1. From Registration to Accounts Receivable – The Whole Can of Worms 2007 UBO/UBU Conference 1 Briefing: DoD/VA Inpatient Resource Sharing Date:21 Mar 2007 Time:1400 - 1450

2. 2007 UBO/UBU Conference From Registration to Accounts Receivable 2 Objectives Understand history of DoD and VA sharing Understand the current DoD and VA sharing governance structure for developing and implementing policy, program guidance, and management for VA/DoD Health Care Resource Sharing Understand new Billing Guidance for inpatient care provided under VA/DoD Health Care Resource Sharing Agreements Understand where to find, and how to use the Modified TRICARE DRG Payment Calculator to calculate payment due for hospitalization Understand coming changes in policy and program guidance for VA/DoD Health Care Resource Sharing

3. 2007 UBO/UBU Conference From Registration to Accounts Receivable 3 Brief History of DoD/VA Sharing Federal Health Resource Sharing Legislation (1980 – 1981) – Encouraged interagency sharing and creativity in development of agreements Veterans Administration and Department of Defense Health Resources Sharing and Emergency Operations Act – Public Law 97-174 (1983) – Encouraged continuation and expansion of resource sharing – Resulted in 1983 Memorandum of Understanding (MOU) between DoD and VA on sharing which says the rate will take into account local conditions and actual costs National Defense Authorization Act (NDAA) of 2003 – Title 38, Section 8111 and Title 10, Section 1104 – Established Joint Executive Council for governance – Encouraged DoD and VA joint strategic planning – Mandated standardized reimbursement rates for DoD/VA sharing – DoD Instruction 6010.23, 12 Sep 2005 Department of Defense and Department of Veterans Affairs Health Care Resource Sharing Program

4. 2007 UBO/UBU Conference From Registration to Accounts Receivable 4 Joint Executive Council Structure SECRETARY DEPARTMENT OF VETERANS AFFAIRS SECRETARY DEPARTMENT OF DEFENSE VA/DoD (JEC) JOINT EXECUTIVE COUNCIL BENEFITS EXECUTIVE COUNCIL (BEC) HEALTH EXECUTIVE COUNCIL (HEC) Evidence-Based Clinical Practice Guidelines Workgroup Contingency Response Workgroup Deployment Health Workgroup Medical Education & Training Workgroup Cooperative Physical Exam Workgroup Financial Management Workgroup Mental Health Workgroup Graduate Medical Education Workgroup Information Management Information Technology Workgroup Joint Facility Utilization and Resource Sharing Workgroup Medical Materiel Management Workgroup Patient Safety Workgroup Pharmacy Workgroup Info System / Info Tech Workgroup Benefits & Services Workgroup VBA / VHA Seamless Transition FMWG develops payment guidance

5. 2007 UBO/UBU Conference From Registration to Accounts Receivable 5 Overarching Goals for DoD/VA Sharing Goal 1 – Leadership Commitment and Accountability Goal 2 – High Quality Health Care Goal 3 – Seamless Coordination of Benefits Goal 4 – Integrated Information Sharing Goal 5 – Efficiency of Operations Goal 6 – Joint Medical Contingency/Readiness Capabilities

6. 2007 UBO/UBU Conference From Registration to Accounts Receivable 6 General Principles for DoD/VA Reimbursement Methodology will be agreed to by both Departments – Not the same as billing DoD Third Party Collections (TPC) program – Not using Interagency Rates (there are a few exceptions) Provide flexibility to take into account local conditions and actual costs – Actual cost is defined as direct, incremental cost – Does not equal MEPRs cost, which is a fully loaded cost – Both departments have been criticized in the past by GAO for not using incremental costs Funds will be credited to the providing facility

7. 2007 UBO/UBU Conference From Registration to Accounts Receivable 7 General Principles for DoD/VA Reimbursement Per NDAA - 2003, rates will be standardized and waivers are allowed 2003 DoD/VA Memorandum of Agreement (MOA) – established basic agreement to use price-based methodology of discounted (CHAMPUS Maximum Allowable Charge (CMAC) and TRICARE DRG-based rates 2003 MOA states that there will be no additional reimbursement to cover costs of Graduate Medical Education (GME) in direct sharing agreements (includes both direct and indirect GME ) Joint Ventures may adjust the discount rate depending on local sharing arrangements – Joint Venture rates can be lower than the standard rates, but not higher Standardized methodology is used for care direct sharing agreements only and does not apply for care provided by VA facilities when they are acting as TRICARE network providers

