RESOLVED: Incarceration Claim and Notice Rejections, Reason Code U538H

Published 09/25/2024

RESOLVED: Incarceration Claim and Notice Rejections, Reason Code U538H
Current Status Date  
Resolved September 24, 2024 Status: On September 23, 2024, the CWF was updated, which corrected the incarceration data for the Medicare beneficiaries affected by this issue. Palmetto GBA has released the claims and HHH notice of admissions/elections suspended in status/location (S/LOC) S MOSUI. Reason Code U538H was removed from the claims/notices to allow them to process after the CWF update.
Provider Action: Please watch for the claims/notices to process. Medicare beneficiaries with valid incarceration records that overlap the claim/notice’s date of service will reject. Please check an eligibility system, like Palmetto GBA’s eServices, to confirm the record.
Open August 28, 2024

Status: CMS and CWF are researching to determine how to correct the incarceration date for impacted beneficiaries and process claims that rejected in error or have been suspended. 

Palmetto GBA is currently suspending affected claims and HHH notice of admissions/elections to status/location (S/LOC) S MOSUI until the issue is resolved. Some claims and notices may have rejected prior the implementation of the suspension. Correcting the rejections will be part of the resolution.  

Provider Action: No action is needed at this time. Palmetto GBA will provide updates when available.
Issue Description
An Eligibility Database update that incorrectly identifies some beneficiaries as incarcerated caused the Common Working File (CWF) to reject claims and home health/hospice (HHH) notice of admissions/elections in error. They are rejecting incorrectly with reason code U538H for "SERVICES BILLED WHILE BENEFICIARY IS INCARCERATED."

 


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