82_FR_9082 82 FR 9061 - TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) Updates and Notice of Termination of Future Federal Register Notices Regarding the DRG Update

82 FR 9061 - TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) Updates and Notice of Termination of Future Federal Register Notices Regarding the DRG Update

DEPARTMENT OF DEFENSE
Office of the Secretary

Federal Register Volume 82, Issue 21 (February 2, 2017)

Page Range9061-9063
FR Document2017-02202

This notice describes the changes made to the TRICARE DRG- based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS). It also provides the updated fixed loss cost outlier threshold, cost-to-charge ratios, and the data necessary to update the Fiscal Year (FY) 2017 rates. This notice also announces there will be no future Federal Register notices published for the annual DRG updates, as all information included in this notice will now be published on the Defense Health Agency's official Web site found at http://www.health.mil. As a result, FY 2017 is the last year for publication of the DRG notice.

Federal Register, Volume 82 Issue 21 (Thursday, February 2, 2017)
[Federal Register Volume 82, Number 21 (Thursday, February 2, 2017)]
[Notices]
[Pages 9061-9063]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-02202]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE; Civilian Health and Medical Program of the Uniformed 
Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) 
Updates and Notice of Termination of Future Federal Register Notices 
Regarding the DRG Update

AGENCY: Office of the Secretary, Department of Defense.

ACTION: Notice of DRG revised rates and notice to terminate future 
Federal Register publication of the DRG Updates.

-----------------------------------------------------------------------

SUMMARY: This notice describes the changes made to the TRICARE DRG-
based payment system in order to conform to changes made to the 
Medicare Prospective Payment System (PPS). It also provides the updated 
fixed loss cost outlier threshold, cost-to-charge ratios, and the data 
necessary to update the Fiscal Year (FY) 2017 rates. This notice also 
announces there will be no future Federal Register notices published 
for the annual DRG updates, as all information included in this notice 
will now be published on the Defense Health Agency's official Web site 
found at http://www.health.mil. As a result, FY 2017 is the last year 
for publication of the DRG notice.

DATES: The rates, weights, and Medicare PPS changes which affect the 
TRICARE DRG-based payment system contained in this notice are effective 
for discharges occurring on or after October 1, 2016.

ADDRESSES: Defense Health Agency (DHA), TRICARE, Medical Benefits and 
Reimbursement Office, 16401 East Centretech Parkway, Aurora, CO 80011-
9066.

FOR FURTHER INFORMATION CONTACT: Sharon L. Seelmeyer, Medical Benefits 
and Reimbursement Section, TRICARE, telephone (303) 676-3690. Questions 
regarding payment of specific claims under the TRICARE DRG-based 
payment system should be addressed to the appropriate contractor.

SUPPLEMENTARY INFORMATION: The final rule published on September 1, 
1987 (52 FR 32992) set forth the basic procedures used under the 
CHAMPUS DRG-based payment system. This was subsequently amended by 
final rules published August 31, 1988 (53 FR 33461); October 21, 1988 
(53 FR 41331); December 16, 1988 (53 FR 50515); May 30, 1990 (55 FR 
21863); October 22, 1990 (55 FR 42560); and September 10, 1998 (63 FR 
48439).
    An explicit tenet of these final rules, and one based on the 
statute authorizing the use of DRGs by TRICARE, is that the TRICARE 
DRG-based payment system is modeled on the Medicare PPS, and that, 
whenever practicable, the TRICARE system will follow the same rules 
that apply to the Medicare PPS. The Centers for Medicare & Medicaid 
Services (CMS) publishes these changes annually in the Federal Register 
and discusses in detail the impact of the changes.
    In addition, this notice updates the rates and weights in 
accordance with our previous final rules. The actual changes we are 
making, along with a description of their relationship to the Medicare 
PPS, are detailed in this notice. While the initial intent of this 
notice was to provide notification of the revised DRG weights and rates 
affecting the DRG based payment system, its relevance has been 
subsequently overshadowed by the public's online accessibility to the 
TRICARE manuals and reimbursement rates on the official Web site of the 
Military Health System (MHS) and the DHA (http://www.health.mil). As a 
result, the public has ready online access to all information published 
in this notice (e.g., DRG weights and rates, to include adjusted 
standardized amounts, wage indexes and Indirect Medical Education 
(IDME) factors, and changes to rate variables, etc.) in either the 
TRICARE

[[Page 9062]]

Reimbursement Manual or on the official Web site of the MHS and the DHA 
(http://www.health.mil). Because of the readily available online access 
to updated DRG rates and the ongoing administrative burden of 
publishing annual notices to the Federal Register, the publication of 
the annual notice is terminated and no further notices will be 
published. Again, updates to the DRG weights and rates, and all 
information in this notice, will be maintained on the Agency's official 
Web site. FY 2017 will be the last year of publishing the annual notice 
to the Federal Register.

I. Medicare PPS Changes Which Affected the TRICARE DRG-Based Payment 
System

    Following is a discussion of the changes CMS has made to the 
Medicare PPS that affect the TRICARE DRG-based payment system.

