(Medicare Claims Processing Manual)

You were previously advised that Medicare payment could not be made for this service. However, after reviewing this claim, we have determined that payment may be made (for a less extensive service). Therefore, if you have already refunded the amounts you c ollected from the beneficiary for this service, you may recollect (these amounts/any amounts which do not exceed your maximum allowable actual charge (MAAC) for the less extensive service for which payment has been made).   140.8 - Processing Physician Requests for Appeal  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  Where a physician requests an appeal, the contractor will notify the beneficiary as discussed in 140.5. The appeal process consists of three stages, even though the physician may be contesting only one issue (e.g., the physician may assert that he/she did not know, and could not have reasonably have been expected to know, that Medicare would not pay for the services).   140.8.1 - Appeal of the Denial or Reduction in Payment  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  The first part of the appeal is a new, independent, and critical reexamination of the facts regarding the denial or reduction in payment. If the contractor finds that the initial denial or reduction in payment was appropriate, the contractor will go on to 140.8.2.  140.8.2 - Beneficiary Given ABN and Agreed to Pay  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  A physician who has given the beneficiary an ABN and has obtained the beneficiarys signed statement agreeing to pay, is not required to make a refund. If the physician claims to have given an ABN to the beneficiary, the contractor will ask the physician t o furnish a copy of the signed ABN. The contractor will examine the ABN to determine whether it meets the guidelines in 140.4. In the absence of acceptable evidence of advance notice, the contractor will go on to 140.8.3.  140.8.3 - Physician Knowledge  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  In determining whether the physician knew, or could reasonably have been expected to know, that Medicare would not pay for the services, the contractor will apply the same rules that are applicable in determining physician liability under 1879 of the Act. (See 30.2.)   140.9 - Guide Paragraphs for Inclusion in Appeal Determination  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  The contractor, upon completion of its appeal, will send the physician an appeal notice and send a copy to the beneficiary. If the initial payment determination is reversed to full or partial payment, the contractor will include in the appeal notice the physician notice language required in 140.7. Otherwise, the contractor will include one of the following paragraphs concerning refund.  Paragraph 1. Refund Not Required -  Beneficiary Was Given Advance Beneficiary Notice and Agreed to Pay   Under 1842(l) of the Social Security Act, a physician who does not accept assignment and collects any amounts from a Medicare beneficiary for services for which Medicare does not pay on the basis of 1862(a)(1) of the Social Security Act, must refund these amounts to the beneficiary. However, a refund is not required if, prior to furnishing the services, the physician notified the beneficiary in writing that Medicare would not pay for the services and the beneficiary signed a statement agreeing to pay for them. After reviewing this claim, we have determined that you informed the beneficiary in advance that Medicare does not pay for the above services and the beneficiary agreed to pay for them. Therefore, you are not required to make a refund in this case. The beneficiary has been sent a copy of this notice.  Paragraph 2. Refund Not Required -  Physician Did Not Know That Medicare Would Not Pay For the Services   Under 1842(1) of the Social Security Act, a physician who does not accept assignment and collects any amounts from a Medicare beneficiary for services for which Medicare does not pay on the basis of 1862(a)(1) of the Social Security Act, must refund thes e amounts to the beneficiary. However, a refund is not necessary if the physician did not know, and could not reasonably have been expected to know, that Medicare does not pay for the services. After reviewing this claim, we find that you did not know, and could not reasonably have been expected to know, that Medicare would not pay for the above services. Therefore, you are not required to make a refund in this case. Upon your receipt of this notice, it is considered that you now have knowledge of the fact that Medicare does not pay for (description of services) for similar conditions. The beneficiary has been sent a copy of this notice.   Paragraph 3. Adverse Action on Denial -  Refund Required   Under 1842(1) of the Social Security Act, a physician who does not accept assignment and collects any amounts from a Medicare beneficiary for services for which Medicare does not pay on the basis of 1862(a)(1) of the Social Security Act, must refund thes e amounts to the beneficiary. A refund is not required if (1) the physician did not know, and could not reasonably have been expected to know, that Medicare would not pay for the services; or (2) the physician notified the beneficiary in writing before fur nishing the services that Medicare would not pay for the services and the beneficiary signed a statement agreeing to pay for them. After reviewing this claim, we have determined that neither of these conditions is met in this case. You must therefore refund any amount you collected for these services within 15 days from the date you receive this notice. A refund must be made within 15 days from receipt of this notice for you to be in compliance with the law. If we paid for a less extensive procedure, you ne ed refund only the amount which exceeds your maximum allowable actual charge (MAAC) for the less extensive procedure. The beneficiary has been sent a copy of this notice. Physicians who knowingly and willfully fail to make appropriate refunds may be subjec t to assessments of double the violative charges, civil money penalties (up to $2000 per violation), and/or exclusion from the Medicare program for a period of up to 5 years.   