Medicare generally audits payments it has made to hospital providers in an effort to insure that such payments were appropriately made in the first place. One such  audit idea was to retract monies hospitals received for treatment provided to beneficiaries later identified by Medicare as having been incarcerated at the time of service. SAC has handled quite a few of them. However, in reviewing the  medical records – EMT & ER reports, nurses notes and history and physical notes made by treating physicians – we frequently find that these patients were not incarcerated at all:  Instead, these patients were brought into the hospital from a residential address, a board and care facility perhaps or, were  homeless. Medical conditions of these patients varied, but many of them came through emergency rooms and required psychiatric care and stabilization.

Medicare has recognized in their past announcements, that the retractions it initiated for many such claims “might have been” erroneous and has already refunded some of them. On September 11, 2014, Medicare posted an update in their MLN bulletin indicating that for those claims that have not been refunded, providers may file requests for reopening with their contractor. So for example, most hospital providers in California would file such requests with  Noridian.

The excerpt included below was taken from Medicare’s news bulletin.

Incarcerated Beneficiary Update

In 2013, CMS initiated recoveries from providers and suppliers based on data that indicated a beneficiary was incarcerated on the date of service. CMS subsequently discovered that some of the data used was incomplete. Since some of these recoveries might have been erroneous, CMS initiated refunds. Most of the incarcerated beneficiary erroneous over-payment refunds were issued before the end of December 2013, with some subsequent refunds on situations that had been appealed. The process CMS used to expedite the refunds precluded the issuance of a detailed remittance advice (RA). However, CMS mailed a spreadsheet to each impacted provider, which listed each claim that was being refunded.

Some of the over-payments for incarcerated beneficiaries were valid and were not refunded. If you believe that an incarcerated beneficiary related claim was erroneously designated as an over-payment, with funds recovered and not subsequently refunded, you may request that your Medicare Administrative Contractor (MAC) reopen the claim.

If you have received an RA from your MAC indicating a Temporary Allowance (TA) but no other documentation (such as a separate letter), you may contact your MAC and request an explanation.

For more information:

• MLN Matters® Article MM8488, “Revised Beneficiary Liability and Messages Associated with Denials for Claims for Services Furnished to Incarcerated Beneficiaries

• “Medicare Coverage of Items and Services Furnished to Beneficiaries in Custody Under a Penal Authority” Fact Sheet

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