59212 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

[FR Doc. 04–22175 Filed 10–1–04; 8:45 am] 

BILLING CODE 5001–06–C

DEPARTMENT OF DEFENSE

Office of the Secretary 

TRICARE; Civilian Health and Medical 

Program of the Uniformed Services 

(CHAMPUS); Fiscal Year 2005 

Diagnosis Related Group (DRG) 

Updates

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of DRG revised rates.

SUMMARY: This notice describes the 

changes made to the TRICARE DRGbased 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 Internet address for 

accessing the updated adjusted 

standardized amount and DRG relative 

weights to be used for FY 2005 under 

the TRICARE DRG-based payment 

system.

EFFECTIVE DATES: The rates, weights and 

Medicare PPS changes which affect the 

TRICARE DRG-based payment system 

contained in this notice are effective for 

admissions occurring on or after 

October 1, 2004.

ADDRESSES: TRICARE Management 

Activity (TMA), Medical Benefits and 

Reimbursement Systems, 16401 East 

Centretech Parkway, Aurora, CA 80011–

9066.

FOR FURTHER INFORMATION CONTACT:

Marty Maxey, Medical Benefits and 

Reimbursement Systems, TMA, 

telephone (303) 676–3627. 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 in 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 DRGVerDate jul<14>2003 19:26 Oct 01, 2004 Jkt 205001 PO 00000 Frm 00035 Fmt 4703 Sfmt 4703 E:\FR\FM\04OCN1.SGM 04OCN1

EN04OC04.049</GPH>
Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59213

based payment system is modeled on 

the Medicare PPS, and that, whenever 

practicable, the TRICARE system will 

follow the same rules that apply to the 

Medicare PPS. The Centers for Medicare 

and Medicaid Services (CMS) publishes 

these changes annually in the Federal 

Register and discusses in detail the 

impact of the changes. 

In addition, this notice updates the 

rates and weights in accordance with 

our previous final rules. The actual 

changes we are making, along with a 

description of their relationship to the 

Medicare PPS, are detailed below. 

I. Medicare PPS Changes Which Affect 

the TRICARE DRG-Based Payment 

System 

Following is a discussion of the 

changes CMS has made to the Medicare 

PPS that affect the TRICARE DRG-based 

payment system. 

A. DRG Classifications 

Under both the Medicare PPS and the 

TRICARE DRG-based payment system, 

cases are classified into the appropriate 

DRG by a Grouper program. The 

Grouper classifies each case into a DRG 

on the basis of the diagnosis and 

procedure codes and demographic 

information (that is, sex, age, and 

discharge status). The Grouper used for 

the TRICARE DRG-based payment 

system is the same as the current 

Medicare Grouper with 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 admission 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 MDC 15 occur before 

assignment of the PreMDC 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 PreMDC DRGs and 

to assign patients to PREMDC 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 PREMDC 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 DRG480 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 2005, CMS will implement 

classification changes, including 

surgical hierarchy changes. The 

TRICARE Grouper will incorporate all 

changes made to the Medicare Grouper, 

with the exception of the changes made 

to MDC 11, DRG 315 to accommodate 

the congressional mandate to cover the 

pancreatic inlet cell transplantation 

clinical trial for Medicare patients. 

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. In addition, TRICARE 

will duplicate all changes with regard to 

the wage index for specific hospitals 

that are redesignated by the Medicare 

Geographic Classification Review Board. 

C. Out-Commuting Wage Index 

Adjustment 

TRICARE is adopting the out 

commuting wage index adjustment used 

in the Medicare PPS due to the passage 

of the Medicare Modernization Act of 

2003 (MMA) P.L. 108–173. 

D. Updated Labor Market Areas 

TRICARE is adopting the new labor 

market areas used in the Medicare PPS. 

E. Equalization of Large Urban and 

Other Area Adjusted Standardized 

Amounts (ASAs) 

TRICARE is adopting CMS’

permanent equalization of the ASA rate 

for large urban and other areas due to 

the passage of the MMA of 2003. Under 

TRICARE, children’s hospitals are 

reimbursed under the TRICARE DRGbased payment system and are entitled 

to receive the children’s hospital 

differential. The differential amount is 

based on large urban and other areas. 

