T-5 Draft TRM.pdf

TRICARE Reimbursement Manual 6010.61-M, June 1, 2020 Revision:

For Definitions, see the TRICARE Operations Manual (TOM), Appendix A.

Foreword

Chapter 1 - General

Chapter 2 - Beneficiary Liability

Chapter 3 - Operational Requirements

Chapter 4 - Double Coverage

Chapter 5 - Allowable Charges

Chapter 6 - Diagnosis Related Groups (DRGs)

Chapter 7 - Mental Health

Chapter 8 - Skilled Nursing Facilities (SNFs)

Chapter 9 - Ambulatory Surgery Centers (ASCs)

Chapter 10 - Birthing Centers

Chapter 11 - Hospice

Chapter 12 - Home Health Care (HHC)

Chapter 13 - Outpatient Prospective Payment System (OPPS)-Ambulatory Payment Classification (APC)

Chapter 14 - Sole Community Hospitals (SCHs)

Chapter 15 - Critical Access Hospitals (CAHs)

Chapter 16 - Long-Term Care Hospitals (LTCHs)

Chapter 17 - Inpatient Rehabilitation Facilities (IRFs)

Chapter 18 – Alternative Payment Models

TRICARE Reimbursement Manual 6010.61-M, June 1, 2020 Chapter 1, General

Chapter 1

General

Section/Addendum Subject/Addendum Title

1 Network Provider Reimbursement

2 Accommodation Of Discounts Under Provider Reimbursement Methods

3 Claims Auditing Software

4 Reimbursement In Teaching Setting

5 National Health Service Corps (NHSC) Physicians Of The Public Health Service

(PHS)

6 Reimbursement Of Physician Assistants (PAs), Nurse Practitioners (NPs), And Certified Psychiatric Nurse Specialists (CPNSs)

7 Reimbursement Of Covered Services Provided By Individual Health Care Providers And Other Non-Institutional Health Care Providers

8 Economic Interest In Connection With Mental Health Admissions

9 Anesthesia

10 Postoperative Pain Management - Epidural Analgesia

11 Claims For Durable Equipment (DE) And Durable Medical Equipment, Prosthetics, Orthotics, And Supplies (DMEPOS)

12 Oxygen And Related Supplies

13 Laboratory Services

14 Ambulance Services Figure 1.14-1 Ground Ambulance Scenarios In Which The Beneficiary Dies Figure 1.14-2 Air Ambulance Scenarios in Which The Beneficiary Dies Figure 1.14-3 Air Ambulance Scenarios in Which The Flight is Aborted

15 Legend Drugs And Insulin

16 Surgery

17 Assistant Surgeons

18 Professional Services: Obstetrical Care

19 Charges For Provider Administrative Expenses

20 State Agency Billing

21 Hospital Reimbursement - Billed Charges Set Rates

22 Hospital Reimbursement - Other Than Billed Charges

23 Hospital Reimbursement - Payment When Only Skilled Nursing Facility (SNF) Level Of Care Is Required

24 Hospital Reimbursement - Outpatient Services

25 Preferred Provider Organization (PPO) Reimbursement

26 Supplemental Insurance

27 Legal Obligation To Pay

28 Reduction Of Payment For Noncompliance With Utilization Review Requirements

29 Reimbursement Of Emergency Inpatient Admissions To Unauthorized Facilities

30 Reimbursement Of Travel Expenses For Specialty Care

31 Newborn Charges

32 Hospital-Based Birthing Room

33 Bonus Payments In Health Professional Shortage Areas (HPSAs)

34 Hospital Inpatient Reimbursement In Locations Outside The 50 United States (U.S.) And The District Of Columbia Figure 1.34-1 Country Specific Index Factors Figure 1.34-2 Institutional Inpatient Diagnostic Groupings For Specified

Locations Outside The 50 U.S. And The District Of Columbia - National Inpatient Per Diem Amounts

Figure 1.34-3 Unique Admissions - National Inpatient Per Diem Amounts

35 Professional Provider Reimbursement In Specified Locations Outside The 50 United States (U.S.) And The District Of Columbia Figure 1.35-1 Country Specific Index Factors

36 Forensic Examinations Following Sexual Assault or Domestic Violence

37 Medical Errors

38 Reimbursement of State Vaccine Programs (SVPs)

39 CHAMPUS Maximum Allowable Charge (CMAC) For Banked Donor Milk (BDM)

40 Organ Acquisition Costs

A Sample State Agency Billing Agreement

B Figures Figure 1.B-1 Suggested Wording To The Beneficiary Concerning Rental vs.

Purchase Of Durable Medical Equipment (DME)

C Minimum Requirements For Reimbursement Of Per Capita State (Or Alternative) State Vaccine Programs (SVPs)

TRICARE Reimbursement Manual 6010.61-M, June 1, 2015

D Maximum Allowable Charge For Breastfeeding Supplies Figure 1.D-1 National Prevailing Charge For Breastfeeding

Supplies With A Specific HCPCS Code For Service Dates On Or After July 5, 2018

Figure 1.D-2 TOP National Prevailing Charge For Breastfeeding Supplies With A Specific HCPCS Code For Service Dates On Or After July 5, 2018

Figure 1.D-3 National Prevailing Charge For Breastfeeding Supplies Without A Specific HCPCS Code For Service Dates On Or After July 5, 2018

Figure 1.D-4 TOP National Prevailing Charge For Breastfeeding Supplies Without A Specific HCPCS Code For Service Dates On Or After July 5, 2018

Chapter 1, Section 1

Chapter 1 Section 1

Network Provider Reimbursement

Issue Date: July 1, 1998 Authority: 32 CFR 199.17(p)(6)

1.0 ISSUE

How are network providers to be reimbursed under TRICARE?

