Incarcerated beneficiary
Medicare will generally not pay for medical items and services furnished to a beneficiary who is incarcerated or in custody at the time items and services are furnished under these Code of Federal Regulations (CFR) citations:
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Medicare does not pay for services furnished to a beneficiary who has no legal obligation to pay for the service and no other person or organization has a legal obligation to provide or pay for the service (42 CFR §411.4)
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Medicare does not pay for services furnished by a Federal provider of services or other Federal agency (42 CFR §411.6)
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Medicare does not pay for services that are paid for directly or indirectly by a governmental entity (42 CFR §411.8)
Definition of individuals in custody
Under Medicare Program regulation at 42 CFR §411.4(b), an individual is considered in custody if this individual is:
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Incarcerated in a jail, prison, penitentiary, or similar institution;
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Temporarily outside of a jail, prison, penitentiary, or similar institution on medical furlough or similar arrangement;
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Escaped from confinement by a penal authority; or
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Required to reside in a mental health facility under a penal statute or rule
Individuals who are not considered to be in custody of a penal authority include, but are not limited to, individuals who are:
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Released to the community pending trial (including those in pretrial community supervision and those released pursuant to cash bail);
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On parole;
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On probation;
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On home detention or home confinement; or
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Required to live in a halfway house or other community-based transitional facility
Special conditions in which Medicare will pay for incarcerated beneficiaries
Payment may be made for services furnished to individuals or groups of individuals who are in the custody of the police or other penal authorities or in the custody of a government agency under a penal statute only if the following conditions are met (under 42 CFR §411.4(b)):
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State or local law requires those individuals or groups of individuals to repay the cost of medical services they receive while in custody.
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State or local government entity enforces the requirement to pay by billing all such individuals, whether or not covered by Medicare or any other health insurance, and by pursuing the collection of the amounts they owe in the same way and with the same vigor that it pursues the collection of other debts.
Verify patient eligibility
Verify patient eligibility to determine if the Medicare beneficiary was incarcerated for the date of service.
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SPOT (Secure provider online tool)
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Billing agencies, clearinghouses, or software vendors
If it is determined incorrect incarceration dates are showing on the beneficiary’s record, the beneficiary will need to contact the Social Security Administration (SSA) to request an update.
Claims processing procedures
MACs must deny claims for items and services rendered to beneficiaries under custody when the Common Working File (CWF) identifies patients in this status.
Providers that render items and services to individuals in custody of a penal authority in a jurisdiction that meets the conditions of 42 CFR 411.4(b)(1)(i) through (iii) should indicate the requirements have been met for payment on the claim by billing as follows:
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Outpatient claims, providers shall append a HCPCS modifier QJ on all lines with a line-item date of service during the incarceration period.
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Inpatient claims, providers shall append condition code “63” to indicate services rendered meets the requirements for payment.
Denials
When a claim denies for services provided to patients under penal custody, the remittance advice will include RARC N103.
A party to a claim denied in whole or in part under this policy may appeal the initial determination on the basis that, on the date of service:
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The conditions of § 411.4(b)(1)(i) through (iii) were met, or
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The beneficiary was not, in fact, in custody under authority of a penal statute and the beneficiary’s record does not reflect incarceration for the date of service.
You may request an appeal by completing a Redetermination and Clerical Error Reopening Request Form (Part A) (Part B).
References