A. DRG Classifications

    Under both the Medicare PPS and the TRICARE DRG-based payment 
system, cases are classified into the appropriate DRG by a Grouper 
program. The Grouper classifies each case into a DRG on the basis of 
the diagnosis and procedure codes and demographic information (that is; 
sex, age, and discharge status). The Grouper used for the TRICARE DRG-
based payment system is the same as the current Medicare Grouper with 
two modifications. The TRICARE system has replaced Medicare DRG 435 
with two age-based DRGs (900 and 901), and has implemented thirty-four 
(34) neonatal DRGs in place of Medicare DRGs 385 through 390. For 
admissions occurring on or after October 1, 2001, DRG 435 has been 
replaced by DRG 523. The TRICARE system has replaced DRG 523 with the 
two age-based DRGs (900 and 901). For admissions occurring on or after 
October 1, 1995, the CHAMPUS Grouper hierarchy logic was changed so the 
age split (age <29 days) and assignments to Major Diagnostic Category 
(MDC) 15 occur before assignment of the pre-MDC DRGs. This resulted in 
all neonate tracheostomies and organ transplants to be grouped to MDC 
15 and not to DRGs 480-483 or 495. For admissions occurring on or after 
October 1, 1998, the CHAMPUS Grouper hierarchy logic was changed to 
move DRG 103 to the pre-MDC DRGs and to assign patients to pre-MDC DRGs 
480, 103, and 495 before assignment to MDC 15 DRGs and the neonatal 
DRGs. For admissions occurring on or after October 1, 2001, DRGs 512 
and 513 were added to the pre-MDC DRGs, between DRGs 480 and 103 in the 
TRICARE Grouper hierarchy logic. For admissions occurring on or after 
October 1, 2004, DRG 483 was deleted and replaced with DRGs 541 and 
542, splitting the assignment of cases on the basis of the performance 
of a major operating room procedure. The description for DRG 480 was 
changed to ``Liver Transplant and/or Intestinal Transplant,'' and the 
description for DRG 103 was changed to ``Heart/Heart Lung Transplant or 
Implant of Heart Assist System.'' For FY 2007, CMS implemented 
classification changes, including surgical hierarchy changes. The 
TRICARE Grouper incorporated all changes made to the Medicare Grouper, 
with the exception of the pre-surgical hierarchy changes, which will 
remain the same as FY 2006. For FY 2008, Medicare implemented their 
Medicare-Severity DRG (MS-DRG) based payment system. TRICARE, however, 
continued with the Centers for Medicare & Medicaid Services DRG-based 
(CMS-DRG) payment system for FY 2008. For FY 2009, the TRICARE/CHAMPUS 
DRG-based payment system shall be modeled on the MS-DRG system, with 
the following modifications.
    The MS-DRG system consolidated the 43 pediatric CMS DRGs that were 
defined based on age less than or equal to 17 into the most clinically 
similar MS-DRGs. In their Inpatient Prospective Payment System final 
rule for MS-DRGs, Medicare stated for their population these pediatric 
CMS DRGs contained a very low volume of Medicare patients. At the same 
time, Medicare encouraged private insurers and other non-Medicare 
payers to make refinements to MS-DRGs to better suit the needs of the 
patients they serve. Consequently, TRICARE finds it appropriate to 
retain the pediatric CMS-DRGs for our population. TRICARE is also 
retaining the TRICARE-specific DRGs for neonates and substance use.
    For FY09, TRICARE will use the MS-DRG v26.0 pre-MDC hierarchy, with 
the exception that MDC 15 is applied after DRG 011- 012 and before MDC 
24.
    For FY10, there are no additional or deleted DRGs.
    For FY 11, the added DRGs and deleted DRGs are the same as those 
included in CMS' final rule published on August 16, 2010 (75 FR 50041-
50677). That is, DRG 009 is deleted; DRGs 014 and 015 are being added.
    For FY 12, the added DRGs and deleted DRGs are the same as those 
included in CMS' final rule published on August 18, 2011 (76 FR 51476-
51846). That is, DRG 015 is deleted; DRGs 016 and 017 are being added.
    For FY 2013 there are no new, revised, or deleted DRGs.
    For FY 2014 there are no new, revised, or deleted DRGs.
    For FY 2015 the added, deleted, and revised DRGs are the same as 
those included in the CMS' final rule published on August 22, 2014 (79 
FR 49880) with the exception of endovascular cardiac valve replacement 
for which CMS added DRGs 266/267 and TRICARE added DRGs 317/318 because 
the TRICARE Grouper already has DRGs 266/267 assigned to a pediatric 
procedure.
    For FY2016 the added, deleted, and revised DRGs are the same as 
those included in the CMS' final rule published on August 17, 2015 (80 
FR 49326) with the exception of the cardiovascular procedure for which 
CMS added DRGs 268-272 and TRICARE added DRGs 275-279, because the 
TRICARE Grouper already has DRGs 268-272 assigned to a pediatric 
procedure. Effective October 1, 2015 (FY 2016), the ICD-10 coding 
system was implemented, replacing the ICD9 coding system.
    For FY17 the added, deleted, and revised DRGs are the same as those 
included in the CMS' final rule published on August 22, 2016 (81 FR 
56761). That is, DRG 230 is deleted; DRGs 229, 884, and 208 have been 
renamed.

