January 26, 2018

TRICARE Revises Payment Methodology for LTCHs and IRFs

TRICARE is moving forward with revising its payment methodologies for long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs). The changes are consistent with the statutory requirement that TRICARE inpatient care "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 Medicare." Each revised reimbursement methodology will be phased in over a three year period.

For both LTCHs and IRFs, the final rule creates a gradual transition from TRICARE's current payment policy by phasing in Medicare's reimbursement rate as follows: Allowing 135 percent of Medicare's LTCH or IRF prospective payment system (PPS) amounts in the first 12-month period after implementation, 115 percent in the second 12-month period after implementation, and 100 percent in the third 12-month period after implementation and follows Medicare policies during subsequent fiscal years.