Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 39043 

First and second preferences of 

meeting time. 

Organization for which you work. 

Organization you will represent (if 

different). 

Stakeholder category: Government, 

industry, union, trade association, 

insurance, manufacturers, consultants, 

or other (if other, please specify). 

Electronic copies of this Federal 

Register notice, as well as news releases 

and other relevant documents, are 

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Authority and Signature 

This document was prepared under 

the direction of David Michaels, PhD, 

MPH, Assistant Secretary of Labor for 

Occupational Safety and Health, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

This action is taken pursuant to sections 

4, 6, and 8, Public Law 91–596, 84 

STAT. 1590 (29 U.S.C. 653, 655, 657), 

Secretary of Labor’s Order No. 4–2010 

(75 FR 55355 (Sept. 10, 2010)), and 29 

CFR part 1911. 

Signed at Washington, DC, on June 29, 

2011. 

David Michaels, 

Assistant Secretary of Labor for Occupational 

Safety and Health. 

[FR Doc. 2011–16742 Filed 7–1–11; 8:45 am] 

BILLING CODE 4510–26–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[Docket ID DoD–2010–HA–0072; RIN 0720– 

AB41] 

TRICARE; Reimbursement of Sole 

Community Hospitals and Adjustment 

to Reimbursement of Critical Access 

Hospitals 

AGENCY: Office of the Secretary, 

Department of Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule is to 

implement the statutory provision at 10 

United States Code (U.S.C.) 1079(j)(2) 

that TRICARE payment methods for 

institutional care be determined, to the 

extent practicable, in accordance with 

the same reimbursement rules as those 

that apply to payments to providers of 

services of the same type under 

Medicare. This proposed rule 

implements a reimbursement 

methodology similar to that furnished to 

Medicare beneficiaries for inpatient 

services provided by Sole Community 

Hospitals (SCHs). It will be phased in 

over a several-year period. 

DATES: Written comments received at 

the address indicated below by 

September 6, 2011 will be accepted. 

ADDRESSES: You may submit comments, 

identified by docket number or 

Regulatory Information Number (RIN) 

and title, by either of the following 

methods: 

The Web site: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Mail: Federal Docket Management 

System Office, Room 3C843, 1160 

Defense Pentagon, Washington, DC 

20301–1160. 

Instructions: All submissions received 

must include the agency name and 

docket number or RIN for this Federal 

Register document. The general policy 

for comments and other submissions 

from members of the public is to make 

these submissions available for public 

viewing on the Internet at http:// 

www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Martha M. Maxey, TRICARE 

Management Activity (TMA), Medical 

Benefits and Reimbursement Branch, 

telephone (303) 676–3627. 

SUPPLEMENTARY INFORMATION: 

I. Introduction and Background 

Hospitals are authorized TRICARE 

institutional providers under 10 U.S.C. 

1079(j)(2) and (4). Under 10 U.S.C. 

1079(j)(2), the amount to be paid to 

hospitals, skilled nursing facilities, and 

other institutional providers under 

TRICARE, ‘‘shall be determined to the 

extent practicable in accordance with 

the same reimbursement rules as apply 

to payments to providers of services of 

the same type under Medicare.’’ 

Medicare reimburses SCHs for inpatient 

care the greatest of these aggregate 

amounts: 

1. What the SCH would have been 

paid under the Medicare DiagnosisRelated Group (DRG) method for all of 

that hospital’s Medicare discharges. 

2. The amount that would have been 

paid if the SCH were paid the average 

‘‘cost’’ per discharge at that hospital in 

Fiscal Year (FY) 1982, 1987, 1996, or 

2006, updated to the current year, for all 

its Medicare discharges. 

TRICARE currently pays SCHs for 

inpatient care in one of two ways: 

Network Hospitals: Payment is an 

amount equal to billed charges less a 

negotiated discount. The discounted 

reimbursement is usually substantially 

greater than what would be paid using 

the Diagnosis-Related Group (DRG) 

method. 

Non-network Hospitals: Payment is 

equal to billed charges. 

TRICARE’s current method results in 

reimbursing SCHs substantially more 

than Medicare does for equivalent 

inpatient care. A change is needed to 

conform to the statute. 

Under 32 CFR 199.14(a)(1)(ii)(D)(6), 

SCHs are exempt from the TRICARE 

DRG-based payment system. Based on 

the above statutory mandate, TRICARE 

is proposing to use an approach that 

approximates The Centers for Medicare 

and Medicaid Services’ (CMS) method 

for SCHs. 