8. 2007 UBO/UBU Conference From Registration to Accounts Receivable 8 Focus on New Inpatient Billing Guidance Policy guidance developed by Financial Management Work Group and coordinated with DoD and VA Guidance document signed August 29, 2006 Requires Modified TRICARE DRG Payment Calculators to implement Implementation guidance and the FY 2007 payment calculators now available on UBO Web site at: http://www.tricare.mil/ocfo/mcfs/ubo/index.cfm

9. 2007 UBO/UBU Conference From Registration to Accounts Receivable 9 Application of General Principles New Inpatient Billing Guidance DoD/VA Policy Guidance – Use CHAMPUS Maximum Allowable Charge rates, less a 10 percent discount, for institutional and professional charges – Apply to nearly all clinical services and specialties Spinal Cord Injury (SCI), Traumatic Brain Injury (TBI), and Blind Rehab cases will not fall under this methodology – Apply to all inpatient sharing agreements, including joint ventures – Allow for additional payment for cases which involve outlier days (i.e., Long-Stay cases) – Do not bill for costs associated with Graduate Medical Education or Capital Expense Equipment – Apply to existing and new DoD/VA Sharing Agreements Incorporate new methodology into new agreements and renewal or renegotiation of existing agreements Must be implemented by one year from date of agreement

10. 2007 UBO/UBU Conference From Registration to Accounts Receivable 10 Implementation for Inpatient Billing Use Diagnosis Related Groups (DRG) payment approach for Institutional (hospitalization) portion of inpatient care – Use Modified TRICARE DRG Payment Calculator to calculate amount to be billed Use Healthcare Common Procedure Coding System (HCPCS) for Non-Institutional (professional and other services) not included in DRG-based payment

11. 2007 UBO/UBU Conference From Registration to Accounts Receivable 11 Implementation in the VA and DoD VA expects to incorporate this billing approach into their current information systems DoD will proceed initially with manual billing, and incorporate this billing approach into its Chargemaster- Based Billing System (CMBB)

12. 2007 UBO/UBU Conference From Registration to Accounts Receivable 12 Implementation for Institutional Services Use Diagnosis Related Groups (DRG) payment approach for Institutional (hospitalization) portion of inpatient care – Use Modified TRICARE DRG Payment Calculator to calculate amount to be billed Modified TRICARE DRG Payment Calculator and associated billing guidance will be posted on the UBO web site

13. 2007 UBO/UBU Conference From Registration to Accounts Receivable 13 Data Sources and Flows Coded Inpatient Case DRG Number Length of Stay (LOS) Disposition Status Code Area Wage Index Number (Look-up table with Calculator) Modified TRICARE DRG Payment Calculator Billable Amount For Institutional Care (10% VA/DoD discount applied) Use in your Current VA/DoD Sharing Agreement Billing Process

14. 2007 UBO/UBU Conference From Registration to Accounts Receivable 14 Modified TRICARE DRG Payment Calculator Inputs – DRG – Length of Stay (LOS) – Disposition Status (Code) – Area Wage Index Number – VA/DoD Resource Sharing Policy parameters Output – Amount to be billed, with 10% discount already calculated

15. 2007 UBO/UBU Conference From Registration to Accounts Receivable 15 Modified TRICARE DRG Payment Calculator VA/DoD Resource Sharing Policy parameters – Use TRICARE/CHAMPUS approach to Institutional payment by Diagnosis Related Groups (DRGs) – Use a partial per diem marginal cost factor for cases with very long length of stay

16. 2007 UBO/UBU Conference From Registration to Accounts Receivable 16 Modified TRICARE DRG Payment Calculator Look-up Table of Area Wage Index Numbers By Zip Code Modified TRICARE DRG Calculator Worksheet

