TRICARE Policy Manual

TRICARE Policy Manual 6010.57-M, February 1, 2008
Providers

Chapter 11

Section 12.1

Corporate Services Provider Class
Issue Date:
Authority: 32 CFR 199.2 and 32 CFR 199.6(f )
1.0

ISSUE

A general overview of the coverage and reimbursement of services provided by a Corporate
Services Provider.
2.0

POLICY

2.1

Regulatory Background

TRICARE supplements the availability of health care in military hospitals and clinics. Services
and items allowable as TRICARE benefits must be obtained from TRICARE-authorized civilian
providers to be considered for payment. The Code of Federal Regulations (CFR), 32 CFR 199.6, along
with the TRICARE Policy Manual (TPM), establishes the specific requirements for institutional and
professional providers recognized for payment under the program. These requirements have been
used to ensure that providers possess licensing/credentials and/or meet recognized standards
unique to their provider status, profession, or field of medicine. In the past, TRICARE has only
recognized three classes of providers; i.e., 1) an institutional provider class consisting of hospitals
and other categories of similar facilities; 2) an individual professional provider class including
physicians and other categories of licensed individuals who render professional services
independently, and certain allied health and extra medical providers that must function under
physician orders and supervision; and 3) a class of providers consisting of suppliers of items and
supplies of an ancillary or supplemental nature, such as Durable Equipment (DE)/Durable Medical
Equipment (DME). However, since the CFR and policy provisions were first established, the manner
in which medical services are delivered has changed. TRICARE beneficiaries, like other health care
consumers, now have access to a wide array of health care delivery systems that were not initially
recognized or reimbursed under the Program. As a result, a fourth class of TRICARE provider has
been established consisting of freestanding corporations and foundations that render principally
professional, ambulatory or in-home care and technical diagnostic procedures. The addition of the
corporate class recognizes the current range of providers with today’s health care delivery
structure, and gives beneficiaries access to another segment of the health care delivery industry.
2.2

Scope of Coverage/Reimbursement

2.2.1
Out-of-System/Non-Network Reimbursement. The intent of this provider class expansion
(recognition of Corporate Services Providers as authorized providers under TRICARE) is not to
create additional benefits that ordinarily would not be covered under TRICARE if provided by a
more traditional health care delivery system (i.e., care traditionally offered in a hospital setting), but

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Chapter 11, Section 12.1
Corporate Services Provider Class
rather to allow those services which would otherwise be allowed except for an individual provider’s
affiliation with a freestanding corporate entity. A provider qualifying for corporate services provider
status under TRICARE would be allowed payment for the following services and supplies:
2.2.1.1 Otherwise covered professional services provided by TRICARE-authorized individual
providers employed by or under contract with a freestanding corporate entity will be paid under
the CHAMPUS Maximum Allowable Charge (CMAC) reimbursement system, subject to any
restrictions and limitations as may be prescribed under existing TRICARE policy.
2.2.1.2 Payment will also be allowed for supplies used by a TRICARE authorized individual
provider employed by or contracted with a corporate services provider in the direct treatment of a
TRICARE eligible beneficiary. Allowable supplies will be reimbursed in accordance with TRICARE
allowable charge methodology as described in TRICARE Reimbursement Manual (TRM), Chapter 5,
Section 1.
2.2.1.3 Reimbursement of covered professional services and supplies will be made directly to the
TRICARE authorized corporate services provider under its own tax identification number.
2.2.1.4 Payment will be allowable for services rendered in the authorized corporate services
provider’s place of business, or in the beneficiary’s home, under such circumstances as the
contractor determines to be necessary for the efficient delivery of such in-home services.
2.2.2
Alternative Network (In-System/Network) Reimbursement Systems. There are regulatory
and contractual provisions currently in place that grant contractors the authority to establish
alternative network reimbursement systems as long as they don’t exceed what would have
otherwise been allowed under Standard TRICARE payment methodologies as described in the TRM.
2.2.2.1 Establishment of alternative reimbursement systems for Corporate Services Providers will
allow contractors and TRICARE beneficiaries access to a wide source of competitive ambulatory and
in-home services while at the same time maintaining budget neutrality; i.e., there should be no
increases in benefit costs since the services would have otherwise been provided in an institutional
setting on either an inpatient or outpatient basis.
2.2.2.2 Since it is assumed that ambulatory services will be less expensive than when provided in
an institutional setting, it is expected that contractors will be able to establish rates which will result
in significant savings to the government. For example, under non-network (out-of-system)
reimbursement methodologies, freestanding bone marrow transplant centers will be restricted
solely to payment of professional services and related supplies which account for only 10% to 20%
of the total program charges for autologous bone marrow transplants. The remaining 70% to 80%
of the charges will be attributable to technical and/or facilities fees. The services will include but are
not limited to: 1) laboratory charges; 2) pre-conditioning chemotherapy; 3) growth factor; 4) home
health; 5) catheter placement; 6) blood products; and 7) recovery post discharge. Under the above
alternative reimbursement provisions, contractors will be given the flexibility of negotiating with
network providers (i.e., freestanding outpatient bone marrow transplant centers who agree to
become network providers) for outpatient bone marrow transplants at rates below those
performed in a hospital setting, which would include CMAC rates for professional fees plus the
Diagnostic Related Group (DRG) amount.

