CurrentAnthemPolicy N/A

General Exclusions From Coverage (Chapter 16)

Defines categories of items and services that are excluded from Medicare payment and explains special situations (e.g., government-paid services, incarceration, VA authorizations) that affect payment responsibility and claim processing. Affects providers, suppliers, and payers administering Medicare-covered benefits.

Policy Summary

PayerAnthem

PolicyGeneral Exclusions From Coverage (Chapter 16)

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionIndicate incarcerated beneficiary status using condition code '63' (claim-level) or modifier QJ (line-level) when jurisdiction meets regulatory criteria.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

20+named exclusion sections and subsections in Chapter 16 table of contents

42 CFR § 411.4regulation cited for custody presumption

63 / QJcode required to indicate incarcerated beneficiary

6 monthsmax VA-authorized non‑VA SNF care duration

12 monthsantigen reasonable supply limit

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General Exclusions and Limits

General Exclusions

Not covered when ANY of the following exclusions apply:

General Exclusions: Not reasonable and necessary; No legal obligation to pay for or provide; Paid for by a governmental entity; Not provided within United States; Resulting from war; Personal comfort items; Routine services and appliances; Custodial care; Cosmetic surgery; Charges by immediate relatives or members of the household; Dental services; Paid or expected to be paid under workers' compensation/automobile/liability/no-fault plans; Nonphysician inpatient services not provided directly or under arrangement by the hospital/SNF; Services related to and required as a result of services not covered under Medicare; Excluded foot care and supportive devices for feet; Excluded investigational devices.

Derived from Chapter 16 §10 list.

Government/Federal Authorization Exclusions

Payment prohibited when items/services are furnished at public expense or authorized by Federal agency:

Governmental Payment Exclusions: Items/services furnished, paid for, or authorized by Federal, State, or local governmental entities are excluded when the government agrees to pay; items furnished pursuant to a Federal agency authorization (e.g., VA authorization) bind the Federal agency to pay and Medicare does not pay.

See §50 and §50.1.1 guidance.

Incarcerated Individuals — Rebuttable Presumption

Services furnished to individuals in custody of a penal authority are presumed excluded unless ALL of the following are demonstrated:

Rebuttable Presumption for Incarcerated Individuals: (1) State or local law requires the individual to pay the cost of items/services received while in custody; (2) The penal authority bills all such individuals regardless of Medicare or other coverage; and (3) The penal authority pursues collection of amounts owed with the same vigor as other debts (e.g., routine collection efforts including filing lawsuits, liens, etc.).

Providers must document evidence; use condition code '63' for entire claim or QJ modifier at line level when jurisdiction meets 42 CFR §411.4(b).

VA-Related Payment Rules

Medicare secondary payment and deductible crediting involving VA:

VA Copayment Crediting and Secondary Payment: Medicare may reimburse or credit toward Medicare deductible/coinsurance VA copayment amounts charged for VA-authorized services furnished by non-VA sources; beneficiaries may submit VA Form 10-9014 and VA explanation of benefits to support reimbursement or deductible crediting.

See §§50.1.1 and 50.1.3; crediting handled per MSP Manual.

Medicare primary/secondary payment rules for VA-authorized services

Medicare payment rules when VA authorizes or pays for services:

VA full authorization: If VA authorization binds the VA to pay in full for the items/services, no Medicare payment may be made and such services do not count against Medicare benefit maximums.

§50.1.3

VA authorizes fewer days or pays partial amounts: When VA authorizes fewer days than the total covered days or pays less than the Medicare allowable, Medicare may pay secondary benefits; the Medicare secondary payment is the lower of (1) gross Medicare payable for all covered days minus VA payment, or (2) gross Medicare payable minus applicable deductible/coinsurance; utilization adjustment rules apply.

§50.1.2 and §50.1.3

Crediting VA payments to Medicare deductibles: VA payments for otherwise covered services are credited to the beneficiary's Part A or Part B deductible as appropriate; beneficiaries should submit VA EOB or Form 10-9014 to obtain credit or secondary payment.

