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TRICARE Outpatient Prospective Payment System

TRICARE uses the Outpatient Prospective Payment System (OPPS) to pay claims filed for hospital-based outpatient services. While the TRICARE OPPS closely mirrors Medicare’s OPPS method, there are some necessary differences to accommodate the uniqueness of the TRICARE program.

The following is a summary of notable differences between TRICARE and Medicare OPPS (not an all-inclusive list):

  • TRICARE will retain its current hospital outpatient deductible, cost-sharing and copayment amounts, and catastrophic loss protection under its OPPS.
  • Defense Health Agency has opted to exempt certain hospitals from the OPPS instead of imposing the hold-harmless provision, given the administrative complexity of capturing the data required for payment of monthly interim TRICARE transitional outpatient payment amounts. To obtain a list of exempt facilities, please refer to the TRICARE Reimbursement Manual, Chapter 13.
  • Under Medicare, hospitals receive a separate observation composite ambulatory payment classification (APC) payment for observation services for patients when billed along with an evaluation and management visit, and the observation is for a minimum of eight hours. TRICARE will also adhere to Medicare’s composite observation mechanism, but will additionally reimburse for maternity observation payment based on a maternity diagnosis on the claim and a minimum four-hour stay.
  • TRICARE will use a statewide cost-to-charge ratio (urban or rural) for the reimbursement of OPPS claims. Medicare uses the provider-specific cost-to-charge ratio in the reimbursement of OPPS claims.

TRICARE OPPS is mandatory for both network and non-network providers.

TRICARE OPPS adopted Medicare’s reimbursement logic for partial hospitalization programs (PHP); in other words, reimbursement of a single per diem based on service units billed per visit and payment of PHP professional services outside the per diem.

For more information regarding TRICARE OPPS, please refer to Chapter 13 of the TRICARE Reimbursement Manual.