[Federal Register Volume 62, Number 202 (Monday, October 20, 1997)]
[Notices]
[Pages 54440-54445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X97-11020]



[[Page 54440]]

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DEPARTMENT OF DEFENSE

Office of the Secretary


Medical and Dental Services Fiscal Year 1998

ACTION: Notice.

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SUMMARY: Notice is hereby given that the Deputy Chief Financial Officer 
in a memorandum dated September 26, 1997 established the following 
reimbursement rates for inpatient and outpatient medical care to be 
provided in FY 1998. These rates are effective October 1, 1997.

Inpatient, Outpatient and Other Rates and Charges

I. Inpatient rates \1\ \2\

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
                        Per inpatient day                           Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
A. Burn Center..................................................       $2,618.00       $4,754.00       $5,079.00
B. Surgical Care Services (Cosmetic Surgery)....................          955.00        1,733.00        1,852.00
C. All Other Inpatient Services (Based on Diagnosis Related                                                     
 Groups (DRG) \3\)                                                                                              
----------------------------------------------------------------------------------------------------------------

1. FY98 Direct Care Inpatient Reimbursement Rates

----------------------------------------------------------------------------------------------------------------
                                                                                                   Other (Full/ 
                    Adjusted standard amount                           IMET         Interagency    Third party) 
----------------------------------------------------------------------------------------------------------------
Large Urban.....................................................       $2,199.00       $4,131.00       $4,372.00
Other Urban/Rural...............................................        2,194.00        4,215.00        4,499.00
Overseas........................................................        2,450.00        5,614.00        5,960.00
----------------------------------------------------------------------------------------------------------------

2. Overview
    The FY98 inpatient rates are based on the cost per DRG, which is 
the inpatient full reimbursement rate per hospital discharge weighted 
to reflect the intensity of the principal diagnosis, secondary 
diagnoses, procedures, patient age, etc. involved. The average cost per 
Relative Weighted Product (RWP) for large urban, other urban/rural, and 
overseas facilities will be published annually as an inpatient adjusted 
standardized amount (ASA) (see paragraph I.C.1., above). The ASA will 
be applied to the RWP for each inpatient case, determined from the DRG 
weights, outlier thresholds, and payment rules published annually for 
hospital reimbursement rates under the Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) pursuant to 32 CFR 
199.14(a)(1), including adjustments for length of stay (LOS) outliers. 
The published ASAs will be adjusted for area wage differences and 
indirect medical education (IME) for the discharging hospital. An 
example of how to apply DoD costs to a DRG standardized weight to 
arrive at DoD costs is contained in paragraph I.C.3., below.
3. Example of Adjusted Standardized Amounts for Inpatient Stays
    Figure 1 shows examples for a nonteaching hospital in a Large Urban 
Area.
    a. The cost to be recovered is DoD's cost for medical services 
provided in the nonteaching hospital located in a large urban area. 
Billings will be at the third party rate.
    b. DRG 020: Nervous System Infection Except Viral Meningitis. The 
RWP for an inlier case is the CHAMPUS weight of 2.9769. (DRG statistics 
shown are from FY 1996).
    c. The DoD adjusted standardized amount to be charged is $4,372 
(i.e., the third party rate as shown in the table).
    d. DoD cost to be recovered at a nonteaching hospital with area 
wage index of 1.0 is the RWP factor (2.9769 ) in 3.b., above, 
multiplied by the amount ($4,372) in 3.c., above.
    e. Cost to be recovered is $13,015.

                                     Figure 1.--Third Party Billing Examples                                    
----------------------------------------------------------------------------------------------------------------
                                                           Arithmetic     Geometric    Short stay     Long stay 
     DRG No.           DRG description       DRG weight     mean LOS      mean LOS      threshold     threshold 
----------------------------------------------------------------------------------------------------------------
020..............  Nervous System                2.9769          11.2           7.8             1            30 
                    Infection Except Viral                                                                      
                    Meningitis.                                                                                 
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                            Area wage        IME                                
                 Hospital                     Location     rate index    adjustment     Group ASA    Applied ASA
----------------------------------------------------------------------------------------------------------------
Nonteaching Hospital......................  Large Urban           1.0           1.0     $4,372.00     $4,372.00 
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                    Relative weighted product                   
        Patient              Length of stay       Days above ---------------------------------------     TPC    
                                                  threshold     Inlier *    Outlier **     Total      amount*** 
----------------------------------------------------------------------------------------------------------------
#1....................  7 days.................            0       2.9769       0.0000       2.9769      $13,015