B. Wage Index and Medicare Geographic Classification Review Board 
Guidelines

    TRICARE will continue to use the same wage index amounts used for 
the Medicare PPS. TRICARE will also duplicate all changes with regard 
to the wage index for specific hospitals that are redesignated by the 
Medicare Geographic Classification Review Board. In addition, TRICARE 
will continue to utilize the out-commuting wage index adjustment.

C. Revision of the Labor-Related Share of the Wage Index

    TRICARE is adopting CMS' percentage of labor related share of the 
standardized amount. For wage index values greater than 1.0, the labor 
related portion of the Adjusted Standardized Amount (ASA) shall 
continue to equal 69.6 percent. For wage index values less than or 
equal to 1.0 the labor related portion of the ASA shall continue to 
equal 62 percent.

D. Hospital Market Basket

    TRICARE will update the adjusted standardized amounts according to 
the final updated hospital market basket used for the Medicare PPS for 
all hospitals subject to the TRICARE DRG-based payment system according 
to

[[Page 9063]]

CMS' August 22, 2016 final rule. For FY17, the market basket is 2.7 
percent. Note: Medicare's FY17 market basket index adjusts according to 
hospitals' compliance with quality data and electronic health record 
meaningful use submissions. These adjustments do not apply to the 
TRICARE Program.

E. Outlier Payments

    Since TRICARE does not include capital payments in our DRG-based 
payments (TRICARE reimburses hospitals for their capital costs as 
reported annually to the contractor on a pass through basis), we will 
use the fixed loss cost outlier threshold calculated by CMS for paying 
cost outliers in the absence of capital prospective payments. For FY17, 
the TRICARE fixed loss cost outlier threshold is based on the sum of 
the applicable DRG-based payment rate plus any amounts payable for IDME 
plus a fixed dollar amount. Thus, for FY17, in order for a case to 
qualify for cost outlier payments, the costs must exceed the TRICARE 
DRG base payment rate (wage adjusted) for the DRG plus the IDME payment 
(if applicable) plus $21,710 (wage adjusted). The marginal cost factor 
for cost outliers continues to be 80 percent.

F. National Operating Standard Cost as a Share of Total Costs

    The FY17 TRICARE National Operating Standard Cost as a Share of 
Total Costs (NOSCASTC) used in calculating the cost outlier threshold 
is 0.921. TRICARE uses the same methodology as CMS for calculating the 
NOSCASTC; however, the variables are different because TRICARE uses 
national cost to charge ratios while CMS uses hospital specific cost to 
charge ratios.

G. IDME Adjustment

    Passage of the Medical Modernization Act of 2003 modified the 
formula multipliers to be used in the calculation of IDME adjustment 
factor. Since the IDME formula used by TRICARE does not include 
disproportionate share hospitals, the variables in the formula are 
different than Medicare's; however, the percentage reductions that will 
be applied to Medicare's formula will also be applied to the TRICARE 
IDME formula. The multiplier for the IDME adjustment factor for TRICARE 
for FY17 is 1.02.

H. Cost to Charge Ratio

    TRICARE uses a national Medicare cost-to-charge ratio (CCR). For 
FY17, the Medicare CCR used for the TRICARE DRG-based payment system 
for acute care hospitals and neonates will be 0.2541. This is based on 
a weighted average of the hospital-specific Medicare CCRs (weighted by 
the number of Medicare discharges) after excluding hospitals not 
subject to the TRICARE DRG system (Sole Community Hospitals, Indian 
Health Service hospitals, and hospitals in Maryland). The Medicare CCR 
is used to calculate cost outlier payments, except for children's 
hospitals. The Medicare CCR has been increased by a factor of 1.0065 to 
include an additional allowance for bad debt. The 1.0065 factor 
reflects the provisions of the Middle Class Tax Relief and Job Creation 
Act of 2012. For children's hospital cost outliers, the CCR used is 
0.2760.

I. Pricing of Claims

    The final rule published on May 21, 2014 (79 FR 29085) set forth 
all final claims with discharge dates of October 1, 2014, or later and 
reimbursed under the TRICARE DRG-Based payment system, are to be priced 
using the rules, weights and rates in effect on as of the date of 
discharge. Prior to this, all final claims were priced using the rules, 
weights, and rates in effective as of the date of admission.

J. Updated Rates and Weights

    The updated rates and weights are accessible through the Internet 
at http://www.health.mil/rates. The implementing regulations for the 
TRICARE/CHAMPUS DRG-based payment system are in 32 CFR part 199.

