CMS Gives Refunds, Guidance on Incarcerated Patients

If you had a Medicare payment recouped for providing services to patients mistakenly identified as "incarcerated," refunds and guidance are on the way.

Last year, the Centers for Medicare & Medicaid Services (CMS) incorrectly recouped payments from physicians for services they provided to numerous Medicare patients who had mistakenly been identified as incarcerated or otherwise in custody.

Novitas Solutions began issuing refunds to affected physicians in December. CMS has also published a fact sheet titled "Medicare Coverage of Items and Services Furnished to Beneficiaries in Custody Under a Penal Authority" to guide physicians on the agency's policies and procedures.

The new fact sheet clarifies when the agency considers patients to be in custody or incarcerated. It makes denial forms and notices more explicit in justifying the reasons for a recoupment. The fact sheet focuses on how physicians can ensure a patient's eligibility through the electronic transaction for eligibility verification, the Medicare administrative contractor's online portal, or by calling the contractor's hotline.

In letters to affected physicians notifying them of their Medicare refund, CMS included a spreadsheet with claim-level details to help identify the claims reprocessed and amounts paid or refunded on the claims. CMS noted that, in some cases, the refund amount may include the claim repayment amount plus interest assessed incorrectly on the erroneous overpayment.

When the recoupment error initially came to light, the American Medical Association sent a letter to urge CMS to halt recoupment and establish a process for resolving future discrepancies without further burdening physicians. TMA and medical associations of 53 states, districts, and territories cosigned the letter. TMA's Payment Advocacy Department staff worked with AMA and CMS staff to resolve the issue.

The organizations urged the agency to stop the recovery 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."

A patient who is on parole, supervised release, or medical furlough or who lives in a halfway house or similar situation may be in the custody of authorities under a penal statute. In such cases, Medicare payment may be barred.

Please note that messaging for denied claims regarding incarcerated Medicare beneficiaries will change in February. For details, see MLN Matters No. MM8488.

For more information, visit the CMS website

Action, Jan. 17, 2014

Last Updated On

May 13, 2016

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