TRICARE Revision to CHAMPUS DRG-Based Payment System, Pricing of Hospital Claims, 29085-29088 [2014-11194]
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Federal Register / Vol. 79, No. 98 / Wednesday, May 21, 2014 / Rules and Regulations
FDA to F. Ellison, Division of Petition
Review, CFSAN, FDA, February 7, 2013.
11. Memorandum from A. Khan, Division of
Petition Review, CFSAN, FDA to F.
Ellison, Division of Petition Review,
CFSAN, FDA, June 22, 2010.
12. Memorandum from T. Walker, Division of
Petition Review, CFSAN, FDA to F.
Ellison, Division of Petition Review,
CFSAN, FDA, December 27, 2011.
13. Memorandum from I. Chen, Division of
Petition Review, CFSAN, FDA to F.
Ellison, Division of Petition Review,
CFSAN, FDA, May 24, 2010.
14. Memorandum from S. Francke-Carroll
and S. Mog, Senior Science and Policy
Staff, CFSAN, FDA to C. Whiteside and
A. Khan, Division of Petition Review,
CFSAN, FDA, March 17, 2011.
15. Memorandum from A. Khan, Division of
Petition Review, CFSAN, FDA to F.
Ellison, Division of Petition Review,
CFSAN, FDA, March 3, 2012.
16. CFSAN Cancer Assessment Committee
Full Committee Review, Carcinogenicity
Evaluation of Advantame, April 27,
2012.
List of Subjects in 21 CFR Part 172
Food additives, Incorporation by
reference, Reporting and recordkeeping
requirements.
Therefore, under the Federal Food,
Drug, and Cosmetic Act and under
authority delegated to the Commissioner
of Food and Drugs, 21 CFR part 172 is
amended as follows:
PART 172—FOOD ADDITIVES
PERMITTED FOR DIRECT ADDITION
TO FOOD FOR HUMAN
CONSUMPTION
1. The authority citation for 21 CFR
part 172 continues to read as follows:
■
Authority: 21 U.S.C. 321, 341, 342, 348,
371, 379e.
2. Add § 172.803 to subpart I to read
as follows:
■
emcdonald on DSK67QTVN1PROD with RULES
§ 172.803
Advantame.
(a) Advantame is the chemical N-[N[3-(3-hydroxy-4methoxyphenyl)propyl]-a-aspartyl]-Lphenylalanine 1-methyl ester,
monohydrate (CAS Reg. No. 714229–
20–6).
(b) Advantame meets the following
specifications when it is tested
according to the methods described or
referenced in the document entitled
‘‘Specifications and Analytical Methods
for Advantame’’ dated April 1, 2009, by
the Ajinomoto Co. Inc., Sweetener
Department 15–1, Kyobashi 1-chome,
Chuo-ku, Tokyo 104–8315, Japan. The
Director of the Office of the Federal
Register approves this incorporation by
reference in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies are
available from the Office of Food
VerDate Mar<15>2010
16:26 May 20, 2014
Jkt 232001
Additive Safety (HFS–200), Center for
Food Safety and Applied Nutrition,
5100 Paint Branch Pkwy., College Park,
MD 20740. Copies may be examined at
the Food and Drug Administration’s
Main Library, 10903 New Hampshire
Ave., Bldg. 2, Third Floor, Silver Spring,
MD 20993, 301–796–2039, or at the
National Archives and Records
Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030 or
go to: https://www.archives.gov/federalregister/cfr/ibr-locations.html.
(1) Assay for advantame, not less than
97.0 percent and not more than 102.0
percent on a dry basis.
(2) Free N-[N-[3-(3-hydroxy-4methoxyphenyl)propyl]-a-aspartyl]-Lphenylalanine, not more than 1.0
percent.
(3) Total other related substances, not
more than 1.5 percent.
(4) Lead, not more than 1.0 milligram
per kilogram.
(5) Water, not more than 5.0 percent.
(6) Residue on ignition, not more than
0.2 percent.
(7) Specific rotation, determined at
20 °C [a]D: ¥45.0 to ¥38.0° calculated
on a dry basis.
(c) The food additive advantame may
be safely used as a sweetening agent and
flavor enhancer in foods generally,
except in meat and poultry, in
accordance with current good
manufacturing practice, in an amount
not to exceed that reasonably required
to achieve the intended technical effect,
in foods for which standards of identity
established under section 401 of the
Federal Food, Drug, and Cosmetic Act
do not preclude such use.
(d) If the food containing the additive
purports to be or is represented to be for
special dietary use, it must be labeled in
compliance with part 105 of this
chapter.