[[Page 54441]]

                                                                                                                
#2....................  21 days................            0       2.9769       0.0000       2.9769       13,015
#3....................  35 days................            5       2.9769       0.6297       3.6066      15,768 
----------------------------------------------------------------------------------------------------------------
* DRG Weight                                                                                                    
** Outlier calculation = 33 percent of per diem weight  x  number of outlier days                               
= .33 (DRG Weight/Geometric Mean LOS)  x  (Patient LOS--Long Stay Threshold)                                    
= .33 (2.9769/7.8)  x  (35-30)                                                                                  
= .33 (.38165)  x  5 (take out to five decimal places)                                                          
= .12594  x  5 (take out to five decimal places)                                                                
= .6297 (take out to four decimal places)                                                                       
*** Applied ASA  x  Total RWP                                                                                   

II. Outpatient Rates \1\ \2\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
                                                A. Medical Care                                                 
----------------------------------------------------------------------------------------------------------------
BAA...........................  Internal Medicine...............         $105.00         $195.00         $208.00
BAB...........................  Allergy.........................           39.00           73.00           78.00
BAC...........................  Cardiology......................           81.00          150.00          160.00
BAE...........................  Diabetic........................           44.00           82.00           87.00
BAF...........................  Endocrinology (Metabolism)......           85.00          158.00          168.00
BAG...........................  Gastroenterology................          110.00          203.00          216.00
BAH...........................  Hematology......................          145.00          269.00          287.00
BAI...........................  Hypertension....................           81.00          149.00          159.00
BAJ...........................  Nephrology......................          171.00          317.00          338.00
BAK...........................  Neurology.......................          109.00          202.00          215.00
BAL...........................  Outpatient Nutrition............           34.00           63.00           67.00
BAM...........................  Oncology........................          114.00          211.00          225.00
BAN...........................  Pulmonary Disease...............          141.00          260.00          278.00
BAO...........................  Rheumatology....................           84.00          156.00          166.00
BAP...........................  Dermatology.....................           63.00          117.00          124.00
BAQ...........................  Infectious Disease..............          141.00          260.00          278.00
BAR...........................  Physical Medicine...............           78.00          145.00          155.00
BAS...........................  Radiation Therapy...............           72.00          132.00          141.00
BAZ...........................  Medical Care Not Elsewhere                 84.00          156.00          166.00
                                 Classified (NEC).                                                              
----------------------------------------------------------------------------------------------------------------
                                                B. Surgical Care                                                
----------------------------------------------------------------------------------------------------------------
BBA...........................  General Surgery.................          119.00          220.00          235.00
BBB...........................  Cardiovascular and Thoracic               110.00          203.00          216.00
                                 Surgery.                                                                       
BBC...........................  Neurosurgery....................          137.00          253.00          270.00
BBD...........................  Ophthalmology...................           84.00          155.00          166.00
BBE...........................  Organ Transplant................          191.00          353.00          376.00
BBF...........................  Otolaryngology..................           88.00          162.00          173.00
BBG...........................  Plastic Surgery.................          100.00          184.00          196.00
BBH...........................  Proctology......................           67.00          124.00          132.00
BBI...........................  Urology.........................          101.00          187.00          199.00
BBJ...........................  Pediatric Surgery...............           89.00          164.00          175.00
BBZ...........................  Surgical Care NEC...............           65.00          120.00          127.00
----------------------------------------------------------------------------------------------------------------
                                 C. Obstetrical and Gynecological (OB-GYN) Care                                 
----------------------------------------------------------------------------------------------------------------
BCA...........................  Family Planning.................           45.00           83.00           89.00
BCB...........................  Gynecology......................           74.00          136.00          146.00
BCC...........................  Obstetrics......................           68.00          126.00          135.00
BCZ...........................  OB-GYN Care NEC.................          112.00          207.00          221.00
----------------------------------------------------------------------------------------------------------------
                                                D. Pediatric Care                                               
----------------------------------------------------------------------------------------------------------------
BDA...........................  Pediatric.......................           54.00          100.00          106.00
BDB...........................  Adolescent......................           55.00          101.00          108.00
BDC...........................  Well Baby.......................           36.00           66.00           70.00
BDZ...........................  Pediatric Care NEC..............           64.00          119.00          126.00
----------------------------------------------------------------------------------------------------------------
                                               E. Orthopaedic Care                                              
----------------------------------------------------------------------------------------------------------------
BEA...........................  Orthopaedic.....................           83.00          153.00          164.00
BEB...........................  Cast............................           45.00           82.00           88.00
BEC...........................  Hand Surgery....................           38.00           70.00           75.00