    Dated: January 30, 2017.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2017-02202 Filed 2-1-17; 8:45 am]
 BILLING CODE 5001-06-P



                                                                              Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Notices                                             9061

                                                  originally created to facilitate the White              from its inventory of record systems                  a result, FY 2017 is the last year for
                                                  House Presidential Appointee vetting                    subject to the Privacy Act of 1974 (5                 publication of the DRG notice.
                                                  process by assisting potential nominees                 U.S.C. 552a), as amended. The proposed                DATES: The rates, weights, and Medicare
                                                  as they completed the vetting                           deletion is not within the purview of                 PPS changes which affect the TRICARE
                                                  documents.                                              subsection (r) of the Privacy Act of 1974             DRG-based payment system contained
                                                    Based on a recent review of DGC 20,                   (5 U.S.C. 552a), as amended, which                    in this notice are effective for discharges
                                                  DoD Presidential Appointee Vetting                      requires the submission of a new or                   occurring on or after October 1, 2016.
                                                  File, it was determined that this system                altered system report.                                ADDRESSES: Defense Health Agency
                                                  of records is now appropriately covered                    Based on a recent review of DGC 20,                (DHA), TRICARE, Medical Benefits and
                                                  under and is maintained in accordance                   DoD Presidential Appointee Vetting                    Reimbursement Office, 16401 East
                                                  with the government-wide Office of                      File, it has been determined that the                 Centretech Parkway, Aurora, CO 80011–
                                                  Government Ethics system of records                     records are covered under and is                      9066.
                                                  notice OGE/GOVT–1, Executive Branch                     maintained in accordance with OGE/                    FOR FURTHER INFORMATION CONTACT:
                                                  Personnel Public Financial Disclosure                   GOVT–1, Executive Branch Personnel                    Sharon L. Seelmeyer, Medical Benefits
                                                  Reports and Other Name-Retrieved                        Public Financial Disclosure Reports and               and Reimbursement Section, TRICARE,
                                                  Ethics Program Records (December 9,                     Other Name-Retrieved Ethics Program                   telephone (303) 676–3690. Questions
                                                  2013, 78 FR 73863). Accordingly, DGC                    Records (December 9, 2013, 78 FR                      regarding payment of specific claims
                                                  20 is duplicative and can be deleted.                   73863). Therefore, DGC 20, DoD                        under the TRICARE DRG-based
                                                  DATES: Comments will be accepted on or                  Presidential Appointee Vetting File can               payment system should be addressed to
                                                  before March 6, 2017. This proposed                     be deleted.                                           the appropriate contractor.
                                                  action will be effective the date                         Dated: January 30, 2017.                            SUPPLEMENTARY INFORMATION: The final
                                                  following the end of the comment
                                                                                                          Aaron Siegel,                                         rule published on September 1, 1987 (52
                                                  period unless comments are received
                                                                                                          Alternate OSD Federal Register Liaison                FR 32992) set forth the basic procedures
                                                  which result in a contrary
                                                                                                          Officer, Department of Defense.                       used under the CHAMPUS DRG-based
                                                  determination.
                                                                                                                                                                payment system. This was subsequently
                                                  ADDRESSES: You may submit comments,                     SYSTEM NAME AND NUMBER:
                                                                                                                                                                amended by final rules published
                                                  identified by docket number and title,                    DoD Presidential Appointee Vetting                  August 31, 1988 (53 FR 33461); October
                                                  by any of the following methods:                        File, DGC 20.                                         21, 1988 (53 FR 41331); December 16,
                                                    * Federal Rulemaking Portal: http://                    HISTORY: December 1, 2000, 65 FR                    1988 (53 FR 50515); May 30, 1990 (55
                                                  www.regulations.gov.                                    75246.                                                FR 21863); October 22, 1990 (55 FR
                                                    Follow the instructions for submitting                [FR Doc. 2017–02224 Filed 2–1–17; 8:45 am]            42560); and September 10, 1998 (63 FR
                                                  comments.                                               BILLING CODE 5001–06–P                                48439).
                                                    * Mail: Department of Defense, Office                                                                          An explicit tenet of these final rules,
                                                  of the Deputy Chief Management                                                                                and one based on the statute authorizing
                                                  Officer, Directorate for Oversight and                  DEPARTMENT OF DEFENSE                                 the use of DRGs by TRICARE, is that the
                                                  Compliance, 4800 Mark Center Drive,                                                                           TRICARE DRG-based payment system is
                                                  Mailbox #24, Suite 08D09B, Alexandria,                  Office of the Secretary                               modeled on the Medicare PPS, and that,
                                                  VA 22350–1700.                                                                                                whenever practicable, the TRICARE
                                                    Instructions: All submissions received                TRICARE; Civilian Health and Medical
                                                                                                                                                                system will follow the same rules that
                                                  must include the agency name and                        Program of the Uniformed Services
                                                                                                                                                                apply to the Medicare PPS. The Centers
                                                  docket number for this Federal Register                 (CHAMPUS); Fiscal Year 2017
                                                                                                                                                                for Medicare & Medicaid Services (CMS)
                                                  document. The general policy for                        Diagnosis Related Group (DRG)
                                                                                                                                                                publishes these changes annually in the
                                                  comments and other submissions from                     Updates and Notice of Termination of
                                                                                                                                                                Federal Register and discusses in detail
                                                  members of the public is to make these                  Future Federal Register Notices
                                                                                                                                                                the impact of the changes.
                                                  submissions available for public                        Regarding the DRG Update                                 In addition, this notice updates the
                                                  viewing on the Internet at http://                                                                            rates and weights in accordance with
                                                                                                          AGENCY:  Office of the Secretary,
                                                  www.regulations.gov as they are                                                                               our previous final rules. The actual
                                                                                                          Department of Defense.
                                                  received without change, including any                                                                        changes we are making, along with a
                                                  personal identifiers or contact                         ACTION: Notice of DRG revised rates and
                                                                                                          notice to terminate future Federal                    description of their relationship to the
                                                  information.                                                                                                  Medicare PPS, are detailed in this
                                                                                                          Register publication of the DRG
                                                  FOR FURTHER INFORMATION CONTACT: Mrs.                   Updates.                                              notice. While the initial intent of this
                                                  Luz D. Ortiz, Chief, Records, Privacy                                                                         notice was to provide notification of the
                                                  and Declassification Division (RPDD),                   SUMMARY:    This notice describes the                 revised DRG weights and rates affecting
                                                  1155 Defense Pentagon, Washington, DC                   changes made to the TRICARE DRG-                      the DRG based payment system, its
                                                  20301–1155, or by phone at (571) 372–                   based payment system in order to                      relevance has been subsequently
                                                  0478.                                                   conform to changes made to the                        overshadowed by the public’s online
                                                  SUPPLEMENTARY INFORMATION: The Office                   Medicare Prospective Payment System                   accessibility to the TRICARE manuals
                                                  of the Secretary systems of records                     (PPS). It also provides the updated fixed             and reimbursement rates on the official
                                                  notices subject to the Privacy Act of                   loss cost outlier threshold, cost-to-                 Web site of the Military Health System
                                                  1974 (5 U.S.C. 552a), as amended, have                  charge ratios, and the data necessary to              (MHS) and the DHA (http://
                                                  been published in the Federal Register                  update the Fiscal Year (FY) 2017 rates.               www.health.mil). As a result, the public
mstockstill on DSK3G9T082PROD with NOTICES