Dated: May 15, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014–11584 Filed 5–19–14; 11:15 am]
BILLING CODE 4160–01–P
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29085
DEPARTMENT OF DEFENSE
Office of the Secretary
[DOD–2012–OS–0105]
RIN 0720–AB58
32 CFR Part 199
TRICARE Revision to CHAMPUS DRGBased Payment System, Pricing of
Hospital Claims
Office of the Secretary,
Department of Defense.
ACTION: Final rule.
AGENCY:
This Final rule changes
TRICARE’s current regulatory provision
for inpatient hospital claims priced
under the DRG-based payment system.
Claims are currently priced by using the
rates and weights that are in effect on a
beneficiary’s date of admission. This
Final rule changes that provision to
price such claims by using the rates and
weights that are in effect on a
beneficiary’s date of discharge.
DATES:
Effective Date: This Final rule is
effective June 20, 2014.
Applicability Date: This rule applies
to claims with a discharge date of
October 1, 2014, or later from hospitals
paid by TRICARE under the Inpatient
Prospective Payment System/DiagnosisRelated Groups-based payment system.
FOR FURTHER INFORMATION CONTACT: Ms.
Amber Butterfield, TRICARE
Management Activity, Medical Benefits
and Reimbursement Office, telephone
(303) 676–3565.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Dates
The effective date above is the date
that the policies herein take effect and
are considered to be officially adopted.
The applicability date, which is
different than the effective date, is the
date on which the policies adopted in
this rule shall apply to claims from
hospitals paid by TRICARE under the
Inpatient Prospective Payment System/
Diagnosis-Related Groups-based
payment system, and must be
implemented.
II. Executive Summary and Overview
A. Purpose of the Final Rule
1. Need for the Regulatory Action
This Final rule amends the TRICARE/
CHAMPUS regulatory provision (32
CFR 199.14(a)(1)(i)(C)(3)) of pricing
inpatient hospital claims that are
reimbursed under the DRG-based
payment system from the beneficiary’s
date of admission, to pricing such
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claims based on the beneficiary’s date of
discharge.
The TRICARE/CHAMPUS DRG-based
payment system applies to acute care
hospitals, unless such hospital is
exempt by regulation from the payment
system. Under the TRICARE DRG-based
payment system, payment for the
operating costs of inpatient hospital
services subject to the payment system
is made on the basis of prospectively
determined rates.
The TRICARE DRG-based payment
system is modeled on the Medicare
Inpatient Prospective Payment System
(IPPS). Although many of the
procedures in the TRICARE DRG-based
payment system are similar or identical
to the procedures in the Medicare IPPS,
the actual payment amounts, DRG
weights, and certain procedures are
different. This is necessary because of
the differences in the two programs,
especially in the beneficiary population.
Since the inception of the TRICARE
DRG-based payment system in 1987,
claims have been priced after the
beneficiary’s discharge by the hospital,
but using the weights and rates that
were in effect on the beneficiary’s date
of admission. That is, claims submitted
for the beneficiary’s inpatient stay have
been grouped to a specific DRG, and the
pricing (e.g., payment rate) has been
determined by using the weights and
rates that were in effect on the date of
the beneficiary’s admission to the
hospital.
B. Summary of the Major Provisions of
the Final Rule
The major provision of this rule is to
revise TRICARE’s regulation on the
pricing of claims paid under the DRGbased payment system. Claims are
currently priced by using the rates and
weights that are in effect on a
beneficiary’s date of admission. This
rule changes that provision to price
such claims by using the rates and
weights that are in effect on a
beneficiary’s date of discharge. The
change shall apply to claims with a
discharge date of October 1, 2014, or
later from hospitals paid by TRICARE
under the Inpatient Prospective
Payment System/Diagnosis-Related
Groups-based payment system.
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C. Costs and Benefits
The benefits of this change include
aligning TRICARE pricing of hospital
claims practices with industry standards
utilized by Medicare and other payers
and thereby increasing standardization
of claims administration and other
claims related processes for contractors
who adjudicate claims.
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There are known costs associated
with this change. On May 27, 2011,
Kennell and Associates completed an
Independent Government Cost Estimate
(‘‘May 27, 2011, IGCE’’) analyzing the
costs associated with the shift of pricing
DRG claims from the date of admission
to the date of discharge. The May 27,
2011, IGCE, identified three known
costs.
1. One time information technology
costs associated with changes to
Managed Care Support Contractors’
claims processing systems and one time
administrative costs associated with the
review change order and the assessment
of the impact on Claims Operations,
Customer Service, Provider
Administration, and Contracts
Maintenance. The total one time
information technology and
administrative costs for North, South,
West and TDEFIC Managed Care
Support Contractors’ combined is
estimated at $88,208.
2. An annual cost of reprocessing
interim claims of $2,500.
