Medical Billing for Healthcare Services Provided by Department of Defense Military Medical Treatment Facilities to Civilian Non-Beneficiaries
Published Date: 2/6/2026
Rule
Summary
Starting March 9, 2026, the Department of Defense is changing how it bills civilians who get medical care at military hospitals but aren’t covered by military health benefits. They’re introducing a sliding fee scale and fee waivers to make bills fairer and less costly, plus they’ll accept insurance payments as full payment except for small extra fees. This helps protect civilians from big medical bills while supporting military healthcare providers’ training.
Analyzed Economic Effects
7 provisions identified: 5 benefits, 1 costs, 1 mixed.
Income-Based Discounts and Caps
If you are a civilian treated at a DoD military medical treatment facility (MTF), you can apply to the Military Health System Modified Payment and Waiver Program (MHS MPWP). If your household income is at or below 100% of the Federal Poverty Guidelines (FPGs) you get a 100% discount (bill reduced to $0). Households between 101%–400% of the FPGs are eligible for a sliding fee discount (with stratified nominal inpatient fees and an outpatient fee of $50), and households between 401%–600% of the FPGs are eligible for a catastrophic fee waiver that limits the bill to at most 5% of monthly household income multiplied by 36 months.
Nominal Fee Schedule for Sliding Scale
Under the sliding fee for households >100% and up to 400% of the FPGs, outpatient nominal fee is $50 and inpatient nominal fees are tiered by income bands (examples: 101%–120% = $750 inpatient; 121%–140% = $1,250; 141%–160% = $2,000; ... up to 381%–400% = $14,000 inpatient). Applicants at 0%–100% FPG have $0 nominal fee.
Insurance Billing and Patient Consent Rule
If you have health insurance and are treated at an MTF, DoD will ask you to complete a DD Form 2569 and must have your consent to file claims on your behalf; you are not eligible for the MHS MPWP if you refuse to permit DoD to file claims. DoD will bill insurers and accept insurer remittances as full payment except for copays, coinsurance, deductibles, nominal fees and non-covered services, and will suspend collection against the patient for up to 120 days while the insurer processes the claim.
Medicare Patients Not Balance Billed
If you are a Medicare patient treated at an MTF, you will not be balance billed for care received in the MTF; Medicare will cover costs associated with stabilization and transfer. MTFs operate as non-participating providers under the DHA's election agreement with Medicare.
Collections Pause, Debt Recall, Payment Plans
While your MHS MPWP application is being reviewed, DoD will suspend collection actions against you (excluding insurance processing). If approved, DoD will reset the delinquency clock and recall debts from the Department of the Treasury's Cross-Servicing Program. You may be offered installment plans up to 72 months with a $25 minimum monthly payment, or you may request lump-sum payment.
Waivers for Training-Value Care — Tax Reporting
The Director of the Defense Health Agency may partially or fully waive already-discounted bills when competent medical authority confirms the care enhanced military providers' knowledge, skills, and abilities (KSAs). Waivers require DD Form 3201-1 and internal DD Form 3201-1A confirmation; waivers of $600 or more will be reported to the IRS and may result in issuance of Form 1099-C and possible taxable income for the patient.
Limits: Pre-2023 Debts and Tort/Third-Party Rules
Debts for MTF care incurred before June 21, 2023 are not eligible for the MHS MPWP (the statute is prospective). Discounts or waivers under the MHS MPWP do not apply to tortfeasors or third‑party payers, and applicants must cooperate with recovery against liable third parties to be eligible for discounts/waivers.
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