§50.1.3 and §50.1.1

IHS and contract health services

Indian Health Service (IHS) contractual services:

IHS contract services: For contract health services to Indians and their dependents under IHS arrangements, Medicare is the primary payer and IHS is the secondary payer.

§50.1.5

Federal/State governmental provider payment exceptions

Services furnished by Federal, State, or local governmental providers:

Federal provider exclusion and exceptions: Generally Federal providers are excluded from Medicare participation, and payment is precluded for services rendered by federally operated non-providers (e.g., VA clinics). Exceptions permit payment for certain Federal providers that serve the general community (including IHS hospitals) or meet statutory exceptions (e.g., VA hospitals with sharing agreements for ESRD). Emergency inpatient/outpatient hospital services may be payable.

§50.2 and §50.3

State/local government free services: Payment may be made for items/services furnished free of charge by State/local hospitals that serve the general community or when services are furnished to control infectious disease or to medically indigent individuals; otherwise free services generally preclude Medicare payment.

§50.3.1

Coverage and Exclusions

Coverage and exclusion rules summarized by category:

Governmental entity exclusion general rule: Medicare payment may not be made for items or services paid for directly or indirectly by a Federal, State, or local governmental entity unless a statutory exception applies (e.g., employee health plan, Medicaid, rural health clinic services).

§50.3

Permitted payments despite government involvement: Payment may be made when services are furnished under a governmental employee health/insurance plan, under titles of the Social Security Act such as Medicaid, or for rural health clinic services.

§50.3

Examples—State Veterans Homes: Payment allowed when institution charges residents or seeks payment from non‑Medicare sources; precluded if institution admits/treats veterans without charge solely due to veteran status or service connection.

§50.3.3(1)

Exclusions and limited exceptions

Services and items are excluded from coverage unless an explicit exception or statutory coverage applies.

Routine services and appliances: Routine physical checkups; eyeglasses, contact lenses, and eye examinations for prescribing/fitting/changing; eye refractions; hearing aids and exams for hearing aids; and immunizations are excluded unless statutorily covered or related to treatment/exposure.

§90

Immunizations and antigens: Immunizations are excluded unless directly related to treatment/exposure or specifically covered by statute. Physician‑prepared antigens may be paid if prepared by an MD/DO who examined the patient and prescribed a dosage regimen; supply limited to a reasonable supply (≤ 12 months).≤ 12 months

§56 and §57

Hearing aids vs prosthetic auditory implants: Hearing aids and associated exams are excluded. Cochlear implants, auditory brainstem implants, and osseointegrated implants are prosthetic devices payable when hearing aids are medically inappropriate or cannot be used.

Inpatient Non-Arranged Services — Exceptions

The general exclusion for non-arranged nonphysician inpatient services does not apply when the service is one of the following:

Exceptions list: Physicians' services for hospital inpatients; physicians' services other than therapy for SNF inpatients; physician assistant services; nurse practitioners and clinical nurse specialists; certified nurse‑midwife services; qualified clinical psychologist services; certified registered nurse anesthetist; services of an anesthetist employed by a physician (for specified periods); and for SNF Part A inpatients certain additional services (home dialysis supplies/equipment, self‑care home dialysis support, institutional dialysis services and related ambulance, EPO, hospice related to terminal condition, radioisotope services, some customized prosthetic devices, some chemotherapy and administration services, cardiac catheterization, CT, MRI, ambulatory surgery using an OR, radiation therapy, emergency services, and related ambulance transport).

See §170 and enumerated exceptions.

Services Related to Non-Covered Procedures

Services that are 'related to' a non-covered service performed during an inpatient stay are not covered; services that are 'not related to' are covered.

Related vs Not Related: If services during an inpatient stay are related to a non‑covered procedure (e.g., cosmetic surgery, non‑covered transplant or implant), those related services are non‑covered. Services not related to the non‑covered procedure (e.g., treatment of an unrelated injury sustained during the stay) are covered. Subsequent services after discharge to treat complications of a prior non‑covered service may be covered when reasonable and necessary, except that services expected to be included in a global fee are not covered.