3. An increase in health care costs to
account for using the weights and rates
in place on the date of discharge. The
May 27, 2011, IGCE, using 2009 claims
data, estimated about 1,200 inpatient
claims will span fiscal years.
Consequently, reimbursing using the
updated weights and rates in place for
the discharges in future fiscal years is
expected to increase the payment for
approximately 1,200 claims with an
estimated additional cost of $500,000
annually.
4. Total costs for this change for Fiscal
Year 2015 equal approximately
$600,000.
III. Background
A. Statutory and Regulatory Overview
Sections 1073 and 1079 of title 10,
United States Code (U.S.C.), authorize
the Secretary of Defense to administer
the medical and dental benefits
provided under chapter 55 of title 10,
and contract for medical care for
specified persons. These sections and
other provisions of 10 U.S.C. chapter 55
authorize promulgation of this Final
rule.
The August 31, 1988, Final rule [53
FR 33461] (the ‘‘August 1988 Final
rule’’) published in the Federal Register
explains TRICARE’s current practice of
utilizing the date of admission to price
claims. Using the date of admission to
price claims allowed hospitals to be
reimbursed for inpatient services under
the same payment methodology they
expected to be used when the patient
was admitted. Prior to implementation
of the DRG-based payment system, the
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hospital could expect to be reimbursed
at the billed charge rate, since that was
the method TRICARE used to reimburse
hospitals at that time. For patients
admitted after implementation of the
DRG-based payment system, the
hospital could expect to be reimbursed
using the DRG-based payment system.
The August 1988 Final rule continues
by stating that since certain services
were previously excluded from the
DRG-based system, but may have
already involved an interim bill prior to
the effective date of the August 1988
Final rule, it would be administratively
difficult and fiscally unfair to hospitals
to attempt to reconcile the total
payments with the DRG-based allowed
amounts. As a result of the analysis at
the time, the provision stated, ‘‘except
for interim claims submitted for
qualifying outlier cases, all claims
reimbursed under the CHAMPUS DRGbased payment system are to be priced
as of the date of admission, regardless
of when the claim is submitted.’’ While
there may have been a need to reference
interim claims when the August 1988
Final rule was written and as we
transition from ‘‘billed’’ charges to the
DRG-based payment method, that is no
longer the case. Consequently, the
interim claims reference has been
deleted.
B. Updating the Pricing Approach
In the early stages of the DRG-based
payment system, the approach of
pricing claims based on the date of the
beneficiary’s admission to the hospital
was an effective operational policy for
TRICARE. At the time TRICARE
adopted the DRG-based payment
system, it was the first prospective
payment system of its kind. TRICARE
decided to use the date of admission to
price claims, allowing hospitals to be
reimbursed for inpatient services under
the same payment methodology they
expected to be used when the patient
was admitted. However, this is no
longer the industry standard.
Consequently, in order to be consistent
with industry standards utilized by
Medicare and other payers, TRICARE
policy shall require all final claims to be
priced based on the rates and weights
that are in effect on a beneficiary’s date
of discharge.
While pricing using the date of
discharge applies to all final claims, the
change in approach will result in
different pricing only for those
relatively few claims that span fiscal
years (FYs). That is, currently if an
admission occurs on September 29 of a
fiscal year (e.g., FY 2013) and the
discharge occurs for example on
October 2 of the subsequent fiscal year
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Federal Register / Vol. 79, No. 98 / Wednesday, May 21, 2014 / Rules and Regulations
(e.g., FY2014) the payment rate is based
upon the DRG rates and weights in
effect on September 29, 2013, or the
prior fiscal year (FY2013), rather than
on October 2, 2013, (FY2014). On and
after this rule’s applicability date, if an
admission occurs for instance on
September 29 of a fiscal year (e.g.,
FY2014) and the discharge occurs on
October 1, 2014, or later (i.e., FY2015)
the claim will be priced using the rates
and weights in place on the date of
discharge (e.g., FY2015). Please note
that the rates and weights for the DRGbased payment system are updated
every fiscal year and are based on the
previous fiscal year’s TRICARE claims
data. As a result, the applicability date
of October 1, 2014, is established to
coincide with the next annual payment
system update.
To improve consistency with other
payers for health care services and
reduce any administrative burden on
providers, we are therefore changing our
regulations to provide that all claims
reimbursed on the DRG-based payment
system will be priced as of the date of
discharge starting with discharges dated
October 1, 2014, or later.
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IV. Public Comments
The proposed rule was published in
the Federal Register (78 FR 10579–
10581) on February 14, 2013, for a 60day public comment period. We
received one comment from one
respondent.
Comment: Billing and adjustments for
a hospital stay are completed on the last
day.