2.0 POLICY

2.1 The contractor shall make timely and accurate payments to all network providers of care in accordance with the terms and conditions of their contracts. Where required, the beneficiary deductibles and cost-shares must be collected and accrued toward the catastrophic cap.

Beneficiaries cannot be exempt from payment of deductibles (except for beneficiaries enrolled in TRICARE Prime and claims for prescription drugs obtained from a network pharmacy) and cost-shares/copayments.

2.2 Network provider reimbursement is neither subject to, nor restricted by, amounts that would have otherwise been paid under standard TRICARE reimbursement methodologies outlined in this manual, (i.e., those reimbursement methodologies applicable only to non-network providers). Contractors are permitted to establish alternative reimbursement systems, except capitation payments, that will ensure adequate beneficiary access to quality network providers (also see Chapter 18). These alternative reimbursement systems may include, but are not restricted to:

• Negotiated or discounted fee schedules; usual and customary fees;

• Salary, flat fee, global or profit/risk sharing arrangements for non-institutional providers; and

• Per diems for institutional providers.

2.3 All claim payments for individual services (whether network or non-network) are subject to the maximum payment methodologies set forth by Federal Law and outlined in this manual.

Health care dollars may not be used to pay amounts in excess of these maximum payment methodologies.

Note: The specific allowable amount may vary based on beneficiary status (e.g., participation in demonstration) or exact geographical location.

- END -

Chapter 1 Section 2

Accommodation Of Discounts Under Provider Reimbursement Methods

Issue Date: December 7, 1990 Authority: 32 CFR 199.4(f)(10) and 32 CFR 199.14(l)

1.0 APPLICABILITY

This policy is mandatory for reimbursement of services provided by either network or non- network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

2.0 POLICY

2.1 A provider shall be reimbursed at an amount below the amount usually paid pursuant to this chapter when the provider has agreed to the lower amount. This applies only when both the provider and the DHA have agreed to the discounted payment rates for non-network providers.

2.2 In the case of individual health care professionals and other non-institutional providers, if the discounted fee is below the provider’s normal billed charge and the allowable charge level, the discounted fee shall be the provider’s actual billed charge and the TRICARE allowable charge.

2.3 In the case of institutional providers normally paid on the basis of a pre-set amount (such as DRG-based amount or per diem amount), if the discount rate is lower than the pre-set rate, the discounted rate shall be the TRICARE-determined allowable cost. This is an exception to the usual rule that the pre-set rate is paid regardless of the institutional provider’s billed charges or other factors.

Chapter 1 Section 3

Claims Auditing Software

Issue Date: September 25, 1991 Authority: 32 CFR 199.9(b) and (c)

1.0 POLICY

The contractor shall use a claims auditing software (Claimcheck® or equivalent) to ensure correct coding on all claims. It is the contractor’s responsibility to obtain the materials necessary to use the software, including any updates. Claims processed under the Outpatient Prospective Payment System (OPPS) are not subject to this software.

Chapter 1 Section 4

Reimbursement In Teaching Setting

Issue Date: August 26, 1985 Authority: 32 CFR 199.2; 32 CFR 199.4(c)(3)(xiii); and 32 CFR 199.6(c)

This policy is mandatory for reimbursement of services provided by either network or non- network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

2.0 ISSUE

Special reimbursement procedures used in teaching settings.

3.0 POLICY

3.1 Definitions

3.1.1 Approved Teaching Programs

For purposes of this section, an approved teaching program is a program of graduate medical education which has been duly approved in its respective specialty or subspecialty by the Accreditation Council for Graduate Medical Education (ACGME) of the American Medical Association (AMA), by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association (AOA), by the Council on Dental Education of the American Dental Association (ADA), or by the Council on Podiatry Education of the American Podiatry Association (APA).

3.1.2 Teaching Hospital

A teaching hospital is any hospital with physicians in training on its staff.

3.1.3 Attending Physician

The physician who has the primary responsibility for the medical diagnosis and treatment of the patient. A consultant or an assistant surgeon, for example, would not be an attending physician. Under very extraordinary circumstances, because of the presence of complex, serious, and multiple, but unrelated, medical conditions, a patient may have more than one attending physician concurrently rendering medical treatment during a single period of time.

An attending physician also may be a teaching physician.

Chapter 1, Section 4

3.1.4 Teaching Physician

A teaching physician is any physician whose duties include providing medical training to physicians in training within a hospital or other institutional provider setting.

3.1.5 Physician In Training

The terms “interns and residents” include physicians participating in approved postgraduate training programs and physicians who are not in approved programs but who are authorized to practice only in a hospital or other institutional provider setting, e.g., individuals with temporary or restricted licenses, or unlicensed graduates of foreign medical schools.

There is no change in a senior resident’s basic status for reimbursement when the senior resident has a staff or faculty appointment or is designated, for example, a “fellow, assistant attending surgeon, or associate physician”. For purposes of this section, residents, interns, and fellows are treated identically and are referred to as physicians in training.