II. SCH Reimbursement Methodology 

Establishing a TRICARE SCH 

inpatient reimbursement method 

exactly matching that of Medicare is not 

practicable. While TRICARE can 

calculate the aggregate DRG 

reimbursement for all TRICARE 

discharges by a SCH during a year, 

using the Medicare cost per discharge 

would not be appropriate for TRICARE. 

Differences in the TRICARE and 

Medicare beneficiary case mix render 

the Medicare average cost per discharge 

not directly applicable for TRICARE 

purposes. 

In addition, basing SCH 

reimbursement on annual updates to a 

TRICARE base-year average cost per 

discharge could result in inappropriate 

payments to some SCHs. At many SCHs, 

the number of TRICARE discharges per 

year is very low. Approximately half of 

the SCHs had fewer than 20 TRICARE 

discharges annually. The TRICARE 

average cost per discharge in 1 year may 

not be a good predictor of the average 

cost per discharge in a future year due 

to significant change in the case mix 

that can occur between two small sets 

of patients. 

Alternatively, TRICARE could make 

payments equal to the SCH’s specific 

cost-to-charge ratio (CCR) multiplied by 

the hospital’s billed charges for services. 

This would avoid making payments 

unrelated to case mix and would be 

consistent with the Medicare principle 

of relating payments for SCHs to cost of 

services. This is the approach adopted 

in the proposed rule. 

III. TRICARE’s SCH Phase-in Period 

In introducing its current SCH 

reimbursement method, Medicare used 

a 3-year phase-in period to provide the 

hospitals time for making business and 

clinical process adjustments. TRICARE 

is proposing a phase-in period with a 

maximum 15 percent per-year reduction 

from the starting point in TRICAREallowed amounts for non-network 

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39044 Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 

hospitals and a 10 percent-per-year 

reduction for network hospitals. This 

involves calculating a hospital’s ratio of 

TRICARE-allowed to billed charges and 

reducing that by 15 percentage points 

each year for non-network hospitals and 

10 percentage points each year for 

network hospitals until it reaches the 

hospital’s CCR. For example, if a nonnetwork hospital currently had a 

TRICARE-allowed to billed ratio of 100 

percent, it would be paid 85 percent of 

billed charges in year one, 70 percent in 

year 2, 55 percent in year 3, and 40 

percent in year 4. For a network hospital 

that had a TRICARE-allowed to billed 

ratio of 98 percent, it would be paid 88 

percent in year 1, 78 percent in year 

two, 68 percent in year 3, and 58 

percent in year 4. It should be noted that 

in no year could the TRICARE payment 

fall below costs (most hospitals have 

costs equal to 30 to 50 percent of billed 

charges). This transition method would 

approximately follow the CHAMPUS 

Maximum Allowable Charge physician 

payment system reform precedent and 

limit reductions to no more than 15 

percent per year during the phase-in 

period. It also provides an incentive for 

hospitals to remain in the network by 

allowing a 5 percent difference in 

payment reductions per year. Finally, it 

will buffer the revenue reductions 

experienced upon initial 

implementation of TRICARE’s SCH 

payment reform while allowing 

hospitals sufficient time to adjust and 

budget for these reductions. 

TRICARE will pay a SCH for inpatient 

services it provides during a FY the 

greater of two aggregate amounts: (1) 

What the SCH would have been paid 

under the DRG method for all of that 

hospital’s TRICARE discharges; or (2) 

An amount equal to the SCH’s specific 

CCR multiplied by the hospital’s billed 

charges for the TRICARE services. This 

will be accomplished through a yearend adjustment to the reimbursements 

provided during the year. 

IV. New SCHs and SCHs With No 

Inpatient Claims 

TRICARE will pay a new SCH using 

the average CCR for all SCHs calculated 

in the most recent year until it files a 

Medicare cost report. For SCHs that had 

no inpatient claims from TRICARE prior 

to implementation of the SCH payment 

reform but do have a claim, TRICARE 

will pay them based on their Medicare 

CCR. 

V. SCH General Temporary Military 

Contingency Payment Adjustment 

In addition to the SCH phase-in 

period outlined in paragraph III. above, 

the agency is proposing a SCH 

Temporary Military Contingency 

Payment Adjustment (TMCPA) for 

TRICARE network hospitals located 

within Military Treatment Facility 

(MTF) Prime Service Areas (PSAs) and 

deemed essential for military readiness 

and support during contingency 

operations. The TMA Director, or 

designee, may approve a SCH General 

TMCPA for hospitals that serve a 

disproportionate share of Active Duty 

Service members (ADSMs) and Active 

Duty dependents (ADDs). Procedures for 

requesting a SCH TMCPA will be 

outlined in the SCH section of the 

TRICARE Reimbursement Manual. 

