Medicare Recoupments for Incarcerated Patients

Recently, Centers for Medicare and Medicaid (CMS)initiated refunds from providers and suppliers based on data that indicated that the beneficiary was incarcerated on the date of service (DOS). Medicare will generally not pay for services furnished to a beneficiary who was incarcerated. Medicare has identified previously paid claims that contain DOS that overlap a period when the beneficiary was incarcerated based on information from the Social Security Administration (SSA). A large number of overpayments were identified, demand letters were released and recoups began taking place.

Today, in an Open Door Forum, CMS stated the data received was flawed. If a beneficiary did not inform the SSA of his or her release from custody, this may result in his or her record being incorrect. In addition, it can take up to one month, once notified, for the update to occur in the SSA system.

As a result, CMS have ceased recoups and demand letters. They expect their systems to be restored by October, 2013 and may resume the recoupments at this time.