§180

This chapter lists categorical exclusions where Medicare payment is prohibited when any one of the named conditions applies. Key excluded categories include: cosmetic surgery (except limited repair/functional exceptions), custodial care, personal comfort items, routine services and appliances (for example, routine physicals, eyeglasses/contact lenses and refractions, hearing aids and related exams, and most immunizations), dental services, services paid or expected to be paid under liability/automobile/no-fault/workers' compensation, certain nonphysician inpatient services not provided directly or under arrangement by the facility, services related to non-covered procedures (e.g., cosmetic or noncovered implants/transplants), excluded foot care/supportive devices, and excluded investigational devices.

When the Veterans Administration (VA) binds itself to pay in full for authorized services, Medicare payment is precluded and the VA-paid services do not count against Medicare benefit maximums. If a physician accepts VA fee-basis payment, the VA payment is considered payment in full and the physician may not bill the patient for the balance. Separate exclusions also apply when items/services are furnished at public expense pursuant to a Federal authorization or when furnished by Federal providers or agencies; these three governmental payment exclusions are applied independently.

General exclusions include items or services paid for directly or indirectly by Federal, State, or local governmental entities (with narrow statutory exceptions such as governmental employee health plans, certain Social Security Act titles, and rural health clinic services). Services furnished outside the United States are excluded except for limited emergency and closely related circumstances (e.g., emergency inpatient care that began while the beneficiary was in the U.S., certain nearer foreign hospitals, or shipboard services within six hours of a U.S. port). Items or services required as a result of war and personal comfort items are also excluded under their respective rules.

Specific excluded categories called out in Chapter 16 include: routine physical checkups and most preventive services not specified by statute; eyeglasses or contact lenses and refractions (except when related to eye disease or post‑surgical/prosthetic lenses); hearing aids and fitting examinations (while implantable auditory prostheses may be payable when indicated); cosmetic surgery (excluded unless required for prompt repair of accidental injury or to improve function of a malformed body member); and dental treatments and supporting structures (with limited exceptions such as extractions required prior to radiation therapy).

Charges imposed by immediate relatives or members of the patient’s household are excluded from Medicare payment. This exclusion is intended to bar reimbursement for items or services that would ordinarily be provided gratuitously because of the relationship and applies to services furnished by relatives or suppliers with excluded relationships.

Items and services that are payable or reasonably expected to be payable under liability, automobile, no‑fault, or workers' compensation plans are not payable by Medicare. The program may recover payments if information shows another payer is responsible; providers should follow the MSP manual for claim handling. Similarly, services paid for by governmental entities are generally excluded unless a statutory exception applies.

Medicare does not cover items and services that are not reasonable and necessary for diagnosis, treatment, or to improve the functioning of a malformed body member. Examples include services or equipment whose use is not part of a reasonable treatment plan (for example, rental of a special hospital bed for home use when not medically necessary).

Refractive procedures (including expenses for refractions) and routine vision and hearing appliances and their fitting exams are excluded from Medicare coverage. Hearing aids and associated examinations for prescribing, fitting, or changing hearing aids are explicitly excluded; by contrast, certain implantable auditory devices (e.g., cochlear implants, auditory brainstem implants, osseointegrated implants) are treated as prosthetic devices and may be payable when hearing aids are medically inappropriate or cannot be used.

Custodial care is defined as personal care that assists with activities of daily living and does not require continuing medical or paramedical attention. Such care is excluded from Medicare coverage. However, when a beneficiary is in an institutional custodial determination, individual medically necessary Part B services (for example, physician visits or ancillary services) may still be payable if documented as reasonable and necessary.

