(Medicare Claims Processing Manual)

 If the supplier does not request an appeal of the initial denial or reduction in payment within that time, the refund must be made to the beneficiary within 30 days after the date the supplier receives the remittance advice (RA).    If the supplier requests an appeal within 30 days of receipt of the notice of the initial determination, the refund must be made to the beneficiary within 15 days after the date the supplier receives the notice of the contractors determination of the su ppliers appeal.   150.5 - Supplier Knowledge Standards for Waiver of Refund Requirement  (Rev. 1, 10- 01-03)  A refund is not required of the supplier if the supplier did not know and could not reasonably have been expected to know that Medicare would not pay for the medical equipment or supplies.  Following are the knowledge standards applicable to the different types of denials.   150.5.1 - Knowledge Standards for 1862(a)(1) Denials  (Rev. 1, 10- 01-03)  In determining whether the supplier knew, or could reasonably have been expected to know, that Medicare would not pay on the basis of medical necessity, apply the same rules that are applicable in determining supplier liability under 1879 of the Act.   150.5.2 - Knowledge Standards for 1834(a)(15) Denials  (Rev. 1, 10- 01-03)  150.5.2.1 - Denial of Payment in Advance  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  Denial of payment in advance under 1834(a)(15)  of the Act refers both to cases in which the supplier requested an advance determination and the contractor determined that the item would not be covered, and to cases in which the supplier failed to request an advance determination when such a request is  mandatory.  150.5.2.2 - When a Request for an Advance Determination of Coverage Is Mandatory  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  A request for an advance determination of coverage of medical equipment and supplies is mandatory under 1834(a)(15)(C)(i) & (ii) of the Act, respectively, when:    The item is on the list developed by the Secretary under 1834(a)(15)(A) of items which are frequently subject to unnecessary utilization in your contractor service area; or    The supplier is on the list developed by the Secretary under 1834(a)(15)(B) of the Act of suppliers for which a substantial number of claims have been denied as not medically reasonable and necessary under 1862(a)(1) of the Act or the Secretary has identified a pattern of overutilization resulting from the business practice of the supplier.   150.5.2.3 - When a Request for an Advance Determination of Coverage Is Optional  (Rev. 1, 10- 01-03)  A request for an advance determination of coverage of medical equipment and supplies is optional under 1834(a)(15)(C)(iii) of the Act when the item is a customized item (other than inexpensive items specified by the Secretary) and the patient to whom the item is to be furnished or the supplier requests an advance determination.   150.5.2.4 - Presumption for Constructive Notice  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  In determining whether the supplier knew, or could reasonably have been expected to know, that Medicare would deny payment in advance under 1834(a)(15) of the Act, presume that the supplier knew that Medicare would not pay in all cases in which the suppli er failed to request a mandatory advance determination, on the basis of constructive notice of the lists of items and of suppliers to the supplier through the contractors regular newsletter/bulletin publication.  The supplier would have to submit convinci ng evidence to the contrary to rebut this presumption.   150.5.2.5 - Presumption When Advance Determination was Requested  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  In determining whether the supplier knew, or could reasonably have been expected to know, before furnishing the item, that Medicare would deny payment in advance under 1834(a)(15) of the Act, presume that the supplier knew that Medicare would not pay in all those cases in which a request for advance determination was made, and the contractor denied payment in advance on the basis that the item is not reasonable and necessary under 1862(a)(1) of the Act or that the item is not covered. This is a nonrebutta ble presumption.  150.5.2.6 - Presumption for Listed Overutilized Items  (Rev. 1, 10- 01-03)  Any denial of a claim for a particular item furnished by a particular supplier because the item is on the 1834(a)(15)(A) list of potentially overutilized items is actual notice to that supplier that an advance determination must be requested for all futur e claims for that item, and for any other items which are identified in the same notification of denial as being on the list of potentially overutilized items. Presume, on that basis, that that supplier has knowledge that an advance determination must be r equested for all future claims for any and all items which are identified in the notification of denial as being on the list of potentially overutilized items.  This is a nonrebuttable presumption.   150.5.2.7 - Presumption for Listed Suppliers  (Rev. 1, 10- 01-03)  Any denial of a claim for an item furnished by a particular supplier because the supplier is on the 1834(a)(15)(B) list of suppliers, is actual notice to that supplier that an advance determination must be requested for all future claims for any item of m edical equipment and supplies which that supplier furnishes.  Presume, on that basis, that that supplier has knowledge that an advance determination must be requested for all future claims for any and all items of medical equipment and supplies which it fu rnishes.  This is a nonrebuttable presumption.  150.5.2.8 - Presumption for Medical Necessity  (Rev. 1, 10- 01-03)  In the case of an optional request for an advance determination of coverage of a customized item of medical equipment and supplies under 1834(a)(15)(C)(iii) of the Act by the patient to whom the item is to be furnished or the supplier, in determining whet her the supplier knew, or could reasonably have been expected to know, that Medicare would deny payment in advance under 1834(a)(15) of the Act, presume that the supplier knew that Medicare would not pay in all cases in which you denied payment in advance  on the basis that the item is not reasonable and necessary under 1862(a)(1) of the Act or that the item is not covered.  