Provider Handbook

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This is a reimbursement system for inpatient charges from facilities, which assigns payment levels to each diagnosis-related group (DRG) based on the average cost of treating all TRICARE beneficiaries in a given DRG. The TRICARE DRG-based payment system is modeled on the Medicare inpatient prospective payment system (PPS). Cases are classified into the appropriate DRG by a grouper program.

The grouper used for the TRICARE DRG-based payment system is the same as the Medicare grouper with some modifications, such as neonate DRGs. Refer to the TRICARE Reimbursement Manual for detailed information. You may also access a DRG calculator online.

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Facilities may request capital and direct medical educational cost reimbursement. Capital items, such as property, structures, and equipment, usually cost more than $500 and can depreciate under tax laws. Direct medical education is defined as formally organized or planned programs of study in which providers engage to enhance the quality of care at an institution.

All initial requests for reimbursement under capital and direct medical education costs must be submitted to Humana Military/PGBA on or before the last day of the 12th month following the close of the hospital’s cost-reporting period. The request shall cover the one-year period corresponding to the hospital’s Medicare cost-reporting period. This applies to hospitals (except children’s hospitals) subject to the TRICARE DRG-based system.

The submission must include a statement certifying that any changes, if applicable, were made as a result of a review, audit, or appeal of the provider’s Medicare cost report. The change(s) must be reported to Humana/PGBA within 30 days of the date the hospital is notified of the change. In addition, an officer or administrator of the provider must certify all cost reports.

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Visit the TRICARE's web site for the DRG calculator. Click on the calculator for the fiscal year and specific dates for the rates that you are searching for. Once you open the DRG calculator you need, insert information into the yellow fields—these are the only fields you can manipulate. The calculator does the rest.

You can locate the indirect medical education (IDME) factor (for teaching hospitals only) and wage index information using the Wage Indexes and IDME Factors File that are also available on the DRG Web page. If a hospital is not listed in the Wage Indexes and IDME Factors file, you can select the ZIP to Wage Index File and put in the ZIP code to get the wage index for that area.

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Network and non-network physicians (M.D.s and D.O.s), podiatrists, oral surgeons, and optometrists who qualify for Medicare Bonus Payments in Health Professional Shortage Areas (HPSA) may be eligible for a 10-percent bonus payment for claims submitted to TRICARE. The only behavioral health providers who are eligible for HPSA bonuses are M.D.s and D.O.s. Non-physicians (Ph.D.s, social workers, counselors, psychiatric nurse practitioners and marriage therapists) are not eligible.

Network and non-network primary care physicians (general practitioners, family physicians, internists, and OB/GYNs) who qualify for Medicare Bonus Payments in Physician Scarcity Areas may be eligible for a 5 percent bonus payment. The 5 percent bonus payment does not apply to podiatrists, oral surgeons, or optometrists.

Providers can determine if they are in an HPSA by accessing the U.S. Department of Health and Human Services, Bureau of Health Professions’ HPSA search tool. 

There is also bonus payment information, including HPSA and Physician Scarcity Area designations, on the CMS web site.

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How Bonus Payments are Calculated

For those providers who are eligible and located in an HPSA, Humana Military’s claims processor, PGBA, will calculate a quarterly 10-percent bonus payment from the total paid amount for TRICARE claims that contain the modifier AQ in Column 24D of the CMS-1500 claim form. For those providers who are eligible and located in a Physician Scarcity Area, PGBA will calculate a quarterly five percent bonus payment from the total paid amount for TRICARE claims that contain the modifier AR (Physician Scarcity Area) in Column 24D of the CMS-1500 claim form. Bonus payments will be calculated on TRICARE Prime, TRICARE Prime Remote, TRICARE Prime Remote for Active Duty Family Members, TRICARE Standard, TRICARE Extra, and TRICARE Reserve Select claims and the amount paid by the government on other health insurance (OHI) claims.

When submitting a claim for the bonus payment, providers must include the AQ and/or the AR (CPT) modifier in Column 24D of the CMS-1500 claim form. For CPT codes with multiple modifiers, place the AQ and AR modifier last. Only the professional component will be used in the calculation of the bonus payment for services that contain both a professional and technical component. Those providers who are eligible and do not submit claims with the appropriate modifier will not receive the bonus payment from TRICARE. There are no retroactive payments, adjustments, or appeals for obtaining a bonus payment, so be sure to include the bonus payment modifier with your initial claims submission if you are eligible.

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