Military Health System

4.1.1  Payment for inpatient hospital stays in specified locations outside the 50 U.S. and the District of Columbia, are made utilizing the lesser of:

4.1.2  The prospectively determined per diem rates for specified locations outside the 50 U.S. and the District of Columbia, are developed into reimbursement groupings by utilizing diagnosis codes. For services provided before the mandated date, as directed by Health and Human Services (HHS), for International Classification of Diseases, 10th Revision (ICD-10) implementation, use diagnosis codes as contained in the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). For services provided on or after the mandated date, as directed by HHS, for ICD-10 implementation, use diagnosis codes as contained in the ICD-10-CM. The per diem rates are the maximum allowable amounts that TRICARE shall reimburse and the amount on which patient cost-shares are calculated. The National U.S. per diem rate is multiplied by a unique country specific index factor which adjusts the National U.S. per diems for the applicable country. The country specific hospital per diem, for those specified locations outside the 50 U.S. and the District of Columbia is the product of the National U.S. per diem and the country specific index.

4.2.1  This payment system applies to all hospitals providing services in:

4.2.2  This payment system will be applied by the foreign claims processor. It applies to hospital inpatient services furnished to retirees or their eligible family members or non-Prime Active Duty Family Members (ADFMs) falling under the claims processing jurisdiction of the foreign claims processor.

4.2.3  Institutional providers accepting, admitting and treating TRICARE beneficiaries will receive the per diem reimbursement on applicable hospital services included on inpatient claims. This payment system is to be used regardless of the type of hospital inpatient services provided. The prospectively determined per diem rates established under this system are all-inclusive and are intended to include, but not be limited to, a standard amount for nursing and technician services; room, board and meals; drugs including any take home drugs; biologicals; surgical dressings, splints, casts; Durable Medical Equipment (DME) for use in the hospital and is related to the provision of a surgical service, procedure or procedures, equipment related to the provision and performance of surgical procedures; laboratory services and testing; X-ray or other diagnostic procedures directly related to the inpatient Episode Of Care (EOC); special unit operating costs, such as intensive care units; malpractice costs, if applicable, or other administrative costs related to the services furnished to the patients, recordkeeping and the provision of records; housekeeping items and services; and capital costs.

4.2.4  The per diem rates do not include such items as physicians’ fees, irrespective of a physician’s employment status with the hospital. The per diem rates do not include other professional providers (e.g., nurse anesthetist) recognized by TRICARE who render directly related inpatient services and bill independently from the hospital for them. A valid primary ICD-9-CM code or narrative description of services must be submitted by the hospital or institutional provider for services provided before the mandated date, as directed by HHS, for ICD-10 implementation. A valid primary ICD-10-CM code or narrative description of services must be submitted by the hospital or institutional provider for services provided on or after the mandated date, as directed by HHS, for ICD-10 implementation. The medical description provided shall be able to support development of the claim by the overseas claims processor prior to reimbursement.

4.4.1  For services provided before the mandated date, as directed by HHS, for ICD-10 implementation:

4.4.2  For services provided on or after the mandated date, as directed by HHS, for ICD-10 implementation:

4.4.3  The rate setting methodology was developed as follows:

4.5.1  General. For services provided before the mandated date, as directed by HHS, for ICD-10 implementation, the per diem group payment rate will be based on the first three digits of the primary diagnosis code. For services provided on or after the mandated date, as directed by HHS, for ICD-10 implementation, the per diem group payment rate will be based on the first alpha character and two digits of the primary diagnosis code. The maximum amount allowed by TRICARE and the amount reimbursed for hospital inpatient care shall be the lesser of:

4.5.2  Only the primary diagnosis code, on the date of admission, will be taken into consideration when determining the group for a payment rate. Only one payment group can be assigned to each independent episode of inpatient care. For services provided before the mandated date, as directed by HHS, for ICD-10 implementation, each institutional claim for service reimbursement must contain a valid ICD-9-CM code or narrative description of services, and must be used to represent the primary diagnosis for inpatient admission. For services provided on or after the mandated date, as directed by HHS, for ICD-10 implementation, each institutional claim for service reimbursement must contain a valid ICD-10-CM code or narrative description of services, and must be used to represent the primary diagnosis for inpatient admission. If a valid diagnosis code or narrative description is not supplied by the institutional provider it must be developed and supported by the overseas claims processor. Development of an institutional claim should contain the necessary elements to satisfy TRICARE Encounter Data (TED) requirements.

4.8.1  Additions, changes, revisions, or deletions to the diagnosis codes or country specific index shall be communicated to the overseas claims processor and be considered as routine updates to this payment system and processed under TRICARE Operations Manual (TOM), Chapter 1, Section 4, paragraph 2.4.

4.8.2  Inpatient per diem rates for Panama and the Philippines will be updated annually in conjunction with the fiscal year TRICARE DRG update in the U.S.