Certain Rates Regarding Recovery From Tortiously Liable Third Persons

OFFICE OF MANAGEMENT AND BUDGET

Cost of Hospital and Medical Care Treatment Furnished by the United States;
Certain Rates Regarding Recovery From Tortiously Liable Third Persons

By virtue of the authority vested in the President by Section 2(a) of P.L. 87-693 (76 Stat. 593; 42 U.S.C.2652), and delegated to the Director of the Office of Management and Budget by Executive Order No. 11541 of July 1, 1970 (35 Federal Register 10737), the two sets of rates outlined below are hereby established. These rates are for use in connection with the recovery, from tortiously liable third persons, of the cost of hospital and medical care and treatment furnished by the United States (Part 43, Chapter I, Title 28, Code of Federal Regulations) through three separate Federal agencies. The rates have been established in accordance with the requirements of OMB Circular A-25, requiring reimbursement of the full cost of all services provided. The rates are established as follows:

1. Department of Defense

The FY 1999 Department of Defense (DoD) reimbursement rates for inpatient, outpatient, and other services are provided in accordance with Section 1095 of title 10, United States Code. Due to size, the sections containing the Drug Reimbursement Rates (Section III.E) and the rates for Ancillary Services Requested by Outside Providers (Section III.F) are not included in this package. The Office of the Assistant Secretary of Defense (Health Affairs) will provide these rates upon request. The medical and dental service rates in this package (including the rates for ancillary services, prescription drugs or other procedures requested by outside providers) are effective October 1, 1998.

2. Health and Human Services

The sum of obligations for each cost center providing medical service is broken down into amounts attributable to inpatient care on the basis of the proportion of staff devoted to each cost center. Total inpatient costs and outpatient costs thus determined are divided by the relevant workload statistic (inpatient day, outpatient visit) to produce the inpatient and outpatient rates. In calculation of the rates, the Department's unfunded retirement liability cost and capital and equipment depreciation cost were incorporated to conform to requirements set forth in OMB Circular A-25. In addition, each cost center's obligations include obligations from certain other accounts, such as Medicare and Medicaid collections and Contract Health funds that were used to support direct program operations. Certain cost centers that primarily support workload outside of the directly operated hospitals or clinics (public health nursing, public health nutrition, health education) were excluded. These obligations are not a part of the traditional cost of hospital operations and do not contribute directly to the inpatient and outpatient visit workload. Overall, these rates reflect a more accurate indication of the cost of care in HHS facilities.

In addition, separate rates per inpatient day and outpatient visit were computed for Alaska and the rest of the United States. This gives proper weight to the higher cost of operating medical facilities in Alaska.

1. Department of Defense

For the Department of Defense, effective October 1, 1998 and thereafter:

Inpatient, Outpatient And Other Rates And Charge.
Inpatient Rates ^{1 2}

	International military education per inpatient day	Interagency& Other Federal Agency &Training (IMET)	Other Sponsored Patients
A. Burn Center	$2,538.00	$4,632.00	$4,952.00
B. Surgical Care Services (Cosmetic Surgery)	$1,236.00	$2,255.00	$2,411.00

C.All Other Inpatient Services (Based on Diagnosis Related Groups (DRG) ³)

1.FY99 Direct Care Inpatient Reimbursement Rates

Adjusted standard amount	IMET	Interagency	Other (full/third party)
Large Urban	$2,429.00	$4,552.00	$4,825.00
Other Urban/Rural	$2,642.00	$5,413.00	$5,760.00
Overseas	$2,989.00	$6,823.00	$7,234.00

2. Overview

The FY99 inpatient rates are based on the cost per DRG, which is the inpatient full reimbursement rate per hospital discharge weighted to reflect the intensity of the principal diagnosis, secondary diagnoses, procedures, patient age, etc. involved. The average cost per Relative Weighted Product (RWP) for large urban, other urban/rural, and overseas facilities will be published annually as an inpatient adjusted standardized amount (ASA) (see paragraph I.C.1. above). The ASA will be applied to the RWP for each inpatient case, determined from the DRG weights, outlier thresholds, and payment rules published annually for hospital reimbursement rates under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) pursuant to 32 CFR 199.14(a)(1), including adjustments for length of stay (LOS) outliers. The published ASAs will be adjusted for area wage differences and indirect medical education (IME) for the discharging hospital. An example of how to apply DoD costs to a DRG standardized weight to arrive at DoD costs is contained in paragraph I.C.3., below.

3. Example of Adjusted Standardized Amounts for Inpatient Stays

Figure 1 shows examples for a nonteaching hospital in a Large Urban Area.

a. The cost to be recovered is DoD's cost for medical services provided in the nonteaching hospital located in a large urban area. Billings will be at the third party rate.

b. DRG 020: Nervous System Infection Except Viral Meningitis. The RWP for an inlier case is the CHAMPUS weight of 2.9769. (DRG statistics shown are from FY 1997).

c. The DoD adjusted standardized amount to be charged is $4,825 (i.e., the third party rate as shown in the table).

d. DoD cost to be recovered at a nonteaching hospital with area wage index of 1.0 is the RWP factor (2.9769 ) in 3.b., above, multiplied by the amount ($4,825) in 3.c., above.

e. Cost to be recovered is $14,364.

FIGURE 1. THIRD PARTY BILLING EXAMPLES

DRG No.	DRG Description	DRG Weight	Arithmetic Mean LOS	Geometric Mean LOS	Short Stay Threshold	Long Stay Threshold
020	Nervous System Infection Except Viral Meningitis	2.9769	11.2	7.8	1	30
Hospital	Location	Area Wage Rate Index	IME Adjustment	Group ASA	Applied ASA
Nonteaching Hospital	Large Urban	1.0	1.0	$4,825.00	$4,825.00
	Relative Weighted Product
Patient	Length of Stay	Days Above Threshold	Inlier*	Outlier**	Total	TPC amount***
#1	7 days	0	2.9769	0.0000	2.9769	$14,364
#2	21 days	0	2.9769	0.0000	2.9769	$14,364
#3	35 days	5	2.9769	0.6297	3.6066	$17,402

* DRG Weight

** Outlier calculation = 33 percent of per diem weight × number of outlier days

= .33 (DRG Weight/Geometric Mean LOS) × (Patient LOS - Long Stay Threshold)

= .33 (2.9769/7.8) × (35-30)

= .33 (.38165) × 5 (take out to five decimal places)

= .12594 × 5 (take out to five decimal places)

= .6297 (take out to four decimal places)

*** Applied ASA × Total RWP

e="2" face="Verdana, Arial, Helvetica, sans-serif">II. Outpatient Rates ^{1 2} Per Visit

III. Other Rates And Charges ^{1 2} Per Visit

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
FBI	A. Immunization	$13.00	$22.00	$24.00
DGC	B. Hyperbaric Chamber ⁵	191.00	343.00	366.00
	C. Ambulatory Procedure Visit (APV) ⁶	926.00	1,657.00	1,765.00
	D. Family Member Rate (formerly Military Dependents Rate)	10.45	..........	..........

E. Reimbursement Rates For Drugs Requested By Outside Providers ⁷

The FY 1999 drug reimbursement rates for drugs are for prescriptions requested by outside providers and obtained at a Military Treatment Facility. The rates are established based on the cost of the particular drugs provided. Final rule 32 CFR Part 220 eliminates the high cost ancillary services' dollar threshold and the associated term "high cost ancillary service." The phrase "high cost ancillary service" will be replaced with the phrase "ancillary services requested by an outside provider" on publication of final rule 32 CFR Part 220. The list of drug reimbursement rates is too large to include here. These rates are available on request from OASD (Health Affairs).

F. Reimbursement Rates for Ancillary Services Requested By Outside Providers ⁸

Final rule 32 CFR Part 220 eliminates the high cost ancillary services' dollar threshold and the associated term "high cost ancillary service." The phrase "high cost ancillary service" will be replaced with the phrase "ancillary services requested by an outside provider" on publication of final rule 32 CFR Part 220. The list of FY 1999 rates for ancillary services requested by outside providers and obtained at a Military Treatment Facility is too large to include here. These rates are available on request from OASD(Health Affairs).

G. Elective Cosmetic Surgery Procedures and Rates

Cosmetic Surgery Procedure	International Classification Diseases (ICD-9)	Current Procedural Terminology (CPT) ⁹	FY 1999 Charge ¹⁰	Amount of Charge
Mammaplasty	85.50, 85.32, 85.31	19325, 19324, 19318	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Mastopexy	85.60	19316	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Facial Rhytidectomy	86.82, 86.22	15824	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Blepharoplasty	08.70, 08.44	15820, 15821, 15822, 15823	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Mentoplasty (Augmentation/Reduction)	76.68, 76.67	21208, 21209	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Abdominoplasty	86.83	15831	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Lipectomy suction per region ¹¹	86.83	15876, 15877, 15878, 15879	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Rhinoplasty	21.87, 21.86	30400, 30410	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Scar Revisions beyond CHAMPUS	86.84	15785	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Mandibular or Maxillary Repositioning	76.41	21194	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Minor Skin Lesions ¹²	86.30	15785	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Dermabrasion	86.25	15780	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Hair Restoration	86.64	15775	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Removing Tattoos	86.25	15780	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Chemical Peel	86.24	15790	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Arm/Thigh Dermolipectomy	86.83	15839	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})
Brow Lift	86.3	15839	Inpatient Surgical Care Per Diem Or APV or applicable Outpatient Clinic Rate	(^{a b c})

H. Dental Rate ¹³ Per Procedure

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
	Dental Services, ADA code and DoD established weight	$56.00	$101.00	$108.00

I. Ambulance Rate ¹⁴ Per Visit

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
FEA	Ambulance	$56.00	$101.00	$107.00

J. Ancillary Services Requested by an Outside Provider ⁸ Per Procedure

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
	Laboratory procedures requested by an outside provider CPT '98 Weight Multiplier	$10.00	$17.00	$18.00
	Radiology procedures requested by an outside provider CP '98 Weight Multiplier	25.00	45.00	48.00
	Cardiology procedures requested by an outside provider CPT '98 Weight Multiplier	17.00	31.00	33.00

K. AirEvac Rate ¹⁵ Per Visit

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
	AirEvac Services - Ambulatory	$90.00	$161.00	$172.00
	AirEvac Services - Litter	256.00	459.00	489.00

Observation Rate ¹⁶ Per hour

MEPRS Code ⁴	Clinical Service	International Military Education & Training (IMET)	Interagency & Other Federal Agency Sponsored Patients	Other (full/third party)
	Observation Services Hour	$14.50	$25.83	$27.50

Notes on Cosmetic Surgery Charges

^a Per diem charges for inpatient surgical care services are listed in Section I.B. (See notes 9 through 11, below, for further details on reimbursable rates.)