Response: We interpret the
commenter’s statement as
acknowledging that billing and
adjustments for a patient’s hospital stay
are typically performed after the patient
has been discharged. Consequently
pricing an inpatient stay according to
the weights and rates on the date of
discharge is appropriate and desirable.
We agree with the commenter’s
statement. Beginning with discharges
that occur on or after October 1, 2014,
the pricing of TRICARE inpatient claims
reimbursed under the DRG methodology
will be based on the weights and rates
that are in effect on the date of
discharge.
We will monitor discharge patterns
and lengths of stay following this
revision and may take additional
regulatory action if we observe any
unintended adverse consequences due
to calculating payments for claims based
on the rates and weights on the date of
discharge as opposed to admission.
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V. Regulatory Procedures
A. Overall Impact
DoD has examined the impacts of this
Final rule as required by Executive
Orders (E.O.s) 12866 (September 1993,
Regulatory Planning and Review) and
13563 (January 18, 2011, Improving
Regulation and Regulatory Review), the
Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96–354),
Unfunded Mandates Reform Act of 1995
(Pub. L. 104–4), and the Congressional
Review Act (5 U.S.C. 804(2)).
1. Executive Order 12866 and Executive
Order 13563
Section 801 of title 5, United States
Code, and Executive Order (E.O.) 12866
require certain regulatory assessments
and procedures for any major rule or
significant regulatory action, defined as
one that would result in an annual effect
of $100 million or more on the national
economy or which would have other
substantial impacts. E.O. 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. It has been
certified that this rule is not
economically significant, and has been
reviewed by the Office of Management
and Budget as required under the
provisions of E.O. 12866 and E.O.
13563.
2. Congressional Review Act. 5 U.S.C.
801
Under the Congressional Review Act,
a major rule may not take effect until at
least 60 days after submission to
Congress of a report regarding the rule.
A major rule is one that would have an
annual effect on the economy of $100
million or more or have certain other
impacts. This Final rule is not a major
rule under the Congressional Review
Act.
3. Public Law 96–354, ‘‘Regulatory
Flexibility Act’’ (RFA) (5 U.S.C. 601)
Public Law 96–354, ‘‘Regulatory
Flexibility Act’’ (RFA) (5 U.S.C. 601),
requires that each Federal agency
prepare a regulatory flexibility analysis
when the agency issues a regulation
which would have a significant impact
on a substantial number of small
entities. This Final rule is not an
economically significant regulatory
action, and it has been certified that it
will not have a significant impact on a
substantial number of small entities.
Therefore, this Final rule is not subject
to the requirements of the RFA.
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29087
4. Public Law 104–4, Section 202,
‘‘Unfunded Mandates Reform Act’’
Section 202 of Public Law 104–4,
‘‘Unfunded Mandates Reform Act,’’
requires that an analysis be performed
to determine whether any federal
mandate may result in the expenditure
by State, local and tribal governments,
in the aggregate, or by the private sector
of $100 million in any one year. It has
been certified that this Final rule does
not contain a Federal mandate that may
result in the expenditure by State, local
and tribal governments, in aggregate, or
by the private sector, of $100 million or
more in any one year, and thus this
Final rule is not subject to this
requirement.
5. Public Law 96–511, ‘‘Paperwork
Reduction Act’’ (44 U.S.C. Chapter 35)
This rule does not contain a
‘‘collection of information’’
requirement, and will not impose
additional information collection
requirements on the public under Public
Law 96–511, ‘‘Paperwork Reduction
Act’’ (44 U.S.C. Chapter 35).
6. Executive Order 13132, ‘‘Federalism’’
E.O. 13132, ‘‘Federalism,’’ requires
that an impact analysis be performed to
determine whether the rule has
federalism implications that would have
substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. It has been
certified that this Final rule does not
have federalism implications, as set
forth in E.O. 13132.
List of Subjects in 32 CFR Part 199
Claims, Dental health, Health care,
Health insurance, Individuals with
disabilities, Military personnel.
Accordingly, 32 CFR part 199 is
amended as follows:
PART 199—[AMENDED]
1. The authority citation for part 199
continues to read as follows:
■
Authority: 5 U.S.C. 301; 10 U.S.C. chapter
55.
2. Section 199.14 is amended by
revising paragraph (a)(1)(i)(C)(3) to read
as follows:
■
§ 199.14 Provider reimbursement
methods.
(a) * * *
(1) * * *
(i) * * *
(C) * * *
(3) Pricing of claims. All final claims
with discharge dates of September 30,
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2014, or earlier that are reimbursed
under the CHAMPUS DRG-based
payment system are to be priced as of
the date of admission, regardless of
when the claim is submitted. All final
claims with discharge dates of October
1, 2014, or later that are reimbursed
under the CHAMPUS DRG-based
payment system are to be priced as of
the date of discharge.
