Collection From Third Party Payers of Reasonable Charges for Healthcare Services, 51347-51351 [2020-16131]
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Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Rules and Regulations
This document contains a
correction to a Treasury Decision 9614,
which was published in the Federal
Register on Tuesday, March 19, 2013.
Treasury Decision 9614 contained final
regulations that apply to transfers of
certain property by a domestic
corporation to a foreign corporation in
certain nonrecognition exchanges, or to
distributions of stock of certain foreign
corporations by a domestic corporation
in certain nonrecognition distributions.
DATES:
Effective date: These corrections are
effective on August 20, 2020.
Applicability date: March 19, 2013.
FOR FURTHER INFORMATION CONTACT:
Logan M. Kincheloe at (202) 317–6937
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
The final regulations (TD 9614) that
are the subject of this correction are
issued under section 367 of the Internal
Revenue Code.
Need for Correction
As published on March 19, 2013 (53
FR 17024), the final regulations (TD
9614; FR Doc. 2013–05700), contained
errors that need to be corrected.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.367(a)–3 is amended
by adding paragraph (g)(1)(v)(A) and (B)
to read as follows:
■
§ 1.367(a)–3 Treatment of transfers of
stock or securities to foreign corporations.
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*
*
*
*
*
(g) * * *
(1) * * *
(v) * * *
(A) Except as provided in paragraphs
(g)(1)(v)(B) of this section and
§ 1.367(a)–3T(g)(1)(ix), the rules of
paragraph (d)(2)(vi) of this section apply
only to transactions occurring on or
after January 23, 2006. See § 1.367(a)–
3(d)(2)(vi), as contained in 26 CFR part
1 revised as of April 1, 2005, for
transactions occurring on or after July
20, 1998, and before January 23, 2006.
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(B)(1) For purposes of paragraph
(d)(2)(vi)(B)(1) of this section as
contained in 26 CFR part 1 revised as of
April 1, 2007, except as provided in
paragraph (g)(1)(v)(B)(3) of this section,
the following conditions must be
satisfied for transactions occurring on or
after December 28, 2007, and before
March 18, 2013: The conditions and
requirements of section 367(a)(5) and
paragraph (g)(1)(v)(B)(2) of this section
must be satisfied with respect to the
domestic acquired corporation’s transfer
of assets to the foreign acquiring
corporation and those conditions and
requirements apply before the
application of the exception under
paragraph (d)(2)(vi)(B)(1) of this section
as contained in 26 CFR part 1 revised as
of April 1, 2007.
(2) The domestic acquired corporation
is controlled (within the meaning of
section 368(c)) by five or fewer (but at
least one) domestic corporations
(controlling domestic corporations)
immediately before the reorganization,
appropriate basis adjustments under
section 367(a)(5) are made to the stock
received by the controlling domestic
corporations in the reorganization, and
any other conditions as provided in
regulations under section 367(a)(5) are
satisfied. For purposes of determining
whether the domestic acquired
corporation is controlled by five or
fewer domestic corporations, all
members of the same affiliated group
within the meaning of section 1504 are
treated as one corporation. Any
adjustments to stock basis required
under section 367(a)(5) must be made to
the stock received by the controlling
domestic corporation in the
reorganization so the appropriate
amount of built-in gain in the property
transferred by the domestic acquired
corporation to the foreign acquiring
corporation in the section 361 exchange
is reflected in the stock received. The
basis adjustment requirement cannot be
satisfied by adjusting the basis in stock
of the foreign acquiring corporation held
by the controlling domestic corporation
before the reorganization. To the extent
the appropriate amount of built-in gain
in the property transferred by the
domestic acquired corporation to the
foreign acquiring corporation in the
section 361 exchange cannot be
preserved in the stock received by the
controlling domestic corporation in the
reorganization, the domestic acquired
corporation’s transfer of property to the
foreign acquiring corporation is subject
to section 367(a) and (d).
(3) For transactions occurring on or
after August 19, 2008, and before March
18, 2013, the following condition also
applies: To the extent any of the
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51347
retransferred assets constitute property
to which section 367(d) applies, the
exception under paragraph
(d)(2)(iv)(B)(1) of this section, as
contained in 26 CFR part 1 revised as of
April 1, 2007, applies only if the
property to which section 367(d) applies
is treated as property subject to section
367(a) for purposes of satisfying the
conditions and requirements of section
367(a)(5).
*
*
*
*
*
§ 1.367(a)–7
[Amended]
Par. 3. In § 1.367(a)–7 amend
paragraph (f)(10) by removing
‘‘§ 1.367(a)–1T(d)(4)’’ and adding in its
place ‘‘§ 1.367(a)–1(d)(4)’’.
■
Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel, (Procedure and Administration).
[FR Doc. 2020–16354 Filed 8–19–20; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 220
[Docket ID: DOD–2016–HA–0107]
RIN 0720–AB68
Collection From Third Party Payers of
Reasonable Charges for Healthcare
Services
Office of the Assistant
Secretary of Defense (Health Affairs),
Department of Defense (DoD).
ACTION: Final rule.
AGENCY:
This rule exercises the DoD’s
authority to update current regulations
to compute reasonable charges for
inpatient and ambulatory (outpatient)
institutional resources and also for
pharmaceuticals, durable medical
equipment (DME), supplies,
immunizations, injections or other
medications administered or furnished
by DoD military medical treatment
facilities (MTFs) under their three
existing healthcare cost recovery
programs: Third Party Collections,
Medical Services Account, and Medical
Affirmative Claims.
DATES: This rule is effective on
September 21, 2020.
FOR FURTHER INFORMATION CONTACT: Ms.
