Reimbursement Methodologies
Reimbursement rates and methodologies are established by Department of Defense (DOD) guidelines. TRICARE applies the CHAMPUS Maximum Allowable Charge (CMAC), which generally aligns with Medicare reimbursement rates and rules for similar services, as the maximum amount TRICARE will reimburse for nationally recognized procedure codes.
Please refer to the TRICARE Reimbursement Manual (TRM) to learn more about each specific claim type and specialty. The TRM includes details on payment methodology for the types of claims below:
- Chapter 1, Section 9: Anesthesia
- Chapter 1, Section 11: Durable Medical Equipment (DE) and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
- Chapter 1, Section 14: Ambulance Services
- Chapter 1, Section 17: Assistant Surgeons
- Chapter 3, Section 1: Individual Health Care Professionals and Other Non-Institutional Health Care Providers
- Chapter 3, Section 6: Home Infusion
- Chapter 6: Diagnosis Related Groups (DRGs)
- Chapter 7: Mental Health
- Chapter 8: Skilled Nursing Facilities (SNFs)
- Chapter 9: Ambulatory Surgery Centers (ASCs)
- Chapter 10: Birthing Centers
- Chapter 11: Hospice
- Chapter 12 Home Health Care (HHC)
- Chapter 13: Outpatient Prospective Payment System (OPPS)-Ambulatory Payment Classification (APC)
- Chapter 13, Section 2, 3.7: Partial Hospitalization Programs (PHPs) and Intensive Outpatient Programs (IOPs)
- Chapter 14: Sole Community Hospitals (SCHs)
- Chapter 15: Critical Access Hospitals (CAHs)
- Chapter 16: Long-Term Care Hospitals (LTCHs)
- Chapter 17: Inpatient Rehabilitation Facilities (IRFs)
- Chapter 18: Alternate Payment Models (APMs)
Network participating providers must accept the TRICARE determined allowable payment combined with the cost share, deductible, and Other Health Insurance (OHI) amounts payable by, or on behalf of, the beneficiary, as full payment for TRICARE allowed services. The provider collects from the TRICARE beneficiary those amounts that the beneficiary has a liability to pay for the TRICARE deductible and cost share/copayment (this requirement does not apply to a State Vaccine Program or State Vaccine Program entity participation agreement).
Please refer to the TRICARE Policy Manual, Chapter 11, Section 12.3 to learn more about Network Participating Agreement requirements.
Site-of-Service Pricing Categories
TRICARE CMAC payments are based on site of service. Payment based on site of service is a concept used by Medicare to distinguish between services rendered in a facility setting as opposed to a non-facility setting. The four categories of sites of services are:
- Category one: Services of Doctors of Medicine (MD), Doctors of Osteopathic Medicine (DO), optometrists, podiatrists, psychologists, oral surgeons, certified nurse midwives, and audiologists provided in facilities, including hospitals (both inpatient and outpatient and billed with the appropriate revenue and procedure code for the outpatient department where the services were rendered), residential treatment centers (RTC), ambulances, hospices, Military Treatment Facilities (MTF), behavioral health care facilities, community mental health centers (CMHC), skilled nursing facilities (SNF), ambulatory surgical centers (ASC), etc.
- Category two: Services of MDs, DOs, optometrists, podiatrists, psychologists, oral surgeons, certified nurse midwives, and audiologists provided in non-facility settings, including provider offices, home settings and all other non-facility settings.
- Category three: Services of all other providers not included in category one, that are provided in facilities, including hospitals (both inpatient and outpatient and billed with the appropriate revenue code for the outpatient department where the services were rendered), RTCs, ambulances, hospices, MTFs, behavioral health care facilities, CMHCs, SNFs, ASCs, etc. The non-facility CMAC rate applies to occupational therapy (OT), physical therapy (PT), and speech therapy (ST) regardless of the setting.
- Category four: Services, of all other providers not included in category two, that are provided in non-facility settings, including provider offices, home settings and all other non-facility settings. The non-facility CMAC rate applies to OT, PT and ST, regardless of the setting.
Accessing TRICARE CMAC Rates
To access the TRICARE CMAC rates, please visit the CMAC rates webpage and follow the online prompts.
TRICARE-Allowable Charge
The TRICARE-allowable charge is the maximum amount TRICARE will authorize for TRICARE-covered medical and other services furnished in an inpatient or outpatient setting.
