TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) Updates and Notice of Termination of Future Federal Register Notices Regarding the DRG Update

Federal Register, Volume 82 Issue 21 (Thursday, February 2, 2017)

Federal Register Volume 82, Number 21 (Thursday, February 2, 2017)

Notices

Pages 9061-9063

From the Federal Register Online via the Government Publishing Office www.gpo.gov

FR Doc No: 2017-02202

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DEPARTMENT OF DEFENSE

Office of the Secretary

TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) Updates and Notice of Termination of Future Federal Register Notices Regarding the DRG Update

AGENCY: Office of the Secretary, Department of Defense.

ACTION: Notice of DRG revised rates and notice to terminate future Federal Register publication of the DRG Updates.

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SUMMARY: This notice describes the changes made to the TRICARE DRG-

based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS). It also provides the updated fixed loss cost outlier threshold, cost-to-charge ratios, and the data necessary to update the Fiscal Year (FY) 2017 rates. This notice also announces there will be no future Federal Register notices published for the annual DRG updates, as all information included in this notice will now be published on the Defense Health Agency's official Web site found at http://www.health.mil. As a result, FY 2017 is the last year for publication of the DRG notice.

DATES: The rates, weights, and Medicare PPS changes which affect the TRICARE DRG-based payment system contained in this notice are effective for discharges occurring on or after October 1, 2016.

ADDRESSES: Defense Health Agency (DHA), TRICARE, Medical Benefits and Reimbursement Office, 16401 East Centretech Parkway, Aurora, CO 80011-

9066.

FOR FURTHER INFORMATION CONTACT: Sharon L. Seelmeyer, Medical Benefits and Reimbursement Section, TRICARE, telephone (303) 676-3690. Questions regarding payment of specific claims under the TRICARE DRG-based payment system should be addressed to the appropriate contractor.

SUPPLEMENTARY INFORMATION: The final rule published on September 1, 1987 (52 FR 32992) set forth the basic procedures used under the CHAMPUS DRG-based payment system. This was subsequently amended by final rules published August 31, 1988 (53 FR 33461); October 21, 1988 (53 FR 41331); December 16, 1988 (53 FR 50515); May 30, 1990 (55 FR 21863); October 22, 1990 (55 FR 42560); and September 10, 1998 (63 FR 48439).

An explicit tenet of these final rules, and one based on the statute authorizing the use of DRGs by TRICARE, is that the TRICARE DRG-based payment system is modeled on the Medicare PPS, and that, whenever practicable, the TRICARE system will follow the same rules that apply to the Medicare PPS. The Centers for Medicare & Medicaid Services (CMS) publishes these changes annually in the Federal Register and discusses in detail the impact of the changes.

In addition, this notice updates the rates and weights in accordance with our previous final rules. The actual changes we are making, along with a description of their relationship to the Medicare PPS, are detailed in this notice. While the initial intent of this notice was to provide notification of the revised DRG weights and rates affecting the DRG based payment system, its relevance has been subsequently overshadowed by the public's online accessibility to the TRICARE manuals and reimbursement rates on the official Web site of the Military Health System (MHS) and the DHA (http://www.health.mil). As a result, the public has ready online access to all information published in this notice (e.g., DRG weights and rates, to include adjusted standardized amounts, wage indexes and Indirect Medical Education (IDME) factors, and changes to rate variables, etc.) in either the TRICARE

Page 9062

Reimbursement Manual or on the official Web site of the MHS and the DHA (http://www.health.mil). Because of the readily available online access to updated DRG rates and the ongoing administrative burden of publishing annual notices to the Federal Register, the publication of the annual notice is terminated and no further notices will be published. Again, updates to the DRG weights and rates, and all information in this notice, will be maintained on the Agency's official Web site. FY 2017 will be the last year of publishing the annual notice to the Federal Register.

  1. Medicare PPS Changes Which Affected the TRICARE DRG-Based Payment System

Following is a discussion of the changes CMS has made to the Medicare PPS that affect the TRICARE DRG-based payment system.

  1. DRG Classifications

Under both the Medicare PPS and the TRICARE DRG-based payment system, cases are classified into the appropriate DRG by a Grouper program. The Grouper classifies each case into a DRG on the basis of the diagnosis and procedure codes and demographic information (that is; sex, age, and discharge status). The Grouper used for the TRICARE DRG-

based payment system is the same as the current Medicare Grouper with two modifications. The TRICARE system has replaced Medicare DRG 435 with two age-based DRGs (900 and 901), and has implemented thirty-four (34) neonatal DRGs in place of Medicare DRGs 385 through 390. For admissions occurring on or after October 1, 2001, DRG 435 has been replaced by DRG 523. The TRICARE system has replaced DRG 523 with the two age-based DRGs (900 and 901). For admissions occurring on or after October 1, 1995, the CHAMPUS Grouper hierarchy logic was changed so the age split (age

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