*
*
*
*
*
Dated: May 12, 2014.
Aaron Siegel,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[FR Doc. 2014–11194 Filed 5–20–14; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
Table of Acronyms
[Docket Number USCG–2014–0250]
RIN 1625–AA08
Special Local Regulation; Jones Beach
Air Show; Atlantic Ocean, Sloop
Channel Through East Bay, and Zach’s
Bay; Wantagh, NY
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is
establishing a temporary special local
regulation on the navigable waters of the
Atlantic Ocean, Sloop Channel through
East Bay and Zach’s Bay near Jones
Beach State Park in Wantagh, NY for the
Jones Beach Air Show. This action is
necessary to provide for the safety of life
of event participants, spectators, and
other waterway users during this event.
The special local regulation will
facilitate public notification of the event
and provide protective measures for the
maritime public and event participants
from the hazards associated with the
Jones Beach Air Show. Entering into,
transiting through, remaining, or
anchoring within these regulated areas
would be prohibited unless authorized
by the captain of the Port (COTP) Sector
Long Island Sound.
DATES: This rule is effective from May
23, 2014 to May 25, 2014.
This rule will be enforced from 9 a.m.
to 3:30 p.m. on May 23, 2014, and from
9 a.m. to 9 p.m. beginning May 24, 2014
through May 25, 2014.
ADDRESSES: Documents mentioned in
this preamble are part of docket [USCG–
2014–0250]. To view documents
mentioned in this preamble as being
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SUMMARY:
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available in the docket, go to https://
www.regulations.gov, type the docket
number in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rulemaking. You may also visit the
Docket Management Facility in Room
W12–140 on the ground floor of the
Department of Transportation West
Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
email Petty Officer Scott Baumgartner,
Prevention Department, Coast Guard
Sector Long Island Sound, (203) 468–
4559, Scott.A.Baumgartner@uscg.mil. If
you have questions on viewing or
submitting material to the docket, call
Barbara Hairston, Program Manager,
Docket Operations, telephone (202)
366–9826.
SUPPLEMENTARY INFORMATION:
COTP Captain of the Port
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking
A. Regulatory History and Information
On May 24, 2013, the Coast Guard
published a Final Rule, entitled, ‘‘Safety
Zones and Special Local Regulations;
Recurring Marine Events in Captain of
the Port Long Island Sound Zone’’ in the
Federal Register (78 FR 31402). This
rulemaking established multiple safety
zones and special local regulations
throughout the Captain of the Port
Sector Long Island Sound Zone
including a safety zone for the Jones
Beach Air Show. This final rule was
preceded by a NPRM entitled, ‘‘Safety
Zones and Special Local Regulations;
Recurring Marine Events in Captain of
the Port Long Island Sound Zone’’ that
was published in the Federal Register
(78 FR 20277). No public comments
were received for this proposed
rulemaking. There were no requests
received for a public meeting and none
were held.
The Coast Guard is issuing this
temporary final rule without prior
notice and opportunity to comment
pursuant to authority under section 4(a)
of the Administrative Procedure Act
(APA) (5 U.S.C. 553(b)). This provision
authorizes an agency to issue a rule
without prior notice and opportunity to
comment when the agency for good
cause finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Under 5 U.S.C.
553(b)(B), the Coast Guard finds that
good cause exists for not publishing a
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notice of proposed rulemaking (NPRM)
with respect to this rule because an
NPRM would be impracticable. Since
the Jones Beach Air Show is scheduled
to take place over three days beginning
May 23, 2014 through May 25, 2014, it
is impracticable to draft, publish, and
receive public comment on this
rulemaking via an NPRM and still
publish a final rule before the event is
scheduled to take place. Delaying this
rulemaking by waiting for a comment
period to run would also reduce the
Coast Guard’s ability to promote the
safety of event participants and the
maritime public during this event.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register for the same reasons stated
above.
B. Basis and Purpose
The legal basis for this temporary rule
is 33 U.S.C. 1233 and Department of
Homeland Security Delegation No.
0170.1 which collectively authorize the
Coast Guard to define regulatory special
local regulations.
The Jones Beach Air Show will take
place from May 23, 2014 through May
25, 2014. The first day of the event, May
23, 2014 the Jones Beach Air Show will
not be open to the general public but
aircraft involved in the event will be
conducting practice runs over the
Atlantic Ocean. On Saturday, May 24,
2014 and Sunday, May 25, 2014 the Air
Show will be open and operating from
10 a.m. through 3 p.m. The event will
involve numerous aircraft performing
various aerial maneuvers. These aircraft
and associated event participants will
be operating at high speeds and/or in
close proximity to other event
participants and spectators. These aerial
activities present multiple hazards,
including those associated with in-flight
accidents that could result in collision,
fire, and debris fall-out. The Jones Beach
Air show and these aerial activities
attract thousands of spectators to Jones
Beach State Park as well as a significant
number of spectator vessels to the
waters around Jones Beach State Park.
