The Centers for Medicare & Medicaid Services (CMS) will deny claims for beneficiaries who are in custody of a State or local government under the authority of a penal statute at the time the provider rendered the service. This provision was implemented in Regulations 42 CFR 411.4(a) and 411.4(b) respectively.
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, 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, Medicare denies payment for items and services furnished to beneficiaries in state or local government custody.
Regulations 42 CFR 411.4(b) states “Payment may be made for services furnished to individuals or groups of individuals who are in the custody of the police or other penal authorities or in the custody of a government agency under a penal statute only if the following conditions are met:
- State or local law requires those individuals or groups of individuals to repay the cost of medical services they receive while in custody.
- The State or local government entity enforces the requirement to pay by billing all such individuals, whether or not covered by Medicare or any other health insurance, and by pursuing the collection of the amounts they owe in the same way and with the same vigor that it pursues the collection of other debts.”
Providers and suppliers who render services or items to a prisoner or patient in a jurisdiction that meets the conditions of 42 CFR 411.4(b) must indicate this fact by submitting HCPCS modifier 'QJ.'
- Definition of HCPCS modifier QJ: 'Services/items provided to a prisoner or patient in State or local custody, however, the State or local government, as applicable, meets the requirements in 42 CFR 411.4(b)'
- This modifier indicates that the provider has been instructed by the State or local government agency that requested the health care items or services provided to the patient that it is the policy of the State or local government that the prisoner/patient is responsible to repay the cost of Medical services, and that it pursues collection of debts incurred for furnishing such items or services with the same vigor and in the same manner as any other debt
Important:
- HCPCS modifier QJ must be entered in the first or second modifier field of Item 24D of the CMS-1500 claim form and in the appropriate field for electronic claims
- Incarcerated dates of service should not be combined with non-incarcerated dates of service on the same claim
- Social Security Administration (SSA) provides dates of incarceration to this carrier. The patient must contact his/her local Social Security office prior to requesting an appeal if the incorrect date is on file. Only Social Security can make this correction.
Example: Carrier’s record indicates the patient was incarcerated on January 15, 2009, but he/she was actually released January 10th. The Social Security office must correct its records before a claim can be processed correctly.
Appeal rights are given on claims denied in whole or part under this policy upon the initial receipt of the determination of the claim on the basis that on the date of service:
- The conditions of 42 CFR 411.4(b) were met
- The prisoner/patient was not, in fact, in the custody of a State or local government under authority of a penal statute