(Medicare Claims Processing Manual)

NOTE: The grace period is applicable only where circumstances have permitted program payment under 1879 of the Act, i.e., limitation on liability was applicable both to the beneficiary and the provider of services. Where the A/B MAC (A) or (HH H) concurs with a URCs decision that covered care has ended, any payments made during the grace period after the URCs notice are made under the authority of that statutory provision (1814 of the Act) rather than under 1879.  110.2 - When to Make Limitation on Liability Decisions  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  A - Initial Claims   In implementing the limitation on liability provision, the contractor makes a coverage decision before making a limitation on liability decision. Section 1879 of the Act provides that limitation on liability can be allowed only in cases:  Where - (1) a determination is made that, by reason of 1862(a)(l) or (9) or by reason of a coverage denial described in subsection (g) of the Act, payment may not be made under Part A or Part B of this title for any expenses incurred for items or services furnished an individual by a provider of services... (Section 1879(a)(1) of the Social Security Act.)   NOTE:   Subsection (g) refers to home health service denials under 1814(a)(2)(C) and 1835(a)(2)(A), i.e., the patient is or was not confined to home; or the patient does or did not need skilled nursing care on an intermittent basis; and to hospice denials under 1861(dd)(3)(A) for services determined to be noncovered because the beneficiary was not te rminally ill.   Only after the contractor makes a decision that care is not reasonable or necessary, is custodial, is not reasonable and necessary for the palliation or management of terminal illness in hospice denials, or does not meet the homebound or intermittent nursi ng care requirements in home health service denials, or does not meet the terminally ill condition for hospice care, should a determination be made regarding limitation on liability. In every such case there will be two parts to the limitation on liability determination:  1. Whether and when the beneficiary knew or should have known that the services were noncovered, and  2. Whether and when the provider knew or should have known that the services were noncovered.   In any case where the provider gave the beneficiary notice that the services would be noncovered, the contractor will find that the provider knew that the services were noncovered.   B  Redetermination   At the redetermination level, again the contractor first makes a determination on the coverage issue. It considers the question of limitation on liability, if applicable, only if the initial adverse coverage decision is wholly or partially affirmed. (See Chapter 29, Appeals of Claim Decisions, for discussion of the appeals process.)   110.3 - Preparation of Denial Notices (Rev. 3560, Issued: 07- 15-16, Effective: 10 -17-16, Implementation: 10- 17-16)  The provider and beneficiary notification procedures discussed in 30 and 40 for determining liability do not change the instructions for the preparation and issuance of denial notices in Medicare Claims Processing Manual, Chapter 21, Medicare Summary Notices.   Accordingly, in cases where the services are found to be custodial care or not reasonable and necessary, or in the case of HHA services, are denied for technical reasons under 1814(a)(2)(C) or 1835(a)(2)(A) of the Act, or in the case of hospice services, are denied for technical reasons under 1861(dd)(3)(A)  of the Act:   An MSN denying the service(s) is sent to the beneficiary in cases where only the beneficiary is entitled to limitation on liability for any part of the noncovered stay.  The notice advises the beneficiary of the beneficiarys entitlement to indemnification  (see 100.) in the event the provider seeks payment from the beneficiary for the noncovered services.  It uses MSN messages 50.36.2:   It appears that you did not know that we would not pay for this service, so you are not liable.  Do not pay your provider for this service. If you have paid your provider for this service, you should submit to this office three things: (1) a copy of this notice, (2) your providers bill, and (3) a receipt or proof that you have paid the bill.  You must file your written request for payment within 6 months of the date of this notice. Future services of this type provided to you will be your responsibility.  All denial notices explain any decision regarding limitation on liability for either the provider, practitioner, or supplier or the beneficiary.  (See Chapter 21, Medicare Summary Notices.)   All denial notices, where either the beneficiary or provider, practitioner, or supplier has been found liable, must state that the provider has a right to a redetermination.  Providers, practitioners, and suppliers do not receive a separate written notification or copy of the MSN.  Providers, practitioners, and suppliers must utilize the coding information (e.g., Remittance Advice Remark Codes) conveyed via the Remittance Advic e (RA) to ascertain reasons associated with Medicare claims determinations affecting payment and applicable appeal rights and/or appeals information.  110.4 - Bill Processing  (Rev. 3187, Issued: 02- 06-15, Effective: 03 -06-15, Implementation: 03- 06-15)  Where payment is made under the limitation on liability provision, because it was determined that both the provider, practitioner, or supplier and the beneficiary did not know and could not have been expected to know that services were not reasonable and necessary, the usual deductible and coinsurance amounts apply.  