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Chapter 11, Section 12.1
Corporate Services Provider Class
2.2.2.3 The following minimal requirements should be adhered to in the establishment of
alternative reimbursement methodologies for in-system/network corporate services providers in
order to ensure quality of care and fiscal accountability:
2.2.2.3.1
Alternative reimbursement methodologies may include and/or be a combination of
fee schedules, discounts from usual and customary fees or CMAC, flat fee arrangements
(negotiated all inclusive rates), capitation arrangements, discounts off of DRGs, per diems; or such
other method as is mutually agreed upon, provided such alternative payments do not exceed what
would have otherwise been allowed under Standard TRICARE payment methodologies in another
setting (e.g., comparable services rendered in a hospital inpatient or outpatient setting).
2.2.2.3.2
Payments in full (e.g., negotiated flat fees, all-inclusive global fees, captitation
arrangements, discounts off of DRGs and per diems) are prospective reimbursement systems which
may include items related or incidental to the treatment of the patient but for which coverage is
not normally extended under TRICARE. These incidental services are to be included in the
negotiated prospective payment rate; i.e., they can neither be billed to the beneficiary or deducted
from the negotiated global rate.
2.2.3
All billing for Corporate Services Providers should be submitted on a Centers for Medicare
and Medicaid Services (CMS) 1500 Claim Form. Defense Health Agency (DHA) will assign pricing
rate codes (e.g., assigning a pricing rate code “GP” for non-institutional per diem rates) to
accommodate approved alternative reimbursement systems. The contractor should designate the
coding that it wants to use as part of the alternative reimbursement request submitted to the
Deputy Director, DHA or designee for review and approval.
2.2.4
The contractor will determine the appropriate procedural category of a qualified
organization and may change the category based upon the provider’s TRICARE claim
characteristics. The category determination is conclusive and may not be appealed.
2.2.5
The corporate entity will not be allowed additional facility charges that are not already
incorporated into the professional services fee structure (i.e., facility charges that are not already
included in the overhead and malpractice cost indices used in establishing locally-adjusted CMAC
rates).
2.2.6
While the expanded provider category will allow coverage of professional services for
corporate entities qualifying for provider authorization status under the provisions of this policy, it
will at the same time restrict coverage of professional services for those corporate entities which
cannot meet the criteria for corporate services provider status under TRICARE.
2.3

Conditions for Coverage/Authorization

2.3.1
Be a corporation or a foundation, but not a professional corporation or professional
association;
2.3.2

Be institution-affiliated or freestanding;

2.3.3
Provide services and related supplies of a type rendered by TRICARE individual
professional providers employed directly or contractually by a corporation, or diagnostic technical
services and related supplies of a type which requires direct patient contact and a technologist

