Rule2023-00381
Expanding TRICARE Access to Care in Response to the COVID-19 Pandemic
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 12, 2023
Issuing agencies
Defense Department
Abstract
The Assistant Secretary of Defense for Health Affairs (ASD(HA)) issues this interim final rule (IFR) with comment to modify the TRICARE regulation by adding freestanding End Stage Renal Disease (ESRD) facilities as a category of TRICARE-authorized institutional provider and establishing reimbursement for such facilities and by temporarily adopting Medicare's New Coronavirus Disease 2019 (COVID-19) Treatments Add-on Payments (NCTAPs).
Full Text
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<title>Federal Register, Volume 88 Issue 8 (Thursday, January 12, 2023)</title>
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[Federal Register Volume 88, Number 8 (Thursday, January 12, 2023)]
[Rules and Regulations]
[Pages 1992-2002]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00381]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
[Docket ID: DoD-2021-HA-0015]
RIN 0720-AB85
Expanding TRICARE Access to Care in Response to the COVID-19
Pandemic
AGENCY: Department of Defense.
ACTION: Interim final rule with request for comments.
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SUMMARY: The Assistant Secretary of Defense for Health Affairs
(ASD(HA)) issues this interim final rule (IFR) with comment to modify
the TRICARE regulation by adding freestanding End Stage Renal Disease
(ESRD) facilities as a category of TRICARE-authorized institutional
provider and establishing reimbursement for such facilities and by
temporarily adopting Medicare's New Coronavirus Disease 2019 (COVID-19)
Treatments Add-on Payments (NCTAPs).
DATES:
[[Page 1993]]
Effective date: This IFR with comment is effective on January 12,
2023 through the end of the declared public health emergency (PHE),
including any extensions, (as determined by 42 United States Code
(U.S.C.) 247d), except the changes to ESRD facility provider status and
reimbursement are permanent and will not expire. The ASD(HA) will
publish a document announcing the expiration date for the temporarily
adopted Medicare NCTAPs consistent with information in the
SUPPLEMENTARY INFORMATION section.
Applicability date: Changes to ESRD provider status and facility
reimbursement and the NCTAP provisions are applicable for TRICARE
covered services received on or after the effective date of this IFR.
Comment date: Comments are invited and must be submitted on or
before March 13, 2023.
ADDRESSES: You may submit comments, identified by docket number and/or
Regulation Identification Number (RIN) number and title, by any of the
following methods:
<bullet> Federal Rulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Mail: Department of Defense, Office of the Assistant to
the Secretary of Defense for Privacy, Civil Liberties, and
Transparency, Regulatory Directorate, 4800 Mark Center Drive, Mailbox
#24, Suite 08D09, Alexandria, VA 22350-1700.
Instructions: All submissions received must include the agency name
and docket number or RIN for this Federal Register document. The
general policy for comments and other submissions from members of the
public is to make these submissions available for public viewing on the
internet at <a href="http://www.regulations.gov">http://www.regulations.gov</a> as they are received without
change, including any personal identifiers or contact information.
<bullet> Jahanbakhsh Badshah, Defense Health Agency, Medical
Benefits and Reimbursement Section, 303-676-3881,
<a href="/cdn-cgi/l/email-protection#d19bb0b9b0bfb3b0bab9a2b9ff93b0b5a2b9b0b9ffb2b8a791b9b4b0bda5b9ffbcb8bd"><span class="__cf_email__" data-cfemail="206a4148414e42414b4853480e624144534841480e434956604845414c54480e4d494c">[email protected]</span></a>, or Jennifer Stankovic, Defense
Health Agency, Medical Benefits and Reimbursement Section, 303-676-
3742, <a href="/cdn-cgi/l/email-protection#80cae5eeeee9e6e5f2aeccaed3f4e1eeebeff6e9e3aee3e9f6c0e8e5e1ecf4e8aeede9ec"><span class="__cf_email__" data-cfemail="e9a38c8787808f8c9bc7a5c7ba9d888782869f808ac78a809fa9818c88859d81c7848085">[email protected]</span></a>, for issues related to
freestanding End Stage Renal Disease facilities.
<bullet> Sharon Seelmeyer, Defense Health Agency, Medical Benefits
and Reimbursement Section, 303-676-3690,
<a href="/cdn-cgi/l/email-protection#27744f46554849094b095442424b4a425e425509444e51674f42464b534f094a4e4b"><span class="__cf_email__" data-cfemail="fcaf949d8e9392d290d28f999990919985998ed29f958abc94999d908894d2919590">[email protected]</span></a>, for issues related to NCTAPs.
SUPPLEMENTARY INFORMATION: Expiration date: Unless extended after
consideration of submitted comments, the provision adopting Medicare
NCTAPs will expire the last day of the fiscal year (FY) in which the
Secretary of the Department of Health and Human Services (HHS)
terminates the COVID-19 PHE. The adoption of ESRD facilities as a type
of TRICARE-authorized institutional provider and the changes to the
reimbursement of such facilities are permanent and will not expire.
The ASD(HA) will publish a document in the Federal Register
announcing the expiration date, as appropriate, and will publish a
Final Rule with any modifications made after consideration of public
comments, the impact of the provisions in this IFR, and changes in the
state of the COVID-19 pandemic.
I. Executive Summary
A. Purpose of the Rule
There is currently an outbreak of respiratory disease caused by a
novel coronavirus. The virus has been named ``SARS-CoV-2,'' and the
disease it causes is referred to as COVID-19. On January 31, 2020, the
Secretary of HHS determined that a PHE had existed since January 27,
2020. On March 13, 2020, the President declared a national emergency
due to the COVID-19 outbreak, retroactive to March 1, 2020
(Proclamation 9994, 85 FR 15337). The current administration has
continued the national emergency declaration, via a notice issued
February 18, 2022, which was published in the Federal Register on
February 23, 2022 (87 FR 10289). Following the declaration of the
national emergency, the President signed into law multiple statutes to
provide economic and health care relief for individuals and businesses,
including health care providers.
While the substantial access to COVID-19 vaccinations in the United
States initially resulted in State and local governments relaxing
restrictions for individuals and in improved conditions for health care
providers due to the decreasing rate of new COVID-19 cases, the
emergence of the Delta variant of the virus, which proved to be more
infectious and more resistant to vaccination, resulted in a surge of
COVID-19 infections in the United States, as well as an increase in the
rate of hospitalizations, deaths, and health care providers at
capacity. In July 2021, the Centers for Disease Control and Prevention
(CDC) released guidance recommending that both vaccinated and
unvaccinated individuals wear face masks in public indoor settings in
areas of substantial or high transmission. Likewise, the Federal
Government and many State, local, and tribal governments resumed or
increased various restrictions. In December 2021, the Omicron variant
replaced the Delta variant as the predominant COVID-19 variant in the
United States. Although the Omicron variant is reportedly less severe
than previous variants, it also results in a much higher level of
transmission than previous variants and is still responsible for high
levels of severe illness, hospitalization, and death, primarily in the
unvaccinated and immunocompromised populations. Additionally, COVID-19
vaccines available in the United States are currently less effective at
preventing COVID-19 caused by the Omicron variant. The CDC also states
that new variants of COVID-19 are expected to occur, and that even if a
variant is less severe in general, ``an increase in the overall number
of cases could cause an increase in hospitalizations, put more strain
on healthcare resources and potentially lead to more deaths.'' \1\
Thus, the pandemic continues to threaten to strain the health care
system. Although most States have again relaxed restrictions, due to
the continuation of pandemic conditions--namely the continuing rates of
new cases; hospitalizations; deaths; providers rationing health care
resources; and intensive care units at or beyond capacity--the
President has continued the national emergency declaration.
