If you’ve noticed an increase in Medicare claim rejections lately, you’re not alone. A recent update to Medicare Beneficiary Identifiers (MBIs) is behind it, affecting nearly one million beneficiaries.
What Triggered the Change?
In May 2023, a significant data breach occurred at the Wisconsin Physicians Service Insurance Corporation (WPS). This key contractor processes Medicare claims for the Centers for Medicare & Medicaid Services (CMS).
This breach potentially exposed sensitive personal information of hundreds of thousands of Medicare beneficiaries, including their Medicare Beneficiary Identifiers (MBIs). MBIs are unique identification numbers used to protect patient information and ensure secure billing and processing of Medicare claims.
Why Claims Are Being Rejected
The main issue? Claims are being submitted using outdated MBIs, which no longer align with current system requirements. As not all payers and clearinghouses have fully updated their databases, these old IDs often lead to claim rejections labeled as “invalid member IDs.”
This highlights the growing need for effective claims denial and management strategies. By proactively updating patient data and working with experienced billing professionals, practices can reduce avoidable denials and maintain smooth reimbursement workflows.
How to Identify an Updated MBI
One of the challenges providers face is that updated Medicare Beneficiary Identifiers (MBIs) appear identical in format to the old ones. This makes it difficult to determine whether a patient’s MBI has been changed following the 2023 data breach.
What You Need to Know:
- Format remains the same:
Updated MBIs still follow the standard 11-character alphanumeric format (e.g., 1EG4-TE5-MK72). While the sequence of characters may be different, the structure is unchanged.
- Patients may be unaware:
Many Medicare beneficiaries received new Medicare cards, but some may not realize a replacement was issued. As a result, they may continue presenting outdated cards during check-in.
- Providers cannot verify by sight alone:
There is no visible indication on the card to show whether an MBI is outdated. The only reliable way to confirm its validity is through:
- Requesting the most recent Medicare card from the patient
- Performing an eligibility check
- Using the MBI Lookup Tool provided by your Medicare Administrative Contractor (MAC)
If a claim is denied due to an “invalid MBI” or “unrecognized member ID,” it is likely that the patient’s Medicare card has been updated, and the older identifier is no longer valid. Implementing regular eligibility verification can help identify these issues early and prevent delays in reimbursement.
How Medicare MBI Changes Are Impacting Providers
The recent update to Medicare Beneficiary Identifiers (MBIs), following a data breach in May 2023, has created challenges for healthcare providers across the board. Here’s a breakdown of how these changes are affecting daily operations and revenue cycles:
Increased Claim Denials
Providers are experiencing a spike in claim denials due to the use of outdated MBIs. Since new Medicare cards have been issued, any claims submitted using old member IDs may be rejected, resulting in immediate delays in reimbursement.
Delayed Reimbursements
Reworking and resubmitting denied claims takes time and slows down cash flow. Practices that depend on steady revenue streams are especially impacted, with potential interruptions to day-to-day operations.
Patient Confusion
Many patients are unaware they’ve received a new Medicare card. They continue presenting outdated ones, which confuse check-in and eligibility verification, adding pressure on the front desk and administrative staff.
Additional Burden on Billing Staff
Billing teams now have to verify and cross-check MBIs more frequently. Without an improved system in place or quick access to tools like the MBI Lookup Tool, staff may experience more manual work and growing backlogs.
Disruption to Workflow
With inconsistent system updates across providers and payers, normal billing workflows are disrupted. This leads to processing delays, missed filing deadlines, and overall inefficiencies in the revenue cycle.
How We Support Providers Through This
As a dedicated medical billing outsourcing partner, we help healthcare practices adapt quickly. Our team closely monitors all CMS updates, verifies eligibility proactively, retrieves updated MBIs when needed, and ensures clean claim submission. This reduces rejections, speeds up payments, and keeps your operations running smoothly.
How to Handle This Smoothly (and Keep Claims Moving)
At CloudRCM, we understand how frustrating claim denials can be, especially when they’re caused by factors outside your control, like Medicare’s sudden update of MBIs following a data breach. But the good news is that there are steps your practice can take right now to minimize delays and ensure timely reimbursement.
Here’s how we help providers deal with this challenge with confidence:
1. Always Request the Updated Medicare Card
If a claim is denied due to an “invalid MBI” or “unrecognized member ID,” it’s often because the patient received a new Medicare card, and the updated number hasn’t been shared yet. Our billing team proactively contacts patients (when permitted) or your front desk to request the most recent card before submitting or resubmitting claims.