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Chapter 11, Section 12.1
Corporate Services Provider Class
who is licensed by the state in which the procedure is rendered or who is certified by a Qualified
Accreditation Organization;
2.3.4
Provide the level of care that does not necessitate that the beneficiary be provided with
on-site sleeping accommodations and food in conjunction with the delivery of the services except
for sleep disorder diagnostic centers in which on-site sleeping accommodations are an integral part
of the diagnostic evaluation process.
2.3.5
Render services for which direct or indirect payment is expected to be made by TRICARE
only after obtaining written authorization (i.e., comply with applicable TRICARE authorization
requirements before rendering designated services or items for which TRICARE cost-share/
copayment may be expected);
2.3.6
Comply with all applicable organizational and individual licensing or certification
requirements that exist in the state, county, municipality, or other political jurisdiction in which the
corporate entity provides services;
2.3.7
Maintain Medicare approval for payment when the contractor determines that a
category, or type, of provider is substantially comparable to a provider or supplier for which
Medicare has regulatory conditions of participation or conditions of coverage, or when Medicare
approved status is not required, be accredited by a qualified accreditation organization, as defined
in Section 12.2; and
2.3.8
Has entered into a negotiated provider contract with a network provider or a
participation agreement with a non-network provider which at least complies with the minimum
participation agreement requirements set forth in Section 12.3. The participation agreement will
accompany the application form (Application for TRICARE-Provider Status: CORPORATE SERVICES
PROVIDER) sent out as part of the initial authorization process for non-network providers as
described below.
2.4

Application Process

2.4.1
The information collected on the “Application for TRICARE-Provider Status: CORPORATE
SERVICES PROVIDERS” (i.e., the information collection form for which the provider is seeking
TRICARE authorization status) will be used by the contractor in determining whether the provider
meets the criteria for authorization as a corporate services provider under the TRICARE program
(refer to Addendum D for a copy of the corporate services provider application form).
2.4.2

The application will be sent out and information collected when a:

2.4.2.1

Provider requests permission to become a TRICARE provider;

2.4.2.2 Claim is filed for care received from a provider who is not listed on the contractor’s
provider file; or
2.4.2.3

Formerly TRICARE authorized provider requests reinstatement.

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Chapter 11, Section 12.1
Corporate Services Provider Class
2.4.3
The contractor will verify that the provider meets TRICARE authorization criteria through
the collection and review of applicable Medicare, Joint Commission, and state and national board
certificates/licenses requests on the corporate services provider application form.
2.4.4
The authorization process is streamlined (simplified) in that the individual authorization
of professional providers employed by or under contract with a corporate entity will not be
required as part of the authorization process.
2.4.4.1 Instead, the responsibility for ensuring all individuals meet TRICARE requirements is
placed on the corporate entity itself.
2.4.4.2 This assurance is further strengthened by requiring Medicare approval for payment as a
condition of authorization under TRICARE, since Medicare also relies on the delegation of
certification of individual professional and allied health care providers to the corporate entity.
2.4.4.3 Although the actual provider of care will still have to be identified on the claim form,
verification of the qualifications of employed and contracted individual providers will not be
required by the contractors. In the case where the individual (e.g., technician) providing the service
does not have a National Provider Identifier (NPI), the NPI of the ordering/supervising physician,
non-physician practitioner, or billing entity is required on the claim form.
2.4.4.4 Reliance on Medicare approval for payment - or when Medicare approved status is not
required, accreditation by a qualified accrediting organization - is administratively expeditious and
cost effective for both TRICARE and providers qualifying for authorization under the new provider
category.
2.4.5
The effective date of authorization will be the date the provider met the “Conditions for
Coverage/Authorization” as prescribed in paragraph 2.3 or June 8, 1999, whichever is later.
Retroactive authorization will apply to both network providers (providers that have entered into
negotiated network contracts) and non-network providers (those providers authorized under the
application process) subject to the effective date of June 8, 1999, appearing in the Corporate
Services Provider Final Rule published in the Federal Register on March 10, 1999.
2.5

Approval Process For New Provider Categories Seeking Authorization Under the
Corporate Services Provider class

2.5.1
While contractors will use the “Conditions for Coverage/Authorization” under paragraph
2.3 for initial review/screening of all new provider categories seeking authorization status under
the Corporate Services Provider class, final approval will be reserved for DHA.
2.5.2
The contractors should only submit those provider categories who on initial analysis
appear to meet the criteria for inclusion under the Corporate Services Provider class. The
submission should include all supporting documentation, along with the contractor’s rationale for
recommending authorization status under the Corporate Services Provider class.
2.5.3
If DHA concurs with the contractor’s recommendation, a new provider specialty code will
be added.

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Chapter 11, Section 12.1
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2.5.4
A notice of the agency’s determination, along with supporting documentation (a copy of
the package seeking final approval status of the provider category), will be sent out to all the
regional contractors for appropriate action.
2.5.5
Requests for final approval status should be submitted to DHA through the contractor’s
Contracting Officer Representative (COR).
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