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Medicare Issues Alert Regarding Incarcerated Beneficiaries
July 24, 2013

The Centers for Medicare and Medicaid Services (CMS) has begun recoveries for services provided to Medicare beneficiaries who were incarcerated on the date of service. Medicare does not pay for supplies or services for persons who are incarcerated when the supplies or services are furnished. An individual may be considered incarcerated when in a prison or jail, in a supervised release program, on medical furlough, residing in a halfway house, or in other situations.

Medicare identified previously paid claims that include dates of service that partially or fully overlap a period when a beneficiary was apparently incarcerated, based upon information CMS received from the Social Security Administration (SSA). As a result, a large number of overpayments were identified, demand letters released, and automatic recoupment of overpayments made. CMS has since learned that the information related to these periods of incarceration was not completely accurate in some cases.

CMS is reviewing the data and will make changes to improve the process used to identify periods of incarceration. As part of this effort, CMS is working to quickly identify claims that resulted in the recent recovery actions and to correct any inappropriate overpayment recoveries.  Information is available as Novitas Solutions Part A and Part B system alerts.  Information is also available on the CMS All-Fee-For-Service-Providers web page. The alerts inform providers and suppliers that they should no longer encourage beneficiaries to contact local Social Security office in order to have their records updated as a result of this recent issue. Providers should no longer fax information to local CMS Regional Offices as CMS is working to develop processes to resolve the issue.

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