(SOUTHERN COLORADO) — Children’s Hospital Colorado (Children’s Colorado) has filed a legal challenge to the Defense Health Agency’s (DHA) planned federal reimbursement changes to TRICARE, the health care insurance program for uniformed service members, veterans and their families.

The changes were scheduled to take effect on Oct. 1.

According to 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 of TRICARE patients cared for at Children’s Colorado in Colorado Springs, the hospital said these new rules will disproportionally impact Southern Region operations and threaten Children’s Colorado’s ability to maintain its current level of care.

“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.”

According to Children’s Colorado, the hospital in 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 planned reimbursement changes to TRICARE are an almost 40% reduction in outpatient reimbursement, Children’s Colorado said.

“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,” Raymond added.

FOX21 News reached out to the DHA, and it said as a matter of policy, it could not comment on pending litigation.