Services determined to be not reasonable and necessary—for example, certain cosmetic procedures or other services explicitly identified as noncovered—are excluded. Inpatient services and other services that are "related to" a non‑covered procedure performed during the same stay are not covered, while services that are not related remain payable. Subsequent care for complications of a non‑covered service may be covered when reasonable and necessary, except where such services are included in a global fee for the non‑covered procedure.

Claim Indicators, Codes, and Key Values

Claim identifiers for incarcerated beneficiariesModifier

63	Condition code to indicate incarcerated beneficiary for entire claim
QJ	Modifier to identify services for incarcerated beneficiary at line level

Claim indicatorsmixed

Y trailer code / code 36

Health Insurance Master File indicator for VA fee-basis card (type code 3)

No explicit codes in this sectionmixed

No codes listed

Excluded service categories (no explicit CPT/HCPCS codes listed in this excerpt)mixed

No codes listed

inv-26: VA authorized SNF care duration — up to six months

Policy statementVA may authorize up to six months of care in non-VA skilled nursing facilities (SNFs) for veterans; services furnished pursuant to a VA authorization do not count against the 100 days of Medicare extended care benefits in a benefit period.

Medicare interactionIf a veteran remains in a SNF until VA benefits are exhausted, Medicare extended care benefits may begin the first day after VA benefits are exhausted if physician certification and Medicare qualifying rules (3‑day hospital stay and 30‑day transfer rules) are met.

Secondary payment possibilityMedicare secondary benefits may be payable where the VA authorizes fewer days than the total number of covered days in the stay.

inv-27: Antigen reasonable supply — ≤ 12-month supply prepared for a particular patient

Reasonable supply limit

Billing, Documentation, and Provider Responsibilities

Billing Rule

VA Authorization — Medicare Nonpayment

When a Veterans' Administration (VA) authorization exists, Medicare will not pay for services the VA has agreed to pay. If a veteran requests Medicare reimbursement for a VA copayment or seeks credit toward the Part B deductible for VA-authorized services furnished by non-VA sources, the beneficiary must submit VA Form 10-9014 (Statement of Charges for Medical Care) and, where applicable, the VA's explanation of benefits showing amounts paid. If a VA payment to the beneficiary or physician is less than the Medicare allowable amount, Medicare may pay secondary benefits (the lesser of the Medicare allowable minus deductible/coinsurance or the Medicare allowable minus the VA payment). If a physician accepts VA fee-basis payment, the VA's usual-and-customary determination is payment in full and the physician may not bill the patient for amounts beyond the VA payment; Medicare cannot reimburse beyond the VA payment in those cases.

Beneficiary requests for VA copayment reimbursement or deductible credit must include VA Form 10-9014.
If VA paid less than Medicare allowable and the beneficiary filed the VA claim, submit VA EOB to support Medicare secondary payment.
When a physician accepts VA fee-basis payment, the VA payment is payment in full and the physician cannot bill the beneficiary for the balance.

Policy Purpose and Scope

This chapter is administrative and addresses payment exclusions rather than clinical indications. It provides the statutory and programmatic bases for categories of non‑covered items and services and explains special payment rules and exceptions (for example, interactions with government payers, VA authorizations, incarcerated individuals, and inpatient non‑arranged services) that affect claim processing and provider responsibilities.

Key Terms

inv-54: In custody / Penal authority — Individual in the custody of a penal authority

DefinitionAn individual in the custody of a penal authority is a person incarcerated in a jail, prison, penitentiary, or similar institution, temporarily outside on medical furlough, escaped from confinement, or required to reside in a mental health facility under a penal statute or rule.

Examples includedIncludes persons incarcerated in jail/prison, on medical furlough, escaped from confinement, or confined under penal statutes to mental health facilities.

Examples excludedDoes not include persons released pending trial, on parole or probation, on home detention/home confinement, or required to live in halfway houses or community transitional facilities.

inv-27: No legal obligation to pay — No legal obligation to pay applies where neither the beneficiary nor any other person/organization has a legal obligation to pay for the ...

Regulatory basisThe 'no legal obligation to pay' exclusion applies where neither the beneficiary nor any other person/organization has a legal obligation to pay for the item or service (42 CFR § 411.4).

