Payment Matters

November 29, 2012

Court Again Rules Medicare's "Must Bill" Policy for Medicare Dual Eligible Bad Debts Is Reasonable

By: Leslie Demaree Goldsmith

The United States District Court for the District of Columbia once again upheld the decision of the Secretary of Health and Human Services (Secretary) to deny reimbursement for Medicare bad debts associated with copayments and deductibles for Medicare beneficiaries who were also eligible for Medicaid, i.e., dual eligible beneficiaries. Grossmont Hospital Corp., et al., v. Sebelius, Civil Action No. 10-cv-1201 (D.D.C. Nov. 9. 2012). The same court ruled similarly in Cove Associates Joint Venture v. Sebelius, No. 1:10-cv-0316 (D.D.C. Mar. 26, 2012), which we discussed in an earlier Payment Matters article.

In order for a Medicare bad debt to be allowable, a provider must demonstrate, among other things, that no other source, including the State, is responsible for the payment. Pursuant to a Joint Signature Memorandum issued by CMS as a “clarification” of its policy on August 10, 2004, JSM-370, a provider must bill and receive a remittance advice from the State in cases where the State owes nothing or only a portion of a dual eligible patient’s Medicare deductible or copayment.

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