Military Health System

Under Title 10, United States Code (USC), Section 1079(i)(2), the amount to be paid to hospitals, Skilled Nursing Facilities (SNFs), and other institutional providers under the TRICARE program, “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 Medicare.” Based on this statutory provision, TRICARE has adopted Medicare’s LTCH Prospective Payment System (PPS) for reimbursement of LTCHs currently in effect for the Medicare program as required under Section 123 of Public Law (PL) 106-113 (Balanced Budget Refinement Act (BBRA)), which provides for the establishment of a PPS for LTCHs described in Section 1886(d)(1)(B)(iv) of the Social Security Act (the Act).

All LTCHs that meet the classification criteria for payment under the LTCH PPS under Title 42 CFR Part 412, subpart B, are considered authorized LTCHs under the TRICARE program.

In the Final Rule published in the Federal Register on December 29, 2017, DHA created a multi-year transition period to buffer the impact from any potential decrease in revenue that hospitals may experience during the implementation of a revised LTCH inpatient payment system. This transition period provides LTCHs with sufficient time to adjust and budget for potential revenue reductions. The transition is as follows:

LTCHs paid under the LTCH PPS are subject to a one-day payment window, where any outpatient services or non-physician services provided one calendar day prior to the LTCH admission are included in the LTCH-DRG payment. This is known as the one-day payment rule. The one-day payment rule only applies to services that are diagnostic and furnished in connection with the principle diagnosis. Any other services not meeting the diagnostic criteria, or services provided outside of the one-day window will be paid separately according to current TRICARE policy.

DHA will reimburse LTCHs who file a request for their direct medical education costs in a timely manner, as outlined in Chapter 6, Section 8. Although the procedures listed in Chapter 6, Section 8 pertain to DRGs, those same procedures are to be used to reimburse LTCHs for direct medical education costs.

When the Medicare hospital day limit is exhausted for a TRICARE beneficiary, who is also eligible for Medicare (i.e., TRICARE for Life (TFL) beneficiaries), TRICARE is the primary payer.