The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report on Oct 7 that documents about $34 million in payments that are improperly made by CMS to cover the medical services that are rendered to the Medicare beneficiaries who are imprisoned.
Medicare usually does not pay for the services rendered to imprisoned beneficiaries. The report from OIG was released as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), in order to make sure that payments are not made on behalf of these beneficiaries.
The payments to beneficiaries who are incarcerated arise from the inability of Medicaid to find if a beneficiary is in jail or lockup. CMS does not have the means to find imprisoned individuals, or monitor or track the judicial status of an individual covered under Medicare. However, CMS relies on the Social Security Administration (SSA) for this information.
A few years ago, CMS started denying payments to imprisoned individuals making use of the database of the Social Security Administration. Shortly after the commencement of the program, it became apparent that there are many flaws in the database of SSA.
SSA was very prompt in entering the details of individuals into the database upon imprisonment, but was not so prompt to remove the “incarcerated” notation upon the release of the person. Due to this, many of the individual Medicare beneficiaries were listed as being “incarcerated” in the database of SSA, when in reality they were not.
In some of the cases, SSA failed to remove the “incarcerated” designation from the record of a person even after a decade. Similarly, it was also found that many people who were incarcerated were not shown in the database of SSA and Medicare was paying for the healthcare of the person, where the jail or prison that is holding the person should instead be the responsible party.
The OIG report found that when a person was correctly identified as imprisoned, the policies and procedures of CMS prevented improper payments when an insurance claim was processed. HHS recommended CMS to make efforts to recover the improper payments and set up a system for itself to determine eligibility for the Medicare reimbursements, rather than relying on the Social Security Administration.