VI. Critical Access Hospital General 

Temporary Military Contingency 

Payment Adjustment 

On August 31, 2009, we published a 

final rule (74 FR 44752), which 

implemented a reimbursement 

methodology similar to that furnished to 

Medicare beneficiaries for services 

provided by critical access hospitals 

(CAHs), i.e., reimbursing them 101 

percent of reasonable costs. It has come 

to our attention that there may be some 

CAHs located in MTF PSAs that are 

deemed essential for military readiness 

and support during contingency 

operations. Thus, the agency also is 

proposing a CAH TMCPA for TRICARE 

network hospitals located within MTF 

PSAs and deemed essential for military 

readiness and support during 

contingency operations. The TMA 

Director may approve a CAH TMCPA 

for hospitals that serve a 

disproportionate share of ADSMs and 

ADDs. Procedures for requesting a CAH 

General TMCPA will be outlined in the 

CAH section of the TRICARE 

Reimbursement Manual. 

VII. Regulatory Impact Analysis 

A. Overall Impact 

The Department of Defense has 

examined the impacts of this proposed 

rule as required by Executive Orders 

(E.O.s) 12866 (September 1993, 

Regulatory Planning and Review) and 

13563 (January 18, 2011, Improving 

Regulation and Regulatory Review), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

the Unfunded Mandates Reform Act of 

1995 (Pub. L. 104–4), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

1. Executive Order 12866 and Executive 

Order 13563 

EOs 12866 and 13563 direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any one year). 

We estimate that the effects of the 

SCH provisions that would be 

implemented by this rule would result 

in SCH revenue reductions exceeding 

$100 million in any one year. We 

estimate the total reduction (from the 

proposed changes in this rule) in 

hospital revenues under the SCH reform 

for its first year of implementation 

(assumed for purposes of this RIA to be 

FY2012), compared to expenditures in 

that same period without the proposed 

SCH changes, to be approximately $211 

million. However, as discussed below, 

the proposed transitions will reduce this 

amount considerably. When the 

transitions are taken into account, the 

first year impact will be a reduction in 

allowed amounts of $31 million. 

We estimate that this rulemaking is 

‘‘economically significant’’ as measured 

by the $100 million threshold and, 

hence, also a major rule under the 

Congressional Review Act. Accordingly, 

we have prepared a regulatory impact 

analysis that, to the best of our ability, 

presents the costs and benefits of the 

rulemaking. 

2. Congressional Review Act. 5 U.S.C. 

801 

Under the Congressional Review Act, 

a major rule may not take effect until at 

least 60 days after submission to 

Congress of a report regarding the rule. 

A major rule is one that would have an 

annual effect on the economy of $100 

million or more or have certain other 

impacts. This Notice of Proposed Rule 

Making (NPRM) is a major rule under 

the Congressional Review Act. 

3. Regulatory Flexibility Act 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses if a rule has a significant 

impact on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals are considered to be small 

entities, either by being nonprofit 

organizations or by meeting the Small 

Business Administration (SBA) 

definition of a small business (having 

revenues of $34.5 million or less in any 

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Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 39045 

one year). For purposes of the RFA, we 

have determined that all SCHs would be 

considered small entities according to 

the SBA size standards. Individuals and 

States are not included in the definition 

of a small entity. Therefore, the 

Secretary has determined that this 

proposed rule would have a significant 

impact on a substantial number of small 

entities. We generally prepare a 

regulatory flexibility analysis that is 

consistent with the RFA (5 U.S.C. 

section 604), unless we certify that the 

rule would not have a significant impact 

on a substantial number of small 

entities. The Regulatory Impact 

Analysis, as well as the contents 

contained in the preamble, is meant to 

serve as the Proposed Regulatory 

Flexibility Analysis. 

4. Unfunded Mandates 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any one year of $100 million in 1995 

dollars, updated annually for inflation. 

That threshold level is currently 

approximately $140 million. This 

proposed rule will not mandate any 

requirements for State, local, or tribal 

governments or the private sector. 

5. Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

This rule will not impose significant 

additional information collection 

requirements on the public under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3502–3511). Existing information 

collection requirements of the TRICARE 

and Medicare programs will be utilized. 

We do not anticipate any increased 

costs to hospitals because of paperwork, 

billing, or software requirements since 

we are keeping TRICARE’s billing/ 

coding requirements; i.e., hospitals will 

be coding and filing claims in the same 

manner as they currently are with 

TRICARE. 

6. Executive Order 13132, ‘‘Federalism’’ 

This rule has been examined for its 

impact under E.O. 13132, and it does 

not contain policies that have 

federalism implications that would have 

substantial direct effects on the States, 

on the relationship between the national 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, 

consultation with State and local 

officials is not required. 