Policy Summary

PayerAnthem

PolicyGeneral Exclusions From Coverage (Chapter 16)

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionIndicate incarcerated beneficiary status using condition code '63' (claim-level) or modifier QJ (line-level) when jurisdiction meets regulatory criteria.

SourceLink

On This Page

Fee-basis acceptance by physician: If a physician accepts VA fee-basis payment, the VA payment is payment in full and Medicare does not pay on the excess; if beneficiary is charged a VA copayment, Medicare may pay secondary benefits up to applicable limits when documentation is provided.

§50.1.1 and examples in text.

Examples—State/local psychiatric hospitals: Payment generally allowed for hospitals serving the general community; excluded for services to those committed under penal statutes.

Individuals in custody of a penal authority: Individuals in custody are generally public charges with no obligation to pay; Medicare is prohibited from paying absent rebuttal as described under custodial presumption rules.

§50.3.3(3)

Health department outpatient clinics: Free services by state/local health department clinics are covered only if rendered due to indigence or to control infectious disease; otherwise excluded.

§50.3.3(4)

Vocational rehabilitation agencies: Title XVIII benefits payable if VR agency charges all clients or limits free services to medically indigent; agency may claim Part B payment if beneficiary authorizes it.

§50.3.3(5)

TRICARE/CHAMPVA coordination: If beneficiary has TRICARE/CHAMPVA and Medicare, Medicare is primary and TRICARE/CHAMPVA is secondary; duplicate payments may be recovered by TRICARE/CHAMPVA.

§50.5 and §50.5.3

Services outside United States: Items and services furnished outside the U.S. are excluded except limited emergency or geographically closer hospital exceptions and certain shipboard services within specified time windows.

§60

Services resulting from war: Items and services required as a result of war or act of war after the current entitlement date are not covered.

§70

Personal comfort items: Items that do not contribute meaningfully to treatment (e.g., radio, TV, beauty services) are excluded, though basic routine personal hygiene services in long-stay institutions may be allowable when provided routinely without charge.

§80

Routine services and appliances: Routine physicals; eyeglasses/contact lenses and refractions; hearing aids and exams for hearing aids; and immunizations are excluded except specified preventive services and disease‑related or post‑surgical/prosthetic lens exceptions.

§90

Custodial care (assistance with activities of daily living without need for continuing medical/paramedical personnel) is excluded. Individual medically necessary Part B services during a custodial stay (e.g., physician visits, ancillary services) may still be covered if reasonable and necessary.

§59 and §60

Cosmetic surgery is excluded except when required for prompt repair of accidental injury, to improve function of a malformed body member, or other therapeutic indications as described.

§62

Charges by immediate relatives/household members: Charges imposed by immediate relatives or members of the patient's household are excluded from Medicare payment.

§63

Dental services: Care, treatment, filling, removal, or replacement of teeth or supporting structures is excluded, with limited exceptions such as extraction necessary to prepare for radiation therapy.

§70

Services reimbursable under other liability/insurance: Items and services for which payment has been made or can reasonably be expected to be made under liability, automobile, no‑fault, or workers' compensation are not payable by Medicare and may be subject to recovery.

§72

Non-hospital/SNF inpatient services not delivered directly or under arrangement: Nonphysician services to hospital or SNF inpatients not provided directly by or under arrangement of the hospital/SNF are generally excluded, with enumerated exceptions for certain practitioner types and specified services that may be payable if medically necessary.

§73 and §74

A reasonable supply of physician‑prepared antigens is considered not more than a 12‑month supply prepared for a particular patient at any one time.

Preparation requirementsAntigens must be prepared by a physician (MD/DO) who has examined the patient and determined a treatment plan and dosage regimen.

Purpose of limitationThe 12‑month limitation ensures antigens retain potency and effectiveness over the administration period.