The operation of these numerous
spectator vessels in such close
proximity to each other presents
additional hazards to the maritime
public beyond those associated with the
aerial activities.
During a review of the regulations
currently published for the Jones Beach
Air Show in Table 1 of 33 CFR 165.151
the Coast Guard discovered that the
positions marking the corners of the
area regulated as a safety zone were
published out of order and when
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Agencies
[Federal Register Volume 79, Number 98 (Wednesday, May 21, 2014)]
[Rules and Regulations]
[Pages 29085-29088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11194]
=======================================================================
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DEPARTMENT OF DEFENSE
Office of the Secretary
[DOD-2012-OS-0105]
RIN 0720-AB58
32 CFR Part 199
TRICARE Revision to CHAMPUS DRG-Based Payment System, Pricing of
Hospital Claims
AGENCY: Office of the Secretary, Department of Defense.
ACTION: Final rule.
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SUMMARY: This Final rule changes TRICARE's current regulatory provision
for inpatient hospital claims priced under the DRG-based payment
system. Claims are currently priced by using the rates and weights that
are in effect on a beneficiary's date of admission. This Final rule
changes that provision to price such claims by using the rates and
weights that are in effect on a beneficiary's date of discharge.
DATES:
Effective Date: This Final rule is effective June 20, 2014.
Applicability Date: This rule applies to claims with a discharge
date of October 1, 2014, or later from hospitals paid by TRICARE under
the Inpatient Prospective Payment System/Diagnosis-Related Groups-based
payment system.
FOR FURTHER INFORMATION CONTACT: Ms. Amber Butterfield, TRICARE
Management Activity, Medical Benefits and Reimbursement Office,
telephone (303) 676-3565.
SUPPLEMENTARY INFORMATION:
I. Dates
The effective date above is the date that the policies herein take
effect and are considered to be officially adopted. The applicability
date, which is different than the effective date, is the date on which
the policies adopted in this rule shall apply to claims from hospitals
paid by TRICARE under the Inpatient Prospective Payment System/
Diagnosis-Related Groups-based payment system, and must be implemented.
II. Executive Summary and Overview
A. Purpose of the Final Rule
1. Need for the Regulatory Action
This Final rule amends the TRICARE/CHAMPUS regulatory provision (32
CFR 199.14(a)(1)(i)(C)(3)) of pricing inpatient hospital claims that
are reimbursed under the DRG-based payment system from the
beneficiary's date of admission, to pricing such
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claims based on the beneficiary's date of discharge.
The TRICARE/CHAMPUS DRG-based payment system applies to acute care
hospitals, unless such hospital is exempt by regulation from the
payment system. Under the TRICARE DRG-based payment system, payment for
the operating costs of inpatient hospital services subject to the
payment system is made on the basis of prospectively determined rates.
The TRICARE DRG-based payment system is modeled on the Medicare
Inpatient Prospective Payment System (IPPS). Although many of the
procedures in the TRICARE DRG-based payment system are similar or
identical to the procedures in the Medicare IPPS, the actual payment
amounts, DRG weights, and certain procedures are different. This is
necessary because of the differences in the two programs, especially in
the beneficiary population.
Since the inception of the TRICARE DRG-based payment system in
1987, claims have been priced after the beneficiary's discharge by the
hospital, but using the weights and rates that were in effect on the
beneficiary's date of admission. That is, claims submitted for the
beneficiary's inpatient stay have been grouped to a specific DRG, and
the pricing (e.g., payment rate) has been determined by using the
weights and rates that were in effect on the date of the beneficiary's
admission to the hospital.
B. Summary of the Major Provisions of the Final Rule
The major provision of this rule is to revise TRICARE's regulation
on the pricing of claims paid under the DRG-based payment system.
Claims are currently priced by using the rates and weights that are in
effect on a beneficiary's date of admission. This rule changes that
provision to price such claims by using the rates and weights that are
in effect on a beneficiary's date of discharge. The change shall apply
to claims with a discharge date of October 1, 2014, or later from
hospitals paid by TRICARE under the Inpatient Prospective Payment
System/Diagnosis-Related Groups-based payment system.
C. Costs and Benefits
The benefits of this change include aligning TRICARE pricing of
hospital claims practices with industry standards utilized by Medicare
and other payers and thereby increasing standardization of claims
administration and other claims related processes for contractors who
adjudicate claims.
