General
Chapter 1
Section 25
Preferred
Provider Organization (PPO) Reimbursement
Issue Date: November 1, 1983
Revision:
1.0 APPLICABILITY
This policy is mandatory for
and only to reimbursement of services provided by non-network providers.
2.0 ISSUE
Can payments be made for services
rendered to beneficiaries by a Preferred Provider Organization (PPO)?
3.0 POLICY
3.1 No
Obligation to Pay
PPOs
provide services at a discounted rate through contractual arrangements
with a third-party payer. In some cases either the PPO or the beneficiary
may bill TRICARE for the difference between the provider’s normal
charge and the contractually-set discount amount. TRICARE cannot
pay even on a secondary payer basis for these amounts. The rationale
for this is that the contracts which PPOs have with third-party
payers normally provide that they will be paid in full by the third-party payer,
taking any discounts into consideration. Since this would leave
no remaining amounts as the responsibility of the beneficiary, there
is no further legal obligation to pay.
3.2 Secondary
Payer
Payments
can be made on a secondary payer basis in those situations where
the person submitting the claim--either the beneficiary, the individual
provider, or the PPO--submits evidence of beneficiary liability
beyond the amounts paid to the PPO by the primary payor.
3.3 Payment for Non-PPO Members
PPO providers may be authorized
providers in their own right and may render services to individuals
who are not PPO members, and these services may be reimbursed.
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