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\1\ <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html?s_cid=11723:covid%2019%20variants%20of%20concern:sem.ga:p:RG:GM:gen:PTN:FY22">https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html?s_cid=11723:covid%2019%20variants%20of%20concern:sem.ga:p:RG:GM:gen:PTN:FY22</a>.
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Consistent with the President's national emergency declaration and
as a result of the COVID-19 pandemic, the ASD(HA) hereby modifies the
following regulations, but in each case, only to the extent determined
necessary to ensure that TRICARE beneficiaries have expanded access to
care required for the treatment of COVID-19 and for other medically
necessary care, and that TRICARE continues to reimburse like Medicare,
to the extent practicable, as required by 10 U.S.C. 1079(i).
Freestanding ESRD Facilities 32 CFR 199.6(b)(4)(xxi) and 199.14(c):
These provisions establish freestanding ESRD facilities as
institutional providers within the TRICARE program and establish a
TRICARE reimbursement methodology for freestanding ESRD facilities.
Currently these facilities are classified as Corporate Service
Providers (CSPs) and are reimbursed using a fee-for-service (FFS)
methodology for covered professional services, and may not be paid
institutional charges (e.g., reimbursement for general nursing services
or the use of treatment rooms).
[[Page 1994]]
The inclusion of freestanding ESRD facilities as institutional
providers is required first in order to permit TRICARE reimbursement of
institutional charges. Both changes (making these providers authorized
institutional providers and adding a reimbursement methodology) will
make TRICARE reimbursement of freestanding ESRD facilities, as well as
dialysis services and supplies, more consistent with the Medicare
reimbursement methodology for freestanding ESRD facilities, in
accordance with the statutory requirement in 10 U.S.C. 1079(i) to
reimburse like Medicare for like services and supplies provided by an
authorized TRICARE institutional provider when determined to be
practicable as required. These permanent changes are included in this
IFR because existing restrictions on ESRD facilities (i.e., provider
status and professional services only-based reimbursement) reduce
access to medically necessary, often lifesaving services for
immunocompromised ESRD patients. This is of even greater concern during
the COVID-19 pandemic, especially with the emergence of the Delta
variant, which is more severe and more resistant to vaccination in
immunocompromised individuals (i.e., those with ESRD), and the Omicron
variant, which is much more resistant to vaccination and much more
transmissible than previous variants.
DRG Add-on for NCTAP 32 CFR 199.14(a)(1)(iv)(C): This change
temporarily adopts Medicare's NCTAP under the Inpatient Prospective
Payment System (IPPS) for COVID-19 cases that meet Medicare's criteria.
By statute, 10 U.S.C. 1079(i), TRICARE shall, to the extent
practicable, reimburse institutional providers in accordance with
Medicare reimbursement rules. As such, TRICARE has generally adopted
the Medicare IPPS using the Diagnosis-Related Group (DRG) system (32
CFR 199.14(a)(1)). Based on Section 3710 of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136),
Medicare increased the weighting factor of the assigned DRG by 20
percent for an individual diagnosed with COVID-19 discharged during the
COVID-19 PHE period. On November 6, 2020 (effective November 2, 2020),
the Centers for Medicare and Medicaid Services (CMS) issued an IFR (85
FR 71142), further increasing the current IPPS payment amounts as drugs
and biological products become available and are authorized or approved
by the Food and Drug Administration for the treatment of COVID-19 in
the inpatient setting for the duration of the PHE. In a final rule (86
FR 44774), CMS subsequently extended the NCTAP expiration date to the
end of the FY in which the PHE ends for all eligible products, with any
new technology add-on payment reducing the NCTAP amount. CMS stated
that they pursued this change because they ``anticipate that there
might be inpatient cases of COVID-19, beyond the end of the PHE, for
which payment based on the assigned Medicare Severity-DRG may not
adequately reflect the additional cost of new COVID-19 treatments'' and
they wish to ``continue to mitigate potential financial disincentives
for hospitals to provide these new treatments, and to minimize any
potential payment disruption immediately following the end of the
PHE.'' In issuing a final rule, the DoD may make modifications based on
public comments received, the impact of the provisions in this IFR, and
any changes in the conditions surrounding the pandemic.
B. Interim Final Rule Justification
Agency rulemaking is governed by the Administrative Procedure Act
(APA), 5 U.S.C. 551 et seq. Section 553(b) requires that, unless the
rule falls within one of the enumerated exemptions, DoD must publish a
notice of proposed rulemaking in the Federal Register that provides
interested persons an opportunity to submit written data, views, or
arguments prior to finalization of regulatory requirements. Section
553(b)(B) authorizes a department or agency to dispense with the prior
notice and opportunity for public comment requirement when the agency,
for ``good cause,'' finds that notice and public comment thereon are
impracticable, unnecessary, or contrary to the public interest. For
both the NCTAP and ESRD provisions, the ASD(HA) has determined notice
and public comment before promulgation of this rule would be contrary
to the public interest and therefore finds good cause to enact the
changes described in this rule through an IFR, effective the date of
publication in the Federal Register. The ASD(HA)'s justification is as
follows:
First, as of this rule's writing, both the PHE and the President's
declared national emergency are still in effect; therefore, the
Administration still finds COVID-19 to be an emergency situation and
unnecessary delays should be avoided to the greatest extent possible.
While DoD acknowledges that the pandemic has been ongoing for many
months, DoD maintains that, given the ongoing uncertainty as to what
dangers future COVID-19 variants may pose, it is impracticable and
contrary to the public interest to delay these regulations until a full
public notice-and-comment process is completed. Second, patients and
providers alike continue to struggle due to burdens imposed by the
COVID-19 pandemic. The emergence of the Delta and Omicron variants have
resulted in increased COVID-19 cases, hospitalizations, and deaths,
which have worsened resource constraints on providers, limited access
to medically necessary health care services and supplies for TRICARE
beneficiaries, and cost many beneficiaries their health and their
lives. Meanwhile, the trajectory of COVID-19, including number of
future variants and severity of each variant, remains an unknown
variable. In such a precarious and uncertain healthcare landscape, it
is imperative that TRICARE ensure continued access to care for TRICARE
beneficiaries while simultaneously following its statutory mandate to
pay for like services and supplies using Medicare reimbursement
methodologies, when practicable. In promulgating this IFR, the Defense
Health Agency (DHA) has evaluated and re-evaluated each provision to
ensure the IFR remains up to date with current developments during the
COVID-19 pandemic and to publish only such requirements and authorities
that DHA deems necessary to respond to the declared national emergency
and PHE in order to best provide for the health of TRICARE
beneficiaries. It is likewise crucial that TRICARE authorize ESRD
facilities as institutional providers as expeditiously as possible to
ameliorate the resource constraints current TRICARE-authorized
providers are facing and increase the access of beneficiaries with a
life-threatening disease to proven, medically necessary care in the
most appropriate setting. Considerations specific to the two provisions
contained in this IFR are discussed in greater depth below. Finally,
this rule imposes no restrictions, financial penalties, or regulatory
burdens on the public that would make a notice and comment period
necessary or prudent; in fact, this IFR would ensure better access to
medically necessary care for TRICARE beneficiaries by providing
appropriate reimbursement to TRICARE providers. We anticipate no
negative feedback from the general public on the provisions within this
IFR; advance notice and comment would only delay increased payment to
providers and improved access to care for beneficiaries. Moreover, an
earlier DHA COVID-19 IFR (85 FR 54914-54924) that relaxed
[[Page 1995]]
certain regulatory restrictions for providers and increased
reimbursement to providers in order to follow Medicare reimbursement
methodologies received no negative comments. A delay to wait for a
notice and comment period is therefore impracticable and is contrary to
public interest and public health. Further, the public is still
encouraged to comment on this IFR and DHA is committed to responding to
any comments in a future final rule.