There are known costs associated with this change. On May 27, 2011,
Kennell and Associates completed an Independent Government Cost
Estimate (``May 27, 2011, IGCE'') analyzing the costs associated with
the shift of pricing DRG claims from the date of admission to the date
of discharge. The May 27, 2011, IGCE, identified three known costs.
1. One time information technology costs associated with changes to
Managed Care Support Contractors' claims processing systems and one
time administrative costs associated with the review change order and
the assessment of the impact on Claims Operations, Customer Service,
Provider Administration, and Contracts Maintenance. The total one time
information technology and administrative costs for North, South, West
and TDEFIC Managed Care Support Contractors' combined is estimated at
$88,208.
2. An annual cost of reprocessing interim claims of $2,500.
3. An increase in health care costs to account for using the
weights and rates in place on the date of discharge. The May 27, 2011,
IGCE, using 2009 claims data, estimated about 1,200 inpatient claims
will span fiscal years. Consequently, reimbursing using the updated
weights and rates in place for the discharges in future fiscal years is
expected to increase the payment for approximately 1,200 claims with an
estimated additional cost of $500,000 annually.
4. Total costs for this change for Fiscal Year 2015 equal
approximately $600,000.
III. Background
A. Statutory and Regulatory Overview
Sections 1073 and 1079 of title 10, United States Code (U.S.C.),
authorize the Secretary of Defense to administer the medical and dental
benefits provided under chapter 55 of title 10, and contract for
medical care for specified persons. These sections and other provisions
of 10 U.S.C. chapter 55 authorize promulgation of this Final rule.
The August 31, 1988, Final rule [53 FR 33461] (the ``August 1988
Final rule'') published in the Federal Register explains TRICARE's
current practice of utilizing the date of admission to price claims.
Using the date of admission to price claims allowed hospitals to be
reimbursed for inpatient services under the same payment methodology
they expected to be used when the patient was admitted. Prior to
implementation of the DRG-based payment system, the hospital could
expect to be reimbursed at the billed charge rate, since that was the
method TRICARE used to reimburse hospitals at that time. For patients
admitted after implementation of the DRG-based payment system, the
hospital could expect to be reimbursed using the DRG-based payment
system.
The August 1988 Final rule continues by stating that since certain
services were previously excluded from the DRG-based system, but may
have already involved an interim bill prior to the effective date of
the August 1988 Final rule, it would be administratively difficult and
fiscally unfair to hospitals to attempt to reconcile the total payments
with the DRG-based allowed amounts. As a result of the analysis at the
time, the provision stated, ``except for interim claims submitted for
qualifying outlier cases, all claims reimbursed under the CHAMPUS DRG-
based payment system are to be priced as of the date of admission,
regardless of when the claim is submitted.'' While there may have been
a need to reference interim claims when the August 1988 Final rule was
written and as we transition from ``billed'' charges to the DRG-based
payment method, that is no longer the case. Consequently, the interim
claims reference has been deleted.
B. Updating the Pricing Approach
In the early stages of the DRG-based payment system, the approach
of pricing claims based on the date of the beneficiary's admission to
the hospital was an effective operational policy for TRICARE. At the
time TRICARE adopted the DRG-based payment system, it was the first
prospective payment system of its kind. TRICARE decided to use the date
of admission to price claims, allowing hospitals to be reimbursed for
inpatient services under the same payment methodology they expected to
be used when the patient was admitted. However, this is no longer the
industry standard. Consequently, in order to be consistent with
industry standards utilized by Medicare and other payers, TRICARE
policy shall require all final claims to be priced based on the rates
and weights that are in effect on a beneficiary's date of discharge.
While pricing using the date of discharge applies to all final
claims, the change in approach will result in different pricing only
for those relatively few claims that span fiscal years (FYs). That is,
currently if an admission occurs on September 29 of a fiscal year
(e.g., FY 2013) and the discharge occurs for example on October 2 of
the subsequent fiscal year
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(e.g., FY2014) the payment rate is based upon the DRG rates and weights
in effect on September 29, 2013, or the prior fiscal year (FY2013),
rather than on October 2, 2013, (FY2014). On and after this rule's
applicability date, if an admission occurs for instance on September 29
of a fiscal year (e.g., FY2014) and the discharge occurs on October 1,
2014, or later (i.e., FY2015) the claim will be priced using the rates
and weights in place on the date of discharge (e.g., FY2015). Please
note that the rates and weights for the DRG-based payment system are
updated every fiscal year and are based on the previous fiscal year's
TRICARE claims data. As a result, the applicability date of October 1,
2014, is established to coincide with the next annual payment system
update.
To improve consistency with other payers for health care services
and reduce any administrative burden on providers, we are therefore
changing our regulations to provide that all claims reimbursed on the
DRG-based payment system will be priced as of the date of discharge
starting with discharges dated October 1, 2014, or later.
