Published on:

CMS Releases Update on Medicare Claim Denials for Incarcerated Beneficiaries

On November 20, 2013, CMS released an update regarding the Medicare denials for claims submitted by providers and suppliers for beneficiaries who were allegedly incarcerated during the dates of service. The large volume of denials, which occurred during this past summer, were incorrect as CMS acknowledged that the systems that track whether a beneficiary is ineligible for Medicare services due to incarceration were incorrectly updated. Medicare providers and suppliers nationwide were impacted by this error as Medicare Administrative Contractors (MACs) automatically denied and in many cases recouped alleged improper claims for services provided to incarcerated beneficiaries. Although CMS acknowledged the errors in late July 2013, it is not until now that Medicare providers and suppliers have received concrete information that addresses how the errors will be fixed and how correct claims will be paid appropriately. CMS is now making strides to refund improper collections and to implement fundamental changes to its claims processing systems. Medicare Administrative Contractors (MACs) will be responsible for reprocessing claims denied in error. Please see our earlier blog posts regarding CMS’s efforts to recoup reimbursement for services provided to incarcerated beneficiaries here.

According to a FAQ Sheet available on CMS’s website, CMS anticipates that incorrectly denied or cancelled claims associated with allegedly incarcerated beneficiaries from June through August of 2013 will be refunded to suppliers via an automated process by the beginning of December. Medicare provider claims denied due to the incorrect information regarding incarcerated beneficiaries between June through August of 2013 will also be reprocessed by the MACs. According to the FAQ bulletin, CMS expects the reprocessing to be completed by the end of December.

Suppliers and providers should be aware that repayments “may not exactly match the original payment that was made for the claims.” Factors such as CMS business processes, outstanding payments, or changes in a beneficiary’s paid deductible amounts may be reflected in the final claim repayment amounts remunerated to the affected providers.

In addition to the information regarding the reprocessing of the claims, CMS stated in the FAQ that MACs are to disregard appeal filing deadlines for any claims that remain denied after the reprocessing. Providers can now wait for claims denials or overpayments related to incarcerated beneficiaries to be reprocessed by CMS, and can file appeals for denied claims regardless of previous appeal filing deadlines.

Wachler & Associates will continue to keep you updated on CMS’s efforts to reprocess incarcerated beneficiary claim denials. If you or your health care entity have any questions regarding CMS’s reprocessing efforts, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888 or

Contact Information