B. Hospitals Included In and Excluded 

From the SCH Reforms 

The SCH reform encompasses all 

SCHs as defined by Medicare that 

participate in the TRICARE program 

that have inpatient stays for TRICARE 

patients. It will also include SCHs 

classified by CMS as Essential Access 

Community Hospitals (EACH) hospitals. 

However, Maryland hospitals that are 

paid by Medicare and TRICARE under 

a cost containment waiver are excluded 

from the SCH Reform. 

C. Analysis of the Impact of Policy 

Changes on Payment Under SCH 

Reform Alternatives Considered 

Alternatives that we considered, the 

proposed changes that we will make, 

and the reasons that we have chosen 

each option are discussed below. 

1. Alternatives Considered for 

Addressing Reduction in SCH Payments 

Analysis of the effects of paying SCHs 

using the computation of either the 

greater of what the SCH would have 

been paid under the DRG method for all 

of that hospital’s TRICARE discharges or 

an amount equal to the SCH’s specific 

CCR multiplied by the hospital’s billed 

charges for the TRICARE services 

approach would reduce the TRICARE 

payments to these SCHs by an average 

of over 50 percent. This approach would 

pay each SCH the greater of two 

aggregate amounts: (1) The sum of the 

TRICARE-allowed amounts if all the 

TRICARE inpatient admissions over a 

12-month period were paid using the 

TRICARE DRG method; or (2) the 

TRICARE-allowed amounts if all the 

TRICARE inpatient admissions over a 

12-month period were paid using the 

CCR approach (in which the TRICAREallowed amount for each admission is 

equal to the billed charge for that 

admission multiplied by the hospital’s 

historical CCR). Table 1 provides our 

estimate of the impact of this approach 

without any transitions. We found that 

there would be large reductions in 

payments for all types of SCHs (see 

Table 3). 

Because the impact of moving from a 

charge-based reimbursement to a costbased reimbursement similar to 

Medicare’s would produce large 

reductions in the TRICARE-allowed 

amounts for all types of SCHs, we 

considered a phase-in of this approach 

over a 4-year period. Under this option, 

the CCR portion of the approach would 

be modified so that the hospital’s billed 

charge on each claim would not be 

multiplied by the hospital’s CCR until 

the fourth year (when the transition was 

complete). In the first 3 years, the billed 

charges for each claim would be 

multiplied by a ratio so that there was 

an equal reduction in the ratio used 

each year over the 4-year transition. For 

example, if the hospital were receiving 

100 percent of its billed charges prior to 

implementation of the SCH reform and 

it had a CCR of 0.32, then its billed 

charges would be multiplied by factors 

of 0.83, 0.66, and 0.49 in the first 3 years 

respectively so that each year the 

payment ratio declined by an equal 

amount (in this case by a factor of 0.17). 

In each year, the aggregate level of 

allowed amounts produced using the 

CCR approach at each SCH would be 

compared with the aggregate level of 

DRG-allowed amounts at the SCH, and 

the SCH would be paid the greater of the 

two aggregate amounts. This 4-year 

transition would allow hospitals to have 

a phased transition to the cost-based 

rates. Although this option would 

provide a multi-year period for SCHs to 

transition to the cost-based rates, we did 

not choose this option because it would 

still result in large reductions for some 

SCHs over a relatively short period of 

time. 

A second option we considered was 

to have a transition based on a reduction 

of 15 percentage points per year in the 

allowed amounts for each SCH. Under 

this option, the CCR portion in this 

approach would be modified. During 

the transition period, the billed charges 

on each claim at an SCH would be 

multiplied by a factor so that the ratio 

decreased by 15 percentage points each 

year from the level in the previous year. 

For example, if the SCH were receiving 

100 percent of its billed charges prior to 

SCH reform and it had a CCR of 0.32, 

then its billed charges would be 

multiplied by factors of 0.85, 0.70, 0.55, 

and 0.40 in the first 4 years respectively, 

so that each year the ratio declined by 

15 percentage points. In the fifth year, 

the ratio would be set at 0.32, the 

hospital’s CCR. (The actual number of 

years of transition will depend on the 

hospital’s CCR and could be more or 

less than the 4 years in this example as 

the ratio will never be less than the 

CCR.) In each year, the aggregate level 

of allowed amounts produced using the 

CCR approach at each SCH would be 

compared with the aggregate level of 

DRG-allowed amounts at the SCH and 

the SCH would be paid the greater of the 

two aggregate amounts. This type of 

transition ensures that there is a 

manageable reduction in the level of 

payments each year for each hospital. 

We selected this option. 

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39046 Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 

2. Alternatives Considered for SCHs in 

the TRICARE Network 

We were concerned there might be 

access problems at some hospitals with 

a high concentration of TRICARE 

patients if their payments were 

decreased significantly. In particular, 

we were concerned that some hospitals 

might leave the TRICARE network if 

payments were reduced too quickly. 