                                                  and are available from the address in                   This notice also announces there will be              has ready online access to all
                                                  FOR FURTHER INFORMATION CONTACT or at                   no future Federal Register notices                    information published in this notice
                                                  the Defense Privacy, Civil Liberties and                published for the annual DRG updates,                 (e.g., DRG weights and rates, to include
                                                  Transparency Division Web site at                       as all information included in this                   adjusted standardized amounts, wage
                                                  http://dpcld.defense.gov/.                              notice will now be published on the                   indexes and Indirect Medical Education
                                                    The Office of the Secretary proposes                  Defense Health Agency’s official Web                  (IDME) factors, and changes to rate
                                                  to delete one system of records notice                  site found at http://www.health.mil. As               variables, etc.) in either the TRICARE


                                             VerDate Sep<11>2014   16:31 Feb 01, 2017   Jkt 241001   PO 00000   Frm 00007   Fmt 4703   Sfmt 4703   E:\FR\FM\02FEN1.SGM   02FEN1


                                                  9062                        Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Notices

                                                  Reimbursement Manual or on the                          admissions occurring on or after                        For FY 2014 there are no new,
                                                  official Web site of the MHS and the                    October 1, 2004, DRG 483 was deleted                  revised, or deleted DRGs.
                                                  DHA (http://www.health.mil). Because                    and replaced with DRGs 541 and 542,                     For FY 2015 the added, deleted, and
                                                  of the readily available online access to               splitting the assignment of cases on the              revised DRGs are the same as those
                                                  updated DRG rates and the ongoing                       basis of the performance of a major                   included in the CMS’ final rule
                                                  administrative burden of publishing                     operating room procedure. The                         published on August 22, 2014 (79 FR
                                                  annual notices to the Federal Register,                 description for DRG 480 was changed to                49880) with the exception of
                                                  the publication of the annual notice is                 ‘‘Liver Transplant and/or Intestinal                  endovascular cardiac valve replacement
                                                  terminated and no further notices will                  Transplant,’’ and the description for                 for which CMS added DRGs 266/267
                                                  be published. Again, updates to the DRG                 DRG 103 was changed to ‘‘Heart/Heart                  and TRICARE added DRGs 317/318
                                                  weights and rates, and all information in               Lung Transplant or Implant of Heart                   because the TRICARE Grouper already
                                                  this notice, will be maintained on the                  Assist System.’’ For FY 2007, CMS                     has DRGs 266/267 assigned to a
                                                  Agency’s official Web site. FY 2017 will                implemented classification changes,                   pediatric procedure.
                                                  be the last year of publishing the annual               including surgical hierarchy changes.                   For FY2016 the added, deleted, and
                                                  notice to the Federal Register.                         The TRICARE Grouper incorporated all                  revised DRGs are the same as those
                                                                                                          changes made to the Medicare Grouper,                 included in the CMS’ final rule
                                                  I. Medicare PPS Changes Which
                                                                                                          with the exception of the pre-surgical                published on August 17, 2015 (80 FR
                                                  Affected the TRICARE DRG-Based
                                                                                                          hierarchy changes, which will remain                  49326) with the exception of the
                                                  Payment System
                                                                                                          the same as FY 2006. For FY 2008,                     cardiovascular procedure for which
                                                     Following is a discussion of the                     Medicare implemented their Medicare-                  CMS added DRGs 268–272 and
                                                  changes CMS has made to the Medicare                    Severity DRG (MS–DRG) based payment                   TRICARE added DRGs 275–279, because
                                                  PPS that affect the TRICARE DRG-based                   system. TRICARE, however, continued                   the TRICARE Grouper already has DRGs
                                                  payment system.                                         with the Centers for Medicare &                       268–272 assigned to a pediatric
                                                  A. DRG Classifications                                  Medicaid Services DRG-based (CMS–                     procedure. Effective October 1, 2015 (FY
                                                                                                          DRG) payment system for FY 2008. For                  2016), the ICD–10 coding system was
                                                     Under both the Medicare PPS and the                                                                        implemented, replacing the ICD9 coding
                                                  TRICARE DRG-based payment system,                       FY 2009, the TRICARE/CHAMPUS
                                                                                                          DRG-based payment system shall be                     system.
                                                  cases are classified into the appropriate                                                                       For FY17 the added, deleted, and
                                                  DRG by a Grouper program. The                           modeled on the MS–DRG system, with
                                                                                                          the following modifications.                          revised DRGs are the same as those
                                                  Grouper classifies each case into a DRG                                                                       included in the CMS’ final rule
                                                  on the basis of the diagnosis and                          The MS–DRG system consolidated the
                                                                                                          43 pediatric CMS DRGs that were                       published on August 22, 2016 (81 FR
                                                  procedure codes and demographic                                                                               56761). That is, DRG 230 is deleted;