With the elimination of the other area 

ASA rate for hospitals subject to the 

TRICARE DRG-based payment, 

TRICARE is also eliminating the other 

area children’s hospital differential rate 

and adopting the large urban differential 

rate for all children’s hospitals. 

F. 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 ASA shall equal 71.1 

percent. For wage index values less than 

or equal to 1.0 the labor related portion 

of the ASA shall equal 62 percent. 

G. 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 DRGbased payment system according to 

CMS’s August 11, 2004, final rule. 

H. Outlier Payments 

Since TRICARE does not include 

capital payments in our DRG-based 

payments, we will use the fixed loss 

cost outlier threshold calculated by 

CMS for paying cost outliers in the 

absence of capital prospective 

payments. For FY 2005, the 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 FY 2005, in order for a case 

to qualify for cost outlier payments, the 

costs must exceed the TRICARE DRG 

based payment rate (wage adjusted) for 

the DRG plus the IDME payment plus 

$23,762 (wage adjusted). The marginal 

cost factor for cost outliers continues to 

be 80 percent. 

I. National Operating Standard Cost as 

a Share of Total Costs 

The FY 2005 TRICARE National 

Operating Standard Cost as a Share of 

Total Costs used in calculating the cost 

outlier threshold is 0.921. 

J. Indirect Medical Education (IDME) 

Adjustment 

Passage of the MMA of 2003 modified 

the formula multipliers to be used in the 

calculation of the indirect medical 

education IDME adjustment factor. 

Since the IDME formula used by 

TRICARE does not include 

disproportionate share hospitals (DSHs), 

the variables in the formula are different 

than Medicare’s, however; the 

percentage reduction that will be 

applied to Medicare’s, formula will also 

be applied to the TRICARE IDME 

formula. The new multiplier for the 

IDME adjustment factor for TRICARE for 

FY 2005 is 1.07. 

59214 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

K. Expansion of the Post Acute Care 

Transfer Policy 

For FY 2005 TRICARE is adopting 

CMS’ expanding post acute care transfer 

policy according to CMS’ final rule 

published August 11, 2004. 

II. Cost to Charge Ratio 

For FY 2005, the cost-to-charge ratio 

used for the TRICARE DRG-based 

payment system will be 0.4438, which 

is increased to 0.4508 to account for bad 

debts. This shall be used to calculate the 

adjusted standardized amounts and to 

calculate cost outlier payments, except 

for children’s hospitals. For children’s 

hospital cost outliers, the cost-to charge 

ratio used is 0.4887. 

III. Updated Rates and Weights 

The updated rates and weights are 

accessible through the Internet at http:/

/www.tricare.osd.mil under the 

sequential headings TRICARE Provider 

Information, Rates and Reimbursements, 

and DRB Information. Table 1 provides 

the ASA rates and Table 2 provides the 

DRG weights to be used under the 

TRICARE DRG-based payment system 

during FY 2005 and which is a result of 

the changes described above. The 

implementing regulations for the 

TRICARE/CHAMPUS DRG-based 

payment system are in 32 CFR Part 199.

Dated: September 28, 2004. 

L.M. Bynum, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense.

[FR Doc. 04–22169 Filed 10–1–04; 8:45 am] 

BILLING CODE 5001–04–M

DEPARTMENT OF DEFENSE

Office of the Secretary 

President’s Information Technology 

Advisory Committee (PITAC)

ACTION: Notice of meeting.

SUMMARY: PITAC’s Subcommittee on 

Cyber Security will provide a status 

update of its activities and present its 

draft findings and recommendations. 

PITAC will discuss the Subcommittee’s 

presentation and provide guidance for 

use in the completion of the report. In 

addition, an update of the activities of 

PITAC’s Subcommittee on 

Computational Science will be 

presented and discussed. Each of the 

sessions for the two Subcommittees will 

conclude with a public comment 

period. A small fraction of the meeting 

time will be allocated for other PITAC 

updates at the discretion of the co-hairs 

and designated Federal officer.

DATES: Wednesday, October 20, 2004, 10 

a.m. to 3 p.m.