This was a particular concern because 

24 of the 25 SCHs with the highest 

levels of TRICARE-allowed amounts in 

the first 6 months of CY 2010 were in 

the TRICARE network. Thus, the SCHs 

that would face the largest reductions in 

the level of TRICARE-allowed amounts 

from TRICARE’s SCH reform would be 

network hospitals. 

An option we considered, and the one 

we are proposing in this rule, is to 

provide a 10 percent-per-year reduction 

in the allowed amounts for SCHs in the 

TRICARE network. This option would 

modify the CCR portion of the approach. 

During the transition period, the billed 

charges on each claim at an SCH in the 

TRICARE network would be multiplied 

by a factor so that the ratio decreased by 

10 percentage points each year from the 

starting point (in contrast to 15 

percentage points for non-network 

hospitals). For example, if a TRICARE 

network SCH had allowed amounts 

equal to 92 percent of its billed charges 

prior to SCH reform, and it had a CCR 

of 0.35, then its billed charges would be 

multiplied by factors of 0.82, 0.72, 0.62, 

0.52, and 0.42 in the first 5 years, 

respectively, to calculate the allowed 

amounts. Under this approach, each 

year the ratio for network SCHs would 

decline by ten percentage points. In the 

sixth year, the ratio would be set at 0.35, 

the hospital’s CCR (assuming that the 

hospital’s CCR had remained at 0.35). In 

each year, the aggregate level of allowed 

amounts produced using the CCR 

approach at each SCH would be 

compared with the aggregate level of 

DRG-allowed amounts at the SCH, and 

the SCH would be paid the greater of the 

two aggregate amounts. This type of 

transition ensures that there is a 

manageable reduction in the level of 

payments each year for each hospital. 

We selected this option. Table 1 shows 

the results of this option. 

D. Effects on Sole Community Hospitals 

Table 1 shows the impact of revised 

SCH inpatient reimbursement during FY 

2012. Table 2 shows projected TRICARE 

reduction in reimbursement for top 20 

hospitals. Table 3 shows full amount of 

reduction without a phase-in period and 

transitional payments. 

TABLE 1—ESTIMATED IMPACT OF SCH 

REFORMS ON TRICARE-ALLOWED

AMOUNTS AT SOLE COMMUNITY

HOSPITALS DURING THE FY 2012— 

FIRST YEAR OF PHASE-IN (WITH

TRANSITION PAYMENTS) 

[In $ millions] 

Estimated 

allowed 

amount 

under 

current 

policy 

Allowed 

amounts 

under 

SCH 

reform 

Reduction in 

allowed 

amounts 

SCH 

Reform 

allowed 

amounts 

as a 

percentage of 

current 

policy 

allowed 

amounts 

$326 $295 $31 90 

Notes: 

(1) This table presents the impact as 

modified by the transition mechanisms 

proposed in this NPRM (the 15 percent-peryear reduction for non-network hospitals and 

the 10 percent-per-year reduction for 

TRICARE network SCHs). This table includes 

the impact of transition payments to SCHs. 

(2) Maryland hospitals are excluded. 

TABLE 2—IMPACT ($M) OF FIRST YEAR FOR TOP 20 SOLE COMMUNITY HOSPITALS

Hospital name City State 

Reduction ($M) in 

FY2010 if phasein started in 

FY2010 

Fairbanks Memorial Hospital ............................................................... Fairbanks ...................................... AK ..................... 0.4 

FLagstaff Medical Center .................................................................... Flagstaff ........................................ AZ ..................... 0.5 

Sierra Vista Regional Health Center ................................................... Sierra Vista ................................... AZ ..................... 1.2 

Yuma Regional Medical Center .......................................................... Yuma ............................................ AZ ..................... 1.3 

North Colorado Medical Center ........................................................... Greeley ......................................... CO ..................... 0.3 

Southeast Georgia Health System Bru ............................................... Brunswick ..................................... GA ..................... 0.3 

Camden Medical Center ...................................................................... Saint Marys .................................. GA ..................... 0.4 

Munson Medical Center ...................................................................... Traverse City ................................ MI ...................... 0.3 

Phelps Co Reg Med Ctr ...................................................................... Rolla ............................................. MO .................... 0.5 

Western Missouri Medical Center ....................................................... Warrensburg ................................. MO .................... 0.5 

Benefis Healthcare .............................................................................. Great Falls .................................... MT ..................... 1.1 

Onslow Memorial Hospital Inc ............................................................. Jacksonville .................................. NC ..................... 1.6 