                                                  information (that is; sex, age, and                     defined based on age less than or equal
                                                                                                          to 17 into the most clinically similar                DRGs 229, 884, and 208 have been
                                                  discharge status). The Grouper used for                                                                       renamed.
                                                  the TRICARE DRG-based payment                           MS–DRGs. In their Inpatient Prospective
                                                  system is the same as the current                       Payment System final rule for MS–                     B. Wage Index and Medicare
                                                  Medicare Grouper with two                               DRGs, Medicare stated for their                       Geographic Classification Review Board
                                                  modifications. The TRICARE system has                   population these pediatric CMS DRGs                   Guidelines
                                                  replaced Medicare DRG 435 with two                      contained a very low volume of
                                                                                                                                                                  TRICARE will continue to use the
                                                  age-based DRGs (900 and 901), and has                   Medicare patients. At the same time,
                                                                                                                                                                same wage index amounts used for the
                                                  implemented thirty-four (34) neonatal                   Medicare encouraged private insurers
                                                                                                                                                                Medicare PPS. TRICARE will also
                                                  DRGs in place of Medicare DRGs 385                      and other non-Medicare payers to make
                                                                                                                                                                duplicate all changes with regard to the
                                                  through 390. For admissions occurring                   refinements to MS–DRGs to better suit
                                                                                                                                                                wage index for specific hospitals that
                                                  on or after October 1, 2001, DRG 435 has                the needs of the patients they serve.
                                                                                                                                                                are redesignated by the Medicare
                                                  been replaced by DRG 523. The                           Consequently, TRICARE finds it
                                                                                                                                                                Geographic Classification Review Board.
                                                  TRICARE system has replaced DRG 523                     appropriate to retain the pediatric CMS–
                                                                                                                                                                In addition, TRICARE will continue to
                                                  with the two age-based DRGs (900 and                    DRGs for our population. TRICARE is
                                                                                                                                                                utilize the out-commuting wage index
                                                  901). For admissions occurring on or                    also retaining the TRICARE-specific
                                                                                                                                                                adjustment.
                                                  after October 1, 1995, the CHAMPUS                      DRGs for neonates and substance use.
                                                  Grouper hierarchy logic was changed so                     For FY09, TRICARE will use the MS–                 C. Revision of the Labor-Related Share
                                                  the age split (age <29 days) and                        DRG v26.0 pre-MDC hierarchy, with the                 of the Wage Index
                                                  assignments to Major Diagnostic                         exception that MDC 15 is applied after                  TRICARE is adopting CMS’
                                                  Category (MDC) 15 occur before                          DRG 011– 012 and before MDC 24.                       percentage of labor related share of the
                                                  assignment of the pre-MDC DRGs. This                       For FY10, there are no additional or               standardized amount. For wage index
                                                  resulted in all neonate tracheostomies                  deleted DRGs.                                         values greater than 1.0, the labor related
                                                  and organ transplants to be grouped to                     For FY 11, the added DRGs and                      portion of the Adjusted Standardized
                                                  MDC 15 and not to DRGs 480–483 or                       deleted DRGs are the same as those                    Amount (ASA) shall continue to equal
                                                  495. For admissions occurring on or                     included in CMS’ final rule published                 69.6 percent. For wage index values less
                                                  after October 1, 1998, the CHAMPUS                      on August 16, 2010 (75 FR 50041–                      than or equal to 1.0 the labor related
                                                  Grouper hierarchy logic was changed to                  50677). That is, DRG 009 is deleted;                  portion of the ASA shall continue to
                                                  move DRG 103 to the pre-MDC DRGs                        DRGs 014 and 015 are being added.                     equal 62 percent.
                                                  and to assign patients to pre-MDC DRGs                     For FY 12, the added DRGs and
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                                                  480, 103, and 495 before assignment to                  deleted DRGs are the same as those                    D. Hospital Market Basket
                                                  MDC 15 DRGs and the neonatal DRGs.                      included in CMS’ final rule published                    TRICARE will update the adjusted
                                                  For admissions occurring on or after                    on August 18, 2011 (76 FR 51476–                      standardized amounts according to the
                                                  October 1, 2001, DRGs 512 and 513                       51846). That is, DRG 015 is deleted;                  final updated hospital market basket
                                                  were added to the pre-MDC DRGs,                         DRGs 016 and 017 are being added.                     used for the Medicare PPS for all
                                                  between DRGs 480 and 103 in the                            For FY 2013 there are no new,                      hospitals subject to the TRICARE DRG-
                                                  TRICARE Grouper hierarchy logic. For                    revised, or deleted DRGs.                             based payment system according to