[[Page 54442]]

                                                                                                                
BEE...........................  Orthotic Laboratory.............           59.00          110.00          117.00
BEF...........................  Podiatry........................           49.00           91.00           97.00
BEZ...........................  Chiropractic....................           21.00           38.00           40.00
----------------------------------------------------------------------------------------------------------------
                                    F. Psychiatric and/or Mental Health Care                                    
----------------------------------------------------------------------------------------------------------------
BFA...........................  Psychiatry......................           97.00          179.00          191.00
BFB...........................  Psychology......................           71.00          132.00          141.00
BFC...........................  Child Guidance..................           59.00          109.00          117.00
BFD...........................  Mental Health...................           80.00          147.00          157.00
BFE...........................  Social Work.....................           80.00          149.00          159.00
BFF...........................  Substance Abuse.................           62.00          115.00          123.00
----------------------------------------------------------------------------------------------------------------
                                    G. Family Practice/Primary Medical Care                                     
----------------------------------------------------------------------------------------------------------------
BGA...........................  Family Practice.................           67.00          124.00          132.00
BHA...........................  Primary Care....................           64.00          118.00          126.00
BHB...........................  Medical Examination.............           59.00          109.00          117.00
BHC...........................  Optometry.......................           42.00           77.00           82.00
BHD...........................  Audiology.......................           30.00           55.00           58.00
BHE...........................  Speech Pathology................           81.00          149.00          159.00
BHF...........................  Community Health................           41.00           75.00           80.00
BHG...........................  Occupational Health.............           59.00          108.00          115.00
BHH...........................  TRICARE Outpatient..............           42.00           78.00           83.00
BHI...........................  Immediate Care..................           82.00          152.00          162.00
BHZ...........................  Primary Care NEC................           43.00           79.00           84.00
----------------------------------------------------------------------------------------------------------------
                                            H. Emergency Medical Care                                           
----------------------------------------------------------------------------------------------------------------
BIA...........................  Emergency Medical...............          107.00          198.00          211.00
----------------------------------------------------------------------------------------------------------------
                                             I. Flight Medical Care                                             
----------------------------------------------------------------------------------------------------------------
BJA...........................  Flight Medicine.................           85.00          157.00          167.00
----------------------------------------------------------------------------------------------------------------
                                            J. Underseas Medical Care                                           
----------------------------------------------------------------------------------------------------------------
BKA...........................  Underseas Medicine..............           32.00           58.00           62.00
----------------------------------------------------------------------------------------------------------------
                                           K. Rehabilitative Services                                           
----------------------------------------------------------------------------------------------------------------
BLA...........................  Physical Therapy................           29.00           54.00           57.00
BLB...........................  Occupational Therapy............           53.00           98.00          104.00
----------------------------------------------------------------------------------------------------------------

III. Other Rates and Charges \1\ \2\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
FBI...........................  A. Immunization.................          $10.00          $19.00          $20.00
DGC...........................  B. Hyperbaric Chamber \5\.......          180.00          333.00          355.00
                                C. Ambulatory Procedure Visit             376.00          691.00          737.00
                                 (APV).\6\                                                                      
                                D. Family Member Rate (formerly            10.20  ..............  ..............
                                 Military Dependents Rate).                                                     
----------------------------------------------------------------------------------------------------------------

E. Reimbursement Rates For Drugs Requested By Outside Providers \7\
    The FY 1998 drug reimbursement rates for drugs are for 
prescriptions requested by outside providers and obtained at a Military 
Treatment Facility. The rates are established based on the cost of the 
particular drugs provided. Final rule of 32 CFR Part 220, estimated to 
be published October 1, 1997, will eliminate the high cost ancillary 
services' dollar threshold and the associated term ``high cost 
ancillary service.'' In anticipation of that change, the phrase ``high 
cost ancillary service'' has been replaced with the phrase ``ancillary 
services requested by an outside provider.'' The list of drug 
reimbursement rates is too large to include here. These rates are 
available on request from OASD (Health Affairs), LTC Michael 
Montgomery, 703-681-8910.
F. Reimbursement Rates for Ancillary Services Requested By Outside 
Providers \8\
    Final rule of 32 CFR Part 220, estimated to be published October 1, 
1997, will eliminate the high cost ancillary services' dollar threshold 
and the associated term ``high cost ancillary service.'' In 
anticipation of that change, the