DeLisa E. Prater, Program Manager,
Defense Health Agency Uniform
Business Office, (703) 275–6380.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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I. Executive Summary
This rule updates the reasonable
charges methodologies for inpatient and
ambulatory institutional billing to allow
for the use of Itemized Resource
Utilization (IRU) based rates–developed
from the cost to provide inpatient and
ambulatory institutional healthcare
resources–in addition to current
bundled prospective reimbursement
approaches of diagnostic related group
(DRG), ambulatory payment
classification (APC), ambulatory surgery
center (ASC) and ambulatory procedure
visit (APV) based rates. It also revises
the reasonable charges methodology for
pharmaceuticals, DME, supplies,
immunizations, injections or medication
administered to allow for their
calculation using either Civilian Health
and Medical Program of the Uniformed
Services (CHAMPUS) prevailing rates or
IRU based rates—developed from the
cost to provide these healthcare items
and resources—regardless of whether
CHAMPUS prevailing rates are
available. The additional IRU
methodology implements an itemized
rate and reasonable charges structure
that improves collections and operation
of DoD’s healthcare cost recovery
programs by ensuring MTFs receive
appropriate reimbursement for
institutional healthcare resources as
well as for pharmaceuticals, DME,
supplies, immunizations, injections or
medication provided or administered
and is more consistent with civilian
health insurance industry practice. The
final rule also replaces ‘‘hospital’’ with
‘‘institutional’’ throughout most of the
regulation to align it with civilian health
insurance industry terminology and
better promote identification and
separate billing of institutional and
professional services.
A. Purpose of the Final Rule
The purpose of this final rule is to
incorporate new additional statutory
authority for calculating reasonable
institutional facility charges for: (a)
Inpatient services and resources
provided at DoD military MTFs in
addition to the current authorized
methodology which uses all-inclusive
prospective CHAMPUS DRG based
payment rates (including professional
charges), and (b) ambulatory services
provided at DoD MTFs in addition to
the current authorized methodologies
which use all-inclusive CHAMPUS APC
and ambulatory surgery center (ASC)
based payment rates and Military Health
System (MHS) ambulatory procedure
visit (APV) based payment rates. As
defined in 32 CFR 199.2, the term
‘‘facility charges’’ means the charges,
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either inpatient or outpatient, made by
a MTF to cover the overhead costs of
providing the service (e.g., building
costs such as depreciation and interest,
staffing costs, drugs and supplies;
overhead costs such as utilities,
housekeeping, maintenance). It also
revises the reasonable charges
methodology for pharmaceuticals, DME,
supplies, immunizations, injections or
medication administered or provided to
allow for their reasonable charges
calculation using either CHAMPUS
prevailing or cost based rates regardless
of whether CHAMPUS prevailing rates
are available. The legal authority for this
final rule is 10 U.S.C. 1095(f), 1097b(b)
and 1079b.
B. Summary of the Major Provisions of
the Final Rule
a. It creates an additional exception to
the general rule that reasonable charges
under 32 CFR 220.8(a), 220.8(b),
220.8(f)(5) and 220.8(f)(6) for inpatient
and ambulatory institutional resources
as well as for pharmaceuticals, DME,
supplies, immunizations, injections or
medication administered are based on
the rates used by CHAMPUS under 32
CFR 199.14 to reimburse authorized
providers. Specifically, it authorizes
DoD MTFs to use an alternative
reasonable charges methodology based
on IRU rates–developed from the cost to
provide these resources and items–in
addition to the use of aggregated and
prospective DRG, APC, ASC and APV
and prevailing CHAMPUS based
encounter rates.
b. As a ‘‘housekeeping’’ change, it
replaces ‘‘hospital’’ with ‘‘institutional’’
throughout most of the regulation to
align it with civilian health insurance
industry terminology and better
promote identification and separate
billing of institutional and professional
services as required by 32 CFR 220.8(b).
C. Legal Authority for This Program
Legal authority for the final rule is
outlined in the following statutes and
regulations listed below:
a. 10 U.S.C. 1079b(a)—Procedures for
charging fees for care provided to
civilians; retention and use of fees
collected.
This section authorizes the Secretary
of Defense to implement procedures
under which the DoD can charge
civilians that are not covered
beneficiaries for trauma and other
medical care provided. The charges
must represent the cost of the service, as
determined by the Secretary. This
section can be accessed via the
following link: https://www.govinfo.gov/
content/pkg/USCODE-2011-title10/pdf/
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USCODE-2011-title10-subtitleA-partIIchap55-sec1079b.pdf.
b. 10 U.S.C. 1085—Medical and
dental care from another executive
department: Reimbursement.
This section authorizes any executive
department providing inpatient medical
or dental care to a member or former
member of the uniformed services under
the jurisdiction of another department
to seek reimbursement for the care
provided, at a rate representative of the
cost of the provision of this care. The
authority to establish these rates is
delegated by the President to the
Secretary of Defense for facilities of
armed forces under jurisdiction of a
military department. This section can be
accessed via the following link: https://
www.govinfo.gov/content/pkg/USCODE2011-title10/pdf/USCODE-2011-title10subtitleA-partII-chap55-sec1085.pdf.
c. 10 U.S.C. 1095(f)—Health care
services incurred on behalf of covered
beneficiaries: collection from third-party
payers.
This section authorizes the Secretary
of Defense to determine rates for
covered beneficiaries using
methodologies based on per diem rates,
all-inclusive per visit rates, diagnosis
related group, or other methodologies as
appropriate. This section can be
accessed via the following link: https://
www.govinfo.gov/content/pkg/USCODE2011-title10/pdf/USCODE-2011-title10subtitleA-partII-chap55-sec1095.pdf.
II. Regulatory History
DoD is authorized to collect
‘‘reasonable charges’’ from third party
payers for the cost of inpatient and
ambulatory (outpatient) institutional
services and also for pharmaceuticals,
DME, supplies, immunizations,
injections or medication administered
or provided at DoD MTFs to military
retirees, all dependents, and other
eligible beneficiaries who have private
health insurance. See 10 U.S.C. 1095
and 32 CFR 220.2. Also, DoD must
collect from nonbeneficiaries (or their
insurers) the cost of trauma or other
medical care provided to them and from
other federal agencies, the average cost
of healthcare provided to their
beneficiaries at DoD MTFs (10 U.S.C.
1079b(a) and 1085). Currently, DoD uses
all-inclusive prospective CHAMPUS
DRG based payment rates (including
professional charges) as the reasonable
charges for inpatient care and allinclusive CHAMPUS APC and ASC
based and MHS APV charges for
miscellaneous institutional ambulatory
care in its healthcare cost recovery
programs—Third Party Collection,
Medical Services Account and Medical
Affirmative Claims. The MHS APV rate
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is authorized by the Assistant Secretary
of Defense (Health Affairs) (ASD(HA))
Policy Memorandum, ‘‘Use of CPT Code
99199’’ (September 14, 2004) because
MTFs currently do not have the
appropriate software to group
encounters into APCs and ASCs. Also,
DoD uses the average cost for
pharmaceutical rates because
CHAMPUS prevailing rates are not
available. However, DoD uses
CHAMPUS based rates for DME,
supplies, immunizations, injections or
medication administered.
