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TRICARE Reimbursement Changes for Ambulatory Surgery Centers (ASCs)

Is your ambulatory surgery center (ASC) ready for the TRICARE reimbursement policy changes that are taking effect on October 1, 2023?  

These changes create a TRICARE and Medicare fee-for-service ASC reimbursement parity for all authorized ASC procedures. Our blog post details the updates and gives revenue cycle management guidance for ASCs. 

TRICARE Policy Overview: What You Need to Know

The Defense Health Agency (DHA) recently announced that TRICARE will adopt the Medicare reimbursement methodology for ASCs beginning on October 1, 2023. This decision reflects DHA’s desire for TRICARE beneficiaries to access high-quality ambulatory surgical care without facing disparities in reimbursement.  

This adoption will closely align TRICARE with Medicare’s ASC fee schedule rules, payment rates, payment indicators, the list of covered procedures and ancillary services, and wage indices.

All changes are documented in the TRICARE Reimbursement Manual: Chapter 9, Section 2.  

Additional resources on TRICARE’s reimbursement rates are as follows: 

  • For services rendered on or after Oct. 1, 2023: Access payment rate details for Medicare on the CMS website 
  • For services rendered prior to Oct. 1, 2023: Refer to the rate schedule posted on TRICARE’s “Ambulatory Surgery Rates” page
  • Access TRICARE complete program manuals here  
  • Access the addendum to the TRICARE Reimbursement Manual (Chapter 9, Section 2) here 

TRICARE’s new reimbursement policy specifically focuses on covered surgical procedures performed in freestanding Ambulatory Surgical Centers (FASCs). It applies to both network and non-network providers, with the possibility of alternative network reimbursement methodologies upon approval by the DHA.  

Payment rates will apply only to facility charges for ambulatory surgery in FASCs, with exceptions for certain dental procedures and CPT code 41899, which will be reimbursed at the Outpatient Prospective Payment System (OPPS) rate. 

How does TRICARE define FASCs? Are there any exclusions?

FASCs are defined as distinct entities classified by the Centers for Medicare and Medicaid Services (CMS) as ASCs, with active participation agreements with both Medicare and TRICARE.  

Facilities without a valid TRICARE or Medicare participation agreement and services/items not listed on Medicare’s ASC coverage list (with exceptions for certain dental procedures) are excluded from the new policy. 

However, FASCs serving pediatric populations without a Medicare participation agreement may still meet TRICARE’s ASC requirements under certain conditions, such as accreditation by recognized bodies. The policy also emphasizes that FASCs should not bill TRICARE beneficiaries for non-covered procedures unless agreed upon in advance in writing. 

TRICARE’s New Reimbursement Policies for ASCs

Reimbursement rates for covered procedures will be based on national rates established in Medicare’s ASC list, adjusted for geographic wage variations. Certain items and services will be excluded from this facility rate, including physician fees, specific laboratory and diagnostic procedures, prosthetic devices, and durable medical equipment for home use. Multiple surgeries and bilateral procedures will be subject to specific reimbursement guidelines, as outlined in the policy.  

Payment Indicators and Unbundling

Payment indicators will determine whether a procedure code is covered, packaged, or separately payable. ASCs will follow Medicare guidelines for packaged and bundled items/services. The policy also addresses the unbundling of procedures to ensure compliance with outlined guidelines. 

State Waivers and Cost-Shares

ASCs in Maryland will not be exempt from the new reimbursement system. The policy clarifies that cost-sharing for surgical procedures performed in an FASC setting will be based on ASC cost-sharing levels, including covered dental procedures. 

Pricing Files and Effective Date

The provisions of this policy will take effect on October 1, 2023. ASCs are required to download and implement the full list of ASC-covered surgical procedures and ancillary services, payment indicators, payment rates, wage-adjusted payment rates, and wage indices as posted on the CMS website. 

Final Takeaways and Revenue Cycle Management Considerations for ASCs

In light of these changes, ASCs should assess their TRICARE contracts and take proactive steps to ensure accurate coding and billing.  
Once your staff reviews your complete TRICARE contracts and understands the adjustments in TRICARE’s reimbursement policies, the next step is to reflect those changes in your revenue cycle processes, such as updating your chargemaster.  

You may want to consider auditing your revenue cycle practices to ensure your CPT codes and billing processes align with the updated guidelines for each procedure. This practice will help address any discrepancies that may lead to claim denials or compliance issues. 

Staying informed about reimbursement policies is crucial to providing high-quality care and maintaining financial stability. Be sure to contact your local TRICARE representative if you have any questions regarding this policy update.

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