Federal Register / Vol. 62, No. 210 / Thursday, October 30, 1997 / Notices 58711

engineering technical assistance, support and

test equipment, training, publications

contractor engineering technical and logistics

support services, and other related elements

of logistics support.

(iv) Military Department: Navy (SCP,

Amendment 6).

(v) Sales Commission, Fee, etc., Paid,

Offered, or Agreed to be Paid: None.

(vi) Sensitivity of Technology Contained in

the Defense Article or Defense Services

Proposed to be Sold: See Annex attached.

(vii) Date Report Delivered to Congress:

July 24, 1997.

Policy Justification

Taipei Economic and Cultural Representative

Office (TECRO) in the United States—AH–

1W Super Cobra Helicopters

The Taipei Economic and Cultural

Representative Office (TECRO) in the United

States has requested the purchase of 21 AH–

1W Super Cobra helicopters, spare and repair

parts, engineering technical assistance,

support and test equipment, training,

publications, contractor engineering

technical and logistics support services, and

other related elements of logistics support.

The estimated cost is $479 million.

This sale is consistent with United States

law and policy, as expressed in Public Law

96–8.

The recipient will use these helicopters

primarily to conduct military exercises for

purpose of self-defense and military

preparedness. The recipient will have no

difficulty absorbing these additional

helicopters into its armed forces.

The sale of this equipment and support

will not affect the basic military balance in

the region.

The prime contractor will be the Bell

Helicopter, Fort Worth, Texas. There are no

offset agreements proposed to be entered into

in connection with this potential sale.

Implementation of this sale will not require

the assignment of any additional U.S.

Government personnel or contractor

representatives in-country.

There will be no adverse impact on U.S.

defense readiness as a result of this sale.

Transmittal No. 97–26

Notice of Proposed Issuance of Letter of Offer

Pursuant to Section 36(b)(1) of the Arms

Export Control Act

Annex—Item No. vi

(vi) Sensitivity of Technology:

1. The AH–1W Super Cobra Helicopter and

associated systems, including operations

manuals and maintenance publications, are

unclassified. The following components are

classified:

a. The AN/APR–44(V)1 radar warning

system hardware is unclassified. After

software (parametric threat data) is

incorporated into the system, it is then

classified Secret. Publications and personnel

training related to this equipment are

classified Confidential.

b. The AN/APR–39 Radar Signal Detecting

Set is Confidential when it is loaded and

classified threat warning parameters.

2. If a technologically advanced adversary

were to obtain knowledge of the specific

hardware in this sale, the information could

be used to develop countermeasures which

might reduce weapon system effectiveness or

be used in the development of a system with

similar or advanced capabilities.

3. A determination has been made that the

recipient country can provide substantially

the same degree of protection for the

sensitive technology being released as the

U.S. Government. This sale is necessary in

furtherance of the U.S. foreign policy and

national security objectives outlined in the

Policy Justification.

[FR Doc. 97–28689 Filed 10–29–97; 8:45 am]

BILLING CODE 5000–04–M

DEPARTMENT OF DEFENSE

Office of the Secretary

TRICARE/CHAMPUS; FY98 DRG

Updates

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of DRG revised rates.

SUMMARY: This notice provides the

updated adjusted standardized amounts,

DRG relative weights, outlier thresholds,

and beneficiary cost-share per diem

rates to be used for FY98 under the

TRICARE/CHAMPUS DRG-based

payment system. It also describes the

changes made to the TRICARE/

CHAMPUS DRG-based payment system

in order to conform to changes made to

the Medicare Prospective Payment

System (PPS).

EFFECTIVE DATES: The rates and weights

and Medicare PPS changes which affect

the TRICARE/CHAMPUS DRG-based

payment system contained in this notice

are effective for admissions occurring on

or after October 1, 1997.

ADDRESSES: TRICARE Support Office

(TSO), Program Development Branch,

Aurora, CO 80045–6900.

FOR FURTHER INFORMATION CONTACT:

Marty Maxey, Program Development

Branch, TSO, telephone (303) 361–1227.