III. Discussion of Comments and
Changes
The proposed rule was published in
the Federal Register on December 18,
2018 (83 FR 64768–64771). Comments
were accepted for 60 days until
February 19, 2019. One comment was
received, but it was unrelated to the
rule. No other comments were received
during this comment period.
No changes to the rule are being made
as a result of this comment period, or
otherwise.
IV. Summary of Changes From the
Proposed Rule
Since the publication of the proposed
rule, no changes have been made to the
rule as a result of the comment period,
further internal coordination, or
administrative corrections.
V. Regulatory Analyses
A. Regulatory Planning and Review
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a. Executive Orders
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ and Executive
Order 13563, ‘‘Improving Regulation
and Regulatory Review’’
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distribute impacts, and equity).
Executive Order 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. It has been determined that
this rule is not a significant regulatory
action. This rule does not: (1) Have an
annual effect on the economy of $100
million or more or adversely affect in a
material way the economy; a section of
the economy; productivity; competition;
jobs; the environment; public health or
safety; or State, local, or tribal
governments or communities; (2) Create
a serious inconsistency or otherwise
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interfere with an action taken or
planned by another Agency; (3)
Materially alter the budgetary impact of
entitlements, grants, user fees, or loan
programs, or the rights and obligations
of recipients thereof; or (4) Raise novel
legal or policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in these
Executive Orders.
Executive Order 13771, ‘‘Reducing
Regulation and Controlling Regulatory
Costs’’
There are no cost savings to the public
anticipated by amending the current 32
CFR part 220. Consistent with the
analysis of transfer payments under
OMB Circular A–4, this final rule does
not involve regulatory costs subject to
Executive Order 13771, ‘‘Reducing
Regulation and Controlling Regulatory
Costs.’’
b. Summary
This rule will create an additional
exception to the general rule that
reasonable charges for inpatient and
ambulatory institutional resources as
well as for pharmaceuticals, DME,
supplies, immunizations, injections or
medication administered are based on
the rates used by CHAMPUS.
Specifically, this rule authorizes DoD
MTFs use a methodology based on IRU,
developed from the cost to provide
these resources and items, to establish
reasonable charges.
c. Affected Population
No new populations will be billed
that were not previously billed, and
reimbursement will continue to be
required from populations currently
being billed. Under this final rule, the
individual rates these populations are
billed will change to rates that, using
the new IRU methodology, more
accurately capture the underlying cost
of the provision of care.
Additionally, third-party payers will
receive medical bills from MTFs in a
manner more consistent with the
submission of medical bills in the
private sector which will enhance their
ability to process these claims.
d. Expected Costs
The final rule will create an
additional exception to the general rule
that reasonable charges under 32 CFR
220.8(a), 220.8(b), 220.8(f)(5) and
220.8(f)(6) for inpatient and ambulatory
institutional resources as well as for
pharmaceuticals, DME, supplies,
immunizations, injections or medication
administered are based on the rates used
by CHAMPUS under 32 CFR 199.14 to
reimburse authorized providers. This
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51349
final rule authorizes DoD MTFs to use
an alternative reasonable charges
methodology based on IRU rates—
developed from the cost to provide
these resources and items—in addition
to the use of aggregated and prospective
DRG, APC, ASC and APV and prevailing
CHAMPUS based encounter rates. The
new IRU based rates will be developed
specific to individual medical services,
while currently some CHAMPUS rates
are based on aggregate or per-diem
averages across a wider range of
services. The itemized capture of
resources will be enabled by the
enterprise Electronic Health Records
system known as MHS GENESIS
currently being deployed across the
Military Health System. Services
rendered during patient visits can be
captured at the transactional level on a
patient account, resulting in a claim
with charges that are more
representative of the actual cost of
rendering services during the specific
visit.
e. Benefits
Compared to currently established
CHAMPUS based rates, IRU based rates
are more representative of actual costs
specific to the institutional resources
and also to pharmaceuticals, DME,
supplies, immunizations, injections or
medication administered or consumed
in the provision of care to a patient.
Also, IRU based rates provide DoD the
ability it does not currently have to bill
third party payers in an itemized
manner that they are accustomed to.
With the availability of IRU based rates,
DoD MTFs can bill for institutional
resources and also for pharmaceuticals,
DME, supplies, immunizations,
injections or medication administered
using charge descriptions (i.e., an MTF’s
comprehensive list of items and services
for which it can charge) and individual
cost-based rates associated with those
descriptions. As a result, institutional
bills are much more consistent with the
actual resources and services provided
to the patient, third party payers who
receive MTF claims will have the
detailed data needed for reimbursement,
and the potential for MTFs to receive
appropriate reimbursement improves.
MTF claims are frequently returned for
additional information or denied
because they are not in an itemized
format consistent with standard
industry health insurance practice. The
format of resulting line-item inpatient
charges based on IRU rates will more
closely resemble the format currently
used in the health insurance industry
and promote more efficient claim
adjudication. This rule will not affect
any payments by TRICARE as this rule
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does not pertain to purchased care. It
specifically applies to rate development
for cost recovery in the direct care
setting.
In addition, using only the current
methodologies for reasonable charges
based on bundled prospective DRG/
APC/ASC/APV based rates methods and
CHAMPUS prevailing rates methods for
pharmaceuticals, DME, supplies,
immunizations, injections or medication
administered limits MTFs’ flexibility
and ability to effectively accommodate
current and new provider
reimbursement methodologies and is
likely reducing and resulting in missed
reimbursement opportunities from third
party payers. Third party payers do not
uniformly have nor apply payment
methods and rates to claims received.
Rather, they each have their own
distinct set of rules for and levels of
payment that are not necessarily DRG/
APC/ASC/APV/CHAMPUS rate based.
For example, there are multiple versions
of groupers, and a payer’s
reimbursement policy may use a
different grouper than DoD or not
involve a grouper at all. Moreover, third
party payers are increasingly replacing
fee-for-service with value-based
performance payment portfolios (e.g.,
pay for performance, bundled payments,
shared savings/accountable care
organizations) for providers, including
DoD MTFs. Itemized billing using IRU
based rates provides payers with the
detailed data needed for whatever
reimbursement process they use
yielding fewer requests for additional
information and re-processing of claims
and increased potential reimbursement.
