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Department of Defense Uniform Business Office

Fiscal Year 2020 Direct Care Inpatient Adjusted Standardized Amounts

Billing Rates and Guidance

The Fiscal Year (FY) 2020 Direct Care Inpatient Adjusted Standardized Amounts (ASA) rates

are computed based on the Military Health System (MHS) direct care standardized cost to

provide a single Medicare Severity Relative Weighted Product (MS-RWP). The MS-RWP is a

Medicare Severity Diagnosis Related Group (MS-DRG) based measure of the relative costliness

of a given discharge. The average standardized cost per MS-RWP for hospitals in locations with

area wage rates greater than 1.0, less than or equal to 1.0, and overseas are published annually as

inpatient ASAs shown in Table 1. This approach maintains compatibility with both Medicare

and TRICARE ASA policies. The ASA rates will be applied to the MS-RWP for each inpatient

case, determined from the 2019 TRICARE MS-DRG weights, outlier thresholds, and payment

rules for discharges between 1 October 2019 and 31 December 2019 to calculate the

Program of the Uniformed Services pursuant to 32 Code of Federal Regulations 199.14(a)(1).

Due to data system limitations, for military treatment facilities (MTFs), direct care adjustments

are made for length of stay (LOS) outliers rather than high cost outliers.

Table 1 provides the average direct care inpatient ASA rates for third party billing, interagency

billing, and International Military Education and Training (IMET) billing for three core-based

statistical areas (CBSA) (high area wage index, low area wage index, and overseas).

Table 1. Average FY 2020 Direct Care Inpatient ASA Rates

Overseas* $8,455.10

$18,480.55

$19,404.19

* Hawaii and Alaska are not considered overseas for billing purposes.

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The IMET program is a key funding component of U.S. security assistance that provides training

on a grant basis to students from allied and friendly nations. Authority for the IMET program is

found pursuant to Chapter 5, part II, Foreign Assistance Act 1961. Funding is appropriated from

MTF-specific ASA rates are the average ASA rates adjusted for indirect medical education costs,

if any, for the discharging hospital. The product of the discharge specific MS-RWP and the

MTF-applied ASA rate is the charge submitted on the claim and is the amount payers will use

for reimbursement purposes. The individual ASAs are published on the Defense Health Agency

(DHA) Uniform Business Office (UBO) Website (http://health.mil/Military-Health-

Topics/Business-Support/Uniform-Business-Office). Examples of how to calculate the

reimbursement charge are shown in Section 2.0.

The ASA per MS-RWP used in the direct care system is comparable to procedures used by the

Centers for Medicare and Medicaid Services (CMS) and TRICARE. The expenses represented

institutional fees are based on the costs for support staff, facility costs, ancillary services,

pharmacy, and supplies.

MTFs without inpatient services, whose providers perform inpatient care in a civilian facility for

a DoD beneficiary, may bill payers the percentage of the ASA/MS-RWP based charge that

represents professional services. In the absence of a MTF-applied ASA rate for the facility, the

ASA rate used will be based on the average for the type of CBSA in which the MTF is located -

areas with wage rate indices greater than 1.0, less than or equal to 1.0, or overseas. The MTF

UBO must receive documentation of care provided in order to produce an appropriate bill.

1.1 Family Member Rate (FMR)

The cost to be recovered is the product of the MTF applied ASA rate and the MS-RWPs

specific to the inpatient medical services provided. This includes the costs of both

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inpatient institutional and professional services. Billing in the examples below is at the

full/TPC rate.

information is provided by accessing the MHS UBO Site located on the MHS Secure Site

LaunchPad available to authorized UBO Service representative users with a Government

Common Access Card.

Table 2 provides the information used in the billing examples for a non-teaching hospital

(DMIS ID 0075 – General Leonard Wood Army Community Hospital, Fort Leonard

Wood, Missouri) in an Area Wage Index ≤ 1.00 location for a discharge in MS-DRG 762

– Vaginal Delivery W Sterilization/D&C W MCC. For this example, FY19 weights are

used since the FY20 are not yet available.

Table 2. Third Party Billing Examples

MS-DRG

Arithmetic

Geometric

Length of

Stay

Days

Above

Inlier Outlier/Transfer Total

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Example #1 provides the example for the inlier LOS discharge in MS-DRG 762. The MS-RWP

for an inlier case is the TRICARE MS-DRG weight of 0.9544. The MS-DRG weight used is the

FY 2019 Version 36 TRICARE DRG weight.

= $12,98.99 x 0.9544 = $12,348.97

Example #2 provides the example for the outlier LOS discharge in MS-DRG 762. The total MS-

RWP for an outlier case is a combination of the TRICARE MS-DRG weight plus additional MS-

RWP credit for each day that the LOS exceeds the Long Stay Threshold. The charge is

= 0.33 (MS-DRG Weight/Geometric Mean LOS) x (Patient LOS - Long Stay

Threshold)

TPC Amount Billed: MTF-Applied TPC ASA rate x Total MS-RWP

= $12,938.99 x 1.3178

= $17,051.00

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Military Treatment Facility

F $13,649.68 $12,937.17 $8,550.62 $13,649.68

F $17,661.51 $16,739.58 $11,063.77 $17,661.51

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