ADDRESSES: National Science 

Foundation, Stafford II Building—Room 

555, 4201 Wilson Boulevard, Arlington, 

Virginia 22230.

SUPPLEMENTARY INFORMATION: Members 

of the public are invited to attend this 

meeting in-person at the National 

Science Foundation. Remote 

participation by teleconference and the 

Internet (through the Webex 

application) will also bed supported. 

Detailed information about this meeting, 

including the agenda and details 

concerning registration for in-person or 

remote participation, will be posted at 

PITAC’s Web site (http‘‘//

www.nitrd.gov/pitac) no later than 

October 6th. This information may also 

be obtained by calling 703–292–4873

FOR FURTHER INFORMATION CONTACT:

Alan Inouye at the National 

Coordination Office for Information 

Technology Research and Development 

at 703–292–4873 or by email at 

inouye@nitrd.gov.

Dated: September 28, 2004. 

L. M. Bynum, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense.

[FR Doc. 04–22173 Filed 10–01–04; 8:45 am] 

BILLING CODE 5001–06–M

DEPARTMENT OF DEFENSE

Office of the Secretary 

Defense Science Board

AGENCY: Department of Defense.

ACTION: Notice of Advisory Committee 

Meetings. 

SUMMARY: The Defense Science Board 

Task Force on Missile Defense, Phase IV 

(Information Policy) will meet in closed 

session on October 15, 2004 and 

December 9–10, 2004, at the Institute for 

Defense Analyses, 1801 N. Beauregard 

Street, Alexandria, VA. The Task Force 

will assess: the scope of the modeling 

and simulation effort; the 

appropriateness of the level of fidelity of 

classes of simulations; the impact of 

communications in the end-to-end 

models; the approaches to ensuring the 

validity of simulations for all uses, 

including exercises and wargaming 

done for training and operations 

concept development; and additional 

opportunities for modeling and 

simulation contribution to Ballistic 

Missile Defense Systems development 

and evaluation. 

The mission of the Defense Science 

Board is to advise the Secretary of 

Defense and the Under Secretary of 

Defense for Acquisition, Technology & 

Logistics on scientific and technical 

matters as they affect the perceived 

needs of the Department of Defense. At 

this meeting, the Defense Science Board 

Task Force will address the above 

mentioned issues in a system of systems 

context with particular emphasis on 

battle management systems, command 

and control systems, and the global 

sensor system. The Task Force will 

provide advice on the state of modeling 

and simulation for use in assessing 

overall performance of segments of the 

Ballistic Missile Defense Systems; e.g., 

ground-based midcourse intercept 

system, space-based interceptor system. 

In accordance with Section 10(d) of 

the Federal Advisory Committee Act, 

Pub. L. 92–463, as amended (5 U.S.C. 

App. II), it has been determined that this 

Defense Science Board Task Force 

meeting concerns matters listed in 5 

U.S.C. 552b(c)(1) and that, accordingly, 

the meeting will be closed to the public.

Dated: September 28, 2004. 

L.M. Bynum, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense.

[FR Doc. 04–22171 Filed 10–1–04; 8:45 am] 

BILLING CODE 5001–08–M

DEPARTMENT OF DEFENSE

Office of the Secretary 

Defense Science Board

AGENCY: Department of Defense.

ACTION: Notice of Advisory Committee 

Meeting. 

SUMMARY: The Defense Science Board 

Task Force on Mobility will meet in 

closed session on October 14–15, 2004; 

November 17–18, 2004; and December 

14–15, 2004, in Arlington, VA. This task 

Force will identify the acquisition 

issues in improving our strategic 

mobility capabilities. 

The mission of the Defense Science 

Board is to advise the Secretary of 

Defense and the Under Secretary of 

Defense for Acquisition, Technology & 

Logistics on scientific and technical 

matters as they affect the perceived 

needs of the Department of Defense. At 

this meeting, the Defense Science Board 

Task Force will review: The part 

transport plays in our present-day 

military capability—the technical 

strengths and weaknesses the 

operational opportunities and 

constraints; the possible advantage of 

better alignment of current assets with 

those in production and those to be 

delivered in the very near future; how