Specifically regarding the adoption of Medicare's NCTAPs, it is
crucial that providers be reimbursed adequately for COVID-19 treatments
involving new, high-cost services and supplies to which Medicare has
deemed appropriate to apply an add-on payment. Adopting this change
will ensure that TRICARE beneficiaries continue to receive maximized
access to new, high-cost COVID-19 treatments such as remdesivir and
convalescent plasma as well as any qualifying treatments that may
follow. CMS established the NCTAP ``to increase the current IPPS
payment amounts to mitigate any potential financial disincentives for
hospitals to provide new COVID-19 treatments during the PHE'' in an IFR
(85 FR 71142) published November 6, 2020. Due to the statutory
requirement that TRICARE reimburse providers using Medicare
reimbursement methodologies for like services and supplies, when
practicable, DHA adopted these changes, as well as the changes made in
this IFR, because the ASD(HA) determined that such changes were
practicable and necessary due to the COVID-19 pandemic. Although DHA is
not required to adopt all Medicare reimbursement methodologies--only
those that are practicable--the ASD(HA) does find it practicable to
adopt Medicare's NCTAP and likewise finds it necessary to promulgate
this change in an IFR, effective the publication date of this IFR (i.e.
dispensing with prior notice and opportunity for public comment due to
good cause), for the reasons discussed in this section and throughout
this preamble. By not matching Medicare reimbursement as anticipated
under statutory requirements and after DHA has previously adopted
Medicare reimbursement changes specific to the PHE, providers may be
hesitant to take on TRICARE beneficiaries as patients, especially while
they continue to struggle financially. Such a scenario could occur
during the remainder of the COVID-19 PHE if provider resource
constraints continue or worsen or another variant surges. DoD wishes to
avoid any such scenario which could impede TRICARE beneficiary future
access to care and which may also decrease beneficiary satisfaction,
decrease beneficiary outcomes, and negatively impact active duty
service member readiness.
Additional good cause exists to publish as an IFR the permanent
amendments to the TRICARE regulation regarding adoption of freestanding
ESRD facilities as authorized institutional providers and modifications
to the reimbursement of freestanding ESRD facilities. As previously
noted, TRICARE is mandated by law, 10 U.S.C. 1079(i)(2), to reimburse
institutional providers using the Medicare reimbursement methodologies,
to the extent practicable. Medicare recognizes freestanding and
hospital-based ESRD facilities as institutional providers and
reimburses ESRD facilities using a specific ESRD Prospective Payment
System (PPS). Due to historically low volume, TRICARE has neither
classified freestanding ESRD facilities as institutional providers nor
adopted the Medicare ESRD PPS. However, in recent years, there has been
increasing volume of TRICARE beneficiaries requiring ESRD services and
DHA has determined that because the TRICARE payment methodology for
freestanding ESRD facilities designated as CSPs does not reimburse
these facilities for their institutional charges, this could result in
freestanding ESRD providers declining to accept TRICARE patients who
need dialysis and other ESRD services and supplies. As such, the
ASD(HA) has determined that, while it would be impracticable to adopt
the Medicare ESRD PPS, it is practicable to adopt a TRICARE-specific
ESRD rate that approximates the Medicare ESRD rate. The national
emergency caused by the COVID-19 pandemic and extended by the Delta,
Omicron, and potentially other future variants has resulted in a severe
shortage of health care providers and supplies, and it is imperative
that (1) TRICARE beneficiaries have maximized access to care for ESRD
services and (2) ESRD services are available, where appropriate,
outside hospital settings to ensure that hospitals are more efficiently
able to maximize resources to treat COVID-19 and other conditions
requiring the acuity of inpatient or outpatient hospital settings. Due
to these resource constraints for providers and the lack of
reimbursement for institutional charges under the TRICARE program's
existing reimbursement methodology based on restricted TRICARE provider
status, ESRD facilities have notified DHA that they may be forced to
leave the TRICARE private sector network if payment rates do not
include reimbursement for institutional charges. A reduction in network
ESRD facilities would severely restrict the access of TRICARE
beneficiaries to life-saving ESRD services and supplies during the
remainder of the COVID-19 pandemic and could impose additional,
unnecessary costs on TRICARE beneficiaries who consequently have to
choose care from a provider who is out of network or is not a
participating provider within the TRICARE program. Barriers to access
and increased costs could prevent TRICARE beneficiaries from seeking or
receiving medically necessary treatment for ESRD. Furthermore, ESRD is
a life-threatening condition and patients with ESRD are
immunocompromised--and therefore more susceptible to COVID-19-so it is
especially imperative during the COVID-19 pandemic that these
beneficiaries receive prompt, accessible, high-quality ESRD services in
the most appropriate setting. Having patients with ESRD receive
treatment in an ESRD facility rather than in another setting may also
improve capacity or other resource constraints that other institutional
providers are facing during the COVID-19 pandemic; by not treating ESRD
patients, these providers will be able to focus their resources on
treating other patients, such as those with COVID-19 during times of
surging infection rates or new variants. For example, should hospitals
continue to experience periodic patient admission surges, TRICARE
beneficiaries who are ESRD patients would neither be occupying valuable
emergency department and inpatient beds nor would they be turned away
from treatment due to hospitals being over capacity, as they could be
treated in freestanding ESRD facilities instead of in a hospital
setting (as appropriate for their specific medical needs). Lastly, DoD
intends to make this change in ESRD provider status and reimbursement
methodology permanent, in conformance with statutory mandates to
reimburse providers of services of the same type (i.e., institutional
providers) to the extent practicable in accordance with Medicare
reimbursement methodologies. While ensuring adequate access to ESRD
providers by immunocompromised TRICARE ESRD patients during the COVID-
19 national emergency, it would not be practicable or efficient to
revoke the new provider status and fail to continue reimbursing ESRD
providers to the extent practicable in accordance with Medicare
[[Page 1996]]
reimbursement upon the expiration of the President's national emergency
declaration.
In exercising the authority under statute 5 U.S.C. 553(b)(B), the
ASD(HA) has determined that good cause exists to avoid delay as further
notice and public comment would be impracticable and contrary to the
public interest. Nonetheless, public comments on this IFR are still
invited and DoD is committed to considering all comments in enacting
any final regulations. Therefore, pursuant to 5 U.S.C. 553(b)(B), and
for the reasons stated in this preamble, the ASD(HA) concludes that
there is good cause to dispense with prior public notice and the
opportunity to comment on this rule before finalizing this rule. For
the same reasons and due to the fact that no harm could occur in
implementing this rule effective upon publication, as it does not
impose any burdens upon the public but rather increases their
reimbursement, the ASD(HA) has determined, consistent with section
553(d) of the APA, that there is good cause to make this IFR effective
immediately upon publication in the Federal Register.
C. Summary of Major Provisions
Freestanding ESRD Facilities
These provisions, 32 CFR 199.6 and 199.14, establish freestanding
ESRD facilities as institutional providers under the TRICARE Program
and modify TRICARE reimbursement of ESRD facilities.
ESRD Background and Coverage
ESRD is the fifth and final stage of Chronic Kidney Disease and
necessitates long-term dialysis or a kidney transplant; without
treatment, death is imminent. There are three treatment options for
ESRD, including two types of dialysis. First, patients may receive a
kidney transplant; however, there are approximately 100,000 individuals
on the national kidney transplant list at any given point in time, but
only 20,000 kidneys available each year in the United States.
