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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