DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid and CHIP Services 
 
MMCO - CMCS Informational Bulletin 
  
 
DATE:  January 6, 2012 
 
FROM:  Melanie Bella, Director 
  Medicare-Medicaid Coordination Office 
 
  Cindy Mann, Director 
  Center for Medicaid and CHIP Services (CMCS) 
 
SUBJECT:   Billing for Services Provided to Qualified Medicare Beneficiaries (QMBs) 
 
This Informational Bulletin provides information for State Medicaid Agencies and other 
interested parties regarding the prohibition on balance-billing Qualified Medicare 
Beneficiaries (QMB) for Medicare cost-sharing, including deductible, coinsurance, and 
copayments. This Bulletin is provided as a companion to a communication on this topic to 
Medicare providers in the form of a recently published Medicare Learning Network Matters 
article which is available at: http://www.cms.gov/MLNMattersArticles/Downloads/SE1128.pdf  
 
Background on QMBs and Benefits 
QMBs are persons who are entitled to Medicare Part A and are eligible for Medicare Part B; 
have incomes below 100 percent of the Federal Poverty Level; and have been determined to be 
eligible for QMB status by their State Medicaid Agency. Medicaid pays the Medicare Part A and 
B premiums, deductibles, co-insurance and co-payments for QMBs. At the States discretion, 
Medicaid may also pay Part C Medicare Advantage premiums for those who join a Medicare 
Advantage plan that covers Medicare Part A and B benefits and Mandatory Supplemental 
Benefits. Regardless of whether the State Medicaid Agency opts to pay the Part C premium, the 
QMB is not liable for any co-insurance or deductibles for Part C benefits.  States also have the 
authority to pay cost-sharing for QMBs for either the Medicare cost-sharing amount, the 
Medicaid State plan rate for the same service, or a rate between those amounts that is established 
by the State and approved by CMS.  
 
Balance-billing Is Prohibited by Federal Law 
Section 1902(n)(3)(B) of the Social Security Act (the Act), as modified by section 4714 of the 
Balanced Budget Act of 1997, prohibits Medicare providers from balance-billing QMBs for 
Medicare cost-sharing.  All Medicare physicians, providers, and suppliers who offer services and 
supplies to QMBs are prohibited from billing QMBs for Medicare cost-sharing, including 
deductible, coinsurance, and copayments.  This section of the Act is available at:  CMCS Informational Bulletin  
January 6, 2012 
Page 2 
 
http://www.ssa.gov/OP_Home/ssact/title19/1902.htm.  QMBs have no legal obligation to make 
further payment to a provider or Medicare managed care plan for Part A or Part B cost sharing.  
Providers who inappropriately bill QMBs for Medicare cost-sharing are subject to sanctions.  
Please note that the statute referenced above supersedes Section 3490.14 of the State Medicaid 
Manual, which is no longer in effect, but may be causing confusion about QMB billing.  
 
How State Medicaid Agencies Process QMB Claims 
Providers who serve QMBs are responsible for billing the State Medicaid Agency for any 
Medicare cost-sharing amounts the State is responsible for covering. When the State receives the 
claim, the Medicaid processing system determines whether the QMB is eligible and to which 
services they are entitled.  Next, the system determines whether the provider is registered as a 
Medicaid-participating provider for the service. Particularly for QMB claims, the provider might 
only be a participating Medicare provider, and not a Medicaid-enrolled provider. The process for 
a Medicare provider to become enrolled as a Medicaid provider varies by State, and providers 
must follow each States specific rules for provider enrollment to receive payment.  Once the 
providers registration is confirmed, the system uses the States Medicaid payment policy to 
determine the States cost-sharing contribution.   
 
Ways to Improve the Claims Process 
Effective communications between State Medicaid Agencies and QMB providers can improve 
the claims process for beneficiaries, States, and providers.  
 
Below are strategies State Medicaid Agencies can consider to both improve communication with 
QMB providers and reinforce the provider prohibition on QMB balance-billing: 
 
1.  Offer separate enrollment forms for QMB-only providers, or allow providers to identify 
as QMB-only on provider enrollment applications. 
 
2.  Include guidance in all communications with QMB providers to emphasize that balance- 
billing of QMBs is a violation of the providers Medicare agreement. 
 
3.  Provide clear guidelines for QMB providers on Medicaid provider enrollment and billing 
processes. 
 
Additionally, CMS suggests the following for providers to improve communications with State 
Medicaid Agencies and better understand the billing process for services provided to QMBs: 
 
1.  Recognize that you must complete the States provider enrollment process to be entered 
into the State payment system.  
 
2.  Contact the State Medicaid Agency directly to determine the process you need to follow 
to begin submitting claims and receiving payment. 
 
    CMCS Informational Bulletin  
January 6, 2012 
Page 3 
 
Additional Information 
More information about QMBs and other people dually eligible for Medicare and Medicaid is 
available through the Medicare Learning Network: 
http://www.cms.gov/mlnproducts/downloads/medicare_beneficiaries_dual_eligibles_at_a_glance
.pd 
 
For more information about Medicare cost-sharing, see the Get Help with Your Medicare 
Costs publication: 
http://www.medicare.gov/Publications/Pubs/pdf/10126.pdf 
 
 
We hope this information is helpful.  Please address any questions to Nancy Dieter at 
nancy.dieter@cms.hhs.gov or Edo Banach at edo.banach@cms.hhs.gov.