The Department of Defense has issued a final TRICARE payment rule for sole community hospitals involving an estimated $676 million in payment reductions through fiscal year 2017.
Over the next several years, the rule — effective Oct. 7 — will transition sole community hospitals from billed charges to reimbursement methodology similar to what Medicare uses. TRICARE, a program covering uniformed service members, generally pays for hospital care using a diagnosis-related-group-based prospective payment system, similar to Medicare's approach.
Up until now, sole community hospitals have been exempt from this system. However, federal officials have determined paying billed charges is "fiscally imprudent and inconsistent with TRICARE's governing statute," according to the final rule. The transition to the new payment system will be gradual in order to reduce the impact on hospitals. Network sole community hospital pay cuts are limited to 10 percent per year, and non-network hospital reimbursement reductions cannot exceed 15 percent annually.
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