Military families with loved ones in Children’s Hospital Colorado can perhaps breathe a little easier this Christmas knowing their insurance will still be accepted in the new year.
Children’s Hospital had planned to move to a “non-network participating provider” with the TriWest Healthcare Alliance on Jan. 1, 2025, after negotiations between the hospital and the insurance provider broke down.
The agreement reached in recent days will allow the hospital to remain in network with TRICARE, the health care insurance program for military service members, veterans and their families. TriWest will replace Healthnet in the western half of the United States on Jan. 1 as the new benefits administrator for TRICARE, the Gazette reported previously.
“Under the new agreement, TRICARE patients will maintain full access to our care and services across Colorado,” a Christmas Eve news release from Children’s Hospital said Tuesday.
The new agreement prevents military families from needing to seek prior authorization from the insurance provider for services, such as lab work or specialty visits.
With five military installations and tens of thousands of veterans in El Paso County, the Colorado Springs hospital sees numerous patients who would have been impacted by the change.
Last year, Children’s Hospital Colorado cared for 15,000 TRICARE patients, 10,300 of whom received services in southern Colorado, according to officials.
The hospital shared the good news with impacted families on Christmas Eve.
“Our patients are at the center of everything we do, and it was important to us to work with TriWest to achieve improvements in the new contract that will help us maintain access to care,” said Greg Raymond, president of Children’s Hospital Colorado’s Southern Region in a written response to questions.
Colorado Sens. John Hickenlooper and Michael Bennet urged TriWest and Children’s Hospital to come to an agreement last week to preserve care for those families when negotiations broke down.
The potential loss of coverage stemmed from a disagreement over the Defense Health Agency cutting TRICARE reimbursement rates last year for children’s hospitals around the nation.
Children’s Hospital Colorado estimated at the time the it would see around $17 million cut from its Tricare reimbursements each year because of the changes that lowered reimbursements for outpatient services, according to a lawsuit the hospital filed against the Department of Defense.
The TRICARE cuts have reduced outpatient reimbursements by 60%, amounting to losses of $2.4 million per month, said Greg Raymond, president of the hospital network’s southern region that’s based in Colorado Springs. He spoke to the Gazette for an earlier story. The nonprofit pediatric health system has lost money at its Colorado Springs location since it opened in 2019, but TRICARE’s changes have deepened those losses, officials said. At $2.5 million a month, the hospital system would lose $30 million in a year.
The hospital has discussed making substantial changes, such as cutting services as a result of lost revenue in the past. But it has not yet made any changes or made decisions about changes, Raymond said, in response to Gazette questions Tuesday.
The hospital lost its case against the DOD in April with a judge ruling in favor of the governments’ change in reimbursement. The new methodology focuses on hospitals’ actual costs — rather than their historic reimbursements, Colorado Politics reported previously.
The newly reached agreement will allow Children’s Hospital Colorado to maintain care, the news release said. Although the hospital will need to work on additional long-term changes to the contract.
“While we are optimistic about this first step in ensuring our military families continue to receive the care they need, TRICARE reimbursement rates remain well below the cost of providing care,” said Jena Hausmann, president and CEO of Children’s Colorado, the region’s nonprofit pediatric hospital system. “… If the federal TRICARE program does not fundamentally change the way it values children and child health, our healthcare system will struggle and access to pediatric care for military children will continue to be at risk in Colorado and across the country.”
The government said in its ruling that of the 35 children’s hospitals seeing the highest amount of TRICARE reimbursement in 2021, 14 would see their payments reduced and six would see their payments increased under the changes.
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