Incarcerated Patient Recoupments: Update on Refunds

Medicare generally will not pay for services furnished to a beneficiary who was incarcerated or in custody under a penal statute or rule at the time the services were furnished.

In early 2013, CMS initiated recoveries from physicians based on data that indicated a beneficiary was incarcerated or in custody on the date of service. CMS later learned the data were incomplete and is reprocessing the affected claims denials issued in June, July, and August.

Most physicians who are due a refund for recoupments made in error should receive the refunds by mid-December. (Note, however, some of the recoupments were appropriate, and these will not be refunded.) These physicians will receive from Novitas Solutions, within three weeks of the refund, a spreadsheet with the payment information for each reprocessed claim. Appeals are being handled separately and will take longer to resolve. In addition, CMS is still identifying some overpayments for older dates of service that were collected, and they may also take longer to resolve. Examples of the spreadsheet and accompanying letter, and FAQs are on the CMS website.

TIP: Verify patients' eligibility for Medicare via the Novitas Interactive Voice Response (IVR) system. If the IVR system lists the patient as inactive, verify if the patient has been incarcerated. A patient who is in an incarcerated status at the time you provide services is responsible for paying the charges.

Messaging for denied claims will change in February 2014. For details, see MLN Matters No. MM8488 (PDF).

Published Dec. 10, 2013

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