Additional benefits from allowing for
IRU based charges include:
(1) Providing greater transparency of
DoD MTFs’ financial efficiency and
performance through more detailed
purchasing, dispensing, and financial
billing functions. IRU based charges
provide information necessary to
complete detailed analyses into what
and how a MTF is purchasing,
dispensing, and billing, which will lead
to more informed decisions on how to
save money, time, and effort at each of
those three stages.
(2) Enabling different MTF
departments and decision makers to
come together to discuss common
practices, terminology, and reporting,
allowing for the development and
analysis of benchmarks evaluating
clinical performance, and identifying
and implementing the most costeffective delivery modes available.
(3) Providing the ability to track and
monitor resources used to treat patients,
thereby allowing MTF staff,
management, and leadership to better
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control and manage costs, and optimize
the efficiency of operations to deliver
efficient care or prevent unnecessary
care.
This IRU based charges approach is
consistent with 10 U.S.C. 1095(f) and
1097b(b) that authorize the ASD(HA) to
calculate all third-party payment
collections and rates charged to
civilians and interagency payers based
on any appropriate method. It is the
ASD(HA)’s determination that itemized
IRU based rates for inpatient and
ambulatory resources and also for
pharmaceuticals, DME, supplies,
immunizations, injections or medication
administered or provided better
represents the reasonable charges and
costs of providing care to all patients in
MTFs.
The rule also replaces ‘‘hospital’’ with
‘‘institutional’’ throughout most of the
regulation to align it with civilian
healthcare insurance industry
terminology. The current regulation
uses ‘‘hospital’’ interchangeably to mean
both: (1) A facility that provides
emergency, inpatient, and in some cases
outpatient medical care for sick or
injured people; and (2) the institutional
component of a hospital stay (i.e.,
overhead and ancillary, diagnostic and
treatment services, other than
professional services provided by the
facility during the inpatient stay such as
room and board, laboratory tests and the
technical component of radiology
services). It is the general rule under
CHAMPUS, 32 CFR 220.8(b) and also
industry best practice to identify and
charge separately for institutional and
inpatient professional services. This
nomenclature change helps DoD MTFs
reinforce the distinction and better
promotes identification and separate
billing of institutional and professional
services as required by 32 CFR 220.8(b)
and in accordance with health
insurance industry best practice.
f. Alternatives
The enterprise-wide Electronic Health
Record system known as MHS GENESIS
that is currently being deployed across
the Military Health System requires the
itemized capture of services rendered at
the transaction level for each patient
visit. Once this system and its related
billing applications are deployed, no
action to adopt this final rule will result
in the inability to generate, submit, and
collect on claims for services rendered
at MTFs. The preferred alternative is
adoption of this final rule for reasons as
outlined in the Benefits section of this
preamble.
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B. Public Law 96–354, ‘‘Regulatory
Flexibility Act’’ (5 U.S.C. 601 et seq.)
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.
C. Small Entities
The RFA requires that each Federal
agency analyze options for regulatory
relief of small business if a rule has a
significant impact on a substantial
number of small entities. For purposes
of the RFA, small entities include small
businesses, nonprofit organizations, and
small governmental jurisdictions. This
final rule is not an economically
significant regulatory action, and 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.
D. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs
designated this rule as not a major rule,
as defined by 5 U.S.C. 804(2).
E. Unfunded Mandates Reform Act (Sec.
202, Pub. L. 104–4)
Section 202 of Public Law 104–4,
‘‘Unfunded Mandates Reform Act,’’ (2
U.S.C. 1532) 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.
F. 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).
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G. 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
determined that this final rule does not
have federalism implications, as set
forth in E.O. 13132.
List of Subjects in 32 CFR Part 220
Claims, Health care, Health insurance,
and Military personnel.
Accordingly, 32 CFR part 220 is
amended as follows:
PART 220–COLLECTION FROM THIRD
PARTY PAYERS OF REASONABLE
CHARGES FOR HEALTHCARE
SERVICES
1. The authority citation for part 220
is revised to read as follows:
■
Authority: 5 U.S.C. 301; 10 U.S.C. 1095(f),
1097b(b) and 1079b.
2. Section 220.8 is amended by:
a. Revising paragraphs (b), (c)(1), (c)(5)
introductory text, and (c)(5)(i);
■ b. In paragraph (d), removing
‘‘inpatient hospital care’’ and adding in
its place ‘‘care’’; and
■ c. Revising paragraphs (f)(2), (f)(5) and
(f)(6) and adding paragraph (f)(8).
The revisions read as follows:
■
■
§ 220.8
Reasonable charges.
jbell on DSKJLSW7X2PROD with RULES
*
*
*
*
*
(b) Inpatient institutional and
professional services on or after October
1, 2017. Reasonable charges for
inpatient institutional services provided
on or after October 1, 2017, are based on
either of two methods as determined by
the ASD(HA). The first uses the
CHAMPUS Diagnosis Related Group
(DRG) payment system rates under 32
CFR 199.14(a)(1). Certain adjustments
are made to reflect differences between
the CHAMPUS payment system and
MHS billing solutions. Among these are
to include in the inpatient hospital
service charges adjustments related to
direct medical education and capital
costs (which in the CHAMPUS system
are handled as annual pass through
payments). Additional adjustments are
made for long stay outlier cases. The
second method uses Itemized Resource
Utilization (IRU) rates based on the cost
to provide inpatient institutional
resources. Like the CHAMPUS system,
inpatient professional services are not
included in the inpatient institutional
VerDate Sep<11>2014
15:44 Aug 19, 2020
Jkt 250001
services charges calculated under either
methodology, but are billed separately
in accordance with paragraph (e) of this
section. In lieu of either method
described in this paragraph (b), the
method in effect prior to April 1, 2003
(described in paragraph (c) of this
section), may continue to be used for a
period of time after April 1, 2003, if the
ASD(HA) determines that effective
implementation requires a temporary
deferral.