The TRICARE payment will be limited to billed charge for professional services. Payment for both Inpatient (DRG) and Outpatient Facility (OPPS) claims can exceed billed charges.
TRICARE Deductible, Cost-Share, and Copayment Application and Collection
TRICARE Prime ADFMs and Retirees: Group A and Group B TRICARE Prime ADFMs and TRICARE Prime retirees have no deductible under TRICARE Prime for health care services obtained in accordance with TRICARE Prime rules and procedures. If otherwise covered health care services are not obtained in accordance with TRICARE Prime rules and procedures, the services may be covered under the POS option (TRICARE Reimbursement Manual, Chapter 2, Section 5) including a deductible of $300 per individual or $600 per family.
TRICARE Prime Group A and Group B ADFM Enrollees: TRICARE Prime enrollees have $0 copayment for covered health care services obtained in accordance with TRICARE Prime rules and procedures. If otherwise covered health care services are not obtained in accordance with TRICARE Prime rules and procedures, the services may be covered under the POS option (TRICARE Reimbursement Manual, Chapter 2, Section 5), including a separate deductible of $300 per individual or $600 per family. This would include any non-emergency out of network care obtained by a TRICARE Prime beneficiary without following applicable referral requirements. Pharmacy copayments are in addition to any TRICARE Prime copayments.
All beneficiaries covered under TRICARE Reserve Select (TRS) and TRICARE Retired Reserve (TRR) follow the applicable TRICARE Select cost-shares, copayments, deductibles, and catastrophic caps. TRS cost-shares follow the applicable cost-shares, deductibles, and catastrophic caps for ADFMs. TRR cost-shares, deductibles, and catastrophic caps match retiree cost-shares. Deductibles.
Collection of deductible amounts: Network providers are required to collect, at a minimum, the copayment at the time of service and the Explanation of Benefits (EOB) shall inform the provider and beneficiary of additional amounts owed to satisfy the deductible. Additionally, TriWest may provide deductible information to network providers in advance so they may also be collected at the time of the service, at the discretion of both the contractor and network providers in their network contracts.
Cost-Shares and copayments: Care received from network providers – The cost-sharing amounts for covered health care services obtained from a network provider are fixed dollar amounts for each specified category of care and are set prospectively for each calendar year with the annual updates available the Rates and Reimbursement webpage.
Care received from non-network providers. The cost-sharing amounts for covered health care services obtained from a non-network provider are as provided in 32 CFR 199.4 and TRICARE Reimbursement Manual (TRM) Chapter 2, Section 1.
CHAMPUS Maximum Allowable Charge (CMAC) impact on cost-sharing. In instances where the CMAC or allowable charge is less than the copayment established by this section and published on the DHA website, network providers may only collect the lower of the allowable charge or the applicable copayment.
Services with Set Copayments. Copayments apply only after any applicable deductibles have been satisfied, except for preventive care, which is available (when all conditions of coverage are met) with no copayment from network physicians, regardless of whether or not applicable deductibles have been satisfied.
Please refer to TRICARE Reimbursement Manual, Chapter 2, Section 2 to learn more about deductibles, cost-shares and copayments for TRICARE services and how they are applied for TRICARE beneficiaries.
Bonus Payments Calculations
Bonus payments are provided to providers who are eligible and located in a Health Professional Shortage Area (HPSA).
Please refer to the TRICARE Reimbursement Manual, Chapter 1, Section 33 to learn more about bonus payments.
Capital and Direct Medical Education Cost Reimbursement
Capital Costs – DHA will reimburse hospitals, through TriWest, for their capital costs as reported annually to TriWest. TriWest shall make annual payments for capital costs. Please refer to TRICARE Reimbursement Manual, Chapter 3, Section 2 to learn more about procedures that pay at capital costs.
Direct Medical Costs – DHA, through TriWest, will reimburse hospitals their actual direct medical education costs as reported annually to TriWest. Such direct medical education costs shall be for a teaching program approved under Medicare Regulation Section 413.85. TriWest shall make annual payments for direct medical education costs and those payments shall be calculated using the same steps required for calculating capital payments in the TRM link below. Allowable direct medical education costs are those specified in Medicare Regulation Section 413.85. Please refer to TRICARE Reimbursement Manual, Chapter 3, Section 2 for the procedures for paying direct medical education costs.
Please refer to TRICARE Reimbursement Manual, Chapter 6, Section 8 to learn more about Capital and Direct Medical Costs.
