This bill modifies TRICARE reimbursement rates based on the location where care is provided, ensuring the lowest authorized rate is paid and requiring geographically specific identifiers on claims, effective January 1, 2026.
Rich McCormick
Representative
GA-7
This bill amends Title 10 of the U.S. Code to change how healthcare providers are paid under the TRICARE program based on the location where care is delivered. It mandates that the lowest authorized reimbursement rate be applied when multiple rates are possible and requires the establishment of location-specific reimbursement rates for different healthcare settings. To ensure proper billing, claims must include a geographically specific identifier code for the provider's location. These changes are set to take effect on January 1, 2026.
TRICARE Reimbursement Rates to Be Based on Location of Care Starting 2026: New Rules Aim for Lower Costs
The new bill is changing how TRICARE pays for healthcare, tying reimbursement rates directly to where services are provided. Instead of a one-size-fits-all approach, payments will now vary based on location, effective January 1, 2026. The core goal? To lower costs for both the government and TRICARE beneficiaries.
Location, Location, Location:
This bill basically tells TRICARE to pay the lowest possible rate when multiple options exist. It sets different rates for different settings – think inpatient hospitals, outpatient departments (both on and off-campus), surgical centers, and doctor's offices. Section 1 of the bill amends section 1097b(a) of title 10, United States Code, to make this happen. For example, if a procedure could be billed at different rates depending on whether it's classified as "on-campus" or "off-campus," TRICARE will now pay the lower of the two.
Real-World Rollout:
Starting in 2026, every TRICARE claim will need a special, geographically specific code. This means your doctor's office in, say, rural Alabama, might get a different reimbursement rate than one in downtown New York City. For a military family, this could mean lower out-of-pocket costs if TRICARE is paying less overall. But, a doctor in a small town might see their TRICARE reimbursements go down, which could affect their practice.
Checking the Fine Print:
While the aim is cost savings, there are a couple of things to watch. Healthcare providers might try to get creative with their coding to snag higher payments. Also, that "lowest authorized rate" rule? It needs to be applied fairly, or it could hit providers in certain areas harder than others. The bill requires unique identifier codes for the location, which adds a layer of administrative work for providers. The bill does not amend or alter any existing laws.
The Bottom Line:
This change is all about making TRICARE spending more efficient. It's a move towards more localized healthcare costs, which could be good news for taxpayers and military families' wallets. But, it will be important to ensure the new rules don't accidentally create bigger problems for healthcare access in certain areas.