Consequently, most ESRD patients receive dialysis until they can
receive a kidney transplant from a suitable donor. A patient may
receive hemodialysis, in which the patient's blood is filtered
externally before being returned to the body. Most patients (86%) begin
ESRD treatment receiving this type of dialysis, which can be performed
at home or in an inpatient or outpatient medical facility.
Alternatively, a patient may receive peritoneal dialysis, in which
fluid is injected into the patient's abdomen, blood is filtered, and
waste is filtered out through a semi-permanent tube. Although this type
of dialysis can be performed in a patient's home, fewer than 11% of
patients begin ESRD receiving this type of dialysis. The remaining 3%
of patients beginning ESRD treatment receive a preemptive kidney
transplant.
In 1972, Congress passed an amendment to the Social Security Act
(Pub. L. 92-603), which added ESRD to the list of qualifying conditions
for which a person is entitled to enroll in Medicare. ESRD patients
under the age of 65 must undergo a waiting period before being able to
enroll in Medicare. Currently, TRICARE beneficiaries are eligible for
Medicare coverage on the basis of an ESRD diagnosis on the first day of
the fourth month of dialysis treatment, after which the beneficiary, if
enrolled in Medicare, becomes dual eligible (i.e., both a beneficiary
of TRICARE and Medicare). Therefore, for those beneficiaries enrolled
in Medicare, TRICARE is first payer during the first three months of
dialysis treatment for beneficiaries under age 65 and is second payer
starting with the fourth month of treatment. Approximately 500 to 600
TRICARE beneficiaries who are not already enrolled to Medicare receive
dialysis each year. Most claims for dialysis received by TRICARE
(approximately 90%) are for individuals with both TRICARE and Medicare
eligibility.
Freestanding ESRD Facilities
The term ``freestanding ESRD facilities'' refers to non-hospital,
freestanding providers that render services and supplies related to
ESRD, including outpatient dialysis treatments, home dialysis training
and equipment, drugs and biologicals, laboratory tests, and nursing
services. Freestanding ESRD facilities may also provide dialysis
services for acute kidney injury (AKI), and will be reimbursed for AKI
services under the provisions established in this IFR. ESRD facilities
may also be known as Dialysis Facilities and Dialysis Centers, and they
include both freestanding and hospital-based providers. Hospital-based
ESRD facilities are already reimbursed for their institutional charges
by TRICARE, generally under the Outpatient Prospective Payment System
(OPPS) or other rules that apply to special hospitals, such as Critical
Access Hospitals; this IFR concerns freestanding ESRD facilities only.
TRICARE utilizes Medicare's classification for determining if a
facility is hospital-based (42 CFR 413.174). If Medicare considers a
dialysis treatment facility to be hospital-based or part of a hospital
outpatient department, TRICARE accepts that determination without
exception. No changes will be made to hospital-based ESRD facilities as
a result of this IFR. They will continue to be reimbursed on the basis
of OPPS, or in the case of Sole Community Hospitals, Critical Access
Hospitals, or other special providers (e.g., Cancer and Children's
hospitals), on the basis of existing reimbursement methodologies.
Currently, freestanding ESRD facilities are considered non-
institutional CSPs under the TRICARE Program and are not considered
institutional providers, as described in 32 CFR 199.6(b). As a result,
these providers can only be reimbursed for professional services and
for covered supplies and pharmaceuticals on a FFS basis. CSPs may not
be reimbursed for institutional services outlined in 32 CFR 199.4(b),
such as the use of special treatment rooms, general staff nursing
services, and room and board. In order to modify TRICARE reimbursement
of ESRD facilities to better reflect Medicare's ESRD PPS (e.g., to
include payment for institutional services), freestanding ESRD
facilities must first be classified as authorized institutional
providers under the TRICARE Program in Sec. 199.6.
Title 42 CFR part 494 provides Medicare's Conditions for Coverage
for both hospital-based and freestanding ESRD Facilities. As ESRD is a
Medicare-qualifying condition, we find it appropriate to adopt Medicare
approval of freestanding ESRD facilities, including all Medicare
conditions for coverage required for Medicare approval of freestanding
ESRD facilities, in order to be an authorized TRICARE ESRD facility and
receive payment under the TRICARE program. Those ESRD facilities that
qualify to be an authorized TRICARE ESRD institutional provider on the
effective date of this IFR may apply for TRICARE authorized provider
status and be reimbursed under the new TRICARE reimbursement
methodology for ESRD facilities for covered services furnished to an
eligible TRICARE beneficiary on or after the IFR effective date. No new
TRICARE CSP participation agreements will be accepted for coverage of
ESRD services on or after the effective date of this IFR, and all
current TRICARE CSP participation agreements will be terminated from
freestanding ESRD facilities on the effective date of this IFR. Only
ESRD services furnished by hospital-based ESRD facilities and TRICARE
authorized freestanding ESRD facilities will qualify as TRICARE
[[Page 1997]]
covered services. We encourage comments on whether TRICARE should
consider any additional criteria for freestanding ESRD facilities to be
considered TRICARE-authorized institutional providers.
Reimbursement
In 2011, CMS established the ESRD PPS, which is the methodology
used to reimburse ESRD facilities. The ESRD PPS pays facilities a case-
mix adjusted rate for dialysis services, per dialysis treatment,
including drugs, laboratory tests, and supplies. The specific rate
varies by patient characteristics (e.g., age, body surface area, body
mass index, co-morbidities, date of onset of dialysis) and facility
characteristics (e.g., area wage-index, treatment volume, and rural
location). The base rate and methodology are updated annually in the
Medicare ESRD PPS Final Rule, published in the Federal Register; in
Calendar Year (CY) 2021, the base rate was $253.13 and in CY22, the
base rate was $257.90 (86 FR 61874).
Additionally, facilities may receive separately-paid outlier
payments if a patient's treatment costs exceed a specified threshold
for certain items. Facilities may also be paid separately for certain
drugs and supplies, using add-on payments known as Transitional Drug
Add-on Payment Adjustment and Transitional Add-on Payment Adjustment
for New and Innovative Equipment and Supplies. Once approved for a
specific drug or supply, the add-on payment is applied for two years,
after which the reimbursement for these products is bundled into the
base payment amount. CMS has also established a Quality Incentive
Program (QIP) for reimbursement of ESRD facilities.
As discussed above, DHA reimburses dialysis services on a FFS basis
for the covered professional services and supplies only, as
freestanding ESRD facilities are not classified as institutional
providers in 32 CFR 199.6. Currently, most freestanding ESRD facilities
are only eligible to be considered CSPs, as defined in 32 CFR 199.6(f).
The CSP class of providers consists of freestanding corporations and
providers that render principally professional, ambulatory, or in-home
care and technical diagnostic procedures. The intent behind CSPs is not
to create additional benefits that ordinarily would not be covered
under TRICARE if provided by a more traditional health care delivery
system, but rather to allow cost-sharing for services which would
otherwise be allowed except for an authorized individual professional
provider's affiliation with a freestanding corporate entity, such as a
medical doctor or physical therapist employed directly with a
freestanding corporate entity or foundation. This limits reimbursement
for freestanding ESRD facilities qualifying as CSPs to only
professional services, along with supplies and drugs, and excludes
reimbursement of facility charges, such as general nursing services and
reimbursement for the use of treatment rooms.