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                                                                              Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Notices                                            9063

                                                  CMS’ August 22, 2016 final rule. For                    care hospitals and neonates will be                      Comments Due: 5 p.m. ET 2/16/17.
                                                  FY17, the market basket is 2.7 percent.                 0.2541. This is based on a weighted                      Docket Numbers: EC17–69–000.
                                                  Note: Medicare’s FY17 market basket                     average of the hospital-specific                         Applicants: American Electric Power
                                                  index adjusts according to hospitals’                   Medicare CCRs (weighted by the                        Service Corporation, Indiana Michigan
                                                  compliance with quality data and                        number of Medicare discharges) after                  Power Company.
                                                  electronic health record meaningful use                 excluding hospitals not subject to the                   Description: Application for
                                                  submissions. These adjustments do not                   TRICARE DRG system (Sole Community                    Authorization under Section 203 of the
                                                  apply to the TRICARE Program.                           Hospitals, Indian Health Service                      FPA of American Electric Power Service
                                                                                                          hospitals, and hospitals in Maryland).                Corporation, et al.
                                                  E. Outlier Payments
                                                                                                          The Medicare CCR is used to calculate                    Filed Date: 1/26/17.
                                                     Since TRICARE does not include                       cost outlier payments, except for                        Accession Number: 20170126–5208.
                                                  capital payments in our DRG-based                       children’s hospitals. The Medicare CCR                   Comments Due: 5 p.m. ET 2/16/17.
                                                  payments (TRICARE reimburses                            has been increased by a factor of 1.0065                 Take notice that the Commission
                                                  hospitals for their capital costs as                    to include an additional allowance for                received the following electric rate
                                                  reported annually to the contractor on a                bad debt. The 1.0065 factor reflects the              filings:
                                                  pass through basis), we will use the                    provisions of the Middle Class Tax
                                                  fixed loss cost outlier threshold                                                                                Docket Numbers: ER12–1316–003;
                                                                                                          Relief and Job Creation Act of 2012. For
                                                  calculated by CMS for paying cost                                                                             ER11–2753–004; ER13–413–004; ER11–
                                                                                                          children’s hospital cost outliers, the
                                                  outliers in the absence of capital                                                                            1933–006; ER12–1329–004; ER16–1888–
                                                                                                          CCR used is 0.2760.
                                                  prospective payments. For FY17, the                                                                           003.
                                                  TRICARE fixed loss cost outlier                         I. Pricing of Claims                                     Applicants: Silver State Solar Power
                                                  threshold is based on the sum of the                       The final rule published on May 21,                North, LLC, Cedar Point Wind, LLC,
                                                  applicable DRG-based payment rate plus                  2014 (79 FR 29085) set forth all final                USG Oregon LLC, Green Mountain
                                                  any amounts payable for IDME plus a                     claims with discharge dates of October                Power Corporation, Wildcat Wind Farm
                                                  fixed dollar amount. Thus, for FY17, in                 1, 2014, or later and reimbursed under                I, LLC, Tidal Energy Marketing Inc.
                                                  order for a case to qualify for cost outlier            the TRICARE DRG-Based payment                            Description: Notice of Change in
                                                  payments, the costs must exceed the                     system, are to be priced using the rules,             Status of Silver State Solar Power North,
                                                  TRICARE DRG base payment rate (wage                     weights and rates in effect on as of the              LLC, et al.
                                                  adjusted) for the DRG plus the IDME                     date of discharge. Prior to this, all final              Filed Date: 1/26/17.
                                                  payment (if applicable) plus $21,710                    claims were priced using the rules,                      Accession Number: 20170126–5207.
                                                  (wage adjusted). The marginal cost                      weights, and rates in effective as of the                Comments Due: 5 p.m. ET 2/16/17.
                                                  factor for cost outliers continues to be                date of admission.                                       Docket Numbers: ER15–535–003.
                                                  80 percent.                                                                                                      Applicants: Nevada Power Company.
                                                                                                          J. Updated Rates and Weights                             Description: Compliance filing: OATT
                                                  F. National Operating Standard Cost as                     The updated rates and weights are                  Order No. 676–H Compliance Filing
                                                  a Share of Total Costs                                  accessible through the Internet at http://            01.25.17 to be effective 2/1/2017.
