Audit and Compliance



The Centers for Medicare & Medicaid Services (CMS) is required to remove Social Security Numbers (SSN) from all Medicare cards by April 2019, replacing the current SSN-based Health Insurance Claim Number (HICN) on the cards with a new unique Medicare number, called the Medicare Beneficiary Identifier (MBI). The latest update from CMS reveals members will receive their new cards a year ahead of schedule, with mailings set to begin in the next 60 days.

The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 mandates the removal of the SSN-based HICN from Medicare cards to address current risk of beneficiary medical identity theft. There's no indication why CMS is issuing the new cards a year early, but one might speculate that the recent data breaches with several health insurance carriers may be a contributing factor. Medicare is the last major health insurer to eliminate SSNs from the insurance ID card.

For providers, this change will mean transitioning from using the HICN to using the new MBI on all transactions for the 58.9 million Americans covered by the Medicare program. (As of November 2017, 38.5 million were enrolled in traditional Medicare, which covers hospital and medical insurance, and 20.4 million were enrolled in a Medicare Advantage Plan, also known as Medicare Part C.)

The Changes
A&C FEB 2018The new card will be known as the Medicare Health Insurance card, and the new MBI (shown below) will be an 11-digit alpha numeric number randomly assigned to each plan member. In addition to assigning an MBI to active enrollees, CMS plans to enumerate 90 million deceased or inactive enrollees, reportedly so that providers can continue to adjust claims and submit appeals after the transition period is over.

How Providers should prepare for the Change
The HICN is used for processing claims and determining eligibility for services across multiple entities, including the Social Security Administration, Railroad Retirement Board, States, Medicare providers, and other types of health insurance plans.

Providers and other stakeholders should ensure they are advising patients of the upcoming change in beneficiary cards and recommending they look for their new cards in the mail starting in April. CMS has provided handouts that providers may distribute in their facilities and include with any mailings to patient.

CMS has established a transition period that will permit providers to continue to report the old HICN on claims. During this transition, Medicare will return both the HICN and the new Medicare ID number on provider remittances. The transition period will expire December 2019. Thereafter, providers MUST use the new MBIs on all transactions. Providers will able to look up patients' new MBIs through their Medicare Administrative Contractor's secure web portal starting in June 2018.

In addition to providers notifying their patients of this massive change, all provider systems that contain patients' MBIs must be updated to handle the new number and its new format. Since there is no intelligence built into the number, providers will be unable to perform any data integrity checks to ensure the number is accurate. In addition, providers must work with their trading partners so that they will to able to receive the new numbers.

Medicare Health Insurance Card Mailing Strategy
Starting April 2018, CMS will begin mailing new Medicare cards to all members on a flow basis by geographic location and other factors and people with Medicare will be able to check the status of card mailings on Medicare.gov. These mailings will follow the sequence outlined below. Additional details on timing will be available as the mailings progress.

Note that CMS does not define "After June 2018." We assume that they do not want to be held to a specific mail date in the event they encounter mailing problems. They also do not currently state how they will handle "return mail" and attempt to locate current addresses for these beneficiaries.

Medicare Card Mailing Schedule

Mailing WaveStates IncludedMailing Dates
1Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West VirginiaApril - June 2018
2 Alaska, American Samoa, California, Guam, Hawaii, Northern Mariana Islands, OregonApril - June 2018
3Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, North Dakota, Oklahoma, South Dakota, WisconsinAfter June 2018
4Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, VermontAfter June 2018
5Alabama, Florida, Georgia, North Carolina, South CarolinaAfter June 2018
6Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Texas, Utah, Washington, WyomingAfter June 2018
7Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Puerto Rico, Tennessee, Virgin IslandsAfter June 2018