3.1.6 Supervision

As required for teaching physicians, supervision of physicians in training means that the teaching physician is not required to be physically present at all times, but must be on the provider’s premises and available to provide immediate and personal assistance and direction if needed. “Personal” means in person and not by telephone or other means.

3.2 Reimbursement Of Teaching Physicians

3.2.1 General

Teaching physicians may be reimbursed on an allowable charge basis only when they provide services as an attending physician or when they provide distinct, identifiable, personal services (e.g., services rendered as a consultant, assistant surgeon). Attending physician services may include both direct patient care services or direct supervision of care provided by a physician in training. Other services performed by a teaching physician such as administration, research, and teaching cannot be reimbursed separately on an allowable charge basis. Rather, these services are included in the payments made to the hospital or other institutional provider for the inpatient care.

3.2.2 Requirements That Must Be Met To Be Considered The Attending Physician

In order to be considered an attending physician, a teaching physician must, as demonstrated by performance of the activities listed below, render sufficient personal and identifiable medical services to the beneficiary to exercise full, personal control over the management of the case. The attending physician’s services to the patient must be of the same character, in terms of the responsibilities to the patient that are assumed and fulfilled, as the services rendered to other paying patients. In order to be considered an attending physician, the teaching physician must:

3.2.2.1 Review the patient’s history and the record of examinations and tests in the institution, and make frequent reviews of the patient’s progress; and

3.2.2.2 Personally examine the patient; and

3.2.2.3 Confirm or revise the diagnosis and determine the course of treatment to be followed;

and

3.2.2.4 Either perform the physician’s services required by the patient or supervise the treatment so as to assure that appropriate services are provided by physicians in training and that the care meets a proper quality level; and

3.2.2.5 Be present and ready to perform any service performed by an attending physician in a nonteaching setting when a major surgical procedure or a complex or dangerous medical procedure is performed; and

3.2.2.6 Be personally responsible for the patient’s care, at least throughout the period of hospitalization.

3.2.3 Direct Supervision By An Attending Physician Of Care Provided By

Physicians In Training

3.2.3.1 Payment on the basis of allowable charges may be made for the professional services rendered to a beneficiary by the attending physician when the attending physician provides personal and identifiable direction to physicians in training who are participating in the care of the patient. While it is not necessary that the attending physician be personally present for all services, the attending physician must be on the provider’s premises and available to provide immediate personal assistance and direction if needed. Accordingly, a physician who merely reviews a patient’s progress on a daily basis but is unavailable when a physician in training renders care cannot be considered to be an attending physician. The attending physician would be considered unavailable either because he or she is not on the provider’s premises or because the activities preclude immediate and personal assistance. On the other hand, in the case of major surgical procedures and other complex and dangerous procedures or situations, such personal direction must include supervision in person by the attending physician.

3.2.3.2 The responsibilities of a supervisory attending physician are demonstrated by such actions as:

• Reviewing the patient’s history and physical examination; and

• Personally examining the patient within a reasonable period after admission; and

• Confirming or revising the diagnosis; and

• Determining the course of treatment to be followed; and

• Assuring that any supervision needed by the physicians in training was furnished;

and

• Making frequent review of the patient’s progress.

3.2.4 Individual, Personal Services

A teaching physician may be reimbursed on an allowable charge basis for any individual, identifiable service rendered to a beneficiary, so long as the service is a covered service and is normally reimbursed separately, and so long as the patient’s records contain entries personally made by the physician which substantiate the service.

3.2.4.1 The contractor shall verify that services for which charges are billed meet TRICARE coverage criteria as part of its responsibilities to make appropriate checks of patient records, examining admission, progress, and discharge notes.

3.2.4.2 While this is not required on every claim, the contractor shall do so on a periodic sampling basis so that the contractor becomes familiar with the practices of the providers in its jurisdiction.

3.2.5 Documentation Required To Reimburse Teaching Physicians On An Allowable Charge Basis

3.2.5.1 For services as attending physician (for direct patient care or for supervision of physicians in training). As evidence that a covered service was rendered by the teaching physician, the patient’s medical record must contain notes and orders which are either written, countersigned, or initialed by the teaching physician. The notes and orders must confirm that the teaching physician met the requirements of paragraphs 3.2.2 and 3.2.3.

3.2.5.2 For individual, personal services. The patient’s medical record must contain notes and orders which confirm that the services were rendered by the teaching physician.

3.2.6 Who May Bill

The services of a teaching physician generally must be billed by the hospital or other institutional provider.

3.2.6.1 The hospital or other institutional provider must bill for teaching physicians’ services when the physician is employed by or under contract to the provider or a related entity. If the services are those of an attending physician, as opposed to individual, personal services rendered by the teaching physician, the conditions for qualifying as an attending physician must have been met, and the claim must be signed by an individual (e.g., the department head) authorized by the physician and who is knowledgeable of the physician’s responsibilities for being considered an attending physician.

3.2.6.2 Exception. When the teaching physician has no relationship with the hospital or other institutional provider (except for standard physician privileges to admit patients) and generally treats patients on a fee for service basis in the private sector, such teaching physicians may submit claims under his/her own provider number (e.g., employee identification number or Social Security Number (SSN)). Unless a teaching physician meets this exception, the claim must be submitted by the hospital or other institutional provider. Physicians who are employed by, or have a contract with, the hospital or other institutional provider, or are employed by a related entity (e.g., physicians employed by a medical school which owns, operates or is affiliated with a hospital or other institutional provider) are examples of teaching physicians whose claims must be submitted by the hospital or other institutional provider.