(c) * * * (1) In general. Prior to April
1, 2003, the computation of reasonable
charges for inpatient institutional and
professional services is reasonable costs
based on diagnosis related groups
(DRGs). Costs shall be based on the
inpatient full reimbursement rate per
hospital discharge, weighted to reflect
the intensity of the principal diagnosis
involved. The average charge per case
shall be published annually as an
inpatient standardized amount. A
relative weight for each DRG shall be
the same as the DRG weights published
annually for hospital reimbursement
rates under CHAMPUS pursuant to 32
CFR 199.14(a)(1). The method in effect
prior to April 1, 2003 (as described in
this paragraph (c)), may continue to be
used for a period of time after April 1,
2003, if the ASD(HA) determines that
effective implementation requires a
temporary deferral of the method
described in paragraph (b) of this
section.
*
*
*
*
*
(5) Identification of professional and
institutional charges. For purposes of
billing third party payers other than
automobile liability and no-fault
insurance carriers, inpatient billings are
subdivided into two categories:
(i) Institutional charges (which refer
to routine service charges associated
with the facility encounter or hospital
stay and ancillary charges).
*
*
*
*
*
(f) * * *
(2) With respect to inpatient
institutional charges in the Burn Center
at Brooke Army Medical Center, the
ASD(HA) may establish an adjustment
to the rate otherwise applicable under
the payment methodologies under this
section to reflect unique attributes of the
Burn Center.
*
*
*
*
*
(5) The charge for immunizations,
allergen extracts, allergic condition
tests, and the administration of certain
medications when these services are
provided by or through a facility of the
Uniformed Services or a separate
immunizations or shot clinic, are based
either on CHAMPUS prevailing rates or
on IRU rates based on the cost to
PO 00000
Frm 00051
Fmt 4700
Sfmt 4700
51351
provide these items, exclusive of any
costs considered for purposes of any
outpatient visit. A separate charge shall
be made for each immunization,
injection or medication administered.
(6) The charges for pharmacy, durable
medical equipment and supply
resources are based either on
CHAMPUS prevailing rates or on IRU
rates based on the cost to provide these
items, exclusive of any costs considered
for purposes of any outpatient visit. A
separate charge shall be made for each
item provided.
*
*
*
*
*
(8) Ambulatory (outpatient)
institutional services on or after October
1, 2017. Reasonable charges for
institutional facility charges for
ambulatory services provided on or after
October 1, 2017, are based on any of
three methods as determined by the
ASD(HA). The first uses the CHAMPUS
Ambulatory Payment Classification
(APC) and Ambulatory Surgery Center
(ASC) payment system rates under 32
CFR 199.14(a)(1)(ii) and (iii) and 32 CFR
199.14(d) respectively. The second uses
a bundled MHS Ambulatory Procedure
Visit (APV) payment system rate charge
reflected by the average cost of
providing an APV exclusive of
professional services. The third method
uses IRU rates based on the cost to
provide ambulatory institutional
resources. Like the CHAMPUS system,
ambulatory professional services are not
included in the ambulatory institutional
facility charges calculated under any of
the three methodologies, but are billed
separately in accordance with paragraph
(e) of this section.
*
*
*
*
*
Dated: July 21, 2020.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[FR Doc. 2020–16131 Filed 8–19–20; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
[Docket Number USCG–2020–0245]
RIN 1625–AA08
Special Local Regulation; Potomac
River, Between Jones Point, VA, and
National Harbor, MD
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
E:\FR\FM\20AUR1.SGM
20AUR1
]]>Agencies
[Federal Register Volume 85, Number 162 (Thursday, August 20, 2020)]
[Rules and Regulations]
[Pages 51347-51351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16131]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 220
[Docket ID: DOD-2016-HA-0107]
RIN 0720-AB68
Collection From Third Party Payers of Reasonable Charges for
Healthcare Services
AGENCY: Office of the Assistant Secretary of Defense (Health Affairs),
Department of Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule exercises the DoD's authority to update current
regulations to compute reasonable charges for inpatient and ambulatory
(outpatient) institutional resources and also for pharmaceuticals,
durable medical equipment (DME), supplies, immunizations, injections or
other medications administered or furnished by DoD military medical
treatment facilities (MTFs) under their three existing healthcare cost
recovery programs: Third Party Collections, Medical Services Account,
and Medical Affirmative Claims.
DATES: This rule is effective on September 21, 2020.
FOR FURTHER INFORMATION CONTACT: Ms. DeLisa E. Prater, Program Manager,
Defense Health Agency Uniform Business Office, (703) 275-6380.
SUPPLEMENTARY INFORMATION:
[[Page 51348]]
I. Executive Summary
This rule updates the reasonable charges methodologies for
inpatient and ambulatory institutional billing to allow for the use of
Itemized Resource Utilization (IRU) based rates-developed from the cost
to provide inpatient and ambulatory institutional healthcare resources-
in addition to current bundled prospective reimbursement approaches of
diagnostic related group (DRG), ambulatory payment classification
(APC), ambulatory surgery center (ASC) and ambulatory procedure visit
(APV) based rates. It also revises the reasonable charges methodology
for pharmaceuticals, DME, supplies, immunizations, injections or
medication administered to allow for their calculation using either
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
prevailing rates or IRU based rates--developed from the cost to provide
these healthcare items and resources--regardless of whether CHAMPUS
prevailing rates are available. The additional IRU methodology
implements an itemized rate and reasonable charges structure that
improves collections and operation of DoD's healthcare cost recovery
programs by ensuring MTFs receive appropriate reimbursement for
institutional healthcare resources as well as for pharmaceuticals, DME,
supplies, immunizations, injections or medication provided or
administered and is more consistent with civilian health insurance
industry practice. The final rule also replaces ``hospital'' with
``institutional'' throughout most of the regulation to align it with
civilian health insurance industry terminology and better promote
identification and separate billing of institutional and professional
services.
