What are TRICARE Allowable Charges?
If you are new to TRICARE, you are likely also new to some of its jargon. What two important things will you learn right away? TRICARE-allowable charges and TRICARE balance billing. These help determine how much money you’ll pay after a doctor’s visit.
TRICARE Allowable Charges and Balance Billing
The TRICARE-allowable charge represents the maximum dollar amount TRICARE will pay a doctor, hospital, or medical equipment provider for a specific service.
Federal law ties these amounts to Medicare rates, which are subject to change based on the type of service, the date of the appointment, and the geographic location where you receive care.
When a provider bills for a service, they may request a higher amount than TRICARE allows. For example, a surgeon might bill $2,000 for a procedure, but the TRICARE-allowable charge for that zip code might be only $1,200. This $1,200 figure is the only number that matters for calculating your cost-share or deductible.
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Balance Billing
Balance billing occurs when a healthcare provider attempts to collect the difference between their high-billed amount and the lower TRICARE-allowable charge.
Under the previous example, if the doctor bills $2,000 but TRICARE only allows $1,200, the remaining $800 is the balance. Whether or not a doctor can legally ask you to pay that $800 depends entirely on their status within the TRICARE network.
Differences Between TRICARE Provider Types
There are three categories of providers: network providers, participating non-network providers, and nonparticipating non-network providers. Managing your costs means knowing the limits of each provider type.
For example, in-network providers have signed formal contracts with TRICARE regional contractors. These professionals agree to accept the TRICARE-allowable charge as the full payment for their services. They are prohibited from balance billing, so when you see an in-network provider, you only owe your fixed copayment or percentage-based cost-share.
These providers also handle all paperwork and file claims directly with TRICARE, so you do not have to pay the full bill upfront.
Participating non-network providers do not have a permanent contract with TRICARE, but they choose to “participate” on a case-by-case basis. By participating in a specific claim, they agree to accept the TRICARE-allowable charge as the total payment.
Like network providers, they cannot balance bill you. They usually file the claim for you, and TRICARE pays them directly.
Nonparticipating non-network providers present the highest financial risk. These doctors have no agreement with TRICARE and do not accept the allowable charge as full payment. They have the legal right to practice balance billing, but with limits on how much they can charge you.
Domestic Versus Overseas Regulations
The rules for balance billing may vary depending on where you receive care. In the United States, federal law protects TRICARE beneficiaries from unlimited billing. Nonparticipating providers in the U.S. cannot charge more than 15% above the TRICARE-allowable charge.
Overseas, nonparticipating providers may have fewer legal limits on balance billing. If a doctor in a foreign country bills $5,000 for a service and TRICARE only allows $2,000, you could be held responsible for the entire $3,000 difference, depending on circumstance.
How to Prevent Overbilling
The most effective way to avoid balance billing? Stay within the network. Before booking an appointment, check the TRICARE official site to confirm the provider’s status. If you must see a non-network provider, ask them upfront if they participate in TRICARE.
Once you receive care, your best resource for financial defense is the Explanation of Benefits (EOB). TRICARE sends this document after processing any claim.
EOB is a summary of TRICARE payments and what you owe. Always compare your doctor’s invoice against your EOB. Look specifically at the patient responsibility section, and if the doctor’s bill asks for more than what the EOB lists as your responsibility, the provider may be illegally balance billing you.
Do you suspect a provider has overcharged you? Contact the provider’s billing office. Present your EOB and point out the TRICARE-allowable charge. TRICARE billing errors are accidental and occur because office staff are unfamiliar with the 15% limit for nonparticipating providers. If the office refuses to adjust the bill, contact your TRICARE regional contractor.
If you have already paid an amount that exceeded the legal limit, you may be entitled to a refund. Submit a copy of your receipt and your EOB to the provider to request reimbursement for the overpayment.
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
