TRICARE and Other Health Insurance OHI: What Happens to the Customer

1. TRICARE and Other Health Insurance (OHI):What Happens to the Customer? August 8, 2007

3. OHI Overview When TRICARE beneficiaries have another health insurance plan, either through their employer or through private purchase, it is considered primary insurance. Coordination of Benefits (COB) is required to ensure that TRICARE beneficiaries receive maximum benefits from their health coverage, but no more than they are entitled to receive.

4. OHI Overview – cont’d If another health insurance plan exists, TRICARE is ALWAYS the secondary payer with the exception of: Medicaid TRICARE supplemental insurance plans State Victims of Crime Compensation program Maternal & Child Health Programs Indian Health Services

5. Claims Review All claims, regardless of dollar amount, require review for possible primary insurance coverage with the following exceptions: Claims for the services of internal resource sharing providers Claims for services provided to active duty service members Claims for all Supplemental Health Care Program inpatient stays

6. Payment Calculation When beneficiaries have other health insurance that is primary, the TRICARE contractor will pay the lower of: The amount TRICARE would have paid as primary payor; or The amount remaining after the other health insurance has paid its benefits.

7. Payment Breakdown Step 1: Determine the amount that TRICARE would have paid in the absence of other health insurance coverage.

8. Payment Breakdown – continued Step 2: From the billed charges (or, if applicable, 115% of the TRICARE allowable charge up to the billed charge) or the OHI allowed amount if the beneficiary’s liability is limited under the OHI, deduct: Duplicate and denied charges Charges without evidence of being processed by OHI Amount paid by all OHI plans

9. Payment Breakdown – continued  Step 3: Compare the amounts in Steps 1 and 2. Pay the lower of the two amounts.

10. Example The total bill for outpatient care for a retiree from a network provider is $1,000.00, of which $800.00 is considered allowable by TRICARE based on the provider’s network agreement. The primary plan paid $600.00 of the bill. The provider submits a claim for $1,000.00 to the contractor along with an EOB from the primary plan. The beneficiary’s deductible has been met.

11. Example - continued STEP 1: $ 800.00 - Allowable charges x 75% - TRICARE portion for retirees $ 600.00 - Amount payable by TRICARE in the absence of other coverage STEP 2: $ 1,000.00 - Billed charges - $ 600.00 - Paid by OHI $ 400.00 - Unpaid balance

12. Example - continued STEP 3: TRICARE pays the $400.00 balance, since it is less than the $600.00 which TRICARE would have paid in the absence of other health insurance coverage. No deduction is made for the patient’s cost-sharing portion of 25%, since the $600.00 paid by the OHI satisfies this.

13. DRG-Based Payments Coordination of benefits on claims processed under the TRICARE Diagnosis Related Group (DRG)-based payment system and TRICARE Inpatient Mental Health Per Diem Payment System follow a five step calculation.

14. DRG - continued Step 1: Determine the DRG-based amount TRICARE would allow minus any TRICARE discounts, payment reductions, and the beneficiary’s cost- share.

15. DRG - continued Step 2: Determine the DRG-based amount TRICARE would allow minus any TRICARE discounts and the amount paid by the OHI.

16. DRG - continued Step 3: From the lesser of the provider’s billed charges, the OHI allowed amount, or the patient’s liability as limited under the OHI subtract the amount paid by the OHI.

17. DRG - continued  Step 4: From the lesser of the provider’s billed charges, the OHI allowed amount, or the patient’s liability as limited under the OHI subtract the beneficiary’s cost-share.

18. DRG - continued Step 5: Compare the amounts in Steps 1 through 4. Pay the lowest amount.

19. Example - DRG The billed charge for five days of inpatient care in April 2002 for a retiree is $5,000.00. The claim is subject to the TRICARE DRG-based payment system, and the DRG-based amount is $4,000.00. The retiree cost-share under the DRG- based system is the lesser of $2,070 (5 days at $414/day) or $1,250.00 (25% of the billed charge). The other health insurance paid $3,000.00. The hospital submits a claim for $2,000.00 along with an EOB from the primary health insurance.

20. Example - continued STEP 1: $ 4,000.00 - DRG-based amount - $ 1,250.00 - Cost-share $ 3,750.00 STEP 2: $ 4,000.00 - DRG-based amount - $ 3,000.00 - OHI payment $ 1,000.00

21. Example - continued STEP 3: $ 5,000.00 - Hospital's charge - $ 3,000.00 - OHI payment $ 2,000.00 STEP 4: $ 5,000.00 - Hospital's charge - $ 1,250.00 - Cost-share $ 3,750.00

22. Example - continued STEP 5: TRICARE pays $1,000.00, since it is the lowest amount of Steps 1 - 4. The beneficiary owes nothing, since the full DRG-based amount has been paid to the hospital.

23. TRICARE Overseas TRICARE Overseas claims require review for possible primary insurance coverage. TRICARE Overseas claims determined to have OHI during processing will be denied until the required OHI information is received to process the claim.

24. TRICARE Overseas Special Circumstances Some Overseas OHI not carried on DEERS Spouses and children covered by national health care programs. In country. In state hospitals. Overseas Travelers Insurance Cruise Line Coverage Overseas exclusion/restrictions by U.S. Carriers

25. Special Situations When a beneficiary’s OHI denies charges for timely filing or because the beneficiary failed to meet a requirement of the coverage, the charges will be denied under TRICARE. Only when a statement is received from the OHI showing how much would have been paid had the claim met the requirements of coverage can the claim be processed.

26. Special Situations – continued Refusal by the beneficiary to claim benefits from their OHI will result in a denial of TRICARE benefits.

27. Beneficiary Liability A beneficiary’s liability is limited by all TRICARE provisions. Providers cannot collect from a beneficiary any amount that would result in a total payment to the provider that exceeds TRICARE limitations.

28. Common OHI Issues Inaccurate OHI information submitted on claims by providers Beneficiaries not keeping providers up-to-date on OHI changes Inaccurate information provided by beneficiaries such as conflicting effective dates for OHI that cause development Limited coverage plans that require manual intervention to process claims