Who’s left holding the hot potato?


A few weeks ago, a provider tipped me off that CMS had started recouping payments for Medicare beneficiaries who were in prison at the time of dates of service. This provider was dumbfounded: How could these beneficiaries be in prison when they had received equipment and services in their home and signed delivery tickets, he wanted to know.

“This goes to a new low in my eyes,” the provider said.

I hadn’t heard of this type of recoupment from other providers, so I saved his email to my file of stories to look into.

Fast forward to this week.

CMS has put out a bulletin detailing the recoupments—“A large number of overpayments have been identified,” it states—and advising providers on how to respond to demand letters. The agency notes:

“There may be instances where providers believe that the beneficiary was not incarcerated when the services 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 forwarded the bulletin to the provider. His response?

“Now we need to ask them to pull up their pant leg to see if they are on in-home incarceration? When does it get to a point that we are asking and doing things totally outside of what we are in business for (taking care of ill people in need)? Guess when my driver gets shot for asking about a person being in prison they will not require us to get involved with someone's personal business outside of healthcare?”

CMS doesn’t go that far, but it advises providers that are receiving demand letters for denial of claims because the beneficiary’s Social Security record indicates incarceration on the date of service to contact the beneficiary to gather as much information as possible.

That sounds like a fun conversation, huh?

I wonder how these things even get this far. Shouldn’t the doc or whoever the referral source is know that an incarcerated Medicare beneficiary doesn’t meet the coverage criteria for the equipment and services? If not, shouldn’t CMS focus its efforts on educating them about this and, therefore, nipping the whole thing in the bud, not to mention saving providers from, at the very least, awkward conversations, and, at the very worst, the possibility of physical harm?

But I guess this is typical of the backward way that CMS tends to deal with fraud and abuse.

Unfortunately, the last person holding the hot potato is often the provider.


The seller beware.  solution:  appeal and  bill the Bureau of Prison, County, State prison system. File a small claim action.  Have your client appeal SSA decision. This is another example of driving small business out of the market place.