To obtain copies of this document, see

the ADDRESSES section above. Questions

regarding payment of specific claims

under the TRICARE/CHAMPUS DRGBased payment system should be

addressed to the appropriate TRICARE/

CHAMPUS contractor.

SUPPLEMENTARY INFORMATION: The final

rule published on September 1, 1987 (52

FR 32992) set forth the basic procedures

used under the TRICARE/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), and October 22,

1990 (55 FR 42560).

An explicit tenet of these final rules,

and one based on the statute authorizing

the use of DRGs by TRICARE/

CHAMPUS, is that the TRICARE/

CHAMPUS DRG-based payment system

is modeled on the Medicare PPS, and

that, whenever practicable, the

TRICARE/CHAMPUS system will

follow the same rules that apply to the

Medicare PPS. The Health Care

Financing Administration (HCFA)

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/CHAMPUS DRG-Based

Payment System

Following is a discussion of the

changes HCFA has made to the

Medicare PPS which affect the

TRICARE/CHAMPUS DRG-based

payment system

A. DRG Classifications

Under both the Medicare PPS and the

TRICARE/CHAMPUS 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/CHAMPUS DRGbased payment system is the same as the

current Medicare Grouper with two

modifications. The TRICARE/

CHAMPUS system has replaced

Medicare DRG 435 with two age-based

DRGs (900 and 901), and we have

implemented thirty-four (34) neonatal

DRGs in place of Medicare DRGs 385

through 390. Grouping for all other

DRGs under the TRICARE/CHAMPUS

system is identical to the Medicare PPS.

For FY98, HCFA will implement a

number of classification changes,

including surgical hierarchy changes,

revisions to the Major Problem

Diagnosis List, and refinements to the

Complications and Comorbidities (CC)

List. In addition, DRGs 214 and 215

(Back and Neck Procedures) will be

replaced with five new DRGs (DRGs

496–500) and DRGs 221 and 222 will be

replaced with three new DRGs (DRGs

501–503). The TRICARE/CHAMPUS

Grouper will incorporate all changes

made to the Medicare Grouper.
58712 Federal Register / Vol. 62, No. 210 / Thursday, October 30, 1997 / Notices

B. Wage Index and Medicare

Geographic Classification Review Board

Guidelines

TRICARE/CHAMPUS will continue to

use the same wage index amounts used

for the Medicare PPS, including the

floor on area wage index. Beginning

with FY98, the wage index for an urban

hospital may not be lower than the

Statewide area rural wage index. In

addition, TRICARE/CHAMPUS will

duplicate all changes with regard to the

wage index for specific hospitals which

are redesignated by the Medicare

Geographic Classification Review Board.

C. Hospital Market Basket

As outlined in HCFA’s August 29,

1997, final rule, the applicable

percentage change in the standardized

amounts have been frozen at the FY97

levels resulting in a 0 percent increase

for FY98.

In connection with the revisions to

the hospital market basket, HCFA

reestimated the labor-related share of

the standardized amounts. Accordingly,

effective with TRICARE/CHAMPUS

discharges occurring on or after October

1, 1997, the labor-related share of the

standardized amount will be 71.1

percent and the nonlabor-related

portion will be 28.9 percent.

D. Changes to Outlier Payments

In accordance with HCFA’s August

29, 1997, final rule, we will eliminate

payment for day outliers, referred to as

long stay outliers under TRICARE/

CHAMPUS, for all cases except

neonates and children’s hospitals.

Since TRICARE/CHAMPUS does not

include capital payments in our DRGbased payments, we will use the

thresholds calculated by HCFA for

paying cost outliers in the absence of

capital prospective payments.

In addition, effective with discharges

occurring on or after October 1, 1997, in

determining the additional payment for

IDME, the IDME adjustment factor will

only be applied to the base DRG

payment, not the sum of the base DRG

payment and any cost outlier payments.

The fixed loss cost outlier threshold will

be based on the sum of DRG payments

and IDME payments for purposes of

comparing costs to payment. In

determining whether a case meets the

cost outlier threshold, we will not

standardize the costs of the case to

account for IDME.

