Hickenlooper, Colleagues Push DOD to Fix Rule Hurting Colo. Springs Children’s Hospitals

Rule change has caused financial challenges for Children's hospitals serving defense communities, limited their ability to provide care

WASHINGTON - Today, U.S. Senators John Hickenlooper and Michael Bennet and U.S. Representatives Doug Lamborn and Jason Crow, along with 16 of their Senate and House colleagues, sent a letter to Secretary of Defense Lloyd Austin urging the Defense Health Agency (DHA) to address the financial burden caused by a change in the way children's hospitals are reimbursed for the care they provide to military families covered by TRICARE, the government health care program for active duty service members and their families.

"We write to express our deep concerns about a 2023 Defense Health Agency (DHA) rule that catalyzed a major shift in the TRICARE reimbursement methodology for children's hospitals," wrote the lawmakers. "Children's hospitals situated in defense communities in our home states are now grappling with the impacts of this change."

DHA previously exempted children's hospitals from the adult Medicare reimbursement process because the program's policies aren't applicable to the care children typically need. Over 2.4 million children obtain care from children's hospitals through TRICARE each year, and the change has placed an outsized burden on children's hospitals in major defense communities, like Colorado Springs. Specifically, the Children's Hospital Colorado said one in five patients in their Colorado Springs facility pay with TRICARE. The rule change is expected to cost them over $25 million annually.

The Children's Hospital Association (CHA) sent letters to the Department of Defense in 2020 and 2023 expressing their concerns about the proposed rule. However, they did not receive a response before the DHA implemented the change in October 2023.

The lawmakers specifically asked the following questions:

• What dialogue has DHA had with the affected children's hospitals to understand how this new reimbursement methodology impacts operations and access to care?

• What data and sources informed the agency's analysis of the impact on children's hospitals that care for TRICARE patients?

• How did the agency account for the financial impacts of military families traveling for care in circumstances where local services are no longer available?

• How did the agency develop the contingency payment and why did the DHA set a lower contingency payment for pediatrics?

• Can the agency verify the number of children's hospitals that are expected to qualify for the contingency payment that is outlined in the rule?

Hickenlooper has publicly supported reversing the rule change and offered an amendment to the annual National Defense Authorization Act that would have defrayed some of these costs.

The full text of the letter is available HERE.

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