140.10 - Physician Fails to Make Refund  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  Under 1842(1)  of the Act, a physician who knowingly and willfully fails to make refund within the time limits in 140.3 may be subject to sanctions (i.e., civil money penalties and/or exclusion from the Medicare program). Generally, the failure of a physician to make a refund comes to the contractors attention as a result of a beneficiary complaint to the contractor, Social Security Administration (SSA), or CMS. If necessary, the contractor will contact the beneficiary to clarify the information in the co mplaint and to determine the amount the beneficiary paid the physician for the denied services. If the contractor determines that a physician failed to make a refund, it will contact the physician in person or by telephone to discuss the facts of the case. The contractor will attempt to determine why the amounts collected have not been refunded and will explain that the law requires that the physician make refund to the beneficiary and that if he/she fails to do so, the OIG may impose civil money penalties and assessments, and sanctions. The contractor will make a dated report of contact and include the information relayed to the physician and the physicians response. The contractor will recontact the beneficiary in 15 days to determine whether the refund has been made. When the amount in question is $300 or more or where there are at least three outstanding violations by the physician, the contractor will contact the Sanctions Coordinator in the appropriate field office of the OIG by telephone to discuss whether referral to OIG  is appropriate. If the case should be referred, the contractor will make the referral to the regional OIG Sanctions Coordinator in accordance with the procedures following. The contractor should not make a referral until the physicians appeal rights have  been exhausted, or until the time limit for an appeal has passed.   140.11 - OIG Referral Procedures  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  The contractor will include in the sanction recommendation to the OIG/FO (to the extent appropriate) the following:    Identification of the Subject -  The subjects name, address and a brief description of the subjects special field of medicine.    Origin of the Case -  A brief description of how the violations were discovered.    Statement of Facts -  A statement of facts in chronological order describing each failure to comply with the refund requirements in 1842(1).    Documentation -  Copies of written correspondence and written summaries of any meetings or telephone contacts with the beneficiary and the physician regarding the physicians failure to make refund.    Other Significant Issues -  Any information that may be of value in the event of a hearing to bar a physician from receiving Medicare payment.   140.12 - Imposition of Sanctions  (Rev. 1, 10- 01-03)  Section 1842(1)(3)  of the Act provides that if a physician knowingly and willfully fails to make a required refund, the Secretary may impose the sanctions provided in 1842(j)(2) of the Act. These include assessments of double the violative charges, civil money penalties ( up to $2000 per violation), and/or exclusion from the Medicare program for a period of up to five years. However, sole community physicians and physicians who are the sole source of an essential specialty are not excluded from the program. The OIG makes determinations to levy a monetary penalty or program exclusion based upon a failure to make a refund.   150 - DMEPOS Refund Requirements (RR) Provision for Claims for Medical Equipment and Supplies under 1834(a)(18), 1834(j)(4), and 1879(h) - Instructions for Contractors and Suppliers  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03 -01-09)  Following are the procedures for implementing 1834(a)(18), 1834(j)(4) and 1879(h) of the Act. Under 132 of SSAA -1994 (Social Security Act Amendments of 1994, P.L. 103-432) which adds 1834(a)(18) to the Act, and under 133 of SSAA -1994 which adds 1834(j)(4) and 1879(h) to the Act, new liability protections for Medicare beneficiaries affect suppliers of medical equipment and supplies. All suppliers who sell or rent medical equipment and supplies to Medicare beneficiaries are subject to the refund provis ions of 1834(a)(18), 1834(j)(4) and 1879(h) of the Act. Beneficiaries liability for payment for certain items and services, that is, for otherwise covered medical equipment and supplies as defined in 150.10 , which are furnished on or after January 1, 1995, and for which Medicare payment is denied for one of several reasons specified below, may be limited as follows. For both assigned and unassigned claims, for which the supplier knew or should have known of  the likelihood that payment would be denied ( that is, the supplier is held to be liable) and for which the beneficiary did not know, the beneficiary has no financial responsibility and the refund provisions of the Act apply in virtually all cases. The single exception to this rule of applicability is  that, with respect to medical equipment and supplies for which the supplier accepted assignment and for which payment is denied because the item or service is not medically reasonable and necessary under 1862(a)(1) of the Act, the 1879 Limitation on Lia bility provisions which applied to such denials prior to January 1, 1995, still apply. The refund provisions do not apply to these denials.   In claims for medical equipment and supplies, payment reductions may be based on partial denials of coverage for additional expenses not attributable to medical necessity. A medical necessity partial denial is the denial of coverage for the unnecessary component of a covered item or service, when that component is in excess of the beneficiarys medical needs. Any such excess component is not medically reasonable and necessary and therefore, under 1862(a)(1) of the Act, it is not covered. A partial denial  may be used to base payment on the least costly, medically appropriate, alternative. The beneficiary liability protections of 1879 and of 1834(j)(4) of the Act apply to any payment reductions due to partial denials of coverage for medical equipment or s upplies on the basis of medical necessity under 1862(a)(1) of the Act. (See 140 for its similar provision for the applicability of the refund requirements under 1842(l) of the Act to partial denials of coverage for physicians services.)