IV. Public Comments
The proposed rule was published in the Federal Register (78 FR
10579-10581) on February 14, 2013, for a 60-day public comment period.
We received one comment from one respondent.
Comment: Billing and adjustments for a hospital stay are completed
on the last day.
Response: We interpret the commenter's statement as acknowledging
that billing and adjustments for a patient's hospital stay are
typically performed after the patient has been discharged. Consequently
pricing an inpatient stay according to the weights and rates on the
date of discharge is appropriate and desirable. We agree with the
commenter's statement. Beginning with discharges that occur on or after
October 1, 2014, the pricing of TRICARE inpatient claims reimbursed
under the DRG methodology will be based on the weights and rates that
are in effect on the date of discharge.
We will monitor discharge patterns and lengths of stay following
this revision and may take additional regulatory action if we observe
any unintended adverse consequences due to calculating payments for
claims based on the rates and weights on the date of discharge as
opposed to admission.
V. Regulatory Procedures
A. Overall Impact
DoD has examined the impacts of this Final rule as required by
Executive Orders (E.O.s) 12866 (September 1993, Regulatory Planning and
Review) and 13563 (January 18, 2011, Improving Regulation and
Regulatory Review), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), and the Congressional Review Act (5 U.S.C. 804(2)).
1. Executive Order 12866 and Executive Order 13563
Section 801 of title 5, United States Code, and Executive Order
(E.O.) 12866 require certain regulatory assessments and procedures for
any major rule or significant regulatory action, defined as one that
would result in an annual effect of $100 million or more on the
national economy or which would have other substantial impacts. E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility. It has
been certified that this rule is not economically significant, and has
been reviewed by the Office of Management and Budget as required under
the provisions of E.O. 12866 and E.O. 13563.
2. Congressional Review Act. 5 U.S.C. 801
Under the Congressional Review Act, a major rule may not take
effect until at least 60 days after submission to Congress of a report
regarding the rule. A major rule is one that would have an annual
effect on the economy of $100 million or more or have certain other
impacts. This Final rule is not a major rule under the Congressional
Review Act.
3. Public Law 96-354, ``Regulatory Flexibility Act'' (RFA) (5 U.S.C.
601)
Public Law 96-354, ``Regulatory Flexibility Act'' (RFA) (5 U.S.C.
601), requires that each Federal agency prepare a regulatory
flexibility analysis when the agency issues a regulation which would
have a significant impact on a substantial number of small entities.
This Final rule is not an economically significant regulatory action,
and it has been certified that it will not have a significant impact on
a substantial number of small entities. Therefore, this Final rule is
not subject to the requirements of the RFA.
4. Public Law 104-4, Section 202, ``Unfunded Mandates Reform Act''
Section 202 of Public Law 104-4, ``Unfunded Mandates Reform Act,''
requires that an analysis be performed to determine whether any federal
mandate may result in the expenditure by State, local and tribal
governments, in the aggregate, or by the private sector of $100 million
in any one year. It has been certified that this Final rule does not
contain a Federal mandate that may result in the expenditure by State,
local and tribal governments, in aggregate, or by the private sector,
of $100 million or more in any one year, and thus this Final rule is
not subject to this requirement.
5. Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter
35)
This rule does not contain a ``collection of information''
requirement, and will not impose additional information collection
requirements on the public under Public Law 96-511, ``Paperwork
Reduction Act'' (44 U.S.C. Chapter 35).
6. Executive Order 13132, ``Federalism''
E.O. 13132, ``Federalism,'' requires that an impact analysis be
performed to determine whether the rule has federalism implications
that would have substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. It has been certified that this Final rule does not have
federalism implications, as set forth in E.O. 13132.
List of Subjects in 32 CFR Part 199
Claims, Dental health, Health care, Health insurance, Individuals
with disabilities, Military personnel.
Accordingly, 32 CFR part 199 is amended as follows:
PART 199--[AMENDED]
0
1. The authority citation for part 199 continues to read as follows:
Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55.
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2. Section 199.14 is amended by revising paragraph (a)(1)(i)(C)(3) to
read as follows:
Sec. 199.14 Provider reimbursement methods.
(a) * * *
(1) * * *
(i) * * *
(C) * * *
(3) Pricing of claims. All final claims with discharge dates of
September 30,
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2014, or earlier that are reimbursed under the CHAMPUS DRG-based
payment system are to be priced as of the date of admission, regardless
of when the claim is submitted. All final claims with discharge dates
of October 1, 2014, or later that are reimbursed under the CHAMPUS DRG-
based payment system are to be priced as of the date of discharge.
* * * * *
Dated: May 12, 2014.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2014-11194 Filed 5-20-14; 8:45 am]
BILLING CODE 5001-06-P