Incarcerated Patient Demand Letter — New Instructions

Are you confused about how to respond if the Centers for Medicare & Medicaid Services (CMS) attempts to recoup your payments for treating an incarcerated patient?

You probably are, as CMS last month changed its mind on what you're supposed to do after learning it had received incomplete information from the Social Security Administration. Contrary to what it previously said, CMS now advises you not to ask your patient to contact the local Social Security office to have his or her records updated and not to fax information to the CMS regional office in Dallas.

So what are you supposed to do if CMS demands its money back? The agency says this list of Frequently Asked Questions will tell you. CMS is reviewing its data to determine if inappropriate recoupments occurred.

And, keep an eye on the CMS All-Fee-For-Service Providers page for updates.

TMA's Payment Advocacy Department staff is working with the American Medical Association and CMS staff in Baltimore to resolve the issue but in the meantime encourages you to appeal a recoupment demand.

TMA, AMA, and other medical organizations told CMS its recovery efforts are "significantly flawed." In a letter to CMS, they urged the agency to stop the recover and "improve the process used to identify periods of incarceration and clarify denial forms and notices so that providers are aware of the explicit reason justifying a recoupment."

The letter said the groups "oppose the burdensome requirement placed on physicians to confirm the incarceration status of patients. While under certain circumstances providers may be aware that a patient is incarcerated, in other instances providers may have no indication of a patient's status, especially if the patient is residing in a halfway house, living under home detention, on parole, or unconscious and unable to convey that he or she is in custody. To confirm a patient's status, CMS recommends that providers call their Medicare Administrative Contractor (MAC) to inquire whether a patient is incarcerated. This additional administrative duty, however, interferes with the physician's focus on patient care and is overly burdensome given that these inquiries may only affect a small portion of patients. CMS should therefore consider these challenges and find an alternate, more appropriate way to determine whether a patient is in custody.

"Based on reports from physicians and other stakeholders, we believe that providers had little or no knowledge of this payment prohibition or the broad definition of 'incarcerated.' This term applies even when an individual is on parole, on a supervised release, on medical furlough, residing in a mental institution, or other similar situation. Without this clarity, we believe CMS should not unjustly punish physicians and retroactively seek overpayments. Rather, CMS should finalize clear, bright-line guidance to educate providers going forward regarding these types of claims."

CMS began trying to recover improper payments for treating incarcerated patients after the U.S. Department of Health and Human Services Office of Inspector General reported that Medicare erroneously paid $33.6 million for incarcerated patients between 2009 and 2011. Prisons, not CMS, pay for health care of incarcerated people who are otherwise eligible for Medicare. However, a person can be incarcerated without being in jail. A patient who is on parole, supervised release, or medical furlough or who lives in a halfway house or in another similar situation may be in the custody of authorities under a penal statute. In such cases, Medicare payment may be barred.

If you need additional information, email TMA Reimbursement Specialist Liz Jero or call her at (800) 880-1300, ext. 1389, or (512) 370-1389.    

Action, Aug. 16, 2013