[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-715]
[[Page Unknown]]
[Federal Register: January 20, 1994]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
[DoD 6010.8-R]
RIN 0720-AA20
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS); Hospital Payments for Ambulatory Care
AGENCY: Office of the Secretary, DoD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule establishes a new payment method for
ambulatory care (other than ambulatory surgery) provided by hospitals
to CHAMPUS beneficiaries, under which payment amounts would be based on
the cost of the service rather than on the billed charge, as at
present. In general, the effect of this change would be to reduce
reimbursement amounts for ambulatory services provided by hospitals.
DATES: Written comments must be received on or before March 21, 1994.
ADDRESSES: Office of the Civilian Health and Medical Program of the
Uniformed Services (OCHAMPUS), Office of Program Development, Aurora,
CO 80045-6900. For copies of the Federal Register containing this
proposed rule, contact the Superintendent of Documents, U.S. Government
Printing Office, Washington, DC 20402, (202) 783-3238.
FOR FURTHER INFORMATION CONTACT:
Steve Lillie, Office of the Assistant Secretary of Defense (Health
Affairs), telephone (703) 695-3350.
Questions regarding payment of specific claims under the CHAMPUS
allowable charge method should be addressed to the appropriate CHAMPUS
contractor.
SUPPLEMENTARY INFORMATION:
I. Introduction
This proposed rule introduces a new payment method, based on
facility costs, for ambulatory care (other than ambulatory surgery)
provided by hospitals.
II. Provisions of Proposed Rule Concerning the Ambulatory Care Payment
Method
CHAMPUS recently established a new payment method for ambulatory
surgery performed by hospitals and freestanding ambulatory surgery
centers. Prior to adoption of this new payment method, institutional
charges for ambulatory surgery were based on billed charges of the
facility. Payments to hospitals for ambulatory care other than
ambulatory surgery continue to be made based on billed charges.
Consistent with the established CHAMPUS policy, authorized by section
1079(j)(2) of title 10, United States Code, of adopting payment methods
based on cost reimbursement, rather than payment of billed charges, we
now propose a new payment method for this category of care based on
facility costs. This payment method would apply to emergency room care,
outpatient clinics, and other ambulatory care provided by the hospital,
but it excludes all care covered by the recently established ambulatory
surgery payment method.
The proposed rule would determine facility costs based on the
billed charges for a service, multiplied by the ambulatory care cost-
to-charge ratio for hospitals nationally and adjusted for certain
special hospital characteristics. The special characteristics will be
determined based on identifying any statistically significant
differences in ambulatory care cost-to-charge ratios among hospitals
based on these characteristics. The characteristics that will be
considered are: The classification of the hospital as large urban,
other urban, or rural in the DRG-based payment system; teaching
hospital; state; and children's hospital. We invite comments on whether
any other special characteristics should be considered. Comments in
this regard would be most helpful if they include specific data
supporting the suggestion.
The proposed rule also prohibits a hospital from submitting billed
charges for an ambulatory care service in excess of the actual charge
made for the service to the general public and applies a 25% payment
reduction for such excessive billings.
III. Regulatory Procedures
Executive Order 12866 requires certain regulatory assessments for
any ``significant regulatory action,'' defined as one which would
result in an annual effect on the economy of $100 million or more, or
have other substantial impacts.
The Regulatory Flexibility Act (RFA) requires that each Federal
agency prepare, and make available for public comment, a regulatory
flexibility analysis when the agency issues a regulation which would
have a significant impact on a substantial number of small entities.
This is not a significant regulatory action under the provisions of
Executive Order 12866, and it would not have a significant impact on a
substantial number of small entities.
This proposed rule imposes no additional information collection
requirements on the public under the Paperwork Reduction Act of 1980
(44 U.S.C. 3501-3511).
This is a proposed rule. Public comments are invited. All comments
will be considered. A discussion of the major issues revised by public
comments will be included with issuance of the final rule, anticipated
approximately 60 days after the end of the comment period.
List of Subjects in 32 CFR Part 199
Claims, Handicapped, Health insurance, Military personnel.
Accordingly, 32 CFR part 199 is proposed to be 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. 1097, 1086.
2. Section 199.14 is proposed to be amended by revising the
introductory text of paragraph (a)(3), by redesignating paragraph
(a)(4) as paragraph (a)(5), and by adding a new paragraph (a)(4), as
follows:
Sec. 199.14 Provider reimbursement methods.
(a) Hospitals.
* * * * *
(3) Billed charges and set rates. The allowable costs for
authorized care in all hospitals for care not subject to the CHAMPUS
DRG-based payment system, the CHAMPUS mental health per diem payment
system, the CHAMPUS ambulatory surgery payment method, or the CHAMPUS
ambulatory care payment method shall be determined on the basis of
billed charges or set rates. Under this procedure the allowable costs
may not exceed the lower of:
* * * * *
(4) Ambulatory care payment method. (i) Applicability. The
ambulatory care payment method determines allowable costs in connection
with all institutional charges from hospitals for outpatient care other
than ambulatory surgery covered by the ambulatory surgery payment
method.
(ii) Determination of allowable costs. Allowable costs are
determined by multiplying the hospital's billed charges by the cost-to-
charge ratio for hospital-based ambulatory care, as determined by the
Director, OCHAMPUS based on Medicare cost reports filed by hospitals
nationally, with adjustments for special hospital characteristics.
(iii) Adjustments for special hospital characteristics. For certain
special hospital characteristics, the Director, OCHAMPUS will determine
if there are statistically significant differences in ambulatory care
cost-to-charge ratios based on certain hospital characteristics. To the
extent that there are such differences, payment adjustments will be
made to assure that the payment amounts reasonably reflect the special
characteristics involved. The special characteristics that will be
considered for such adjustments are: Large urban, small urban, and
rural hospitals (as those categories are recognized in the CHAMPUS DRG-
based payment system); teaching hospitals; state; and children's
hospitals.
(iv) Prohibition against excessive charges. The billed charge for a
service covered by the ambulatory care payment method may not exceed
the actual charge for such service made to the general public. In any
case in which the Director, OCHAMPUS determines that the billed charge
exceeds such actual charge for such service made to the general public,
the payment amount determined under the ambulatory care payment method
shall consider the billed charge to be the actual charge for such
service made to the general public, and, as an incentive for proper
billing, the resulting payment amount shall be reduced by 25 percent.
* * * * *
Dated: January 7, 1994.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 94-715 Filed 1-19-94; 8:45 am]
BILLING CODE 5000-04-M
