General
Chapter 1
Section 27
Legal
Obligation To Pay
Issue Date: February 9, 1987
Revision:
1.0 APPLICABILITY
This policy is mandatory for
reimbursement of services provided by all providers.
2.0 ISSUE
Under what circumstances can
TRICARE make no payment for services or supplies because the beneficiary
has no legal obligation to pay for them?
3.0 POLICY
Defense Health Agency (DHA)
cannot pay for services or supplies for which the beneficiary or
sponsor has no legal obligation to pay or for which no charge would
be made if the beneficiary or sponsor was not eligible under TRICARE.
An obligation to pay is defined as a legal debt which is enforceable
through a court action. The beneficiary’s obligation to pay for
services can be abrogated by a number of circumstances which must
be judged on the merits of each situation.
4.0 EXCEPTIONS
4.1 Amounts
may be paid for which there is no legal obligation to pay in situations
involving claims paid under the TRICARE Diagnosis Related Group
(DRG)-based payment system, the inpatient mental health per diem
payment system, or the reasonable cost method for Critical Access
Hospitals (CAHs) where the allowable amount exceeds the provider’s
billed charge.
4.2 Hospitals Which Do Not Charge
4.2.1 According to Section 1079(m)
of Chapter 55, Title 10, United States Code (USC), certain hospitals
can be excepted from the requirement that a beneficiary cost-share
be collected for every claim. In order to qualify for this exception
the hospital must certify in writing to the responsible contractor
that it will:
4.2.1.1 Not impose a legal obligation
of any kind on any of its patients; and
4.2.1.2 Accept and treat TRICARE beneficiaries
to the same extent as any other patient or category of patients;
and
4.2.1.3 Provide evidence that it has
sources of revenue to cover unbilled costs.
4.2.2 The contractor is to ensure
that payments to such hospitals do not exceed the average amount
paid for comparable services in the area and that the hospital’s
practice of not billing patients does not result in increased costs
to TRICARE.
4.2.3 Claims for professional services
may qualify for this exception only when they are billed through
a facility meeting the above criteria. Professional claims billed
under a different Employer Identification Number (EIN) or Social
Security Number (SSN) will not be exempt from imposing a legal obligation
on patients for payment of their cost-share or deductible.
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