[[Page 54443]]

phrase ``high cost ancillary service'' has been replaced with the 
phrase ``ancillary services requested by an outside provider.'' The 
list of FY 1998 rates for ancillary services requested by outside 
providers and obtained at a Military Treatment Facility is too large to 
include here. These rates are available on request from OASD (Health 
Affairs) LTC Michael Montgomery, 703-681-8910.
G. Elective Cosmetic Surgery Procedures and Rates

----------------------------------------------------------------------------------------------------------------
                                    International    Current Procedural                                         
   Cosmetic surgery procedure      Classification     Terminology (CPT)    FY 1998 charge \10\      Amount of   
                                  Diseases (ICD-9)           \9\                                      charge    
----------------------------------------------------------------------------------------------------------------
Mammaplasty....................  85.50, 85.32,       19325, 19324,       Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                  85.31.              19318.              Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Mastopexy......................  85.60.............  19316.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Facial Rhytidectomy............  86.82, 86.22......  15824.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Blepharoplasty.................  08.70, 08.44......  15820, 15821,       Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                      15822, 15823.       Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Mentoplasty (Augmentation/       76.68, 76.67......  21208, 21209......  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
 Reduction).                                                              Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Abdominoplasty.................  86.83.............  15831.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Lipectomy suction per            86.83.............  15876, 15877,       Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
 region.\11\                                          15878, 15879.       Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Rhinoplasty....................  21.87, 21.86......  30400, 30410......  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Scar Revisions beyond CHAMPUS..  86.84.............  1578__............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Mandibular or Maxillary          76.41.............  21194.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
 Repositioning.                                                           Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Minor Skin Lesions.\12\          86.30.............  1578__............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Dermabrasion...................  86.25.............  15780.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Hair Restoration...............  86.64.............  15775.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Removing Tattoos...............  86.25.............  15780.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Chemical Peel..................  86.24.............  15790.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Arm/Thigh Dermolipectomy.......  86.83.............  1583__............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
Brow Lift......................  86.3..............  15839.............  Inpatient Surgical      <SUP>a <SUP>b <SUP>c          
                                                                          Care Per Diem or APV                  
                                                                          or applicable                         
                                                                          Outpatient Clinic                     
                                                                          Rate.                                 
----------------------------------------------------------------------------------------------------------------

H. Dental Rate \13\ Per Procedure

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
                                Dental Services.................          $35.00         $101.00         $106.00
                                ADA code and DoD established                                                    
                                 weight.                                                                        
----------------------------------------------------------------------------------------------------------------

I. Ambulance Rate \14\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
FEA...........................  Ambulance.......................          $32.00          $60.00          $64.00
----------------------------------------------------------------------------------------------------------------

J. Laboratory and Radiology Services Requested by an Outside Provider 
\8\ Per Procedure

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
                                Laboratory procedures requested            $9.00          $13.00          $14.00
                                 by an outside provider CPT-4                                                   
                                 Weight Multiplier.                                                             

[[Page 54444]]

                                                                                                                
                                Radiology procedures requested             23.00           35.00           37.00
                                 by an outside provider CPT-4                                                   
                                 Weight Multiplier.                                                             
----------------------------------------------------------------------------------------------------------------

K. AirEvac Rate \15\ Per Visit

----------------------------------------------------------------------------------------------------------------
                                                                   International    Interagency                 
                                                                     Military        and other                  
        MEPRS code \4\                  Clinical service            Education &   Federal agency   Other (Full/ 
                                                                     Training        sponsored     Third party) 
                                                                      (IMET)         patients                   
----------------------------------------------------------------------------------------------------------------
                                AirEvac Services--Ambulatory....         $113.00         $209.00         $223.00
                                AirEvac Services--Litter........          323.00          598.00          638.00
----------------------------------------------------------------------------------------------------------------

Notes on Cosmetic Surgery Charges:

    <SUP>a</SUP> Per diem charges for inpatient surgical care 
services are listed in Section I.B. (See notes 9 through 11, below, 
for further details on reimbursable rates.)
    <SUP>b</SUP> Charges for ambulatory procedure visits (formerly 
same day surgery) are listed in Section III.C. (See notes 9 through 
11, below, for further details on reimbursable rates.) The 
ambulatory procedure visit (APV) rate is used if the elective 
cosmetic surgery is performed in an ambulatory procedure unit (APU).
    <SUP>c</SUP> Charges for outpatient clinic visits are listed in 
Sections II.A-K. The outpatient clinic rate is not used for services 
provided in an APU. The APV rate should be used in these cases.

