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TRICARE Reimbursement Manual 6010.64-M, April 2021
Chapter 1
Section 22
Hospital Reimbursement - Other Than Billed Charges
Issue Date:  August 26, 1985
Authority:  32 CFR 199.14(a)
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
What methods other than the established reimbursement methods for hospitals in 32 CFR 199.14 may be used to determine hospital reimbursement?
3.1  Agreements
3.1.1  The contractor shall obtain discounts for TRICARE reimbursement when discount agreements are available to the contractor.  The contractor shall determine if any state in its jurisdiction has enacted legislation which implements a rate setting system which can be applied to TRICARE.  The contractor shall utilize the rates if this results in a lower cost to the Government.  The contractor shall maintain documentation of its actions with regard to each state which shows how any discounts or state-set rates are used or the reasons they cannot be used.
3.1.2  The contractor may negotiate individual or collective agreements with providers to establish reimbursement methods.
3.1.3  The established reimbursement methods in 32 CFR 199.14, are required for those hospitals which are subject to them (Chapter 6, Section 4 and Chapter 7, Section 1). Therefore, none of the above agreements or procedures can be used for any hospital subject to the established reimbursement methods in 32 CFR 199.14. However, when the hospital participates with the contractor as a network provider, the established reimbursement method in 32 CFR 199.14, shall be further reduced by the negotiated (discount) rate.
3.2  Outside the United States (US)
A Government Designated Authority (GDA) is authorized by regulation to determine appropriate reimbursement methodologies for covered medical services or supplies provided by hospitals outside the US (see Section 34 for reimbursement methodology utilized for hospital services provided in the Philippines).
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