Welcome Logout

DRG Rates to Update on Calendar-Year Basis

Tuesday, December 17, 2019

Diagnosis-related group reimbursement (DRG) is a reimbursement system for inpatient charges from facilities. Rather than calculating payments based on actual costs spent caring for a hospitalized patient, TRICARE pays a fixed amount based on the patient’s DRG or diagnosis. TRICARE’s DRG-based payment system is modeled on Medicare’s inpatient prospective payment system (PPS), with rates updated annually. 

Starting Jan. 1, 2020, TRICARE will post updated DRG rates on a calendar year (Jan. 1–Dec. 31) rather than a fiscal year (Sept. 1–Oct. 30) basis. Providers may experience a delay in facility claims processing while rates are being updated. Previously this delay occurred around October each year. With this shift, expect any delay to occur in January.