Page 20 - Medicare Benefit Policy Manual

“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.”

Moreover, 72 FR 47405 states further that the—

“…definition of “custody” is in accordance with how custody is defined by Federal
courts for purposes of the habeas corpus protections of the Constitution. For example,
the term “custody” is not limited solely to physical confinement. (Sanders v. Freeman,
221F.3d 846, 850-851 (6 Cir. 2000).) Individuals on parole, probation, bail, or
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supervised release may be “in custody.”

42 CFR §411.4(b) goes on to describe the special conditions that must be met in order for
Medicare to make payment for individuals who are in custody, 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:

1. State or local law requires those individuals or groups of individuals to repay the
cost of medical services they receive while in custody, and

2. 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."

The 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 unless the State can demonstrate to the A/B MAC (A)’s,
(B)’s, or (HHH)’s, or DME MAC’s satisfaction, in consultation with the RO, that:

• State or local law requires that individuals in custody repay the cost of the
services.

• The State or local government entity enforces the requirement to pay by billing
and seeking collection from all individuals in custody with the same legal status
(e.g., not guilty by reason of insanity), whether insured or uninsured, and by
pursuing collection of the amounts they owe in the same way and with the same
vigor that it pursues the collection of other debts. This includes collection of any
Medicare deductible and coinsurance amounts and the cost of items and services
not covered by Medicare.