This rule will establish a TRICARE reimbursement methodology for
freestanding ESRD facilities to better reflect the Medicare
reimbursement rate under the Medicare ESRD PPS by recognizing
freestanding ESRD facilities as authorized institutional providers and
permitting reimbursement of facility charges. In 2021, freestanding
ESRD providers were paid, via the CHAMPUS Maximum Allowable Charge
Method (CMAC), approximately $119 per session, on average, for
professional services, plus an additional average of $125 for
supplementary drugs, tests, and supplies, leading to an average per-
session reimbursement of approximately $244. While this rate was
roughly comparable to the Medicare base rate, it does not account for
other adjustments and modifications made by Medicare to the base rate
as part of the Medicare ESRD PPS.
Medicare adjusts the base rate for patient-level characteristics,
including age, body mass index, specific conditions, and date of onset,
as well as facility-level characteristics such as wage-index, low-
volume factors, rural locations, and outlier payments. Medicare also
provides a separate payment for certain exceptional drugs or equipment
and supply items during a transitional status. Finally, Medicare
continues to refine the system through the QIP.
Our analysis has shown that the two most important factors in
Medicare's adjustment of the base rate that would apply to TRICARE's
population are age and date of onset. The age adjustment factor is
approximately 7% for patients ages 44-69. We found that over 70% of
TRICARE ESRD patients where TRICARE is the primary payer are between
the ages of 44-69, and thus we think that a 7% adjustment would be
practicable. A more important factor is the 32.7% adjustment used by
Medicare for patients in the first four months since the onset of
dialysis.
In lieu of the current method of reimbursement utilizing the CMAC
for the professional charges plus additional allowed amounts for
laboratory, pharmaceuticals, and supplies (with no reimbursement for
facility charges), under the provisions of this rule, TRICARE will
reimburse a single, flat, per-session fee which will include all
charges for the facility use, general nursing services, laboratory
services related to ESRD care, pharmaceuticals (excepting those allowed
for separate payment by Medicare), and supplies. The TRICARE ESRD rate
will have a higher reimbursement for the first 120 days of dialysis,
and a different, lower rate for days 121 and later where TRICARE is the
primary payer. This reflects Medicare's adjustment of 32.7% for the
first four months of ESRD treatment. We also propose to add a 7%
adjustment to each rate (i.e. both for 0-120 days and 121 days and
later) to account for the fact that approximately 70% of the
beneficiaries receiving ESRD care for which TRICARE is the primary
payer are between ages 44 and 69. Additionally, to account for training
services and supplies, dialysis training sessions will receive a home
dialysis training add-on payment for day treatment days 121 and after.
The training add-on payment will not apply to treatment days 1-120, as
the onset adjustment factor of 32.7% is applied to the per-session rate
for treatment days 1-120. The rates below use CY 2021 rates as an
example.
----------------------------------------------------------------------------------------------------------------
CY 2021 TRICARE Proposed TRICARE Proposed TRICARE
FFS methodology CY 2021 Medicare 2021 rate-- first 2021 rate-- 121
average base rate 120 days days and later
----------------------------------------------------------------------------------------------------------------
Per Session Reimbursement, CY 21 $244.............. $253.13........... $359.42........... $270.85.
Reimbursement Components........ $119 for the Medicare Published Medicare Base Rate Medicare Base Rate
Professional Base Rate. multiplied by: 7% multiplied by: 7%
Charge plus $125 Age Adjustment; Age Adjustment.
for Lab, Drugs, 32.7% Onset
and Supplies. Adjustment.
----------------------------------------------------------------------------------------------------------------
[[Page 1998]]
As stated above, this fee will incorporate all ESRD-related
laboratory services, pharmaceuticals, and supplies required in the
course of the dialysis treatment. The flat rates above also apply to
renal dialysis services furnished to TRICARE beneficiaries for home
dialysis services, which include: home dialysis support services
identified at 42 CFR 494.100; the purchase and delivery of all
necessary home dialysis supplies; and dialysis training for days 1-120.
The authorized TRICARE ESRD institutional provider will receive the
same reimbursement rate for home dialysis services as it would receive
for in-facility dialysis services. All renal dialysis items and
services furnished in the ESRD facility or in a patient's home are
included in the rates above and must be furnished by the ESRD facility,
either directly or under an arrangement. Only the following services
will be allowed separate reimbursement:
<bullet> Evaluation and management services rendered by authorized
individual professional providers (e.g., a nephrologist evaluating the
patient). These services will continue to be reimbursed via the CMAC
system.
<bullet> Drugs, supplies, and devices listed by Medicare as
eligible for Transitional Drug Add-on Payment Adjustment and
Transitional Add-on Payment Adjustment for New and Innovative Equipment
and Supplies. These services may be reimbursed via the CMAC and/or
Durable Medical Equipment Prosthetics Orthotics and Supplies (DMEPOS)
reimbursement system (e.g., reimbursement for drugs may be made using
existing policy on the reimbursement of medical claims that include
drugs), and in cases where no CMAC, DMEPOS, or other rate exists,
TRICARE will reimburse on the basis of billed charges, subject to the
provisions of 32 CFR 199.9, administrative remedies for fraud and
abuse. Information on these items can be found in the Medicare website
sections outlining the ESRD PPS. [<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/ESRD-Transitional-Drug">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/ESRD-Transitional-Drug</a> and
<a href="https://www.cms.gov/medicare/esrd-pps/esrd-pps-transitional-add-payment-adjustment-new-and-innovative-equipment-and-supplies-tpnies">https://www.cms.gov/medicare/esrd-pps/esrd-pps-transitional-add-payment-adjustment-new-and-innovative-equipment-and-supplies-tpnies</a>].
<bullet> Services unrelated to ESRD care (e.g., if a flu shot is
administered at the same time as dialysis treatment). These services
will continue to be reimbursed using existing reimbursement systems
(e.g., CMAC).
The flat rate shall be updated each year by utilizing the Medicare
base rate, promulgated in their annual ESRD PPS final rule, and by
adjusting it using the age adjustment factor for individuals aged 44-69
(currently 7%, however, if Medicare modifies this adjustment factor in
subsequent years DHA will utilize the updated factor) and the Medicare
adjustment factor for date of onset (currently 32.7%, however, if
Medicare modifies this adjustment factor in subsequent years DHA will
utilize the updated factor).
The flat rate also will be wage adjusted to provide adequate
locality adjustments, using the wage indices published by Medicare for
the ESRD PPS. This adjustment serves to more appropriately reimburse
freestanding ESRD facilities based on their locality (e.g., higher cost
areas receive higher reimbursement than lower-cost areas). Both
Medicare and TRICARE reimbursement methodologies for other provider
types use a similar methodology to appropriately reimburse providers
based on locality; the Medicare ESRD PPS likewise uses an area wage-
index adjustment to the base rate for this purpose. TRICARE's ESRD
reimbursement methodology will apply the wage adjustment factor to the
same percentage of the base rate as specified by CMS in the ESRD PPS,
including any future updates by CMS in the ESRD final rule. Therefore,
the TRICARE ESRD reimbursement methodology will approximate the
Medicare methodology in the ESRD PPS. DHA will issue policy regarding
the precise reimbursement methodology for freestanding ESRD facilities
in its implementing instructions, and will provide an annual listing of
rates on its website at <a href="http://www.health.mil/rates">www.health.mil/rates</a> within 90 days of issuance
of the Medicare Final Rule containing the updated base rate.
This reimbursement approach approximates, but does not duplicate,
Medicare's ESRD PPS. It is not practicable for DHA to implement
Medicare's ESRD PPS because of the small number of beneficiaries for
which TRICARE is the primary payer. The administrative start-up and
ongoing maintenance costs of implementing such a complex system would
outweigh benefits of adoption. We believe that this flat payment, one
for the first 120 days, and another for 121 days and later,
sufficiently retains the intent to reimburse like Medicare to the
extent practicable, while also ensuring adequate reimbursement for ESRD
services delivered at freestanding ESRD facilities.
