Special Eligibility Rules under Diagnosis-Related Groups

Under the TRICARE Standard diagnosis-related group (DRG) payment system, if a patient loses or gains eligibility during a hospitalization, the DRG hospital will be paid as if the patient were eligible during the entire admission. If the patient becomes entitled to Medicare Part A and Medicare Part B coverage, Medicare is the first payer and TRICARE becomes the secondary payer. For a patient who becomes eligible for Medicare because of age, and who is not an ADFM, TRICARE’s secondary pay status is for that claim only. However, a change in eligibility often will affect outlier payments. The patient’s cost-share will be based on the status of the sponsor (active duty or retired) at the time of admission.

For all other providers, including DRG-exempt hospitals, TRICARE Standard will share the cost of only that portion of the services or supplies that was rendered before eligibility ceased.
            

Entitlement to Medicare and TRICARE

TRICARE beneficiaries who also are entitled to Medicare remain eligible for TRICARE as a secondary payer, provided they are entitled to Medicare Part A and have Medicare Part B coverage. There are two exceptions to this rule:

• ADFMs entitled to Medicare Part A do not have to purchase Medicare Part B coverage. However, once the sponsor retires, all Medicare-entitled family members, including the retired service member (if entitled to Medicare Part A), must also be entitled to and have Medicare Part B coverage to retain TRICARE eligibility.
• Medicare beneficiaries enrolled in TRS or the US Family Health Plan (USFHP) are not required to have Medicare Part B coverage to retain coverage under these programs. However, DoD strongly encourages these beneficiaries to purchase Medicare Part B when initially eligible to avoid paying a 10-percent surcharge for each 12-month period that the beneficiary was eligible to enroll but did not.

When beneficiaries age 65 and older do not meet the eligibility requirements for Medicare Part A, they will need a Notice of Award or Notice of Disapproved Claim from the Social Security Administration to remain eligible for TRICARE.

In addition, beneficiaries under age 65 who have lost Medicare entitlement (for example, because they are declared no longer disabled) also need a formal Notice of Disapproved Claim from the Social Security Administration to remain eligible for TRICARE.

Note: Medicare does not terminate at the same time that Social Security disability payments terminate. Medicare may continue up to eight and a half years beyond the termination of Social Security disability payments.

The beneficiary must continue to purchase Medicare Part B regardless of the termination of disability payments.
          

Eligibility for TRICARE and Veterans Affairs Benefits

In some cases, beneficiaries are eligible for benefits under both the TRICARE and Veterans Affairs (VA) programs. If a TRICARE beneficiary is also eligible for health care through VA, he or she has the option to use either TRICARE or VA benefits. Furthermore, TRICARE covers beneficiaries even if they received treatment though the VA for the same medical condition in a previous episode of care. However, TRICARE will not duplicate payments made by or authorized to be made by VA for treatment of a service-connected disability.

Note: Eligibility for health care through VA for a service-connected disability is not considered double coverage.

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