Carolinaeast Health System ................................................................ New Bern ..................................... NC ..................... 1.4 

Altru Health System, dba Altru Hospital .............................................. Grand Forks ................................. ND ..................... 0.5 

Trinity Hospitals ................................................................................... Minot ............................................. ND ..................... 0.9 

Gerald Champion Regional Medical Center ....................................... Alamogordo .................................. NM .................... 0.6 

Jackson County Memorial Hospital ..................................................... Altus ............................................. OK ..................... 0.3 

Beaufort Memorial Hospital ................................................................. Beaufort ........................................ SC ..................... 1.5 

Rapid City Regional Hospital—Hospital .............................................. Rapid City ..................................... SD ..................... 1.2 

Cheyenne Regional Medical Center ................................................... Cheyenne ..................................... WY .................... 1.3 

Note 1: Top 20 SCHs based on total amount reimbursed during FY2007–FY2010 where TRICARE was primary payer. 

Note 2: Impact of reduction calculated using FY2010 reimbursed amount. 

Note 3: Applied reduction of 10% for FY2010 if network provider; 15% for FY2010 if non-network provider until the hospital reaches their costto-charge ratio. 

Note 4: Samaritan Medical Center, Watertown, NY gained SCH status in FY2011. Based on preliminary data, Samaritan Medical Center would 

most likely be included in the top 20 SCH list. 

Note 5: Mary Washington Hospital, Fredericksburg, VA lost SCH status in January 2011. 

Note 6: This data includes all claims received through February 2, 2011 for dates of care beginning in FY2010 and not estimated to completion. 

Note 7: CMS currently reviewing SCH status of North Colorado Medical Center, Greeley, CO. 

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Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 39047 

TABLE 3—ESTIMATED IMPACT OF COST-BASED REIMBURSEMENT ON TRICARE-ALLOWED AMOUNTS AT SOLE COMMUNITY

HOSPITALS WITHOUT TRANSITION PAYMENTS

[In $ millions] 

Current policy Cost-based 

reimbursement 

Reduction in TRICARE-allowed 

amounts 

Allowed amounts under costbased 

reimbursement as 

a percent of current 

policy-allowed 

amounts 

$369 $158 $211 43 

Notes: 

(1) This table does not include any 

transition payments to SCHs. 

(2) Maryland hospitals are excluded. 

List of Subjects in 32 CFR Part 199 

Claims, Dental health, Health care, 

Health insurance, Individuals with 

disabilities, Military personnel. 

Accordingly, 32 CFR part 199 is 

proposed to be amended as follows: 

PART 199—[AMENDED] 

1. The authority citation for part 199 

continues to read as follows: 

Authority: 5 U.S.C. 301; 10 U.S.C. Chapter 

55. 

2. In § 199.2, paragraph (b) is 

amended by adding a definition for 

‘‘Sole Community Hospitals’’ in 

alphabetical order to read as follows: 

§ 199.2 Definitions. 

* * * * * 

(b) * * * 

Sole community hospitals (SCHs). 

Urban or rural hospitals that are the sole 

source of care in their community and 

meet the applicable requirements 

established by § 199.6 (b)(4)(xvii). 

* * * * * 

3. Section 199.6 is amended by 

adding new paragraph (b)(4)(xvii) to 

read as follows: 

§ 199.6 TRICARE—authorized providers. 

* * * * * 

(b) * * * 

(4) * * * 

(xvii) Sole community hospitals 

(SCHs). SCHs must meet all the criteria 

for classification as a SCH under 42 CFR 

412.92 in order to be considered a SCH 

under the TRICARE program. 

* * * * * 

4. Section 199.14 is amended by: 

a. Revising paragraph (a)(1)(ii)(D)(6), 

paragraph (a)(2)(viii)(D), paragraph 

(a)(3), the first sentence of paragraph 

(a)(4), and the first sentence of 

paragraph (a)(6); and 

b. Adding new paragraph (a)(7). 

The revisions and additions read as 

follows: 

§ 199.14 Provider reimbursement 

methods. 

(a) * * * 

(1) * * * 

(ii) * * * 

(D) * * * 

(6) Sole community hospitals. Prior to 

Fiscal Year 2012, any hospital that has 

qualified for special treatment under the 

Medicare prospective payment system 

as a SCH (see subpart G of 42 CFR part 

412) and has not given up that 

classification is exempt from the 

CHAMPUS DRG-based payment system. 

* * * * * 

(2) * * * 

(viii) * * * 

(D) Sole community hospitals. Prior to 

Fiscal Year 2012, any hospital that has 

qualified for special treatment under the 

Medicare prospective payment system 

as a SCH and has not given up that 

classification is exempt. 