Prior Authorization

Active Duty Uniformed Services — Prior Approval

The Uniformed Services may pay for civilian care for active duty members; except for emergencies, prior approval from the appropriate service is generally required before payment by the Uniformed Services will be made. Services paid for or expected to be paid for by the Uniformed Services are not payable under Medicare.

Prior approval generally required for non-emergency civilian care to be paid by Army, Navy, Air Force, Marine Corps, etc.
If prior approval/authorization exists and the Uniformed Service pays (or will pay), do not bill Medicare.

Note

Prior Authorization Not Specified

No single, explicit prior authorization requirement applies across the policies excerpted here beyond the specific programs noted (e.g., VA, Uniformed Services). Coverage and payment determinations depend on whether services were authorized/paid by another governmental payer, whether the provider accepted such payment, and whether required documentation or condition codes were submitted.

Check program-specific rules (VA fee-basis, Uniformed Services) for prior approval requirements.
If another government entity has authorized or paid for services, Medicare may be precluded — obtain supporting documentation before billing Medicare.

Prior Authorization

Incarcerated Beneficiary Claim Identification

Claims for services furnished to incarcerated individuals must indicate that the jurisdiction meets the conditions of 42 CFR § 411.4(b). Providers should report the '63' condition code for an entire claim or use modifier QJ at the line level to identify services to inmates. If not indicated, the claim or affected line(s) will be denied.

Use Condition Code 63 for whole-claim identification of incarcerated beneficiary services.
Use modifier QJ at the line level when applicable.
If the jurisdiction does not meet the regulatory requirements, or the proper code/modifier is not present, the claim/line will be denied.

Denial Risk

If Physician Accepted Assignment and Fails to Respond

If the A/B Medicare Administrative Contractor (A/B MAC) queries whether a claim has been or will be submitted to the VA or whether the beneficiary or physician filed the VA claim, providers must respond. For assigned claims, if the physician accepted assignment and does not respond to the A/B MAC inquiry within 30 days, the A/B MAC will deny the claim on the grounds the physician refused to furnish information necessary to determine proper payment. For unassigned claims, failure to respond within 30 days generally results in the A/B MAC paying the claim as usual.

When contacted by the A/B MAC about potential VA claims, reply promptly (within 30 days).
Assigned claims: nonresponse = denial and prohibition on billing the beneficiary for the denied services.
Unassigned claims: nonresponse may result in payment pending other rules.

Denial Risk

If Physician Does Not Respond Within 30 Days

When the A/B MAC cannot determine who filed the VA claim for secondary benefits, it will attempt to obtain clarification from the physician or supplier. If the physician does not respond within 30 days on assigned claims, the A/B MAC will deny benefits for failure to furnish necessary information. For unassigned claims, nonresponse may result in the A/B MAC assuming the beneficiary filed the VA claim and paying secondary benefits to the beneficiary.

Assigned claims: physician nonresponse within 30 days → denial.
Unassigned claims: physician nonresponse within 30 days → A/B MAC may pay secondary benefits to beneficiary.

Denial Risk

Payment Exclusion Triggers

Medicare will not pay for items or services paid for, directly or indirectly, by a Federal, State, or local governmental entity except in specified limited circumstances (e.g., government employee health plans, Title XIX/Medicaid, rural health clinic services). Common exclusion triggers include routine physical checkups, eyeglasses/contact lenses and related exams, hearing aids and accessories, immunizations, and any services paid for by another governmental payer. Claims for services for which payment has been or can reasonably be expected to be made under liability, automobile/no-fault, or workers' compensation will also be denied; consult the MSP manual for instructions.

Do not bill Medicare when another governmental entity has paid for the same items/services unless an exception applies.
Routine services and appliances (e.g., hearing aids, routine exams, immunizations) are excluded.
If another payer (liability/auto/worker's comp) is available, follow MSP manual guidance for coordination of benefits and repayment.

Documentation Required

Antigen Preparation Documentation

Document antigen preparation services when billing: the physician preparing antigens must be an MD or DO, must have examined the patient, and must have determined a treatment plan and dosage regimen. A 'reasonable supply' is limited to a 12-month supply prepared for a particular patient at any one time.

