Additional updates to No Legal Obligation to Pay for or Provide Services and Examples of Application of Government Entity Exclusion (Pub. 100-02, chapter 16, sections 40 and 50.3.3 and newly created section 40.7) and Claims Submitted for Items or Services Furnished to Medicare Beneficiaries in State or Local Custody Under a Penal Authority (Pub. 100-04, chapter 1, section 10.4) - This CR Rescinds and Fully Replaces CR 13903
The purpose of this Change Request (CR) is to update the internet only manual to make it consistent with our regulations. In the CY 2025 OPPS rule, CMS clarified its regulations at 42 CFR 411.4(b) by stating that for purposes of Medicare payment, an individual is considered to be in the custody of a penal authority if the individual is: (A) Incarcerated in a jail, prison, penitentiary, or similar institution; (B) Temporarily outside of a jail, prison, penitentiary, or similar institution on medical furlough or similar arrangement;
Issued by: Centers for Medicare & Medicaid Services (CMS)
Issue Date: January 26, 2026
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