3.2.6.3 Billing services. Teaching physicians who are entitled to bill independently may still contract or arrange with another entity to submit their claims, provided the claims are submitted under the teaching physician’s provider number. Such entities include: any association of teaching physicians organized for the purpose of billing for and distributing insurance monies and other payments received for professional services to patients; and medical schools, if the services are performed by an authorized individual provider who is a faculty member of a medical, osteopathic, podiatric, or dental school.

3.2.7 When Teaching Physician Services Cannot Be Reimbursed On An Allowable Charge Basis

There are situations in which a patient receives medical services in the teaching setting for which payment on the basis of allowable charges is not applicable. Whether or not a physician makes a charge for services to patients which involve the participation of physicians in training, the hospital or other institutional provider receives reimbursement on inpatient claims for an appropriate share of the compensation it pays its physicians in training and teaching physicians for services in the teaching program which do not constitute services to patients. If the teaching program is an approved program, reimbursement for other costs of educational programs conducted by the hospital or other institutional provider will also be available as a part of the inpatient reimbursement made to the provider. The following examples are common situations for which a teaching physician cannot be reimbursed on an allowable charge basis:

3.2.7.1 The services of a teaching physician while visiting patients during grand rounds are basically teaching and do not contribute to an attending relationship with any of the patients visited.

3.2.7.2 A physician who is assigned to a teaching ward may not be routinely considered as the attending physician for all patients in the ward.

3.3 Reimbursement Of Physicians In Training

3.3.1 Physicians in training in an approved teaching program, are considered to be “students” and may not be reimbursed directly for services rendered to a beneficiary when their services are provided as part of their employment (either salaried or contractual) by a hospital or other institutional provider. They should not be identified as the attending physician, they are not authorized to execute various certifications, and separate charges for their services should not be billed. Their services are reimbursed to the hospital or other institutional provider through the DRG-based payments or through payments based on billed charges.

3.3.2 Services of physicians in training may be reimbursed on an allowable charge basis only if:

3.3.2.1 The physician in training is fully licensed to practice medicine by the state in which the services are performed, and

3.3.2.2 The services are rendered outside the scope and requirements of the approved training program to which the physician in training is assigned.

3.4 The TRICARE national allowable charge system shall be used to reimburse professional services provided by providers in a teaching setting. The ZIP code of the hospital is to be used to determine the location of the service.

Chapter 1 Section 5

National Health Service Corps (NHSC) Physicians Of The Public Health Service (PHS)

Authority: 32 CFR 199.6(c)

This policy is mandatory for reimbursement of services provided by network and non-network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

What are the limitations on reimbursement of NHSC physicians?

Physicians of the NHSC may be assigned to areas where there is a shortage of medical providers. These physicians are prohibited from accepting TRICARE payments, but the entities to which they are assigned are eligible for payment. The names of such physicians are available from the PHS, Department of Health and Human Services (DHHS).

Chapter 1 Section 6

Reimbursement Of Physician Assistants (PAs), Nurse Practitioners (NPs), And Certified Psychiatric Nurse Specialists (CPNSs)

Issue Date: July 9, 1990 Authority: 32 CFR 199.14(j)(1)(x)

How are PA, NP, and CPNS services to be reimbursed?

3.1 The allowable charge for the services of the above listed providers may not exceed 85% of the allowable charge for a comparable service rendered by a physician. The employing physician of a PA must be an authorized TRICARE provider.

3.1.1 When the employing physician of a PA is not participating in a TRICARE reimbursement plan at less than the allowable charge determined under the provisions of Section 1, the allowable charge for the PA service may not exceed 85% of the allowable charge for the physician calculated in accordance with these provisions. When the PA and the physician perform component services of a procedure other than assistant-at-surgery (e.g., home, office or hospital visit components), the allowable charge for the procedure (to include both the services of the physician and PA) may not exceed the allowable charge for the procedure rendered by a physician.

3.1.2 When the employing physician is participating in a TRICARE reimbursement plan at less than the allowable charge as calculated in paragraph 3.1.1, the allowable charge for the PA service may not exceed 85% of the reduced allowable charge for the physician unless the reimbursement plan has specifically included use of PAs in the negotiated rates.

3.2 For services provided on or after July 27, 2012, the allowable charge for PA services performed as an assistant-at-surgery may not exceed 85% of the allowable charge for a

Chapter 1, Section 6 Reimbursement Of Physician Assistants (PAs), Nurse Practitioners (NPs), And Certified

Psychiatric Nurse Specialists (CPNSs) physician serving as an assistant surgeon when authorized as TRICARE benefits in accordance with the provisions of 32 CFR 199.4(c)(3)(iii).

3.3 The allowable charge for NP services performed as an assistant-at-surgery may not exceed 85% of the allowable charge for a physician serving as an assistant surgeon when authorized as TRICARE benefits in accordance with the provisions of 32 CFR 199.4(c)(3)(iii).

3.4 The procedure or service performed by the PA is billed by the supervising or employing physician, billing it as a separately identified line item (e.g., PA Office Visit) and accompanied by the assigned PA provider number.

3.5 The procedure or service performed by the NP or CPNS is billed by the NP or CPNS.

Unlike a PA, a NP or CPNS can bill on their own behalf. Like the PA, the NP or CPNS shall bill using an assigned NP provider number.