                                                    The FY17 TRICARE National                             www.health.mil/rates. The                                Filed Date: 1/26/17.
                                                  Operating Standard Cost as a Share of                   implementing regulations for the                         Accession Number: 20170126–5095.
                                                  Total Costs (NOSCASTC) used in                          TRICARE/CHAMPUS DRG-based                                Comments Due: 5 p.m. ET 2/16/17.
                                                  calculating the cost outlier threshold is               payment system are in 32 CFR part 199.                   Docket Numbers: ER17–626–001.
                                                  0.921. TRICARE uses the same                              Dated: January 30, 2017.                               Applicants: Long Beach Peakers LLC.
                                                  methodology as CMS for calculating the                  Aaron Siegel,                                            Description: Tariff Amendment:
                                                  NOSCASTC; however, the variables are                                                                          Amendment to Tariff Revision Filing to
                                                                                                          Alternate OSD Federal Register Liaison
                                                  different because TRICARE uses                          Officer, Department of Defense.                       be effective 12/23/2016.
                                                  national cost to charge ratios while CMS                                                                         Filed Date: 1/26/17.
                                                                                                          [FR Doc. 2017–02202 Filed 2–1–17; 8:45 am]
                                                  uses hospital specific cost to charge                                                                            Accession Number: 20170126–5115.
                                                                                                          BILLING CODE 5001–06–P
                                                  ratios.                                                                                                          Comments Due: 5 p.m. ET 2/16/17.
                                                  G. IDME Adjustment                                                                                               Docket Numbers: ER17–856–000.
                                                     Passage of the Medical Modernization                 DEPARTMENT OF ENERGY                                     Applicants: PJM Interconnection,
                                                  Act of 2003 modified the formula                                                                              L.L.C., Rockland Electric Company.
                                                  multipliers to be used in the calculation               Federal Energy Regulatory                                Description: § 205(d) Rate Filing:
                                                  of IDME adjustment factor. Since the                    Commission                                            RECO Request for Increase of Annual
                                                  IDME formula used by TRICARE does                                                                             Transmission Revenue Requirement to
                                                                                                          Combined Notice of Filings #1                         be effective 4/3/2017.
                                                  not include disproportionate share
                                                  hospitals, the variables in the formula                    Take notice that the Commission                       Filed Date: 1/26/17.
                                                  are different than Medicare’s; however,                 received the following electric corporate                Accession Number: 20170126–5152.
                                                  the percentage reductions that will be                  filings:                                                 Comments Due: 5 p.m. ET 2/16/17.
                                                  applied to Medicare’s formula will also                    Docket Numbers: EC17–68–000.                          Docket Numbers: ER17–857–000.
                                                  be applied to the TRICARE IDME                             Applicants: AIA Energy North                          Applicants: ISO New England Inc.,
                                                  formula. The multiplier for the IDME                    America LLC, Duquesne Light                           New England Power Pool Participants
                                                                                                                                                                Committee.
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                                                  adjustment factor for TRICARE for FY17                  Company, Duquesne Power, LLC.
                                                  is 1.02.                                                   Description: Application for                          Description: § 205(d) Rate Filing:
                                                                                                          Authorization under Section 203 of the                Revisions to Attach. K Related to Public
                                                  H. Cost to Charge Ratio                                                                                       Policy Trans. Study Process Timeline to
                                                                                                          FPA and Request for Expedited Action,
                                                    TRICARE uses a national Medicare                      et al. of AIA Energy North America LLC,               be effective 3/27/2017.
                                                  cost-to-charge ratio (CCR). For FY17, the               et al.                                                   Filed Date: 1/26/17.
                                                  Medicare CCR used for the TRICARE                          Filed Date: 1/26/17.                                  Accession Number: 20170126–5166.
                                                  DRG-based payment system for acute                         Accession Number: 20170126–5201.                      Comments Due: 5 p.m. ET 2/16/17.


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Document Created: 2017-02-02 00:55:18
Document Modified: 2017-02-02 00:55:18
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of DRG revised rates and notice to terminate future Federal Register publication of the DRG Updates.
DatesThe rates, weights, and Medicare PPS changes which affect the TRICARE DRG-based payment system contained in this notice are effective for discharges occurring on or after October 1, 2016.
ContactSharon L. Seelmeyer, Medical Benefits and Reimbursement Section, TRICARE, telephone (303) 676-3690. Questions regarding payment of specific claims under the TRICARE DRG-based
FR Citation82 FR 9061 

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