Ensure documentation that the physician examined the patient and established the treatment plan/dosage before billing for prepared antigens.
Limit billed antigen supply to a reasonable amount (≤ 12 months).

Documentation Required

Custodial Care Documentation for Covered Services

When services are furnished during an institutional custodial determination, providers should document medical necessity for any Part B services (for example, physician visits or ancillary services) to support coverage despite a custodial status. Ancillary Part B services that are medically necessary may still be payable even if the overall institutional care is custodial.

Document the clinical reason and medical necessity for each Part B service provided to a patient in custodial care.
Examples: physician periodic visits and medically necessary ancillary services may be payable even when stay is custodial.

Note

Reference the MSP Manual

For any coordination with other payers (liability, workers' compensation, CHAMPVA/TRICARE, or governmental payers) and for instructions about contractor prepayment processing and inquiries, providers should reference the Medicare Secondary Payer (MSP) Manual and relevant CMS/MSP guidance.

Use the MSP Manual for processing instructions, prepayment requirements, and contractor inquiry procedures.
When another payer may be responsible, follow MSP rules for documentation, reporting, and potential repayment.

Billing Rule

When VA Payment to Beneficiary or Physician Is Less Than Medicare Allowable

When the VA pays the beneficiary (or physician) less than the Medicare allowable and the beneficiary is seeking Medicare secondary benefits, the beneficiary should submit the VA explanation of benefits with the Medicare claim. If the VA notice does not clearly identify payments for particular services, the A/B MAC may ask the provider to help match VA payments to billed services; providers must assist or the contractor may make reasonable assumptions.

Submit the VA EOB or computer-generated notice with Medicare claim to support secondary payment claims.
If contractor requests assistance to match VA payments to billed services, respond to avoid assumptions or denials.

Application scenarioThis exclusion applies when items/services are furnished at no cost (e.g., free x‑rays or immunizations provided by health organizations), unless the reason for non‑charge is indigence or other permissible waiver circumstances.

Determinative factorThe key factor is the reason the particular individual is not charged—not merely that charges are waived for some individuals.

inv-56: VA Fee Basis Card — VA Outpatient Medical Treatment Information Card authorizing VA payment up to a specified monthly amount for treatment; constitutes VA ag...

What it isVA Outpatient Medical Treatment Information Card (fee basis ID card) is issued to certain veterans and constitutes an agreement by the VA to pay up to a specified monthly dollar amount for treatment of specific disabilities or conditions listed on the card.

Provider choiceThe veteran is not restricted in choice of physician and the physician selected does not have to inform the VA in advance; physicians who accept fee‑basis payment must accept the VA's usual and customary charge determination as payment in full.

Payment consequenceWhen a physician accepts VA fee‑basis payment, that VA payment is payment in full and neither the patient nor other parties can be charged the balance (except limited VA copayment rules).

inv-57: Y trailer code / code 36 (type code 3) — Health Insurance Master File indicator that a beneficiary has a VA fee-basis card and triggers A/B MAC contractor procedures to determine...

Master file indicator'Y' trailer code / code 36 (type code 3) is an automatic Health Insurance Master File notice indicating a beneficiary has a VA fee‑basis card.

Contractor actionReceipt of the Y trailer code triggers A/B MAC procedures to contact the physician or supplier to ascertain whether a claim has been or will be submitted to the VA; responses determine Medicare payment or denial.

Denial risk for nonresponseIf a physician who accepted assignment fails to respond to the contractor's inquiry within 30 days, the A/B MAC denies the Medicare claim; unassigned cases may be paid if no response.

inv-58: United States — Includes the 50 States, DC, Puerto Rico, Virgin Islands, Guam, Northern Mariana Islands, American Samoa, and for ship services, territori...

Geographic scope'United States' includes the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, American Samoa, and, for ship services, the territorial waters adjoining U.S. land areas.

