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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