Diagnosis-Related Group Calculator
Providers can use the following DRG calculator to view rates within the TRICARE DRG Based Payment system.
View the DRG calculator.
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies pricing
Please visit DMEPOS pricing information for reimbursement rates established for certain items and services of Durable Equipment (DE), Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Parenteral and Enteral Nutrition (PEN).
This site includes a link to CMS DME POS Fee Schedule to access DMEPOS and PEN reimbursement rates for certain items and services that begin with a HCPCS code of A, B, E, K, L, Q, or V.
Outpatient Prospective Payment System Exemptions
Providers excluded from Outpatient Prospective Payment System (OPPS) exemptions include:
- Outpatient services provided by hospitals of the Indian Health Service (IHS) will continue to be paid under separately established rates
- Certain hospitals that qualify for payment under the state’s cost containment waiver, e.g., Maryland
- CAHs – See TRICARE Reimbursement Manual, Chapter 15, Section 1
- Hospitals located outside one of the 50 U.S. states, the District of Columbia, and Puerto Rico
Specialty care providers include:
- Freestanding Ambulatory Surgery Centers (ASC), also referred to as FASC
- Freestanding PHPs and Intensive Outpatient Programs (IOP) that offer psych and substance use treatments, Substance Use Disorder Rehabilitation Facilities (SUDRF), and freestanding Opioid Treatment Programs (OTP)
- Comprehensive Outpatient Rehabilitation Facilities (CORF)
- Home Health Agencies (HHA)
- Hospice programs
- Community Mental Health Centers (CMHC)
- Other corporate services providers (e.g., Freestanding Cardiac Catheterization, Sleep Disorder Diagnostic Centers, and Freestanding Hyperbaric Oxygen Treatment Centers).
- Freestanding Birthing Centers
- Department of Veterans Affairs (DVA)/Veterans Health Administration (VHA) Hospitals
- Freestanding End Stage Renal Disease (ESRD) Facilities
- SNFs
- Psychiatric Residential Treatment Centers (RTC)
Note: Antigens, splints, casts, and hepatitis B vaccines furnished outside the patient’s plan of care in CORFs, HHAs and hospice programs will continue to receive reimbursement under current TRICARE-allowable charge methodology.
Please refer to TRICARE Reimbursement Manual, Chapter 13, Section 1 to learn more about OPPS exempt providers and scope of services excluded.
Present on Admission Code Indicators
Inpatient Prospective Payment System (IPPS) hospitals paid under the TRICARE DRG-based payment system are required to report a POA indicator for both primary and secondary diagnoses on inpatient discharges. POA is defined as present at the time the order for inpatient admission occurs.
The following hospitals are exempt from POA reporting for TRICARE:
- CAHs
- Long-term care hospitals
- Maryland waiver hospitals
- Cancer hospitals
- Children’s inpatient hospitals
- Inpatient rehabilitation hospitals
- Psychiatric hospitals and psychiatric units
- VA hospitals
POA indicators include:
- Y: Indicates that the condition was present on admission
- W: Affirms that the provider has determined, based on data and clinical judgment, that it is not possible to document when the onset of the condition occurred
- N: Indicates that the condition was not present on admission
- U: Indicates that the documentation is insufficient to determine whether the condition was present at the time of admission
A list of exempt ICD-10-CM diagnosis codes is available at Coding | CMS.
State-Prevailing Rates
State-prevailing rates are established for codes that have no current available TRICARE-allowable charge pricing. Prevailing rates are those charges that fall within the range of charges most frequently used in a state for a particular procedure or service.
When no fee schedule is available, a prevailing charge is developed for the state in which the service or procedure is provided. In lieu of a specific exception, prevailing profiles are developed on:
- A statewide basis (localities within states are not used, nor are prevailing profiles developed for any area larger than individual states)
- A non-specialty basis
For more details, please see the TRICARE Reimbursement Manual, Chapter 5.
Reimbursement Discounts
Please refer to TRICARE Reimbursement Manual, Chapter 1, Section 16 to learn about reimbursement discounts such as multiple surgery, bilateral and discounted procedures.
Updates to TRICARE Rates and Weights
Reimbursement rates and methodologies are subject to change per DOD guidelines. TRICARE rates are subject to change on at least an annual basis, which is consistent with Medicare. Please see the following link for updated rates and weights.
DRAFT — pending DHA approval. Submitted for review on 2/15/24.