A. Purpose of the Final Rule
The purpose of this final rule is to incorporate new additional
statutory authority for calculating reasonable institutional facility
charges for: (a) Inpatient services and resources provided at DoD
military MTFs in addition to the current authorized methodology which
uses all-inclusive prospective CHAMPUS DRG based payment rates
(including professional charges), and (b) ambulatory services provided
at DoD MTFs in addition to the current authorized methodologies which
use all-inclusive CHAMPUS APC and ambulatory surgery center (ASC) based
payment rates and Military Health System (MHS) ambulatory procedure
visit (APV) based payment rates. As defined in 32 CFR 199.2, the term
``facility charges'' means the charges, either inpatient or outpatient,
made by a MTF to cover the overhead costs of providing the service
(e.g., building costs such as depreciation and interest, staffing
costs, drugs and supplies; overhead costs such as utilities,
housekeeping, maintenance). It also revises the reasonable charges
methodology for pharmaceuticals, DME, supplies, immunizations,
injections or medication administered or provided to allow for their
reasonable charges calculation using either CHAMPUS prevailing or cost
based rates regardless of whether CHAMPUS prevailing rates are
available. The legal authority for this final rule is 10 U.S.C.
1095(f), 1097b(b) and 1079b.
B. Summary of the Major Provisions of the Final Rule
a. It creates an additional exception to the general rule that
reasonable charges under 32 CFR 220.8(a), 220.8(b), 220.8(f)(5) and
220.8(f)(6) for inpatient and ambulatory institutional resources as
well as for pharmaceuticals, DME, supplies, immunizations, injections
or medication administered are based on the rates used by CHAMPUS under
32 CFR 199.14 to reimburse authorized providers. Specifically, it
authorizes DoD MTFs to use an alternative reasonable charges
methodology based on IRU rates-developed from the cost to provide these
resources and items-in addition to the use of aggregated and
prospective DRG, APC, ASC and APV and prevailing CHAMPUS based
encounter rates.
b. As a ``housekeeping'' change, it replaces ``hospital'' with
``institutional'' throughout most of the regulation to align it with
civilian health insurance industry terminology and better promote
identification and separate billing of institutional and professional
services as required by 32 CFR 220.8(b).
C. Legal Authority for This Program
Legal authority for the final rule is outlined in the following
statutes and regulations listed below:
a. 10 U.S.C. 1079b(a)--Procedures for charging fees for care
provided to civilians; retention and use of fees collected.
This section authorizes the Secretary of Defense to implement
procedures under which the DoD can charge civilians that are not
covered beneficiaries for trauma and other medical care provided. The
charges must represent the cost of the service, as determined by the
Secretary. This section can be accessed via the following link: https://www.govinfo.gov/content/pkg/USCODE-2011-title10/pdf/USCODE-2011-title10-subtitleA-partII-chap55-sec1079b.pdf.
b. 10 U.S.C. 1085--Medical and dental care from another executive
department: Reimbursement.
This section authorizes any executive department providing
inpatient medical or dental care to a member or former member of the
uniformed services under the jurisdiction of another department to seek
reimbursement for the care provided, at a rate representative of the
cost of the provision of this care. The authority to establish these
rates is delegated by the President to the Secretary of Defense for
facilities of armed forces under jurisdiction of a military department.
This section can be accessed via the following link: https://www.govinfo.gov/content/pkg/USCODE-2011-title10/pdf/USCODE-2011-title10-subtitleA-partII-chap55-sec1085.pdf.
c. 10 U.S.C. 1095(f)--Health care services incurred on behalf of
covered beneficiaries: collection from third-party payers.
This section authorizes the Secretary of Defense to determine rates
for covered beneficiaries using methodologies based on per diem rates,
all-inclusive per visit rates, diagnosis related group, or other
methodologies as appropriate. This section can be accessed via the
following link: https://www.govinfo.gov/content/pkg/USCODE-2011-title10/pdf/USCODE-2011-title10-subtitleA-partII-chap55-sec1095.pdf.
II. Regulatory History
DoD is authorized to collect ``reasonable charges'' from third
party payers for the cost of inpatient and ambulatory (outpatient)
institutional services and also for pharmaceuticals, DME, supplies,
immunizations, injections or medication administered or provided at DoD
MTFs to military retirees, all dependents, and other eligible
beneficiaries who have private health insurance. See 10 U.S.C. 1095 and
32 CFR 220.2. Also, DoD must collect from nonbeneficiaries (or their
insurers) the cost of trauma or other medical care provided to them and
from other federal agencies, the average cost of healthcare provided to
their beneficiaries at DoD MTFs (10 U.S.C. 1079b(a) and 1085).
Currently, DoD uses all-inclusive prospective CHAMPUS DRG based payment
rates (including professional charges) as the reasonable charges for
inpatient care and all-inclusive CHAMPUS APC and ASC based and MHS APV
charges for miscellaneous institutional ambulatory care in its
healthcare cost recovery programs--Third Party Collection, Medical
Services Account and Medical Affirmative Claims. The MHS APV rate
[[Page 51349]]
is authorized by the Assistant Secretary of Defense (Health Affairs)
(ASD(HA)) Policy Memorandum, ``Use of CPT Code 99199'' (September 14,
2004) because MTFs currently do not have the appropriate software to
group encounters into APCs and ASCs. Also, DoD uses the average cost
for pharmaceutical rates because CHAMPUS prevailing rates are not
available. However, DoD uses CHAMPUS based rates for DME, supplies,
immunizations, injections or medication administered.
III. Discussion of Comments and Changes
The proposed rule was published in the Federal Register on December
18, 2018 (83 FR 64768-64771). Comments were accepted for 60 days until
February 19, 2019. One comment was received, but it was unrelated to
the rule. No other comments were received during this comment period.
No changes to the rule are being made as a result of this comment
period, or otherwise.
IV. Summary of Changes From the Proposed Rule
Since the publication of the proposed rule, no changes have been
made to the rule as a result of the comment period, further internal
coordination, or administrative corrections.
V. Regulatory Analyses
A. Regulatory Planning and Review
a. Executive Orders
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review''
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. It has been determined that this rule is not a significant
regulatory action. This rule does not: (1) Have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy; a section of the economy; productivity; competition; jobs;
the environment; public health or safety; or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another Agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs, or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
these Executive Orders.
Executive Order 13771, ``Reducing Regulation and Controlling Regulatory
Costs''
There are no cost savings to the public anticipated by amending the
current 32 CFR part 220. Consistent with the analysis of transfer
payments under OMB Circular A-4, this final rule does not involve
regulatory costs subject to Executive Order 13771, ``Reducing
Regulation and Controlling Regulatory Costs.''
b. Summary
This rule will create an additional exception to the general rule
that reasonable charges for inpatient and ambulatory institutional
resources as well as for pharmaceuticals, DME, supplies, immunizations,
injections or medication administered are based on the rates used by
CHAMPUS. Specifically, this rule authorizes DoD MTFs use a methodology
based on IRU, developed from the cost to provide these resources and
items, to establish reasonable charges.
c. Affected Population
No new populations will be billed that were not previously billed,
and reimbursement will continue to be required from populations
currently being billed. Under this final rule, the individual rates
these populations are billed will change to rates that, using the new
IRU methodology, more accurately capture the underlying cost of the
provision of care.