* * * * * 

(3) Reimbursement for inpatient 

services provided by a CAH. (i) For 

admissions on or after December 1, 

2009, inpatient services provided by a 

CAH, other than services provided in 

psychiatric and rehabilitation distinct 

part units, shall be reimbursed at 101 

percent of reasonable cost. This does not 

include any costs of physician services 

or other professional services provided 

to CAH inpatients. Inpatient services 

provided in psychiatric distinct part 

units would be subject to the 

CHAMPUS mental health payment 

system. Inpatient services provided in 

rehabilitation distinct part units would 

be subject to billed charges. 

(ii) The percentage amount stated in 

paragraph (a)(3)(i) of this section is 

subject to possible upward adjustment 

based on a temporary military 

contingency payment adjustment 

(TMCPA) for TRICARE network 

hospitals located within Military 

Treatment Facility Prime Service Areas 

and deemed essential for military 

readiness and support during 

contingency operations. The TMA 

Director may approve a CAH TMCPA 

for hospitals that serve a 

disproportionate share of active duty 

service members (ADSMs) and active 

duty dependents (ADDs). A TMCPA 

may be approved by the Director, TMA 

for a specified period based on a 

showing that without the TMCPA, 

DoD’s ability to meet military 

contingency mission requirements will 

be significantly compromised. 

(4) Billed charges and set rates. The 

allowable costs for authorized care in all 

hospitals not subject to the CHAMPUS 

DRG-based payment system, the 

CHAMPUS mental health per-diem 

system, the reasonable cost method for 

CAHs, or the reimbursement rules for 

SCHs shall be determined on the basis 

of billed charges or set rates. * * * 

* * * * * 

(6) Hospital outpatient services. This 

paragraph (a)(6) identifies and clarifies 

payment methods for certain outpatient 

services, including emergency services, 

provided by hospitals. * * * 

(7) Reimbursement for inpatient 

services provided by a SCH. (i) In 

accordance with 10 U.S.C. 1079(j)(2), 

TRICARE payment methods for 

institutional care shall be determined, to 

the extent practicable, in accordance 

with the same reimbursement rules as 

those that apply to payments to 

providers of services of the same type 

under Medicare. TRICARE’s SCH 

reimbursements approximate 

Medicare’s for SCHs. Inpatient services 

provided by a SCH, other than services 

provided in psychiatric and 

rehabilitation distinct part units, shall 

be reimbursed through a two-step 

process, with an initial payment as step 

one, and a year-end adjustment as step 

two. 

(ii) The initial payment for a SCH 

referred to in paragraph (a)(7)(i) of this 

section will be based on the applicable 

percentage of the TRICARE-allowed 

amount. The TRICARE-allowed amount 

is the lesser of billed charges or the 

negotiated amount accepted by a 

network SCH. The applicable 

percentage is the greater of the SCH’s 

specific historical cost-to-charge ratio 

(as calculated by CMS), or the following 

percentage: 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

39048 Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Proposed Rules 

(A) In FY 2012, 90 percent for 

network SCHs or 85 percent for nonnetwork SCHs. 

(B) In FY 2013, 80 percent for network 

SCHs or 70 percent for non-network 

SCHs. 

(C) In FY 2014, 70 percent for network 

SCHs or 55 percent for non-network 

SCHs. 

(D) In FY 2015, 60 percent for 

network SCHs or 40 percent for nonnetwork SCHs. 

(E) In FY 2016, 50 percent for network 

SCHs or 25 percent for non-network 

SCHs. 

(F) In FY 2017, 40 percent for network 

SCHs or 10 percent for non-network 

SCHs. 

(G) In FY 2018, 30 percent for 

network SCHs or 0 percent for nonnetwork SCHs. 

(H) In FY 2019, 20 percent for 

network SCHs or 0 percent for nonnetwork SCHs. 

(I) In FY 2020, 10 percent for network 

SCHs or 0 percent for non-network 

SCHs. 

(J) In FY 2021, 0 percent for network 

SCHs or 0 percent for non-network 

SCHs. 

(iii) The second step referred to in 

paragraph (a)(7)(i) of this section is a 

year-end adjustment. The year-end 

adjustment will compare the aggregate 

amount paid over a 12-month period 

under paragraph (a)(7)(ii) of this section 

to the aggregate amount that would have 

been paid for the same care using the 

TRICARE DRG-method (under 

paragraph (a)(1) of this section). In the 

event that the DRG method amount is 

the greater, the year-end adjustment will 

be the amount by which it exceeds the 

aggregate amount paid. In addition, the 

year-end adjustment also may 

incorporate a possible upward 

adjustment based on a TMCPA for 

TRICARE network hospitals located 

within MTF PSAs and deemed essential 

for military readiness and support 

during contingency operations. The 

TMA Director, or designee, may approve 

a SCH TMCPA for hospitals that serve 

a disproportionate share of ADSMs and 

ADDs. A TMCPA may be approved by 

the Director, TMA, for a specified 

period based on a showing that, without 

the TMCPA, DoD’s ability to meet 

military contingency mission 

requirements will be significantly 

compromised. 

