CMS identifies ‘large number of overpayments’ for incarcerated Medicare beneficiaries

Friday, July 19, 2013

BALTIMORE – CMS has initiated recoveries from providers for medical items and services provided to Medicare beneficiaries who were incarcerated on the date of service.

CMS has identified previously paid claims that contain dates of service that partially or fully overlap a period when the beneficiary was incarcerated based on information from the Social Security Administration (SSA). The agency generally does not pay for medical items and services furnished to a beneficiary who was incarcerated when the items and services were furnished.

“A large number of overpayments have been identified and demand letters released with appeals instructions,” the agency states in a bulletin.

CMS asks, however, that providers not file appeal requests at this time. Providers receiving demand letters for denial of claims because the beneficiary’s SSA record indicates incarceration on the date of service and who have reason to believe that the beneficiary was not incarcerated on the DOS, may wish to contact the beneficiary to gather as much information as possible.

Information gathered indicated SSA record may need to be updated

If a beneficiary did not inform the SSA of his or her release from custody, this may result in his or her record being incorrect. If a provider believes this is the case, the provider may wish to encourage the beneficiary to contact his or her local SSA office to have his or her records updated. It can take up to one month for the beneficiary’s Medicare eligibility file to be updated with the revised SSA information. If the beneficiary tells the provider that SSA is updating his or her records, we suggest the provider contact the Medicare Administrative Contractor using the contact information on the overpayment demand letter.

Information gathered indicates SSA record is current

If the provider believes that the beneficiary was not incarcerated on the date of service in question and the beneficiary advises that SSA’s records are currently accurate, the provider can contact their local CMS Regional Office by fax found at

CMS notes that there may be instances where providers believe that the beneficiary was not incarcerated when the service was provided. However, a beneficiary may be "incarcerated" even when the individual is not confined within a penal facility. For example, a beneficiary who is on a supervised release, on medical furlough, residing in a halfway house or other similar situation may, nevertheless, be in the custody of authorities under a penal statute. In such cases, Medicare payment may be barred. 




I feel this is an error made at Social Security by removing the inmates release date; therefore, showing the beneficiary is still incarcerated.  I have a Bi-Pap patient who personally came to our branch for a Bi-Pap set up and instruct; however, Social Security all of a sudden does not have a release date.  Why should a beneficiary be forced to fix an error made by the SSA?  This is just another beneficiary and provider nightmare caused by the government. 

Two suggestions for payment.   Bill the Penal institution.. For federal bill the BOP, Bureau of Prisions, or the penal institution.  Of course, appeal, every denied claim.  File a small claim action for recovery from agency the person is incarceragted (guest of).   

Medicare has sent out an updated message which is even more confusing that their first one.  The bottom line seems to be that we have to wait for them to figure out where the problem is, but they don't say we can delay sending in the refunds!  Since the claims in question are up to 3 years old, we can't necessarily locate the patient to ask whether or not the information is correct!