4.0 EFFECTIVE DATES

4.1 Reimbursement of PA services is effective for services rendered on or after July 1, 1990.

4.2 Reimbursement of NP services as stated above is effective for services rendered on or after September 1, 2003.

4.3 Reimbursement of CPNS services shall be 85% of the allowable amounts for physicians effective for services rendered on or after June 1, 2007.

Chapter 1 Section 7

Reimbursement Of Covered Services Provided By Individual Health Care Providers And Other Non- Institutional Health Care Providers

Issue Date: July 5, 1991 Authority: 32 CFR 199.6 and 32 CFR 199.14(j)

This policy is related to reimbursement of covered beneficiary related services of individual health care providers and professionals that would otherwise meet the qualifications of individual health care providers except that they are either employed by or under contract to an institutional provider, and other non-institutional health care providers to be reimbursed.

3.1 Covered services provided by all TRICARE authorized individual health care providers and other non-institutional health care providers shall be reimbursed using the allowable charge methodology unless otherwise stated.

3.1.1 This policy applies to all categories of individual health care providers and professionals that would otherwise meet the qualifications of individual health care providers except that they are either employed by or under contract to an institutional provider, and other non-institutional providers regardless of the beneficiary services provided.

3.1.2 This policy applies to all locations, inpatient or outpatient, where services are provided by these providers. These services could be provided by individual health care providers in a Diagnosis Related Groups (DRG) hospital, a DRG exempt hospital, an Ambulatory Surgery Center (ASC), or in a facility without a TRICARE all-inclusive rate.

Note: Facility charges for inpatient and outpatient services shall continue to be billed on the current Centers for Medicare and Medicaid Services (CMS) 1450 UB-04. This would

Chapter 1, Section 7 Reimbursement Of Covered Services Provided By Individual Health Care Providers

And Other Non-Institutional Health Care Providers include inpatient services that are and have been included in the reimbursement under the DRG-based payment system or the mental health per diem payment system. Outpatient facility charges would include services that aid the individual health care provider in the treatment of the beneficiary. These charges may include such services as the use of hospital facilities factoring in overhead costs of utilities, billing, equipment and maintenance costs, insurance, nursing staff, including emergency room services (nonprofessional services), the services of nurses, technicians, and other aides, medical supplies (gauze, oxygen, ointments, dressings, splints, casts, prosthetic devices), and drugs and biologicals which cannot be self-administered.

3.1.3 Services provided by individual authorized health care providers and other non-institutional health care providers shall be billed only on the current CMS 1500 Claim Form or the TRICARE 2642 for payment. Individual health care providers (e.g., physicians) and non-institutional providers (e.g., suppliers) are to use the CMS 1500 Claim Form. Institutional providers (e.g., hospitals) are to use the CMS 1500 Claim Form or the CMS 1450 UB-04 (if adequate Common Procedure Terminology (CPT) coding information is submitted) to bill for the professional component of physicians and other authorized professional providers.

Beneficiaries (or their representatives) who complete and file their own claims for individual health care providers and other non-institutional health care provider services may want to use the TRICARE 2642 claim form for payment.

Chapter 1 Section 8

Economic Interest In Connection With Mental Health Admissions

Issue Date: March 13, 1992 Authority: 32 CFR 199.4(g)(73)

This policy is mandatory for reimbursement of services provided by network and non-network providers. However, alternative network reimbursement methodologies are permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

Economic interest in connection with mental health admissions.

Inpatient mental health services (including acute care, inpatient/residential Substance

Use Disorder (SUD) detoxification and rehabilitation, and Residential Treatment Center (RTC) services) are excluded for care received when a patient is referred to a provider of such services by a physician (or other health care professional with authority to admit) who has an economic interest in the facility to which the patient is referred, unless a waiver is granted. Requests for waiver shall be considered under the same procedure and based on the same criteria as used for obtaining preadmission authorization (or continued stay authorization for emergency admissions), with the only additional requirement being that the economic interest be disclosed as part of the request. However, a provider may appeal a reconsidered determination that an economic relationship constitutes an economic interest within the scope of the exclusion to the same extent that a provider may appeal any other determinations. If a situation arises where a decision is made to exclude payment solely on the basis of the provider’s economic interest, the normal appeals process will be available.

4.0 EXCLUSIONS

The economic interest provision does not apply to:

• Services under the Extended Care Health Option (ECHO).

• Partial hospitalization.

Chapter 1 Section 9

Anesthesia

Authority: 32 CFR 199.4(c)(2)(vii), (c)(2)(viii), and 32 CFR 199.6(c) Copyright: CPT only © 2006 American Medical Association (or such other date of publication of CPT). All Rights Reserved.

1.0 CPT PROCEDURE CODE RANGE

00100 - 01999

2.0 APPLICABILITY

The policy is mandatory for reimbursement of services provided by either network or

3.0 ISSUE

How is reimbursement for anesthesia services to be determined?

4.0 POLICY

4.1 Procedure codes. Claims are to be billed using the Current Procedural Terminology, 4th Edition (CPT-4) anesthesia codes.

4.2 Payment. Payment is calculated by multiplying the applicable conversion factor by the appropriate number of base units plus time units for each code.