Notes on Reimbursable Rates:

    <SUP>1</SUP> Percentages can be applied when preparing bills for 
both inpatient and outpatient services. Pursuant to the provisions 
of 10 U.S.C. 1095, the inpatient Diagnosis Related Groups and 
inpatient per diem percentages are 96 percent hospital and 4 percent 
professional charges. The outpatient per visit percentages are 88 
percent outpatient services and 12 percent professional charges.
    <SUP>2</SUP> DoD civilian employees located in overseas areas 
shall be rendered a bill when services are performed. Payment is due 
60 days from the date of the bill.
    <SUP>3</SUP> The cost per Diagnosis Related Group (DRG) is based 
on the inpatient full reimbursement rate per hospital discharge, 
weighted to reflect the intensity of the principal and secondary 
diagnoses, surgical procedures, and patient demographics involved. 
The adjusted standardized amounts (ASA) per Relative Weighted 
Product (RWP) for use in the direct care system is comparable to 
procedures used by the Health Care Financing Administration (HCFA) 
and the Civilian Health and Medical Program for the Uniformed 
Services (CHAMPUS). These expenses include all direct care expenses 
associated with direct patient care. The average cost per RWP for 
large urban, other urban/rural, and overseas will be published 
annually as an adjusted standardized amount (ASA) and will include 
the cost of inpatient professional services. The DRG rates will 
apply to reimbursement from all sources, not just third party 
payers.
    <SUP>4</SUP> The Medical Expense and Performance Reporting 
System (MEPRS) code is a three digit code which defines the summary 
account and the subaccount within a functional category in the DoD 
medical system. MEPRS codes are used to ensure that consistent 
expense and operating performance data is reported in the DoD 
military medical system. An example of the MEPRS hierarchical 
arrangement follows:

------------------------------------------------------------------------
                                                         MEPRS code     
------------------------------------------------------------------------
Outpatient Care (Functional Category).............  B                   
Medical Care (Summary Account)....................  BA                  
Internal Medicine (Subaccount)....................  BAA                 
------------------------------------------------------------------------

    <SUP>5</SUP> Hyperbaric services charges shall be based on hours 
of service in 15 minute increments. The rates listed in Section 
III.B. are for 60 minutes or 1 hour of service. Providers shall 
calculate the charges based on the number of hours (and/or fractions 
of an hour) of service. Fractions of an hour shall be rounded to the 
next 15 minute increment (e.g., 31 minutes shall be charged as 45 
minutes).
    <SUP>6</SUP> Ambulatory procedure visit is defined in DOD 
Instruction 6025.8, ``Ambulatory Procedure Visit (APV),'' dated 
September 23, 1996, as immediate (day of procedure) pre-procedure 
and immediate post-procedure care requiring an unusual degree of 
intensity and provided in an ambulatory procedure unit (APU). Care 
is required in the facility for less than 24 hours. This rate is 
also used for elective cosmetic surgery performed in an APU.
    <SUP>7</SUP> Prescription services requested by outside 
providers (e.g., physicians or dentists) are relevant to the Third 
Party Collection Program. Third party payers (such as insurance 
companies) shall be billed for prescription services when 
beneficiaries who have medical insurance obtain medications from a 
Military Treatment Facility (MTF) that are prescribed by providers 
external to the MTF. Eligible beneficiaries (family members or 
retirees with medical insurance) are not personally liable for this 
cost and shall not be billed by the MTF. Medical Services Account 
(MSA) patients, who are not beneficiaries as defined in 10 U.S.C. 
1074 and 1076, are charged at the ``Other'' rate if they are seen by 
an outside provider and only come to the MTF for prescription 
services. The standard cost of medications ordered by an outside 
provider includes the cost of the drugs plus a dispensing fee per 
prescription. The prescription cost is calculated by multiplying the 
number of units (e.g., tablets or capsules) by the unit cost and 
adding a $5.00 dispensing fee per prescription. The final rule at 32 
CFR Part 220, estimated to be published October 1, 1997, will 
eliminate the dollar threshold for high cost ancillary services (by 
changing the threshold from $25 to $0) and the associated term 
``high cost ancillary service.'' In anticipation of that change, the 
phrase ``high cost ancillary service'' has been replaced with the 
phrase ``ancillary services requested by an outside provider.'' The 
elimination of the threshold also eliminates the bundling of costs 
whereby a patient is billed if the total cost of ancillary services 
in a day (defined as 0001 hours to 2400 hours) exceeded $25.00.
    <SUP>8</SUP> Charges for ancillary services requested by an 
outside provider (physicians, dentists, etc.) are relevant to the 
Third Party Collection Program. Third party payers (such as 
insurance companies) shall be billed for ancillary services when 
beneficiaries who have medical