Payment rulePayment may not be made for items or services furnished outside these U.S. jurisdictions, even if contracted for while in the U.S. or purchased from a U.S. firm.

Ship/foreign rulesFor ship services, territorial waters adjoining U.S. land areas are considered within the United States for coverage purposes; hospitals not physically situated in these jurisdictions are considered outside the U.S. and not payable.

inv-59: Individuals in custody of a penal authority — Considered public charges with generally no obligation to pay; Medicare is prohibited from paying for such care absent exceptional circum...

Presumption statusIndividuals in custody of a penal authority are generally considered public charges with no obligation to pay; Medicare is generally prohibited from paying for such care absent demonstration of specific legal obligation by the penal authority.

Rebuttal requirementsTo rebut the presumption, the penal authority must demonstrate that state/local law requires the individual to pay, that the authority bills all individuals who receive services, and that it pursues collection with the same vigor as other debts.

Related exclusionsOther payment exclusions (e.g., 42 CFR § 411.6 for federal providers or § 411.8 for government payments) may also apply when governmental entities furnish or pay for services.

inv-60: Hearing aid — Amplifying devices (air- or bone-conduction) that compensate for impaired hearing; excluded from Medicare coverage along with exams for f...

Hearing aid definitionHearing aids are amplifying devices (air‑ or bone‑conduction) that compensate for impaired hearing, including devices that provide acoustic or mechanical energy to the cochlea.

Exclusion statusHearing aids and examinations for prescribing, fitting, or changing hearing aids are excluded from Medicare coverage under section 1862(a)(7) and 42 CFR 411.15(d).

Distinction for implantsDevices that replace the function of the middle ear, cochlea, or auditory nerve (e.g., cochlear implants, auditory brainstem implants, osseointegrated implants) are classified as prosthetic devices and may be payable when hearing aids are medically inappropriate or cannot be used.

inv-61: Prosthetic auditory devices — Devices that replace function of middle ear, cochlea, or auditory nerve (e.g., cochlear implants, auditory brainstem implants, osseointeg...)

Definition and examplesProsthetic auditory devices are devices that replace the function of the middle ear, cochlea, or auditory nerve (examples: cochlear implants, auditory brainstem implants, osseointegrated implants).

Coverage conditionThese devices are payable by Medicare as prosthetic devices only when hearing aids are medically inappropriate or cannot be utilized due to congenital malformations, chronic disease, severe sensorineural hearing loss, or surgery.

Related policy noteMedicare contractors deny payment for items/services associated with hearing aids but provide policy for medically necessary treatment of complications of implantable hearing aids.

inv-62: Custodial care — Personal care assisting activities of daily living that does not require continuing medical or paramedical attention and is therefore exc...

DefinitionCustodial care is personal care that assists with activities of daily living (e.g., walking, bathing, dressing, feeding, toileting, diet preparation, supervision of self‑administered medications) and does not require continuing medical or paramedical attention.

Coverage statusCustodial care is excluded from Medicare coverage; institutional care below the SNF level is custodial.

Exception for servicesEven during custodial stays, individual medically necessary Part B services (e.g., physician periodic visits, ancillary services) may be covered if documented as reasonable and necessary.

inv-63: Not delivered directly or under arrangement — Nonphysician services provided to hospital or SNF inpatients that are not furnished by the hospital/SNF itself nor under an arrangement w...

DefinitionNonphysician services not delivered directly by the hospital/SNF or under arrangement with the facility are generally excluded when furnished to hospital or SNF inpatients.

Exceptions listExceptions include physicians' services for hospital inpatients, physician services (other than therapy) for SNF inpatients, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse‑midwives, qualified clinical psychologists, certified registered nurse anesthetists, and certain other enumerated services; A/B MAC may pay these if medically necessary.

SNF Part A exceptionsFor SNF Part A inpatients additional exceptions apply (e.g., home dialysis supplies and equipment, institutional dialysis services, some customized prosthetic devices, certain chemotherapy services), which may be covered if provided by authorized providers.