4.2.1 There are two conversion factors--one for physicians and one for non-physicians, and the conversion factors are adjusted by wage indexes for each locality. The locality-specific conversion factors are adjusted in the same manner applied to CHAMPUS Maximum Allowable Charges (CMACs). That is, the current contractor-maintained conversion factors are compared to the Medicare locality- specific conversion factors, and the conversion factors are reduced a maximum of 15% a year or to the Medicare level.

4.2.2 Base units for each procedure are derived from the Medicare Anesthesia Relative Value Guide. Time units are 15 minutes, and any fraction of a unit is considered a whole unit.

Time units will be as submitted on the claim.

Chapter 1, Section 9 Anesthesia

4.3 Files provided to contractors. Each year the contractors will receive a file which contains the conversion factors (two per locality) along with the number of base units per CPT-4 code.

4.4 Identification of provider. Since payment rates distinguish between physicians and non-physicians, each anesthesia claim must identify who provided the anesthesia. In those cases where part of the anesthesia service is provided by an anesthesiologist and the remainder by a nonphysician anesthetist, the claim(s) must identify exactly the services provided by each type of provider, so that the appropriate payment level can be used.

4.5 Anesthesia administered by operating surgeon. Administration of general anesthesia by the operating surgeon is not covered. If the surgeon bills a single charge which includes both the surgery and the anesthesia, a breakdown of the charge should be obtained and the anesthesia services denied. When a breakdown of charges is not available, payment will be based on the allowable charge for the surgery alone.

4.6 Total payment. Generally the total amount allowed or anesthesia provided by an anesthesiologist and a nonphysician anesthetist cannot exceed what would have been allowed had the anesthesia been provided only by an anesthesiologist. In no case can it exceed that amount if the nonphysician anesthetist is an anesthesiologist assistant. If the nonphysician anesthetist is a certified registered nurse anesthetist, the total allowed amount can exceed that amount only if unusual circumstances warrant additional payment and those circumstances are documented in the medical record.

Chapter 1 Section 10

Postoperative Pain Management - Epidural Analgesia

Issue Date: February 21, 1995 Authority: 32 CFR 199.4(c)(2) Copyright: CPT only © 2006 American Medical Association (or such other date of publication of

How are physicians to be reimbursed for postoperative pain management?

3.0 BACKGROUND

3.1 Postoperative pain management consisting mainly of the intramuscular (IM) and/or intravenous (IV) administration of patient controlled analgesia (PCA) is considered a part of the global charge for the surgery. The administration of epidural analgesia is a specialized technique that can only be provided by a specially trained physician. It includes the following services:

• Placement of the epidural catheter (an invasive procedure requiring about 20 minutes).

• Mixing of the epidural analgesia infusion.

• Programming and initiation of infusion pump.

• Completion of detailed epidural analgesia orders.

• Daily monitoring and adjustment of epidural and infusion pump.

• Twenty-four hour availability/coverage to physically respond to problems/complications.

3.2 Since postoperative epidural analgesia care represents a level of services above that of routine postoperative pain relief provided by physicians, it is allowed outside the global surgical fee subject to the following reimbursement guidelines.

4.0 POLICY

Chapter 1, Section 10 Postoperative Pain Management - Epidural Analgesia

4.1 Payment of postoperative pain management outside the global surgical fee is only allowed for epidural analgesia care provided and billed by a physician. TRICARE will pay the physician for:

4.1.1 Insertion of the epidural catheter (CPT procedure codes 62278 and 62279 -epidural, lumbar or caudal, continuous) on the day of the surgery; and

4.1.2 Daily hospital management of epidural drug administration (CPT procedure code 01996) following the day of surgery (not the day of surgery).

4.2 The physician is only allowed to bill one pain management procedure code (CPT procedure code 01996) per day. The procedure includes all visits and contacts during the 24-hour time period to adjust the dosage and to maintain a functioning catheter.

4.3 Daily hospital management of epidural drug administration will be paid up to 3 calendar days following the day of surgery. Additional management services may be allowed at the discretion of the contractor based on best commercial practices.

Chapter 1 Section 11

Claims For Durable Equipment (DE) And Durable Medical Equipment, Prosthetics, Orthotics, And Supplies

(DMEPOS)

Issue Date: December 29, 1982 Authority: 32 CFR 199.4(d)(3)(ii), (d)(3)(iii), (d)(3)(vii), and (d)(3)(viii)

1.1 This policy is mandatory for DE, such as wheelchairs, iron lungs, and hospital beds.

1.2 This policy is mandatory for reimbursement of DMEPOS provided by either network or non- network providers. Alternative network reimbursement methodologies are also permitted when approved by the Defense Health Agency (DHA) and specifically included in the network provider agreement.

How are claims for DE and DMEPOS to be reimbursed?

For coverage policy on DMEPOS see the TRICARE Policy Manual (TPM), Chapter 8, Section 2.1. Reimbursement for DE and DMEPOS is established by fee schedules. The DMEPOS fee schedule is referred to, all-inclusively, as the DMEPOS fee schedule. The maximum allowable amount is limited to the lower of the billed charge, the negotiated rate (network providers) or the DMEPOS fee schedule amount.

