[Federal Register Volume 65, Number 227 (Friday, November 24, 2000)]
[Notices]
[Pages 70554-70555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29935]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); Fiscal Year 2001 Diagnosis Related Group (DRG) Updates

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of DRG revised rates.

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SUMMARY: This notice 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).
    It also provides the updated fixed loss cost outlier threshold, 
cost-to-charge ratios and the Internet address for accessing the 
updated adjusted standardized amounts, DRG relative weights, and 
beneficiary cost-share per diem rates to be used for FY 2001 under the 
TRICARE/CHAMPUS DRG-based payment system.

EFFECTIVE DATES: The rates, 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, 
2000.

ADDRESSES: TRICARE Management Activity (TMA), Medical Benefits and 
Reimbursement Systems, 16401 East Centretech Parkway, Aurora, CO 80011-
9043.
    For copies of the Federal Register containing this notice, contact 
the Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, (202) 783-3238. The charge for the Federal 
Register is $1.50 for each issue payable by check or money order to the 
Superintendent of Documents.

FOR FURTHER INFORMATION CONTACT: Marty Maxey, Medical Benefits and 
Reimbursement Systems, TMA, telephone (303) 676-3627.
    To obtain copies of this document, see the ADDRESSES section above. 
Questions regarding payment of specific claims under the TRICARE/
CHAMPUS 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/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. 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.

[[Page 70555]]

I. Medicare PPS Changes Which Affect the TRICARE/CHAMPUS DRG-Based 
Payment System

    Following is a discussion of the changes the Health Care Financing 
Administration (HCFA) has made to the Medicare PPS that 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 DRG-based 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 
has implemented thirty-four (34) neonatal DRGs in place of Medicare 
DRGs 385 through 390. 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 
tranplants 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 FY 2001, HCFA will implement classification changes, including 
surgical hierarchy changes. The CHAMPUS Grouper will incorporate all 
changes made to the Medicare Grouper.

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. In addition, TRICARE/CHAMPUS will duplicate 
all changes with regard to the wage index for specific hospitals that 
are redesignated by the Medicare Geographic Classification Review 
Board.

C. Hospital Market Basket

    TRICARE/CHAMPUS will update the adjusted standardized amounts 
according to the final updated hospital market basket used for the 
Medicare PPS according to HCFA's August 1, 2000, final rule.

D. Outlier Payments

    Since TRICARE/CHAMPUS does not include capital payments in our DRG-
based payments, we will use the fixed loss cost outlier threshold 
calculated by HFCA for paying cost outliers in the absence of capital 
prospective payments. For FY 2001, 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 2001, in order for a case to qualify for cost outlier payments, the 
costs must exceed the TRICARE/CHAMPUS DRG base payment rate (wage 
adjusted) for the DRG plus the IDME payment plus $16,036 (wage 
adjusted). The marginal cost factor for cost outliers continues to be 
80 percent.

E. Blood Clotting Factor

    For FY 2001, TRICARE/CHAMPUS will use the following HCPCS codes and 
payment rates for blood clotting factors:

J7190 Factor VIII (antihemophilic factor--human): $0.85 per unit
J7191 Factor VIII (antihemophilic factor--porcine): 2.09 per unit
J7192 Factor VIII (antihemophilic factor--recombinant): 1.12 per unit
J7194 Factor IX (complex): 0.31 per unit
J7198 Anti-inhibitor: 1.43 per unit
Q0160 Factor IX (antihemophilic factor, purified, Non-recombinant): 
1.05 per unit
Q0161 Factor IX (antihemophilic factor, recombinant): 1.12 per unit

F. Indirect Medical Education (IDME) Adjustment

    The Balanced Budget Refinement Act of 1999, modified the transition 
for the IDME adjustment that was established by the Balanced Budget Act 
of 1997. The new multiplier for the IDME adjustment factor for TRICARE/
CHAMPUS for FY 2001 is 1.16.

II. Cost to Charge Ratio

    For FY 2001, the cost-to-charge ratio used for the TRICARE/CHAMPUS 
DRG-based payment system will be 0.5353, which is increased to 0.5408 
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 0.5913.

III. Updated Rates and Weights

    The updated rates and weights are accessible through the Internet 
at www.tricare.osd.mil under the heading TRICARE Provider Information. 
Table 1 provides the ASA rates and Table 2 provides the DRG weights to 
be used under the TRICARE/CHAMPUS DRG-based payment system during FY 
2001 and which is a result of the changes described above. The 
implementing regulations for the TRICARE/CHAMPUS DRUG-based payment 
system are in 32 CFR part 199.

    Dated: November 16, 2000.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 00-29935 Filed 11-22-00; 8:45 am]
BILLING CODE 5001-10-M