17. 2007 UBO/UBU Conference From Registration to Accounts Receivable 17 Modified TRICARE DRG Payment Calculator Payment Details Portion (For Info Only) Modified TRICARE DRG Calculator Portion

18. 2007 UBO/UBU Conference From Registration to Accounts Receivable 18 Modified TRICARE DRG Payment Calculator Overview of Inputs & Output Payment Calculation Portion of the Calculator Case- specific inputs Hospital- specific input Case- specific output

19. 2007 UBO/UBU Conference From Registration to Accounts Receivable 19 Modified TRICARE DRG Payment Calculator Overview of Inputs & Output Payment Calculation Portion of the Calculator Case-specific output VA/DoD Resource Sharing Policy Information

20. 2007 UBO/UBU Conference From Registration to Accounts Receivable 20 Modified TRICARE DRG Payment Calculator Case-specific inputs – Diagnosis Related Group (DRG) Number – Length of Stay (LOS) – Disposition Status (Code)

21. 2007 UBO/UBU Conference From Registration to Accounts Receivable 21 Modified TRICARE DRG Payment Calculator Case-specific Inputs Case- specific inputs Payment Calculation Portion of the Calculator

22. 2007 UBO/UBU Conference From Registration to Accounts Receivable 22 Modified TRICARE DRG Payment Calculator Population of DRG Description DRG Description Populated Automatically Payment Calculation Portion of the Calculator

23. 2007 UBO/UBU Conference From Registration to Accounts Receivable 23 Modified TRICARE DRG Payment Calculator Hospital-specific input is the Area Wage-Index number – Applied for the physical location (i.e., zip code) of the hospital which treats the patient – Adjusts the Labor portion of the payment amount to the level of local wages for the hospital location – Is a constant number for each fiscal year for a given hospital – A Zip_2_Wage look-up table is provided as part of the Modified TRICARE DRG Payment Calculator workbook

24. 2007 UBO/UBU Conference From Registration to Accounts Receivable 24 Modified TRICARE DRG Payment Calculator (Zip_2_Wage Look-up Table) Table of Area Wage Index Numbers By Zip Code

25. 2007 UBO/UBU Conference From Registration to Accounts Receivable 25 Modified TRICARE DRG Payment Calculator (Zip_2_Wage Look-up Table) Area Wage Index Look-up Table By Zip Code

26. 2007 UBO/UBU Conference From Registration to Accounts Receivable 26 Modified TRICARE DRG Payment Calculator (Zip_2_Wage Look-Up Table) Area Wage Index Number Zip Code Of Treating Hospital

27. 2007 UBO/UBU Conference From Registration to Accounts Receivable 27 Modified TRICARE DRG Payment Calculator Hospital-specific input – Area Wage Index Number Look-up in Zip_2_Wage Look-up Table, if necessary, based on zip code of treating hospital

28. 2007 UBO/UBU Conference From Registration to Accounts Receivable 28 Modified TRICARE DRG Payment Calculator Hospital-specific Input Payment Calculation Portion of the Calculator Hospital- specific input

29. 2007 UBO/UBU Conference From Registration to Accounts Receivable 29 Modified TRICARE DRG Payment Calculator Payment Policy Information Payment policy summary – National Adjusted Standardized Amount (ASA) is a constant for each fiscal year – ASA split between Labor and Non-Labor adjusted based on Area Wage Index – VA/DoD Resource Sharing Discount = 10% – Long-Stay marginal cost factor = 33% of calculated per diem amount

30. 2007 UBO/UBU Conference From Registration to Accounts Receivable 30 Modified TRICARE DRG Payment Calculator Reading the Payment Policy Information VA/DoD Resource Sharing Policy Information Payment Calculation Portion of the Calculator

31. 2007 UBO/UBU Conference From Registration to Accounts Receivable 31 Modified TRICARE DRG Payment Calculator Amount to be billed is automatically calculated using the following: – VA/DoD Resource Sharing policy information – Case-specific inputs, and – Hospital-specific input

32. 2007 UBO/UBU Conference From Registration to Accounts Receivable 32 Modified TRICARE DRG Payment Calculator Reading the Billable Amount Payment Calculation Portion of the Calculator Case-specific output