For FY98, 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 FY98, in

order for a case to qualify for cost outlier

payments, the costs must exceed the

TRICARE/CHAMPUS DRG base

payment rate for the DRG plus the IDME

payment plus $10,180. The marginal

cost factor for cost outliers continues to

be 80 percent. The above changes to the

cost outlier payments will not be

adopted for children’s hospitals or

neonates at this time.

E. Changes to Indirect Medical

Education (IDME) Adjustment

We will adopt Medicare’s PPS

changes to revise the IDME formula to

gradually reduce the current level of

IDME adjustment over the next several

years. Since the IDME formula used by

TRICARE/CHAMPUS does not include

disproportionate share hospitals (DSHs),

the variables in the formula are different

than Medicare’s, however, the

percentage reductions that will be

applied to Medicare’s formula will also

be applied to the TRICARE/CHAMPUS

IDME formula. We will also adopt

Medicare’s PPS changes as they pertain

to the counting and reporting of

residents and beds on the Medicare cost

reports for purposes of reimbursing

hospitals for the TRICARE/CHAMPUS

share of IDME costs.

F. Graduate Medical Education

We will adopt Medicare’s PPS

changes as they pertain to the counting

and reporting of residents on the

Medicare cost reports for purposes of

reimbursing hospitals for the TRICARE/

CHAMPUS share of graduate medical

education costs.

G. Capital-Related Costs

TRICARE/CHAMPUS reimburses

hospitals for our share of hospitals’

capital costs on a pass through basis. As

provided for in our previous final rules,

these annual payments are subject to

any reductions which are required for

the Medicare PPS. Accordingly, for days

of care occurring on or after October 1,

1997, through September 30, 2003, a

reduction of 17.68 percent will be

applied to all capital payments.

H. Blood Clotting Factor

We will reinstate the add-on payment

for the costs of administering blood

clotting factor provided to beneficiaries

who have hemophilia and who are

hospital inpatients for discharges

occurring on or after October 1, 1997.

The new payment levels which

TRICARE/CHAMPUS will use are:

Factor VIII

(antihemophilic factorhuman).

$0.76 per unit.

Factor VIII

(antihemophilic factorrecombinant).

1.00 per unit.

Factor IX (complex) .......... 0.32 per unit

Other hemophilia clotting

factors (e.g., anti-inhibitors).

1.10 per unit.

I. Hospitals Excluded From the

Prospective Payment System

TRICARE/CHAMPUS will adopt the

changes outlined in HCFA’s August 29,

1997, final rule as they apply to

hospitals and units excluded from the

Medicare PPS.

II. Cost-to-Charge Ratio

For FY98, the cost-to-charge ratio

used for the TRICARE/CHAMPUS DRGbased payment system will be 0.5436

which is increased to 0.5536 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

0.6027.

III. Updated Rates and Weights

Tables 1 and 2 provide the rates and

weights to be used under the TRICARE/

CHAMPUS DRG-based payment system

during FY98 and which are a result of

the change described above. The

implementing regulations for the

TRICARE/CHAMPUS DRG-based

payment system are in 32 CFR Part 199.

The rates and weights are also available

on the Internet at htt://

www.ochampus.mil under the heading

of Reports.

As a courtesy, we will provide a

separate list of the updated DRG weights

that includes the long-stay thresholds

for use by MTFs and other non-DoD

users of the TRICARE/CHAMPUS DRG

weights and rates through TSO’s home

page. The list will also be found under

the Heading of Reports but will

specifically indicate the list is for MTFs

and non DoD users. Beginning next

year, the updated rates and weights will

no longer be published in the Federal

Register and will only be available online.

Dated: October 23, 1997.

L.M. Bynum,

Alternate Federal Register Liaison Officer,

Department of Defense.

BILLING CODE 5000–04–M
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[FR Doc. 97–28686 Filed 10–29–97; 8:45 am]

BILLING CODE 5000–04–C