We invite comments on this methodology and may make further
refinements through the issuance of a Final Rule.
Copayments and Cost-Sharing
Treatment in freestanding ESRD facilities (including home dialysis
services) shall be considered specialty outpatient visits for the
purposes of cost-sharing and copayments under the program. Applicable
copayments and cost-shares as described in 32 CFR 199.4 and
199.17(k)(2)(iii) will apply upon publication of this rule.
DRG Add-On Payment for NCTAP
This provision, 32 CFR 199.14(a)(1)(iv)(C), temporarily adopts
Medicare's NCTAP for services and supplies otherwise covered under the
TRICARE Program, including adopting Medicare's termination date for
NCTAPs, which CMS extended for discharges that occur through the end of
the FY in which the PHE terminates. TRICARE shall reimburse acute care
hospitals an NCTAP amount which is the lesser of (1) 65 percent of the
operating outlier threshold for the claim or (2) 65 percent of the
amount by which the costs of the case exceed the standard DRG payment,
including the adjustment to the relative weight under section 3710 of
the CARES Act, for certain cases that include the use of a drug or
biological product currently authorized or approved for treating COVID-
19. The NCTAP will not be included as part of the calculation of the
operating outlier payments. Providers must submit claims in accordance
with the TRICARE claims filing deadline requirements, which are located
in the TRICARE implementing instructions (i.e., the TRICARE manuals).
D. Legal Authority for This Program
This rule is issued under 10 U.S.C. 1073(a)(2) giving authority and
responsibility to the Secretary of Defense to administer the TRICARE
program. The statutory requirements to reimburse individual and
institutional providers for like services and supplies using the same
methodologies as Medicare are located in 10 U.S.C. 1079(h) and (i),
respectively. The text of 10 U.S.C. chapter 55 can be found at <a href="https://manuals.health.mil/">https://manuals.health.mil/</a>.
II. Regulatory History
Each of the sections being modified by this rule are revised every
few years to ensure requirements continue to align with the evolving
health care field.
Title 32 CFR 199.6 was last modified November 17, 2020 (85 FR
73196). This change added Doctors of Podiatric Medicine and Podiatrists
as allied health professionals under the TRICARE Program, added
referral and supervision requirements for physical therapists and
occupational therapists, and added
[[Page 1999]]
speech pathologists as paramedical providers under the TRICARE Program.
Title 32 CFR 199.14 was last modified September 3, 2020 (85 FR
54924). This change added multiple provisions related to the COVID-19
pandemic (i.e., adjusting DRG and long-term care facility payments),
adopted Medicare New Technology Add-On Payments, and adopted Medicare
Hospital Value Based Program adjustments.
III. Regulatory Analysis
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, distributive 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. Accordingly, the rule has been reviewed by the Office of
Management and Budget under the requirements of these Executive Orders.
This rule has been designated a ``significant regulatory action''
although determined to be not economically significant, under section
3(f) of Executive Order 12866.
b. Summary
The modifications to paragraphs 199.6(b)(4)(xxi) and 199.14(c) in
this IFR will establish freestanding ESRD facilities as a category of
institutional provider within the TRICARE program and will create a
TRICARE reimbursement system for those facilities. These changes will
make TRICARE reimbursement of freestanding ESRD facilities, as well as
dialysis services and supplies provided by these facilities, more
consistent with the Medicare PPS rates for ESRD facilities, in
accordance with the statutory requirement to reimburse like Medicare
for like services and supplies to providers of services of the same
type (i.e., institutional providers) except when impracticable. These
changes will also allow for TRICARE payment of institutional services
rendered by freestanding ESRD facilities. The modification to paragraph
199.14(c) will require the deletion of a now-defunct provision, that
the Director, DHA, shall establish reimbursement for institutions other
than hospitals and Skilled Nursing Facilities. Since the new ESRD
reimbursement provisions will be moved to paragraph 199.14(c), and
since 10 U.S.C 1079(i)(2) requires amounts to be paid to institutions
to be prescribed in regulation, the existing requirement in 199.14(c)
is unnecessary and will be deleted from regulation.
The modifications to paragraph 199.14(a)(1)(iv)(C) in this IFR will
temporarily adopt the Medicare NCTAP for COVID-19 patients through the
end of the FY in which the PHE terminates. The NCTAP provides
additional reimbursement in addition to the 20 percent add-on payment
under section 3710 of the CARES Act equal to the lesser of (1) 65
percent of the operating outlier threshold for the claim or (2) 65
percent of the amount by which the costs of the case exceed the
standard DRG payment, including the adjustment to the relative weight
under section 3710 of the CARES Act, for certain cases that include the
use of a drug or biological product currently authorized or approved
for treating COVID-19. NCTAP claims are those that are eligible for the
20 percent add-on payment indicated by the presence of COVID diagnosis
codes, plus the presence of certain procedure codes for certain COVID-
19 treatments including remdesivir, or convalescent plasma.
c. Affected Population
This change impacts all TRICARE beneficiaries who require dialysis,
who are receiving COVID-19 treatments eligible for NCTAPs, or who
require medically necessary services during the COVID-19 pandemic.
Providers who render treatments eligible for NCTAPs will be impacted by
being able to receive higher, more appropriate reimbursement from
TRICARE than they would have in the absence of this rule. Providers may
also experience decreased patient volume burden if their patients with
ESRD are able to be treated in a freestanding ESRD facility instead.
Freestanding ESRD facilities will be impacted by receiving higher
reimbursement for care provided to TRICARE beneficiaries who have not
enrolled in Medicare. TRICARE's health care contractors will be
impacted by being required to implement the provisions of this
regulatory change. State, local, and tribal governments will not be
impacted.
d. Costs
The cost estimates related to the changes discussed in this IFR
include incremental health care cost increases (also known as transfer
costs) as well as administrative costs to the government. Only the ESRD
provisions will result in recurring incremental health care costs,
while the NCTAP provision will result in cost increases from the
effective date of the IFR though the FY in which the PHE terminates.
The cost estimate assumes that the PHE continues into, but not beyond,
FY 2023; however, the COVID-19 pandemic contains substantial
uncertainty including the possibility of additional COVID-19 variants
resistant to current vaccines and treatments, as well as the actual
date the PHE terminates. As such, we find it appropriate to make these
regulatory changes despite the potential short effective period, as the
end of the pandemic is by no means a certainty.
Based on these factors, as well as the assumptions for each
provision detailed below, we estimate that the total cost estimate for
this IFR through FY 2023 will be approximately $8.08M. This estimate
includes approximately $0.75M in administrative costs and $7.33M in
direct health care costs. The NCTAP provision is expected to have costs
through FY 2023, while the permanent ESRD provisions are expected to
result in $5.23M in incremental annual costs, with a 4.5% increase each
subsequent year due to inflation and an increase in cases.
A breakdown of costs, by provision, is provided in the below table.
A discussion of assumptions follows.
------------------------------------------------------------------------
Provision FY23 costs
------------------------------------------------------------------------
ESRD.................................................... $5.23M
DRG Add-on for NCTAP.................................... 2.1
Administrative costs.................................... 0.75
Estimated Total Cost Impact............................. 8.08M
------------------------------------------------------------------------
Assumptions specific to the estimates for each individual provision
are explained below.
