Retirees eligible for TRICARE for Life (TFL) will face higher outpatient costs at VA hospitals and clinics starting Oct. 1 if they continue to seek care there for conditions not rated as service-connected.
TRICARE managers this spring discovered that, for more than a decade, TRICARE was exceeding its legal authority by covering almost all outpatient costs that VA assessed on elderly retirees who were treated for ailments or injuries not linked to time in service.
On Oct. 1 that will end.
TRICARE policy regarding TFL retirees and VA health care will “get back into sync” with statutory requirements, explained Michael O’Bar, deputy chief of TRICARE policy and operations, in a phone interview.
Wisconsin Physicians Service, support contractor for the TRICARE for Life program, sent letters this month to 12,000 TFL retirees all of whom, over the past year or so, received VA care for conditions unrelated to service disabilities. Though they have paid little out of pocket in the past, the letter warned, they soon could face higher costs for that VA-provided care.
The law that established TRICARE for Life as a prized supplement to Medicare for retirees 65 and older directs TRICARE to cover the cost of TFL claims only after Medicare has paid its share, followed by any other health insurance that retirees might have to serve as second payer.
VA does not actively recruit TRICARE beneficiaries to its clinics and hospitals, officials explained. But VA is a TRICARE network provider and will deliver care to TRICARE beneficiaries as capacity allows.
This usually is for specialty services, but some VA facilities also have primary care capacity.
More often, when VA already is caring for a veteran with a service-connected condition, in order to care for the whole patient, VA has offered veterans the option of using their TRICARE benefit for routine care that falls outside their service-connected condition.
The hitch is that while VA facilities are TRICARE-authorized providers, they are not Medicare certified so VA cannot bill Medicare for that care given older military retirees for non-service connected ailments, officials recently realized.
That means TRICARE can pay no more than 20 percent of TRICARE-allowable charges. The beneficiary legally is responsible for the 80 percent Medicare won’t pay because VA is not a Medicare-certified provider.
TRICARE, in effect, has been violating the law by covering the whole tab for VA care to these TFL beneficiaries. O’Bar explained that TRICARE overpaid because it relied on a Memorandum of Understanding between VA and DoD on care reimbursements signed in 1995. The memo wasn’t updated to reflect the TRICARE for Life law enacted in 2001.
A new memo is being drafted.
O’Bar said making the required change effective Oct. 1 gives retirees time to avoid higher VA costs by finding private sector care providers who will accept Medicare, and using TLF, as designed, to cover provider costs that Medicare won’t pay.
Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: