Review of Medicare Payments for Services Provided to Incarcerated Beneficiaries in the State of Louisiana

EXECUTIVE SUMMARY:

The objective of this review was to determine whether Medicare fee-for-service claims paid in Louisiana for beneficiaries identified as incarcerated during the period January 1, 1997 through December 31, 1999 were in compliance with Federal regulations and Centers for Medicare & Medicaid Services (CMS) guidelines.  Louisiana was 1 of 10 states selected as part of a nationwide review requested by the Senate Finance Committee.  We found that our random sample of 100 claims included 75 allowable claims, 18 unallowable claims and 7 claims for which the allowability of the claim could not be determined.  The CMS plans to establish an edit in its Common Working File (CWF) that will deny claims for incarcerated beneficiaries.  We believe the planned edit will prevent many improper payments for claims of incarcerated beneficiaries. However, we believe CMS and its contractors will need to educate suppliers and providers on the proper use of the modifier or condition code. Also, claims with the modifier or condition code must be monitored to assure the conditions under regulations at 42 CFR 411.4 (b) required for payment are, indeed, being met.  CMS regional officials agreed with the findings and recommendations.