Update: Children’s Colorado Files Legal Challenge to Stop TRICARE Reimbursement Changes, Moves Forward with Legislative Action

Updated to include a call for advocacy and legal action on 4/22/24

On Sept. 29, 2023, Children's Hospital Colorado (Children's Colorado) filed a legal challenge to the Defense Health Agency’s (DHA) federal reimbursement changes to TRICARE, the health care insurance program for uniformed service members, veterans and their families. Those changes took effect Oct. 1, 2023.

This was an unprecedented action in Children’s Colorado’s history.

Impact of DHA ruling on Children's Colorado

The new federal DHA rules significantly lower the amount that Children’s Colorado is reimbursed for outpatient health care services. Due to the high percentage (17%) of military children we have the honor to care for at Children’s Hospital Colorado, Colorado Springs, these new rules will disproportionally impact Southern Region operations and threaten our ability to maintain our current level of care for the entire Colorado Springs community, including military and non-military patients and families alike.

“When we made the decision to bring this level of specialty pediatric care to the Colorado Springs community, we knew our hospital would be a safety-net facility that operated on slim financial margins,” said Greg Raymond, Southern Region President at Children’s Hospital Colorado, Colorado Springs. “However, DHA’s arbitrary reimbursement reductions will have a negative impact that will make it impossible to sustain our current pediatric health care services and programs that are available to our entire community.”

TRICARE cuts threaten specialty pediatric care in Colorado

On April 17, 2024, Children’s Colorado received an unfavorable ruling regarding the case against the Department of Defense after they reduced TRICARE reimbursements to children's hospitals. We are disappointed by the ruling and gravely concerned about the impact this will have for all children cared for by our hospital system in Colorado, with the most significant effects in southern Colorado. This decision will limit access to pediatric care and decrease the quality of health services, which are critical for the well-being of our community's children.

As the primary pediatric hospital in Colorado and the surrounding seven-state region, this will also negatively impact all patients treated at any of our 16 locations in Colorado. Patients currently treated by many of our specialists in Colorado Springs will have to travel to other locations, creating longer, up to months-long wait times due to a shortage of pediatric specialty providers throughout the state.

Children’s Colorado, Colorado Springs has cared for more than 15,000 children of military families insured by TRICARE every year since opening in 2019. The DHA’s reimbursement changes to TRICARE are an almost 40% reduction in outpatient reimbursement and will prevent Children’s Colorado from sustaining that care.

History of expanding access to care

Families have come to rely on the Colorado Springs hospital: Through the COVID-19 pandemic that severely impacted some children with MIS-C and a historic pediatric respiratory surge. Thousands of families have needed the Level III Neonatal Intensive Care Unit available for infants born as early as 22 weeks of pregnancy. Those with complex medical conditions benefitted from the expansion of outpatient services closer to home.

Military families stationed at major bases in southern Colorado rely on the hospital in Colorado Springs for a full spectrum of pediatric specialty care delivered through services such as outpatient surgeries, mental health therapy and cancer treatment. Our Colorado Springs hospital is a key contributing factor to ensuring the military installations in southern Colorado remain designated Exceptional Family Member locations.

“This is not just a reimbursement issue; this is an equity issue that will compromise the care available to all families – not just military families – in southern Colorado,” says Raymond.

How you can help preserve pediatric healthcare services

Since these TRICARE cuts were finalized last spring, we have been doing – and will continue to do – everything in our power to advocate with members of Congress and other elected officials about the dangerous consequences of this change and the implications for maintaining access to pediatric specialty care and preserving military readiness.

We have secured bipartisan support among members of Congress, and while passing federal legislation is never easy, this legislative work will continue to play out through the course of this year.

Fortunately, we are not alone in this work. Of the 20 largest children's hospitals that provide care to military kids, 14 are negatively impacted by this rule. A coalition of children’s hospitals is advocating for patients and families by asking Congress to change the law to continue to support the critical services delivered in children’s hospitals across the United States.

You can help us speak up today by contacting your U.S. Senators to amplify the importance of rolling back reimbursement cuts to TRICARE.