This is a nonrebuttable presumption.  150.5.2.9 - Presumption About Beneficiary Knowledge  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  Presume that a Medicare beneficiary does not know, and cannot reasonably be expected to know, that Medicare will deny, or has denied, payment in advance under 1834(a)(15) of the Act unless and until the beneficiary has received a proper advance beneficiar y notice (ABN) to that effect from the supplier before the item is furnished to them.   150.5.3 - Knowledge Standards for 1834(a)(17)(B) Denials  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  In determining whether the supplier knew, or could reasonably have been expected to know, that Medicare would not pay because of the prohibition on unsolicited telephone contacts under 1834(a)(17)(B)  of the Act, presume that the supplier knew that Medicare would not pay on the basis of constructive notice to the supplier through publication of the prohibition on such contacts through the contractors professional relations function, as well as publici ty through trade organizations own publications, professional training, conventions, etc.  The supplier would have to submit convincing evidence to the contrary, showing ignorance of the prohibition on the suppliers part, to rebut this presumption.  A single denial of a claim for any item furnished by a particular supplier on the basis of the prohibition on unsolicited telephone contacts shall be held to be actual notice of the prohibition to that supplier; and that supplier shall be considered, on that basis, to have had knowledge that payment would be denied for all such future claims, even those for different items of medical equipment and supplies.  That is, after a single denial under 1834(a)(17)(B) of a claim by a particular supplier, the presumption of that suppliers knowledge becomes nonrebuttable.   150.5.4 - Knowledge Standards for 1834(j)(1) Denials  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  In determining whether the supplier knew, or could reasonably have been expected to know, that Medicare would not pay due to failure to meet supplier number requirements under 1834(j)(1) of the Act, presume that the supplier knew that Medicare would not pay.  Every supplier is expected to know whether or not it has a supplier number, and to know that Medicare will not make payment for medical equipment and supplies furnished a Medicare beneficiary by a supplier which does not have a supplier number.  All suppliers should have this knowledge on the basis of the contractors professional relations function, as well as publicity through trade organizations own publications, professional training, conventions, etc.  The supplier would have to submit extraordinary evidence to the contrary to rebut this presumption.  If a supplier submits evidence the contractor finds credible, consult your regional office before rebutting the presumption of supplier knowledge.  After a single denial under 1834(j)(1) of a claim by a particular supplier, the presumption of that suppliers knowledge becomes nonrebuttable.  150.5.5 - Additional Knowledge Standards for All Medical Equipment and Supplies Denials  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  The contractor may make a determination, as provided for in Section I.2.D.2.b. imputing a lack of knowledge to a supplier, on the basis that the supplier did not know and could not reasonably have been expected to know that Medicare would not pay, if the s upplier did not know and could not reasonably have been expected to know that a purchase (or rental) of medical equipment or supplies involved a Medicare beneficiary.   150.6 - Advance Beneficiary Notice Standards for Waiver of Refund Requirement  (Rev. 1, 10- 01-03)  A refund is not required of the supplier if, before the medical equipment or supplies were furnished, the beneficiary was informed by the supplier that Medicare would not pay for the specific item or service and, after receiving such an advance beneficiary notice, the beneficiary agreed to pay for the item or service. This requirement for advance notice may be satisfied by a properly executed Advance Beneficiary Notice (ABN) Form CMS -R-131 used in accordance with the instructions at 50.  150.7 - Appeal Rights (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  Nonparticipating suppliers have the same rights to appeal the contractors determination in an unassigned claim for medical equipment and supplies if the contractor denies payment on the basis of 1862(a)(1)  , 1834(a)(17)(B)  , 1834(j)(1) , or 1834(a)(15) of the Act as they or participating suppliers have in assigned claims. These rights of appeal also extend to determinations that a refund is required either because the supplier knew or should have known that Medicare would not pay for the item or service , or because the beneficiary was not properly informed in writing in advance that Medicare would not pay or was unlikely to pay for the item or service. In addition to the beneficiarys right to appeal the contractors decision to deny payment on the basis  of 1862(a)(1), 1834(a)(17)(B), 1834(j)(1), or 1834(a)(15) of the Act, the beneficiary becomes a party to any appeal request filed by the supplier. Since the beneficiary and the supplier may have adverse interests in a decision regarding refund, it is essential to notify the beneficiary in any case in which the supplier requests an appeal of the denial or asserts that a refund is not required because one of the conditions in 150.5 is met. (See Chapter 29, Appeals of this Claims Decision, for detailed appeals instructions.)   150.8 - Processing Initial Denials  (Rev. 4250; Issued: 03- 08-10; Effective: 04 -08-19; Implementation: 04 -08-19)