Diagnosis Related Groups (DRGs)
Chapter 6
Section 1
Hospital Reimbursement - TRICARE Diagnosis
Related Group (DRG)-Based Payment System (General)
Issue Date: October
8, 1987
Revision:
1.0 APPLICABILITY
This
policy is mandatory for reimbursement of services provided by either
network or non-network providers. However, alternative network reimbursement
methodologies are permitted when approved by the Defense Health
Agency (DHA) and specifically included in the network provider agreement.
2.0 ISSUE
How
is the TRICARE DRG-based payment system to be used in determining
reimbursement for hospitals under TRICARE?
3.0 POLICY
Statutory
Background:
3.1 Department of Defense (DoD) Authorization
Act, 1984. The DoD Authorization Act, 1984, amended Title 10, Section
1079(j)(2)(A) and provided TRICARE with the statutory authority
to reimburse institutional providers based on DRGs. Specifically,
it provides that payments “shall be determined to the extent practicable
in accordance with the same reimbursement rules as apply to payments
to providers of services of the same type under Title XVIII of the
Social Security Act”.
3.2 Consolidated Omnibus Budget Reconciliation
Act (COBRA), 1986. On April 7, 1986, the President signed the COBRA
which contained a provision requiring hospitals which participate
in Medicare also to participate in TRICARE for inpatient services.
Because of questions regarding the effect of this provision, it
was amended by (Public Law 99-514, Section 1895(B)(6), which was
signed by the President on October 22, 1986. This amendment requires
all providers participating in Medicare also to participate in TRICARE
for inpatient hospital services provided pursuant to admissions
to hospitals occurring on or after January 1, 1987.
4.0 EFFECTIVE
DATES
4.1 Implementation
of the TRICARE DRG-based payment system was effective for admissions occurring
on or after October 1, 1987. Unless specified differently in sections
of this instruction, this is to be considered the effective date
for the TRICARE DRG-based payment system.
4.2 Implementation of the TRICARE/CHAMPUS
DRG-based payment system modeled on the Medicare Severity DRG shall
occur for admissions on or after October 1, 2008.
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