(iv) The SCH reimbursement 

provisions of paragraphs (a)(7)(i) 

through (iii) do not apply to any costs 

of physician services or other 

professional services provided to SCH 

inpatients (which are subject to 

individual provider payment provisions 

of this section), inpatient services 

provided in psychiatric distinct part 

units (which are subject to the 

CHAMPUS mental health per-diem 

payment system), or inpatient services 

provided in rehabilitation distinct part 

units (which are reimbursed on the 

basis of billed charges or set rates). 

* * * * * 

Dated: June 23, 2011. 

Patricia L. Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

[FR Doc. 2011–16629 Filed 7–1–11; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF THE INTERIOR 

National Park Service 

36 CFR Part 7 

RIN 1024–AD92 

Special Regulations; Areas of the 

National Park System, Yellowstone 

National Park 

AGENCY: National Park Service, Interior. 

ACTION: Proposed rule. 

SUMMARY: The National Park Service 

(NPS) is proposing this rule to establish 

a management framework that allows 

the public to experience the unique 

winter resources and values at 

Yellowstone National Park. The 

proposed rule would provide a variety 

of use levels and experiences for visitors 

by establishing maximum numbers of 

snowmobiles and snowcoaches 

permitted in the park on a given day. It 

also would require that most 

snowmobiles and snowcoaches 

operating in the park meet air and 

sound requirements and be 

accompanied or operated by a 

commercial guide. 

DATES: Comments must be received by 

September 6, 2011. 

ADDRESSES: You may submit your 

comments, identified by Regulation 

Identifier Number (RIN) 1024–AD92, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Yellowstone National Park, 

Winter Use Proposed Rule, P.O. Box 

168, Yellowstone NP, WY 82190 

• Hand Deliver to: Management 

Assistant’s Office, Headquarters 

Building, Mammoth Hot Springs, 

Yellowstone National Park, Wyoming. 

All submissions received must 

include the agency name and RIN. For 

additional information see ‘‘Public 

Participation’’ under SUPPLEMENTARY

INFORMATION below. 

FOR FURTHER INFORMATION CONTACT: 

Wade Vagias, Management Assistant’s 

Office, Headquarters Building, 

Yellowstone National Park, 307–344– 

2019 or at the address listed in the 

ADDRESSES section. 

SUPPLEMENTARY INFORMATION: 

Background 

The NPS has been managing winter 

use in Yellowstone National Park for 

several decades. A detailed history of 

the winter use issue, past planning 

efforts, and litigation is provided in the 

background section of the 2011 Draft 

Environmental Impact Statement (DEIS). 

The park has most recently operated 

under the 2009 interim plan, which was 

in effect for the past two winter seasons 

and expired by its own terms on March 

15, 2011. With publication of this 

proposed rule, and the DEIS, the NPS is 

soliciting public comment on a longterm direction for winter use in 

Yellowstone National Park. 

Additional information, including the 

DEIS, is available online at: http:// 

www.nps.gov/yell/parkmgmt/ 

participate.htm. 

Park Resource Issues 

The DEIS analyzes the issues and 

environmental impacts of seven 

alternatives for the management of 

winter use in the park. Major issues 

analyzed in the DEIS include social and 

economic issues, human health and 

safety, wildlife, air quality, natural 

soundscapes, visitor use and 

experience, and visitor accessibility. 

Impacts associated with each of the 

alternatives are detailed in the DEIS, 

which is available at the following site: 

http://parkplanning.nps.gov. 

Description of the Proposed Rule 

Snowmobile and snowcoach use at 

Yellowstone National Park is referred to 

as oversnow vehicle (OSV) use. The 

proposed regulations are similar in 

many respects to plans and rules that 

have been in effect for the last six winter 

seasons. Thus, many of the regulations 

regarding operating conditions, 

designated routes, and restricted hours 

of operation have been enforced by the 

NPS for several years. One notable 

difference, however, is a new proposal 

in this rule to provide a variety of use 

levels and experiences for visitors by 

establishing varying maximum numbers 

of OSVs permitted in the park for 

different days throughout the winter 

season. This would be accomplished by 

implementing different use levels for 

OSV use that would vary day-by-day, on 

a pre-set annual schedule, rather than 

being fixed for the entire winter season. 

Authorized snowmobile use would 

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