<bullet> Freestanding ESRD Facilities. We assumed that the number
of TRICARE beneficiaries requiring ESRD services, the proportion of
beneficiaries receiving acute versus chronic dialysis, and the number
of each type of ESRD service (e.g., dialysis, lab services, medical
supplies, pharmaceuticals) for which TRICARE was the primary payer will
remain constant. This estimate assumes paying freestanding ESRDs a
facility charge for the first 120 days of dialysis equal to the base
payment rate under the Medicare ESRD PPS multiplied by the 7 percent
factor (for age) and the 32.7 percent factor (for the first 120 days of
dialysis). This base rate would be further adjusted for locality using
a wage index adjustment factor, using the same or similar adjustments
as
[[Page 2000]]
Medicare, as appropriate. For ESRD services past 120 days of dialysis,
the cost estimate assumed only the seven percent adjustment factor for
age and the wage index adjustment factor locality would be applied. Any
services or supplies not included in Medicare's ESRD PPS bundle would
continue to be reimbursed separately by TRICARE using the applicable
existing reimbursement methodology. The cost estimate of $5.23M
annually was calculated by multiplying the base amount plus applicable
adjustments by the number of ESRD claims for which TRICARE would be the
primary payer, although this amount will increase by a small 4.5%
adjustment factor annually. Additionally, we expect this provision to
result in approximately $340,000 in one-time administrative costs.
<bullet> DRG Add-on for NCTAP. This estimate assumes an effective
date for this provision of October 1, 2022 and that the PHE will end
during FY23. In creating this estimate, we first analyzed TRICARE
inpatient claims at private sector hospitals and identified that almost
half of inpatient admissions also had a procedure code treatment with
at least one of the selected therapies eligible for NCTAP add-on
payments. We identified from TRICARE actual data that there were 6,600
total TRICARE COVID-19 admissions during the November 2020-June 2021
period; 3,000 of these admissions included a treatment eligible for an
NCTAP and 1,400 of those treatments had a cost that exceeded the DRG
payment. Therefore, we assumed 21 percent (i.e., 1,400 divided by
6,000) of total TRICARE COVID-19 treatments would qualify for an NCTAP.
Towards the end of the PHE, we expect fewer admissions due to
decreasing hospitalization rates, and thus we assumed approximately 100
admissions per month in FY23. To estimate direct health care costs, we
assumed that 21 percent of the projected TRICARE COVID-19 admissions
would be paid the NCTAP of 65 percent of the amount by which the costs
of the case exceed the standard DRG payment. We calculated an average
NCTAP of $8,450 per case by identifying the TRICARE COVID-19 private
sector cases in which the COVID-19 treatment exceeded the DRG payment,
calculating the average excess cost per case, and multiplying this
average excess cost by 65 percent. We multiplied the average expected
NCTAP of $8,450 by the expected number of monthly TRICARE private
sector hospitalizations projected to be affected by this provision and
estimated $2.1M in incremental direct health care costs in FY23. We
also estimated administrative start-up costs of $410,000 for the
Managed Care Support Contractors to maintain a list of approved NCTAPs,
identify which claims are eligible for a NCTAP, and to calculate the
estimated NCTAP amount for each claim.
e. Benefits
Freestanding ESRD facilities will be positively impacted by
increased reimbursement and may improve both the access to and quality
of care patients receive, which will in turn benefit TRICARE
beneficiaries with ESRD, a chronic, life-threatening condition.
Providers rendering treatments to patients with COVID-19 will benefit
by receiving higher, more adequate reimbursement for services and
supplies eligible for an NCTAP. Both providers and patients requiring
emergency or inpatient treatment will benefit if TRICARE beneficiaries
with ESRD are treated in a freestanding ESRD facility rather than in an
emergency department or inpatient hospital during any future COVID-19
surges.
f. Alternatives
DoD considered several alternatives to this IFR. The first
alternative involved taking no action. Although this alternative would
be cost neutral, it was rejected as not addressing the medical needs of
the beneficiary population in response to the COVID-19 pandemic.
Additionally, it would fail to fulfill the statutory mandate that
TRICARE reimburse like Medicare, when deemed practicable.
The second alternative, related to the provisions regarding
freestanding ESRD facilities, was to adopt Medicare's reimbursement
system (the ESRD PPS) in total. The advantages of this option were:
<bullet> It is completely consistent with the statutory provision
to pay institutional providers using the same methodology as Medicare;
<bullet> It would provide the nuanced payment differences made by
Medicare on the basis of age, comorbidities, body measurements, and
facility-specific adjustments for low-volume facilities and rural
facilities;
<bullet> It would accommodate outlier payments and cases; and
<bullet> It contains provisions for a QIP.
However, this option was not pursued because of the very low volume
of TRICARE beneficiaries who receive dialysis services from
freestanding ESRDs and who are not enrolled to Medicare. Most dialysis
services that are paid by TRICARE are for individuals who are both
Medicare and TRICARE eligible (approximately 90% of claims for dialysis
services in FY 2019 were for patients where Medicare was the primary
payer). In these cases, where Medicare pays as primary, TRICARE
generally provides reimbursement for the remaining patient liability,
which was approximately $44 per treatment in FY 2019. Thus, for 90% of
dialysis claims received by TRICARE, TRICARE is already following
Medicare reimbursement methods, as the remaining patient liability is
less than what would have otherwise been paid had TRICARE been the
primary payer, in accordance with TRICARE regulations regarding other
health insurance and dual eligibility. The cost of implementing the
full ESRD PPS system is estimated to be at least $600,000 in start-up
costs, plus ongoing administrative costs, to ensure all adjustments
were made for each claim, plus additional special pricing software or
algorithms. Additional administrative funds may be required to
implement the QIP and other programs, as implemented by Medicare now or
in the future. Further, implementation of the ESRD PPS would be time-
consuming, taking up to a year to accomplish. In contrast, we estimate
that the option provided in this IFR can be implemented relatively
quickly, and for approximately $340,000 in start-up costs with lower
ongoing administrative costs. Further, the flat rate will provide the
ESRD facilities with predictability with regard to TRICARE payments and
will reduce uncertainty and specialized coding or case-mix
documentation requirements that may be required by the ESRD PPS,
reducing the administrative burden on the provider. To summarize,
adopting the ESRD PPS was considered, but was deemed impracticable and
overly burdensome to both the Government and providers.
B. Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
The ASD(HA) certified that this IFR is not subject to the
flexibility analysis requirements of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) because it would not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The great majority of hospitals, freestanding ESRDs, pharmacies, and
most other health care providers and suppliers are small entities,
either by being nonprofit organizations or by meeting the SBA
definition of a small business (having revenues of less than $8.0
million to $41.5 million in any one year). Individuals and States are
not included in the definition of a small entity.
[[Page 2001]]
All of the provisions of this IFR are likely to have an economic
impact on health care providers and suppliers. As its measure of
significant economic impact on a substantial number of small entities,
HHS uses an adverse change in revenue of more than 3 to 5 percent.
While TRICARE is not required to follow this guidance in the issuance
of our rules, we provide this metric for context, given that these
temporary changes align with similar changes made by Medicare. Given
that all provisions within this rule are likely to increase
reimbursement to providers and suppliers, we find that these provisions
would not have an adverse impact on revenue and, therefore, would not
have a significant impact on these providers meeting the definition of
small business.
Therefore, the Regulatory Flexibility Act, as amended, does not
require us to prepare a regulatory flexibility analysis.
C. Congressional Review Act
Pursuant to Subtitle E of the Small Business Regulatory Enforcement
Fairness Act of 1996 (also known as 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).
D. Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''
Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1532) requires agencies to assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any one year of
$100 million in 1995 dollars, updated annually for inflation. This IFR
will not mandate any requirements for State, local, or tribal
governments, nor will it affect private sector costs.
E. Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter
35)
It has been determined that 32 CFR part 199 does not impose
reporting or recordkeeping requirements under the Paperwork Reduction
Act of 1995.
