Appeal type: unknown
Decision: unknown

 
The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that providers/suppliers must report services correctly. Procedures should be reported with the 
Current Procedural Terminology (CPT) code that describes the services performed. You can find this rule in 
the Centers for Medicare and Medicaid Services (CMS), Medicare National Correct Coding Initiative Policy 
Manual for Medicare Services, Chapter I(A). 
 
Under Section 1862(a)(2) of the Social Security Act (the Act), the Medicare program does not pay for 
services if the beneficiary has no legal obligation to pay for the services and no other person or organization 
has a legal obligation to provide or pay for that service. Also, under Section 1862(a)(3) of the Act, if services 
are paid for directly or indirectly by a governmental entity, Medicare does not pay for the services. These 
provisions are implemented by regulations 42 C.F.R. 411.4, 411.6, and 411.8, respectively. 
 
The regulation at 42 CFR 411.4(b) states: Individuals who are in custody include, but are not limited to, 
individuals who are under arrest, incarcerated, imprisoned, escaped from confinement, under supervised 
release, on medical furlough, required to reside in mental health facilities, required to reside in halfway houses, 
required to live under home detention, or confined completely or partially in any way under a penal statute or 
rule. 
 
In accordance with the foregoing statutory and regulatory provisions, Medicare excludes from coverage items 
and services furnished to beneficiaries in State or local government custody under a penal statute, unless, it is 
determined that the State or local government enforces a legal requirement that all prisoners/patients repay the 
cost of all healthcare items and services rendered while in such custody and also pursues collection efforts 
against such individuals in the same way, and with the same vigor, as it pursues other debts. CMS presumes 
that a State or local government that has custody of a Medicare beneficiary under a penal statute has a financial 
obligation to pay for the cost of healthcare items and services. Therefore, Medicares policy is to deny payment 
for items and services furnished to beneficiaries in State or local government custody. 
 
CMS has established claim level editing to implement this policy using data received from the Social Security 
Administration (SSA). Specifically, the data contain the names of the Medicare beneficiaries and time periods 
when the beneficiary is in such State or local custody. These data will be compared to the data on the incoming claims. The Common Working File (CWF) will reject claims where the dates from the SSA file and the dates 
of service on the claim overlap. Any claims rejected by CWF will contain a trailer to the Medicare contractor 
indicating the date span covered. Contractors will, in turn, deny payment of such claims. 
 
However, providers and suppliers that render services or items to a prisoner or patient in a jurisdiction that 
meets the conditions of 42 CFR 411.4(b) should indicate this fact with the use of modifier QJ (for A/B 
Medicare Administrative Contractor (MAC) (B) or Durable Medical Equipment (DME) MAC processed 
claims or for outpatient claims processed by A/B MAC (A).  
 
You can find this information in the Centers for Medicare and Medicaid Services, Internet-Only Manual, 
Publication 100-04, Medicare Claims Processing Manual, Chapter 1, Section 10.4. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.