impacts,
facilities, and other institutional serving vulnerable TRICARE and equity). E.O. 13563 emphasizes the
providers under TRICARE, ‘‘shall be populations. importance of quantifying both costs
determined to the extent practicable in Comment: One commenter stated that and benefits, of reducing costs, of
accordance with the same TRICARE patients to IRFs should not harmonizing rules, and of promoting
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reimbursement rules as apply to complicate the compliance methodology flexibility. A regulatory impact analysis
payments to providers of services of the for satisfying the 60 Percent Rule and (RIA) must be prepared for major rules
same type under [Medicare].’’ Given the that the 60 Percent Rule is not a with economically significant effects
statutory language, TRICARE is component of payment policy. ($100M or more in any one year).
adopting Medicare’s IRF PPS Response: We believe that the We estimate that the effects of the
reimbursement method for our statement in the proposed rule has LTCH and IRF provisions that would be
beneficiaries. Medicare does use confused the commenter regarding implemented by this rule would not
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![61694 Federal Register / Vol. 82, No. 249 / Friday, December 29, 2017 / Rules and Regulations
(A) For the first 12 months of DEPARTMENT OF HOMELAND U.S.C. 553(b)). This provision
implementation, the TRICARE IRF PPS SECURITY authorizes an agency to issue a rule
allowable cost will be 135 percent of without prior notice and opportunity to
Medicare IRF PPS amounts. Coast Guard comment when the agency for good
cause finds that those procedures are
(B) For the second 12 months of
33 CFR Part 165 ‘‘impracticable, unnecessary, or contrary
implementation, the TRICARE IRF PPS
to the public interest.’’ Under 5 U.S.C.
allowable cost will be 115 percent of the [Docket Number USCG–2017–1077]
553(b)(B), the Coast Guard finds that
Medicare IRF PPS amounts. good cause exists for not publishing a
RIN 1625–AA00
(C) For the third 12 months of notice of proposed rulemaking (NPRM)
implementation, and subsequent years, Safety Zone; Mississippi River, Baton with respect to this rule because it is
the TRICARE IRF PPS allowable cost Rouge, LA impractical and contrary to public
will be 100 percent of the Medicare IRF interest. We must establish this safety
AGENCY: Coast Guard, DHS. zone by December 31, 2017. It is
PPS amounts.
ACTION: Temporary final rule. impracticable to publish an NPRM
(iii) The IRF PPS allowable cost in
because we lack sufficient time to
paragraph (a)(10)(ii) of this section may SUMMARY: The Coast Guard is
provide a reasonable comment period
be supplemented by an inpatient establishing a temporary safety zone for and then consider those comments
general temporary military contingency all navigable waters from mile marker before issuing the rule. It is also
payment adjustment (GTMCPA) for (MM) 229.5 to MM 230.5 Above Head of contrary to public interest as it would
TRICARE authorized IRFs. Passes on the Lower Mississippi River. delay the safety measures necessary to
This temporary safety zone is necessary protect life and property from the
(A) This is a year-end discretionary,
to provide for the safety of life on these possible hazards associated with the
temporary adjustment that the Director,
navigable waters near downtown, Baton display.
DHA (or designee) may approve based Rouge, LA, during a fireworks display
on the following criteria: Under 5 U.S.C. 553(d)(3), the Coast
on December 31, 2017. Entry of vessels Guard finds that good cause exists for
(1) The IRF serves a disproportionate or persons into this zone is prohibited making it effective less than 30 days
share of ADSMs and ADDs; unless specifically authorized by the after publication in the Federal
(2) The IRF is a TRICARE network Captain of the Port Sector New Orleans Register. Waiting a full 30 days after
hospital; or a designated representative. publication in the Federal Register is
DATES: This rule is effective from 11:30 contrary to the public interest as that
(3) The IRF’s actual costs for inpatient
p.m. on December 31, 2017, through 1 would delay the effectiveness of the
services exceed TRICARE payments or
a.m. on January 1, 2018. safety zone until after the planned
other extraordinary economic
ADDRESSES: To view documents fireworks event. Immediate action is
circumstance exists; and needed to protect vessels and mariners
mentioned in this preamble as being
(4) Without the GTMCPA, DoD’s available in the docket, go to http:// from the safety hazards associated with
ability to meet military contingency www.regulations.gov, type USCG–2017– an aerial fireworks display over the
mission requirements will be 1077 in the ‘‘SEARCH’’ box and click waterway. The Coast Guard will notify
significantly compromised. ‘‘SEARCH.’’ Click on Open Docket the public and maritime community
(B) Policy and procedural instructions Folder on the line associated with this that the safety zone will be in effect and
implementing the GTMCPA will be rule. of the enforcement periods via broadcast
issued as deemed appropriate by the FOR FURTHER INFORMATION CONTACT: If
notices to mariners.
Director, DHA (or designee). As with you have questions on this rule, call or III. Legal Authority and Need for Rule
other discretionary authority under this email Lieutenant Raymond Wagner, The Coast Guard is issuing this rule
part, a decision to allow or deny a Marine Safety Unit Baton Rouge, U.S. under authority in 33 U.S.C. 1231. The
GTMCPA to an IRF is not subject to the Coast Guard; telephone 225–298–5400 Captain of the Port Sector New Orleans
appeal and hearing procedures of ext. 230, email Raymond.W.Wagner@ (COTP) has determined that potential
§ 199.10. uscg.mil. hazards associated with the fireworks
(iv) Exemption. The TRICARE IRF SUPPLEMENTARY INFORMATION: display on December 31, 2017 will be a
PPS methodology under this paragraph safety concern for any vessels or persons
I. Table of Abbreviations
does not apply to hospitals in States that in the vicinity of the launch area
are reimbursed by Medicare and AHP Above Head of Passes between mile marker (MM) 229.5 and
TRICARE under a waiver that exempts CFR Code of Federal Regulations MM 230.5 Above Head of Passes (AHP)
them from Medicare’s inpatient COTP Captain of the Port Sector New on the Lower Mississippi River. This
prospective payment system or the Orleans rule is needed to protect personnel,
DHS Department of Homeland Security vessels, and the marine environment in
TRICARE DRG-based payment system, FR Federal Register the navigable waters within the safety
to Children’s hospitals, or to VA NPRM Notice of proposed rulemaking zone during the fireworks display.
hospitals, respectively. § Section
* * * * * U.S.C. United States Code IV. Discussion of the Rule
Dated: December 22, 2017. The Coast Guard is establishing a
II. Background Information and
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temporary safety zone on the Lower
Aaron Siegel, Regulatory History Mississippi River for 1 hour and 30
Alternate OSD Federal Register Liaison The Coast Guard is issuing this minutes on the night of December 31,
Officer, Department of Defense. temporary rule without prior notice and 2017. The safety zone will include all
[FR Doc. 2017–28022 Filed 12–28–17; 8:45 am] opportunity to comment pursuant to navigable waters of the Lower
BILLING CODE 5001–06–P authority under section 4(a) of the Mississippi River in Baton Rouge, LA,
Administrative Procedure Act (APA) (5 from mile marker (MM) 229.5 to MM
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Document Created: 2018-01-03 13:16:33
Document Modified: 2018-01-03 13:16:33
| 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 | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This rule is effective March 5, 2018. | |
| Contact | Sharon Seelmeyer, Defense Health Agency (DHA), Medical Benefits and Reimbursement Branch, telephone (303) 676-3690. | |
| FR Citation | 82 FR 61678 | |
| RIN Number | 0720-AB47 | |
| CFR Associated | Claims; Dental Health; Health Care; Health Insurance; Individuals with Disabilities and Military Personnel |
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