F. Executive Order 13132, ``Federalism''
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates an IFR (and subsequent final rule)
that imposes substantial direct requirement costs on State and local
governments, preempts State law, or otherwise has Federalism
implications. This IFR does not preempt State law or impose substantial
direct costs on State and local governments.
G. Executive Order 13175, ``Consultation and Coordination With Indian
Tribal Governments''
Executive Order 13175 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct compliance costs on one or more Indian tribes, preempts tribal
law, or effects the distribution of power and responsibilities between
the Federal Government and Indian tribes. This rule will not have a
substantial effect on Indian tribal governments.
List of Subjects in 32 CFR Part 199
Administrative practice and procedure, Claims, Fraud, Health care,
Health insurance, Individuals with disabilities, Military personnel.
Accordingly, 32 CFR part 199 is amended as follows:
PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED
SERVICES (CHAMPUS)
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.
0
2. Amend Sec. 199.6 by adding paragraph (b)(4)(xxi) and revising
paragraph (f)(1)(i) to read as follows:
Sec. 199.6 TRICARE-authorized providers.
* * * * *
(b) * * *
(4) * * *
(xxi) Freestanding End Stage Renal Disease (ESRD) facilities.
Freestanding ESRD facilities must be Medicare certified and meet all
Medicare conditions for coverage as provided in 42 CFR part 494, and be
classified as freestanding ESRD facilities by Medicare, in order to be
approved as TRICARE-authorized institutional providers and receive
payment under the TRICARE program. State licensing are not required in
cases of a freestanding ESRD facility located in a State that does not
license such facilities. Freestanding ESRD facilities are not hospital-
affiliated nor hospital-based and are reimbursed based on the payment
methodology established in Sec. 199.14(c). Freestanding ESRD
facilities render outpatient hemodialysis or peritoneal dialysis
services in the ESRD facility or in a patient's home for the treatment
of ESRD and acute kidney injury (AKI).
* * * * *
(f) * * *
(1) * * *
(i) This corporate services provider class is established to
accommodate individuals who would meet the criteria for status as a
CHAMPUS authorized individual professional provider as established by
paragraph (c) of this section but for the fact that they are employed
directly or contractually by a corporation or foundation that provides
principally professional services which are within the scope of the
CHAMPUS benefit. With authorization of freestanding end stage renal
disease (ESRD) facilities as TRICARE institutional providers under
paragraph (b)(4)(xxi) of this section, corporate service provider
status will not be authorized for the provision of ESRD services.
* * * * *
0
3. Amend Sec. 199.14 by adding paragraph (a)(1)(iv)(C) and revising
paragraph (c) to read as follows:
Sec. 199.14 Provider reimbursement methods.
(a) * * *
(1) * * *
(iv) * * *
(C) Additional payment for new COVID-19 Treatments. TRICARE will
adopt the Medicare New COVID-19 Treatments Add-On Payments (NCTAP)
adjustment to DRGs. New COVID-19 treatments shall be reimbursed the
lesser of (1) 65 percent of the operating outlier threshold for the
claim or (2) 65 percent of the amount by which the costs of the case
exceed the standard DRG payment for an individual treated using new
COVID-19 treatments discharged during the Secretary of Health and Human
Services' declared public health emergency (PHE) through the end of the
FY in which the PHE terminates.
* * * * *
(c) Reimbursement of Freestanding End Stage Renal Disease (ESRD)
facilities. (1) This paragraph (c)(1) establishes payment methods for
dialysis provided by TRICARE authorized freestanding ESRD facilities.
TRICARE shall reimburse a single, flat, per-session fee to TRICARE
authorized freestanding ESRD facilities rendering hemodialysis or
peritoneal dialysis for treatment of ESRD or AKI. The flat, per-session
fee will apply to renal dialysis services furnished in the ESRD
facility or in a patient's home. All renal dialysis items and services
furnished in the ESRD facility or in a patient's home are included in
the flat per-session rate, except for those items and services listed
in paragraph (c)(1)(ii) of this section.
(i) Services included in the flat per-session rate must be
furnished by an authorized TRICARE ESRD institutional provider:
[[Page 2002]]
(A) Institutional charges (e.g., charges for facility use, use or
treatment rooms, and general nursing services);
(B) Routine laboratory services related to the dialysis session;
(C) Pharmaceuticals and supplies related to the dialysis;
(D) Home dialysis support services identified at 42 CFR 494.100;
(E) Purchase and delivery of all necessary home dialysis supplies;
and
(F) Dialysis training for days 1-120.
(ii) Services which may be billed separately:
(A) Evaluation and management services provided by authorized
individual professional providers. These services will continue to be
reimbursed using existing reimbursement systems (e.g., CMAC).
(B) Drugs, supplies, and devices listed by Medicare as eligible for
Transitional Drug Add-on Payment Adjustment and Transitional Add-on
Payment Adjustment for New and Innovative Equipment and Supplies under
the Medicare ESRD PPS. These services will continue to be reimbursed
using existing reimbursement systems (e.g., CMAC).
(C) Professional services, supplies, and pharmaceuticals unrelated
to dialysis care (e.g., if a flu shot is administered at the same time
as dialysis treatment). These services will continue to be reimbursed
using existing reimbursement systems (e.g., CMAC).
(iii) Establishment of the flat rate:
(A) Per session rate for treatment days 1-120. The flat, per-
session rate shall be equal to the current Medicare base rate,
multiplied by the current Medicare adjustment factor applied to
individuals aged 44-69 (7% for CY 22), and further multiplied by the
current Medicare adjustment factor for the date of onset (32.7% for CY
2022). The Medicare factors utilized in subsequent years will be based
on modifications made under 42 CFR part 413, subpart H, Medicare ESRD
PPS.
(B) Per session rate for treatment day 121 and beyond. The flat,
per-session rate shall be equal to the Medicare base rate, multiplied
by the Medicare adjustment factor applied to individuals aged 44-69.
The Medicare factors utilized in subsequent years will be based on
modifications made under 42 CFR part 413, subpart H, Medicare ESRD PPS.
(C) Wage adjustment. The per-session rates in paragraphs
(c)(1)(iii)(A) and (B) of this section shall be wage adjusted using the
wage adjustment factors and labor-related shares published in the most
recent Medicare ESRD Final Rule at the time the annual per-session
rates are posted.
(D) Annual updates. The per session rates will be updated within 90
days of publication of new Medicare base rates, and published to the
TRICARE website at <a href="http://www.health.mil">www.health.mil</a>.
(E) Dialysis training. To account for training services and
supplies, dialysis training sessions will receive a home dialysis
training add-on payment for day treatment days 121 and after. The
training add-on payment will not apply to treatment days 1-120, as the
onset adjustment factor of 32.7% is applied to the per-session rate for
treatment days 1-120.
(2) The reimbursement methods established in paragraph (c)(1) of
this section applies to freestanding ESRD facilities meeting the
requirements established for TRICARE authorized freestanding ESRD
facilities in Sec. 199.6. For purposes of cost-sharing and copayments,
treatment provided by freestanding ESRD facilities are considered
outpatient specialty visits. The applicable copayments and cost-shares
described in Sec. Sec. 199.4 and 199.17(k)(2)(iii) shall apply.
Hospital-based ESRD facilities are not subject to the provisions of
this paragraph, and will continue to be reimbursed utilizing other
applicable reimbursement systems (e.g., the Outpatient Prospective
Payment System).
* * * * *
Dated: January 6, 2023.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2023-00381 Filed 1-11-23; 8:45 am]
BILLING CODE 5001-06-P
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</html>Indexed from Federal Register on January 12, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.