4.0 REIMBURSEMENT

4.1 Prior to January 1, 2016, the DMEPOS fee schedule was categorized by state. Beginning January 1, 2016, Medicare fee schedule amounts for certain items were adjusted based on information from the DMEPOS competitive bidding program, and for some items, the adjusted DMEPOS fee schedule amounts for items furnished in rural areas within the state will be different than the adjusted DMEPOS fee schedule amounts in other areas of the state. The ZIP codes for areas defined as rural areas are based on current ZIP code boundaries. The allowed amount shall be that which is in effect in the specific geographic location at the time covered services and supplies are provided to a beneficiary. For DMEPOS delivered to the beneficiary’s home, the home address is the controlling factor in pricing and the home address shall be used to determine the DMEPOS allowed amount.

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Claims For Durable Equipment (DE) And Durable Medical Equipment, Prosthetics, Orthotics, And Supplies (DMEPOS)

4.2 Payment for an item of DE/Durable Medical Equipment (DME) may also take into consideration:

4.2.1 The lower of the total rental cost for the period of medical necessity or the reasonable purchase cost; and

4.2.2 Delivery charge, pick-up charge, shipping and handling charges, and taxes.

4.3 The DMEPOS fee schedule classifies most items into one of six categories.

4.3.1 Inexpensive or other routinely purchased DE/DME;

4.3.2 Items requiring frequent and substantial servicing;

4.3.3 Customized items;

4.3.4 Other prosthetic and orthotic devices;

4.3.5 Capped rental items; or

4.3.6 Oxygen and oxygen equipment.

4.4 Inexpensive or routinely purchased DE/DME.

4.4.1 Payment for this type of equipment is for rental or lump sum purchase. The total payment may not exceed the actual charge of the fee for a purchase.

4.4.2 Inexpensive DE/DME. This category is defined as equipment whose purchase price does not exceed $150.

4.4.3 Other routinely purchased DE/DME. This category consists of equipment that is purchased at least 75% of the time and includes equipment that is an accessory used in conjunction with a nebulizer, aspirator, or ventilators that are either continuous airway pressure devices or intermittent assist devices with continuous airway pressure devices.

4.4.4 Modifiers used in this category are as follows (not an all-inclusive list):

RR Rental NU Purchase of new equipment. Only used if new equipment was delivered.

UE Purchase of used equipment. Used equipment that has been purchased or rented by someone before the current purchase transaction. Used equipment also includes equipment that has been used under circumstances where there has been no commercial transaction (e.g., equipment used for trial periods or as a demonstrator).

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4.5 Items requiring frequent and substantial servicing.

4.5.1 Equipment in this category is paid on a rental basis only. Payment is based on the monthly DMEPOS fee schedule amounts until the medical necessity ends. No payment is made for the purchase of equipment, maintenance and servicing, or for replacement of items in this category.

4.5.2 Supplies and accessories are not allowed separately.

4.5.3 For oxygen and oxygen supplies see Section 12 and the TPM, Chapter 8, Section 10.1.

4.6 Certain customized items.

4.6.1 In order to be considered a customized item, a covered item (including a wheelchair) must be uniquely constructed or substantially modified for a specific beneficiary according to the description and orders of a physician and be so different from another item used for the same purpose that the two items cannot be grouped together for pricing purposes. See the TPM, Chapter 8, Section 2.1.

4.6.2 The beneficiary’s physician must prescribe the customized equipment and provide information regarding the patient’s physical and medical status to warrant the equipment medically necessary, reasonable, and appropriate for the beneficiary’s condition.

4.6.3 See the TPM, Chapter 8, Section 2.1 for further information regarding customization of DME.

4.7 Capped rental items. Items in this category are paid on a monthly rental basis not to exceed a period of continuous use of 15 months or on a purchase option basis not to exceed a period of continuous use of 13 months.

4.8 The Purchase Option for Capped Rental Items

4.8.1 In the tenth month of a rental, the beneficiary is given a purchase option.

4.8.1.1 The contractor shall continue to pay rental fees not to exceed a period of continuous use of 13 months and ownership of the equipment passes to the beneficiary if the purchase option is exercised by the beneficiary. Ownership of the equipment will pass to the beneficiaries after 13 continuous months of rental.

4.8.2 The contractor shall continue to pay rental fees if the purchase option is not exercised, until the 15 month cap is reached and no further payment shall be made other than for maintenance and servicing fees, until medical necessity ends.

4.8.3 In the case of electric wheelchairs only, the beneficiary must be given a purchase option at the time the equipment is first provided. The modifiers used with these items are:

BR Beneficiary has elected to rent BP Beneficiary has elected to purchase BU Beneficiary has not informed the supplier of his/her decision

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4.8.4 Modifiers used for capped rental items are:

KH First rental month KI Second and third rental months

KJ Fourth to fifteenth rental months

4.9 Upgrade DE/DME (Deluxe, Luxury, or Immaterial Features).

4.9.1 The allowable charge for standard equipment or item of DE/DME may be applied toward any upgraded item, when the beneficiary chooses to upgrade a covered DE/DME, to include additional features that are intended primarily for comfort or convenience, or features beyond those required by the beneficiary’s medical condition. Under this arrangement, charges for an upgraded DE/DME are the sole responsibility of the beneficiary. Beneficiary’s cost-shares and deductible will apply to the basic DE/DME.

4.9.2 The DE/DME provider is to identify non-payable upgrades to DE/DME using the appropriate Healthcare Common Procedure Coding System (HCPCS)/Current Procedural Terminology (CPT) modifiers.

