General
Chapter 1
Section 27
Legal Obligation To Pay
Issue Date: February 9, 1987
Revision:
1.0 APPLICABILITY
This policy is mandatory for reimbursement
of services provided by all providers.
2.0 ISSUE
Under what circumstances can TRICARE make no
payment for services or supplies because the beneficiary has no
legal obligation to pay for them?
3.0 POLICY
Defense Health Agency (DHA) cannot pay for
services or supplies for which the beneficiary or sponsor has no
legal obligation to pay or for which no charge would be made if
the beneficiary or sponsor was not eligible under TRICARE. An obligation
to pay is defined as a legal debt which is enforceable through a
court action. The beneficiary’s obligation to pay for services can
be abrogated by a number of circumstances which must be judged on
the merits of each situation.
4.0 EXCEPTIONS
4.1 Amounts
may be paid for which there is no legal obligation to pay in situations
involving claims paid under the TRICARE Diagnosis Related Group
(DRG)-based payment system, the inpatient mental health per diem
payment system, or the reasonable cost method for Critical Access
Hospitals (CAHs) where the allowable amount exceeds the provider’s
billed charge.
4.2 Hospitals
Which Do Not Charge
4.2.1 According to Section 1079(m) of Chapter 55,
Title 10, United States Code (USC), certain hospitals can be excepted
from the requirement that a beneficiary cost-share be collected
for every claim. In order to qualify for this exception the hospital
must certify in writing to the responsible contractor that it will:
4.2.1.1 Not impose
a legal obligation of any kind on any of its patients; and
4.2.1.2 Accept
and treat TRICARE beneficiaries to the same extent as any other
patient or category of patients; and
4.2.1.3 Provide
evidence that it has sources of revenue to cover unbilled costs.
4.2.2 The contractor
is to ensure that payments to such hospitals do not exceed the average amount
paid for comparable services in the area and that the hospital’s
practice of not billing patients does not result in increased costs
to TRICARE.
4.2.3 Claims for professional services may qualify
for this exception only when they are billed through a facility
meeting the above criteria. Professional claims billed under a different
Employer Identification Number (EIN) or Social Security Number (SSN)
will not be exempt from imposing a legal obligation on patients
for payment of their cost-share or deductible.
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