Additionally, third-party payers will receive medical bills from
MTFs in a manner more consistent with the submission of medical bills
in the private sector which will enhance their ability to process these
claims.
d. Expected Costs
The final rule will create an additional exception to the general
rule that reasonable charges under 32 CFR 220.8(a), 220.8(b),
220.8(f)(5) and 220.8(f)(6) for inpatient and ambulatory institutional
resources as well as for pharmaceuticals, DME, supplies, immunizations,
injections or medication administered are based on the rates used by
CHAMPUS under 32 CFR 199.14 to reimburse authorized providers. This
final rule authorizes DoD MTFs to use an alternative reasonable charges
methodology based on IRU rates--developed from the cost to provide
these resources and items--in addition to the use of aggregated and
prospective DRG, APC, ASC and APV and prevailing CHAMPUS based
encounter rates. The new IRU based rates will be developed specific to
individual medical services, while currently some CHAMPUS rates are
based on aggregate or per-diem averages across a wider range of
services. The itemized capture of resources will be enabled by the
enterprise Electronic Health Records system known as MHS GENESIS
currently being deployed across the Military Health System. Services
rendered during patient visits can be captured at the transactional
level on a patient account, resulting in a claim with charges that are
more representative of the actual cost of rendering services during the
specific visit.
e. Benefits
Compared to currently established CHAMPUS based rates, IRU based
rates are more representative of actual costs specific to the
institutional resources and also to pharmaceuticals, DME, supplies,
immunizations, injections or medication administered or consumed in the
provision of care to a patient. Also, IRU based rates provide DoD the
ability it does not currently have to bill third party payers in an
itemized manner that they are accustomed to. With the availability of
IRU based rates, DoD MTFs can bill for institutional resources and also
for pharmaceuticals, DME, supplies, immunizations, injections or
medication administered using charge descriptions (i.e., an MTF's
comprehensive list of items and services for which it can charge) and
individual cost-based rates associated with those descriptions. As a
result, institutional bills are much more consistent with the actual
resources and services provided to the patient, third party payers who
receive MTF claims will have the detailed data needed for
reimbursement, and the potential for MTFs to receive appropriate
reimbursement improves. MTF claims are frequently returned for
additional information or denied because they are not in an itemized
format consistent with standard industry health insurance practice. The
format of resulting line-item inpatient charges based on IRU rates will
more closely resemble the format currently used in the health insurance
industry and promote more efficient claim adjudication. This rule will
not affect any payments by TRICARE as this rule
[[Page 51350]]
does not pertain to purchased care. It specifically applies to rate
development for cost recovery in the direct care setting.
In addition, using only the current methodologies for reasonable
charges based on bundled prospective DRG/APC/ASC/APV based rates
methods and CHAMPUS prevailing rates methods for pharmaceuticals, DME,
supplies, immunizations, injections or medication administered limits
MTFs' flexibility and ability to effectively accommodate current and
new provider reimbursement methodologies and is likely reducing and
resulting in missed reimbursement opportunities from third party
payers. Third party payers do not uniformly have nor apply payment
methods and rates to claims received. Rather, they each have their own
distinct set of rules for and levels of payment that are not
necessarily DRG/APC/ASC/APV/CHAMPUS rate based. For example, there are
multiple versions of groupers, and a payer's reimbursement policy may
use a different grouper than DoD or not involve a grouper at all.
Moreover, third party payers are increasingly replacing
fee[hyphen]for[hyphen]service with value-based performance payment
portfolios (e.g., pay for performance, bundled payments, shared
savings/accountable care organizations) for providers, including DoD
MTFs. Itemized billing using IRU based rates provides payers with the
detailed data needed for whatever reimbursement process they use
yielding fewer requests for additional information and re-processing of
claims and increased potential reimbursement.
Additional benefits from allowing for IRU based charges include:
(1) Providing greater transparency of DoD MTFs' financial
efficiency and performance through more detailed purchasing,
dispensing, and financial billing functions. IRU based charges provide
information necessary to complete detailed analyses into what and how a
MTF is purchasing, dispensing, and billing, which will lead to more
informed decisions on how to save money, time, and effort at each of
those three stages.
(2) Enabling different MTF departments and decision makers to come
together to discuss common practices, terminology, and reporting,
allowing for the development and analysis of benchmarks evaluating
clinical performance, and identifying and implementing the most cost-
effective delivery modes available.
(3) Providing the ability to track and monitor resources used to
treat patients, thereby allowing MTF staff, management, and leadership
to better control and manage costs, and optimize the efficiency of
operations to deliver efficient care or prevent unnecessary care.
This IRU based charges approach is consistent with 10 U.S.C.
1095(f) and 1097b(b) that authorize the ASD(HA) to calculate all third-
party payment collections and rates charged to civilians and
interagency payers based on any appropriate method. It is the ASD(HA)'s
determination that itemized IRU based rates for inpatient and
ambulatory resources and also for pharmaceuticals, DME, supplies,
immunizations, injections or medication administered or provided better
represents the reasonable charges and costs of providing care to all
patients in MTFs.
The rule also replaces ``hospital'' with ``institutional''
throughout most of the regulation to align it with civilian healthcare
insurance industry terminology. The current regulation uses
``hospital'' interchangeably to mean both: (1) A facility that provides
emergency, inpatient, and in some cases outpatient medical care for
sick or injured people; and (2) the institutional component of a
hospital stay (i.e., overhead and ancillary, diagnostic and treatment
services, other than professional services provided by the facility
during the inpatient stay such as room and board, laboratory tests and
the technical component of radiology services). It is the general rule
under CHAMPUS, 32 CFR 220.8(b) and also industry best practice to
identify and charge separately for institutional and inpatient
professional services. This nomenclature change helps DoD MTFs
reinforce the distinction and better promotes identification and
separate billing of institutional and professional services as required
by 32 CFR 220.8(b) and in accordance with health insurance industry
best practice.
f. Alternatives
The enterprise-wide Electronic Health Record system known as MHS
GENESIS that is currently being deployed across the Military Health
System requires the itemized capture of services rendered at the
transaction level for each patient visit. Once this system and its
related billing applications are deployed, no action to adopt this
final rule will result in the inability to generate, submit, and
collect on claims for services rendered at MTFs. The preferred
alternative is adoption of this final rule for reasons as outlined in
the Benefits section of this preamble.
B. Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601 et
seq.)
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.
C. Small Entities
The RFA requires that each Federal agency analyze options for
regulatory relief of small business if a rule has a significant impact
on a substantial number of small entities. For purposes of the RFA,
small entities include small businesses, nonprofit organizations, and
small governmental jurisdictions. This final rule is not an
economically significant regulatory action, and 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.
D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a major rule, as defined by 5 U.S.C. 804(2).
E. Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)
Section 202 of Public Law 104-4, ``Unfunded Mandates Reform Act,''
(2 U.S.C. 1532) 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.
F. 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).
[[Page 51351]]
G. 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 determined that this final rule does not have
federalism implications, as set forth in E.O. 13132.
List of Subjects in 32 CFR Part 220
Claims, Health care, Health insurance, and Military personnel.
Accordingly, 32 CFR part 220 is amended as follows:
PART 220-COLLECTION FROM THIRD PARTY PAYERS OF REASONABLE CHARGES
FOR HEALTHCARE SERVICES
0
1. The authority citation for part 220 is revised to read as follows:
Authority: 5 U.S.C. 301; 10 U.S.C. 1095(f), 1097b(b) and 1079b.
0
2. Section 220.8 is amended by:
0
a. Revising paragraphs (b), (c)(1), (c)(5) introductory text, and
(c)(5)(i);
0
b. In paragraph (d), removing ``inpatient hospital care'' and adding in
its place ``care''; and
0
c. Revising paragraphs (f)(2), (f)(5) and (f)(6) and adding paragraph
(f)(8).
The revisions read as follows:
Sec. 220.8 Reasonable charges.
* * * * *
(b) Inpatient institutional and professional services on or after
October 1, 2017. Reasonable charges for inpatient institutional
services provided on or after October 1, 2017, are based on either of
two methods as determined by the ASD(HA). The first uses the CHAMPUS
Diagnosis Related Group (DRG) payment system rates under 32 CFR
199.14(a)(1). Certain adjustments are made to reflect differences
between the CHAMPUS payment system and MHS billing solutions. Among
these are to include in the inpatient hospital service charges
adjustments related to direct medical education and capital costs
(which in the CHAMPUS system are handled as annual pass through
payments). Additional adjustments are made for long stay outlier cases.
The second method uses Itemized Resource Utilization (IRU) rates based
on the cost to provide inpatient institutional resources. Like the
CHAMPUS system, inpatient professional services are not included in the
inpatient institutional services charges calculated under either
methodology, but are billed separately in accordance with paragraph (e)
of this section. In lieu of either method described in this paragraph
(b), the method in effect prior to April 1, 2003 (described in
paragraph (c) of this section), may continue to be used for a period of
time after April 1, 2003, if the ASD(HA) determines that effective
implementation requires a temporary deferral.
(c) * * * (1) In general. Prior to April 1, 2003, the computation
of reasonable charges for inpatient institutional and professional
services is reasonable costs based on diagnosis related groups (DRGs).
Costs shall be based on the inpatient full reimbursement rate per
hospital discharge, weighted to reflect the intensity of the principal
diagnosis involved. The average charge per case shall be published
annually as an inpatient standardized amount. A relative weight for
each DRG shall be the same as the DRG weights published annually for
hospital reimbursement rates under CHAMPUS pursuant to 32 CFR
199.14(a)(1). The method in effect prior to April 1, 2003 (as described
in this paragraph (c)), may continue to be used for a period of time
after April 1, 2003, if the ASD(HA) determines that effective
implementation requires a temporary deferral of the method described in
paragraph (b) of this section.
* * * * *
(5) Identification of professional and institutional charges. For
purposes of billing third party payers other than automobile liability
and no-fault insurance carriers, inpatient billings are subdivided into
two categories:
(i) Institutional charges (which refer to routine service charges
associated with the facility encounter or hospital stay and ancillary
charges).
* * * * *
(f) * * *
(2) With respect to inpatient institutional charges in the Burn
Center at Brooke Army Medical Center, the ASD(HA) may establish an
adjustment to the rate otherwise applicable under the payment
methodologies under this section to reflect unique attributes of the
Burn Center.
* * * * *
(5) The charge for immunizations, allergen extracts, allergic
condition tests, and the administration of certain medications when
these services are provided by or through a facility of the Uniformed
Services or a separate immunizations or shot clinic, are based either
on CHAMPUS prevailing rates or on IRU rates based on the cost to
provide these items, exclusive of any costs considered for purposes of
any outpatient visit. A separate charge shall be made for each
immunization, injection or medication administered.
(6) The charges for pharmacy, durable medical equipment and supply
resources are based either on CHAMPUS prevailing rates or on IRU rates
based on the cost to provide these items, exclusive of any costs
considered for purposes of any outpatient visit. A separate charge
shall be made for each item provided.
* * * * *
(8) Ambulatory (outpatient) institutional services on or after
October 1, 2017. Reasonable charges for institutional facility charges
for ambulatory services provided on or after October 1, 2017, are based
on any of three methods as determined by the ASD(HA). The first uses
the CHAMPUS Ambulatory Payment Classification (APC) and Ambulatory
Surgery Center (ASC) payment system rates under 32 CFR 199.14(a)(1)(ii)
and (iii) and 32 CFR 199.14(d) respectively. The second uses a bundled
MHS Ambulatory Procedure Visit (APV) payment system rate charge
reflected by the average cost of providing an APV exclusive of
professional services. The third method uses IRU rates based on the
cost to provide ambulatory institutional resources. Like the CHAMPUS
system, ambulatory professional services are not included in the
ambulatory institutional facility charges calculated under any of the
three methodologies, but are billed separately in accordance with
paragraph (e) of this section.
* * * * *
Dated: July 21, 2020.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2020-16131 Filed 8-19-20; 8:45 am]
BILLING CODE 5001-06-P
