Kusserow on Compliance: CMS continued to pay millions of dollars for incarcerated beneficiaries

A couple years ago the OIG issued a report, followed by a public outcry about Medicare paying claims for incarcerated beneficiaries. The simple fact is that those in custody of a governmental entity are not eligible for Medicare. Last year Congress passed a law mandating CMS to establish policies and implement claims audits to ensure that payments are not made for Medicare services rendered to incarcerated beneficiaries and steps to detect and recoup payments made for instances in which an individual’s incarcerated status is not updated on CMS’s data systems. Under the same law, the OIG was mandated to submit a report to Congress within 18 months of passage, and periodically thereafter, on CMS actions to prevent payments made for incarcerated beneficiaries. The OIG issued an audit report on their evaluation of 2015 CMS policies and procedures and their planned revisions to them. They compared this information against requirements prohibiting payment for Medicare services rendered to incarcerated beneficiaries.

OIG findings

  1. CMS’s is not in full compliance with Medicare requirements.
  2. CMS failed to detect and recoup improper payments on behalf of incarcerated beneficiaries because they turned off its post payment claims edit to identify those claims.
  3. Medicare paid 63,949 claims of 11,786 incarcerated beneficiaries ($34,588,984) CY 2013-2014.
  4. CMS has not taken steps to act on the identified potentially improper payments.
  5. Failure to detect occurred in September 2013 when CMS turned off a post payment claims edit that it had created in April 2013.
  6. CMS planned revisions to its policies and procedures to deny Medicare payments for the same period that SSA suspends its benefits does not comply with the legal mandates.

OIG recommendations

CMS did not concur with the first recommendation listed below but did so for the other two.

  1. Develop and implement a system that allows CMS to collect the information necessary to fully comply with Medicare requirements that prohibit payment for Medicare services rendered to incarcerated beneficiaries and, if necessary, seek the appropriate legislation and funding;
  2. Review the $34.6 million in claims to determine which portion, if any, was not claimed in accordance with Medicare requirements and direct the Medicare contractors to recoup any ensuing improper payments; and
  3. Identify improper payments made on behalf of incarcerated beneficiaries after our audit period and ensure that Medicare contractors recoup those payments.

CMS officials stated that CMS is planning to obtain the dates that SSA uses to suspend benefits and plans to deny Medicare payments for incarcerated beneficiaries for the same periods that SSA suspends its own benefits for the same individuals.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.