March 31, 2021

TRICARE is adopting the Centers for Medicare and Medicaid Services (CMS) HVBP for hospitals, skilled nursing facilities and other institutional providers under the Inpatient Prospective Payment System (IPPS). This program will apply a claim-by-claim adjustment factor to the base Diagnosis Related Group (DRG) payment for claims in the fiscal year associated with the acute care hospital's performance period. The adjustment factor can be found in the CMS IPPS Final Rule Table

Exclusions include those facilities not included in the IPPS:

• Psychiatric hospitals
• Rehabilitation hospitals
• Long-term care hospitals
• Children’s hospitals
• Critical Access Hospitals (CAH)
• Prospective Payment System-exempt TRICARE cancer hospitals
• Hospitals in the state of Maryland
• Hospitals located in Puerto Rico and other United States territories do not participate in HVBP. (If CMS decides at a later date to include these hospitals, TRICARE will also include them in HVBP)

See the TRICARE Reimbursement Manual (TRM), Chapter 1, Section 41 for more information.