33. 2007 UBO/UBU Conference From Registration to Accounts Receivable 33 Modified TRICARE DRG Payment Calculator Payment Details The calculator provides details of the payment calculations as they apply to inpatient case types – Statistical Inlier DRG – Short-Stay – Long-Stay – Transfer For information only; not used in billing

34. 2007 UBO/UBU Conference From Registration to Accounts Receivable 34 Modified TRICARE DRG Payment Calculator Payment Details Portion of the Calculator (Not used in billing process. Provided as information only) Details of Information Used in Payment calculations

35. 2007 UBO/UBU Conference From Registration to Accounts Receivable 35 Summary – Inpatient Resource Sharing New guidance related to billing for inpatient care under VA/DoD Health Care Resource Sharing Agreements was published in August 2006 – Standard methodology used by both VA and DoD hospitals in billing for inpatient care – Modified TRICARE DRG Payment Calculator used to calculate billable amount for hospitalization portion of care Required materials are available on the UBO web site

36. 2007 UBO/UBU Conference From Registration to Accounts Receivable 36 Future Billing Issues/Changes Financial Management Work Group is currently revising the outpatient billing guidance Federal facilities methodology will be developed drawing on experience gained at the North Chicago location

37. 2007 UBO/UBU Conference From Registration to Accounts Receivable 37 Summary DoD/VA Health Care Resource Sharing has a long and important history Recent major changes include establishment of the Joint Executive Council and an emphasis on joint strategic planning New VA/DoD policy memorandum describes Inpatient Billing Guidelines for inpatient care provided under VA/DoD Health Care Resource Sharing agreements – Modified TRICARE DRG Payment Calculators will be used calculate of amount to be billed for Institutional component of service – FY2006 and FY2007 calculators and billing guidance documents now available on the UBO web site Future changes coming as programs continue to evolve – Revision of outpatient billing guidance – Federal facilities methodology

38. 2007 UBO/UBU Conference From Registration to Accounts Receivable 38 Q&A Questions? Please continue to use the MHS Helpdesk, the TMA UBO Helpdesk, and/or contact us directly: (703) 575- 5385 or at ubo.helpdesk@altarum.orgubo.helpdesk@altarum.org Please remember the TMA UBO website, it has a lot of information available Please continue to report code/rate/mapping issues: fix now and/or take into consideration for next rate update

39. 2007 UBO/UBU Conference From Registration to Accounts Receivable 39 Quiz What is the name of the combined DoD and VA organization through which the agencies’ Health Care Resource Sharing programs are managed? What is the basis for payment of inpatient Institutional care under the new VA/DoD Inpatient Billing Guidelines for care provided under VA/DoD Health Care Resource Sharing Agreements? How will users find the correct Area Wage Index Number to use in the payment calculator? Where are the payment calculators and implementation guidance be posted?

40. 2007 UBO/UBU Conference From Registration to Accounts Receivable 40 Contact Information Ms. Connie McDonald, DoD/VA Sharing – Phone: (703) 681-1724 – E-mail: Connie.McDonald@ha.osd.milConnie.McDonald@ha.osd.mil Mr. Russ Coleman, UBO Support Team Contractor – Phone: (210) 832-3020 – E-mail: Russ.Coleman@altarum.orgRuss.Coleman@altarum.org

41. 2007 UBO/UBU Conference From Registration to Accounts Receivable 41 VA/DoD Inpatient Resource Sharing Disposition Status Codes Used in Modified TRICARE DRG Payment Calculator 01= Home, self-care 02= Short term hospital 03= Skilled Nursing Facility (SNF) 04= Intermediate Care Facility (ICF) 05= Other facility 06= Home Health Service 07= Left Against Medical Advice (AMA) 20= Died 30= Still a Patient 50= Hospice-Home 51= Hospice-Medical Facility 61= Swing Bed 62= Rehab Facility/Rehab Unit 63= Long Term Care Hospital 65= Psychiatric Hospital or Unit 66= Discharge/Transfer to Critical Access Hospital (CAH) 71= OP Services - Other Facility 72= OP Services - This Facility