Example: A beneficiary requests an upgrade DE/DME - the DE/DME provider bills beneficiary for non-payable upgrade, modifier GA on first line for item that is provided and modifier GK on second line for item that is covered. TRICARE cost-shares medically necessary item only (GK line item). The claim line with GA modifier will be denied as not medically necessary with the beneficiary responsibility (PR) message on the Explanation of Benefits (EOB). The claim line with the GK modifier will continue through the usual claims processing.

4.9.3 When the beneficiary upgrades an item of DE/DME, the upgrade charge is not managed by TRICARE, but calculated by the provider or supplier issuing the equipment. As a result, upgraded charges, clerical or calculation errors in connection with the upgraded equipment are not subject to appeal but are subject to administrative review by the contractor upon request from the beneficiary.

Note: The upgrade charge is the difference between the provider’s or supplier’s charge for the deluxe or upgraded item, and the allowable charge amount for the “covered” (standard) item.

4.9.4 Upgraded items of DE/DME do not count toward the beneficiary’s catastrophic cap.

However, the beneficiary’s responsibility for the standard DE/DME equipment will count towards the catastrophic cap. Charges for deluxe or upgraded items are the beneficiary’s responsibility even after the out-of-pocket maximum has been met for covered services.

4.10 Rental fee schedule.

4.10.1 For the first three rental months, the rental DMEPOS fee schedule is calculated so as to limit the monthly rental of 10% of the average of allowed purchase prices on claims for new equipment during a base period, updated to account for inflation. For each of the remaining months, the monthly rental is limited to 7.5% of the average allowed purchase price.

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4.10.2 After paying the rental DMEPOS fee schedule amount for 15 months, no further payment may be made except for reasonable and necessary maintenance and servicing.

Reasonable and necessary charges for maintenance and servicing are those made for parts and labor not otherwise covered under a manufacturer’s or supplier’s warranty

4.10.3 Modifiers used in this category are as follows:

RR Rental KH First month rental KI Second and third month rental

KJ Fourth to fifteenth months BR Beneficiary elected to rent BP Beneficiary elected to purchase BU Beneficiary has not informed supplier of decision after 30 days

MS Maintenance and Servicing NU New equipment UE Used equipment NR New when rented

4.10.4 Claims Adjudication Determinations.

4.10.4.1 The contractor shall adjudicate DE/DME claims using the following two-step sequential process and shall determine: :

Step 1: Whether the equipment meets the definition of DE/DME, is medically necessary, and is otherwise covered; and

Step 2: Whether the equipment should be rented or obtained through purchase (including lease/purchase). To arrive at a determination, the following information is required:

• A statement of the patient’s prognosis and the estimated length of medical necessity for the equipment.

• The reasonable monthly rental charge.

• The reasonable purchase cost of the equipment.

• The contractor shall determine whether, given the estimated period of medical necessity, it would be more economical and appropriate for the equipment to be rented or purchased.

4.10.4.2 The contractor shall establish a mechanism for making regular monthly payments without requiring the claimant to submit a claim each month, if the beneficiary opts to rent/purchase. (It is not required or expected that the contractor will automate the automatic payment; the volume of this type claim will be quite low.) In cases of “indefinite needs,” medical

Chapter 1, Section 11 necessity must be evaluated after the first three months and every six months thereafter.

Special care should be taken to avoid payment after termination of TRICARE eligibility or in excess of the total allowable benefit.

4.10.4.3 The contractor shall, in making monthly payments, report on the TRICARE Encounter Data (TED) record only that portion of the billed charge which is applicable to that monthly payment. (See the TRICARE Systems Manual (TSM), Chapter 2.) For example, a wheelchair is being purchased for which the total charge is $770. The contractor determines that payments will be made over a 10-month period. The allowed charge is $600. The contractor will show the monthly billed charge as $77 and $60 as the allowed.

4.10.5 Notice To Beneficiary. The contractor shall notify the beneficiary when the contractor makes a determination to rent or purchase. The beneficiary is not required to follow the contractor’s determination. He or she may purchase the equipment even though the contractor has determined that rental is more cost effective. However, payment for the equipment will be based on the contractor’s determination. Because of this, the notice should be carefully worded to avoid giving any impression that compliance is mandatory, but should caution the beneficiary concerning the expenses in excess of the allowed amount. Suggested wording is included in Addendum B.

4.11 Automatic Mailing/Delivery of DMEPOS

The contractor shall ensure that all DMEPOS services are medically necessary and appropriate, to include refills of repetitive services and/or supplies, and any automatically dispensed quantities of supplies on a predetermined regular basis.

4.12 Oxygen and oxygen equipment. Oxygen and oxygen equipment is to be reimbursed in accordance with Section 12.

4.13 Parenteral/enteral nutrition therapy. Parenteral/enteral pumps can be either rented or purchased.

4.14 Splints and Casts. The reimbursement rates for these items of DMEPOS shall be based on Medicare’s pricing.

4.15 Reimbursement Rates.

4.15.1 The contractor shall replace the existing pricing with the updated pricing information within 10 calendar days of publication on the Internet. The DMEPOS pricing information is available at https://www.health.mil/rates.

4.15.2 The pricing for splints and casts is included in the DMEPOS pricing available at https:// www.health.mil/rates.

4.15.3 Refer to Chapter 1, Addendum D for payment of breastfeeding supplies that are not listed in the DMEPOS fee schedule.

4.15.4 See the TRICARE Operations Manual (TOM), Chapter 1, Section 4 regarding updating and maintaining TRICARE reimbursement systems.

http://www.health.mil/rates…