[[Page 54445]]

insurance obtain services from the MTF that are prescribed by 
providers external to the MTF. Laboratory and Radiology procedure 
costs are calculated using the Physicians' Current Procedural 
Terminology (CPT)-4 Report weight multiplied by either the 
laboratory or radiology multiplier (Section III.J). Eligible 
beneficiaries (family members or retirees with medical insurance) 
are not personally liable for this cost and shall not be billed by 
the MTF. MSA patients, who are not beneficiaries as defined by 10 
U.S.C. 1074 and 1076, are charged at the ``Other'' rate if they are 
seen by an outside provider and only come to the MTF for services. 
The final rule at 32 CFR Part 220, estimated to be published October 
1, 1997, will eliminate the dollar threshold for high cost ancillary 
services (by changing the threshold from $25 to $0) and the 
associated term ``high cost ancillary service.'' In anticipation of 
that change, the phrase ``high cost ancillary service'' has been 
replaced with the phrase ``ancillary services requested by an 
outside provider.'' The elimination of the threshold also eliminates 
the bundling of costs whereby a patient is billed if the total cost 
of ancillary services in a day (defined as 0001 hours to 2400 hours) 
exceeded $25.00.
    <SUP>9</SUP> The attending physician is to complete the CPT-4 
code to indicate the appropriate procedure followed during cosmetic 
surgery. The appropriate rate will be applied depending on the 
treatment modality of the patient: Ambulatory procedure visit, 
outpatient clinic visit or inpatient surgical care services.
    <SUP>10</SUP> Family members of active duty personnel, retirees 
and their family members, and survivors shall be charged elective 
cosmetic surgery rates. Elective cosmetic surgery procedure 
information is contained in Section III.G. The patient shall be 
charged the rate as specified in the FY 1998 reimbursable rates for 
an episode of care. The charges for elective cosmetic surgery are at 
the full reimbursement rate (designated as the ``Other'' rate) for 
inpatient per diem surgical care services in Section I.B., 
ambulatory procedure visits as contained in Section III.C, or the 
appropriate outpatient clinic rate in Sections II.A-K. The patient 
is responsible for the cost of the implant(s) and the prescribed 
cosmetic surgery rate. (Note: The implants and procedures used for 
the augmentation mammaplasty are in compliance with Federal Drug 
Administration guidelines.)
    <SUP>11</SUP> Each regional lipectomy shall carry a separate 
charge. Regions include head and neck, abdomen, flanks, and hips.
    <SUP>12</SUP> These procedures are inclusive in the minor skin 
lesions. However, CHAMPUS separates them as noted here. All charges 
shall be for the entire treatment, regardless of the number of 
visits required.
    <SUP>13</SUP> Dental service rates are based on a dental rate 
multiplier times the American Dental Association (ADA) code and the 
DoD established weight for that code.
    <SUP>14</SUP> Ambulance charges shall be based on hours of 
service in 15 minute increments. The rates listed in Section III.I 
are for 60 minutes or 1 hour of service. Providers shall calculate 
the charges based on the number of hours (and/or fractions of an 
hour) that the ambulance is logged out on a patient run. Fractions 
of an hour shall be rounded to the next 15 minute increment (e.g., 
31 minutes shall be charged as 45 minutes).
    <SUP>15</SUP> Air in-flight medical care reimbursement charges 
are determined by the status of the patient (ambulatory or litter) 
and are per patient. The charges are billed only by the Air Force 
Global Patient Movement Requirement Center (GPMRC).

    Dated: October 14, 1997.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR No. 97-27647 Filed 10-17-97; 8:45 am]
BILLING CODE 5000-04-P