2. Use the MBI Lookup Tool Efficiently
Don’t have the patient’s new card in hand? No problem. We utilize the eServices MBI Lookup Tool through your Medicare Administrative Contractor (MAC) to quickly retrieve the most current and valid MBI, saving valuable time and avoiding unnecessary rejections.
Note: Access to the MBI Lookup Tool requires provider portal registration and appropriate access levels, something our team handles better on your behalf.
3. Run Real-Time Eligibility (RTE) Checks
Before any claim is submitted, we run a Real-Time Eligibility check to confirm active coverage and match the patient’s MBI on file. This extra step helps us identify mismatches early, verify insurance status, and make sure you’re billing with the most accurate data possible.
4. Educate Staff and Patients Ahead of Time
Changes like these can be confusing for everyone, especially your front desk staff and patients. That’s why we also assist your practice with:
- Creating brief training guides for your staff on how to handle new Medicare cards.
- Drafting patient communication templates to inform them about the recent CMS updates and the importance of providing their new card.
5. Track Denials and Trends
We monitor claim denials in real time. If we notice a trend with MBIs triggering rejections, we immediately flag the issue, update our workflows, and get in touch with your team for quick resolution. No surprises. No backlog.
Timeline of MBI Updates and Claim Rejections
The impact of the May 2023 data breach continues to affect providers well into 2024 and beyond. To better understand how this situation unfolded and why providers are still seeing claim rejections, here’s a brief timeline:
| Date | Event |
| May 2023 | Data Breach: The breach at Wisconsin Physicians Service Insurance Corporation (WPS) exposed sensitive personal data, including Medicare Beneficiary Identifiers (MBIs) for hundreds of thousands of beneficiaries. |
| Late 2023 | New MBIs Issued: CMS issued new Medicare cards with updated MBIs to affected beneficiaries. |
| 2024-2025 | Ongoing Rejection Surge: As of early 2025, many healthcare providers are still facing a surge in claims being rejected due to outdated MBIs. |
Affected MAC Regions and States
The impact of the May 2023 data breach and the resulting Medicare Beneficiary Identifier (MBI) updates has been more significant in certain regions. Providers in these areas should be particularly vigilant about claim rejections.
Key MACs and Affected Regions:
- Wisconsin Physicians Service (WPS): Primarily affects Midwestern states like Wisconsin, Minnesota, and Michigan. These areas are seeing higher claim rejection rates.
- Noridian Healthcare Solutions: Covers the Western U.S., including California, Montana, and North Dakota. Providers in these states may experience delays due to outdated MBIs.
- National Government Services (NGS): Serves Eastern states such as New York, Ohio, and Pennsylvania. Ongoing MBI updates may cause claim issues in these regions.
- CGS Administrators: Includes Illinois, Indiana, and Kentucky, where providers should expect potential claim disruptions.
States to Watch:
- Midwest: Wisconsin, Michigan, Minnesota, South Dakota
- West: California, Montana, Nevada
- Northeast: New York, Ohio, Pennsylvania
Final Thought:
Adapting to changes like the recent Medicare MBI update can be challenging, but with proactive steps and the right support, your practice can minimize disruptions and ensure smooth, timely reimbursements. At CloudRCM, we’re committed to staying ahead of these updates, handling the complexities of Medicare claims, and keeping your revenue cycle on track.
CMS press release Wisconsin Physicians Service Insurance Corporation (WPS).
FAQs:
Why Are Medicare Claims Being Rejected Due to Invalid MBIs in 2024?
Claims are being rejected because outdated Medicare Beneficiary Identifiers (MBIs) are being submitted after recent updates. Many payer and clearinghouse systems have not yet updated their databases, leading to “invalid member ID” rejections.
What is the Medicare Beneficiary Identifier (MBI)?
The MBI is a unique, 11-character alphanumeric ID assigned to each Medicare beneficiary to protect their personal information and replace the old Social Security Number-based Health Insurance Claim Number (HICN).
Did Medicare have a security breach?
Yes, in May 2023, a data breach at Wisconsin Physicians Service (WPS), a Medicare contractor, exposed the personal information of nearly one million beneficiaries, prompting CMS to issue new MBIs.
