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B-329697 1 (2018-01-16)

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cIAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE
441 G St. N.W.
Washington, DC 20548


B-329697


January 16, 2018

The Honorable John McCain
Chairman
The Honorable Jack Reed
Ranking Member
Committee on Armed Services
United States Senate

The Honorable Mac Thornberry
Chairman
The Honorable Adam Smith
Ranking Member
Committee on Armed Services
House of Representatives

Subject: Department of Defense, Office of the Secretary: TRICARE; Reimbursement of Long
        Term Care Hospitals and Inpatient Rehabilitation Facilities

Pursuant to section 801 (a)(2)(A) of title 5, United States Code, this is our report on a major rule
promulgated by the Department of Defense, Office of the Secretary (DOD) entitled TRICARE;
Reimbursement of Long Term Care Hospitals and Inpatient Rehabilitation Facilities (RIN: 0720-
AB47). We received the rule on December 26, 2017. It was published in the Federal Register
as a final rule on December 29, 2017. 82 Fed. Reg. 61,678.

According to DOD, the final rule establishes reimbursement rates for Long Term Care Hospitals
(LTCHs) and Inpatient Rehabilitation Facilities (IRFs) in accordance with the statutory
requirement that TRICARE inpatient care payments shall be determined to the extent
practicable in accordance with the same reimbursement rules as apply to payments to providers
of services of the same type under Medicare. This final rule adopts Medicare's reimbursement
methodologies for inpatient services provided by LTCHs and IRFs. Each reimbursement
methodology will be phased in over a 3-year period. The final rule also removes the definitions
for hospital, long-term (tuberculosis, chronic care, or rehabilitation) and long-term hospital
care, and creates separate definitions for Long Term Care Hospital and Inpatient
Rehabilitation Facility adopting the Centers for Medicare and Medicaid Services classification
criteria. The final rule also includes authority for a year-end, discretionary General Temporary
Military Contingency Payment Adjustment for inpatient services in TRICARE network I RFs when
deemed essential to meet military contingency requirements.

The rule is effective March 5, 2018. The regulations setting forth the revised reimbursement
systems shall be applicable for all admissions to Long Term Care Hospitals and Inpatient
Rehabilitation Facilities, respectively, commencing on or after the first day of the month which is
at least 120 days after the date of publication of the rule in the Federal Register.

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