The TRICARE outpatient prospective payment system (OPPS) is scheduled to be implemented on May 1, 2009. TRICARE will begin using OPPS to pay claims filed for hospital outpatient services. TRICARE OPPS is mandatory for both network and non-network providers.
 
TRICARE OPPS applies to all hospitals participating in the Medicare program, with some exceptions (e.g., critical access hospitals, cancer hospitals and children’s hospitals). TRICARE OPPS also applies to hospital-based partial hospitalization programs (PHPs) subject to TRICARE’s prior authorization requirements, and hospitals or distinct parts thereof that are excluded from the inpatient Diagnosis Related Group (DRG) system, to the extent the hospital (or distinct part thereof) furnishes outpatient services.
 
TRICARE will adopt Medicare’s PHP reimbursement methodology for hospital-based PHPs, i.e., two separate Ambulatory Payment Classifi cation (APC) payment rates: one for days with three services (APC 0172) and one for days with four or more services (APC 0173).
 
TRICARE also will allow physicians, clinical psychologists, clinical nurse specialists, nurse practitioners and physician assistants to bill separately for their professional services delivered in a PHP. The only professional services that will be included in the per diem are those furnished by clinical social workers, occupational therapists, and alcohol and addiction counselors.
 
Temporary Transitional Payment Adjustments (TTPAs) will be in place for all hospitals, both network and non-network, in order to buffer the initial decline in payments upon implementation of TRICARE OPPS. For network hospitals,the TTPAs will cover a four-year period. The four-year transition will set higher payment percentages for the 10 APC codes for emergency room (ER) and hospital clinic visits (APC codes 604–609 and 613–616), with reductions in each transition year. For non-network hospitals, the TTPAs will cover a three-year period, with reductions in each transition year. The table shows the TTPA percentages for APC codes 604–609 and 613–616 during the four-year network hospital and three-year non-network hospital transition periods.
 
OPPS implementation in rural areas for small hospitals with less than 100 beds and sole community hospitals is currently scheduled to be delayed until January 1, 2010, when the Medicare transitional corridor payments for these hospitals expire. For more information on TRICARE OPPS implementation,
refer to Chapter 13 of the TRICARE Reimbursement Manual, or visit TRICARE's Web site.