When payment under limitation on liability is made for noncovered services, the contractor processes the bill in the same manner as any payment bill for covered services. For institutional services, if both the beneficiary and the provider have liability w aived, the A/B MAC (A) charges the number of days or visits paid for under the limitation on liability provision to the beneficiarys utilization record. For noninstitutional services, it applies deductible and coinsurance, and, where applicable, statutory limits on services.   For situations where the contractor determines that the provider, practitioner, or supplier knew or should have known that the services were not reasonable and necessary, and the beneficiary did not know and could not have been expected to know that the services were not reasonabl e and necessary, the beneficiary qualifies for indemnification and is not responsible for paying deductible and coinsurance charges related to the denied claim. Additionally, where such indemnification is made, the contractor does not charge the beneficiar ys Medicare utilization record days, visits, deductibles, or coinsurance (nor does it apply statutory limits, e.g., the psychiatric services Limit) for the denied items and services furnished.   The contractor follows the no- payment procedures in the relevant bill processing instructions in the following cases:    Either the beneficiary or the provider/practitioner/supplier, or both knew or should have known that services were not covered.    The provider, practitioner, or supplier knew or should have known that the services were not covered even though the beneficiary did not know. In these cases, the notice to the beneficiary will have informed the beneficiary that, even though no Medicare pa yment is being made, the beneficiary is not liable for the cost of the services and that the beneficiary may be indemnified for any improper payments the beneficiary made to the provider, practitioner, or supplier.   Where no Medicare payment is made because limitation on liability does not apply, or where payment ceases because of notice in a noncovered case, the normal provisions for no-payment situations apply.  For ancillary and outpatient services billed by institutional providers, the provider follows the instructions in Chapter 4 for hospitals, Chapter 7 for SNFs, and Chapter 10 for HHAs to process bills for these types of claims. Further, where ancillary services may not be paid under Part A because they were rendered in connection with a noncovered inpatient stay, the provider may still bill under Part B for ancillary services that may be covered under 1861(s)(3) -(9) of the Act.   110.5 - Contractor Review of ABNs  (Rev. 1, 10- 01-03)  110.5.1 - General Rules  (Rev. 1, 10- 01-03)  A.  Generally, notifiers (physicians, practitioners, suppliers, providers) are not required to routinely submit copies of ABNs (CMS -R-131) to their Medicare contractor along with their claims (see 50.6.3 ). This is based on a rebuttable administrative presumption that a certain modifier (GA) or occurrence code (32) on the claims signify that notifiers are using the proper standard form CMS -R-131 and are preparing and delivering ABNs in compliance with the instructions in this Chapter.  B.  Contractors may and should request CMS -R-131 ABNs (or any other ABN if the circumstances demand) be submitted to them for review in any circumstance in which the contractor is not confident that the administrative presumption is correct or in which the contractor has good reason to examine the ABNs of either particular notifiers or any class of notifiers. In the case where a contractor requests submission of copies of ABNs, the notifiers must submit such copies (see 50.6.3).   C.  All Hospital ABNs (HINNs) will be reviewed by QIOs (see 80.5) and all HHABNs and SNFABNs will be reviewed when the contractor performs complex medical review of the demand bills.  110.5.2 - Situations in Which Contractor Review of ABNs is Indicated  (Rev. 1, 10- 01-03)  Circumstances involving ABNs (viz., with respect to claims on which there is any payment denial, that include either or both the GA modifier and occurrence code 32, and that do not include a copy of the ABN) in which the contractor should not be confident that the administrative presumption, viz., that notifiers are using the proper form and are properly preparing and delivering ABNs, is correct and should request submission of ABNs include, but are not limited to, the following:   A.  Any claim where the contractor has any indication that the notifier may not have given proper notice, either no notice at all or defective notice, whether based on the contractors experience (with the notifier or class of notifiers, or with the class of i tems or services), on beneficiary complaint, on any other plausible allegation, or on any other reasonable basis. (Contractors, of course, may not make baseless or capricious requests for routine submission of ABNs.)   B.  Any claim for payment for more than one item or service. (In such cases, the contractor must ascertain which item(s) and/or service(s) the ABN specified and, therefore, to which claimed item(s) and/or service(s) the ABN applies with respect to assigning li ability to the beneficiary. Liability is shifted to the beneficiary only if the ABN accurately specifies the items or services and if the specified expected reason for denial turns out to be the actual reason for denial.)   C.  Any claim for an item or service for which there is a coverage frequency limit, and which includes one or more other items or services which are not frequency- limited. (Since ABNs may be given routinely for frequency- limited items and services, it is predi ctable that virtually all claims which include any frequency -limited item or service will include the GA modifier and/or occurrence code 32. When other, non- frequency -limited items or services are included on such a claim, any ABN specifying a frequency-limit as the expected reason for denial would not be applicable to the liability determination with respect to any item or service on such a claim that is not frequency -limited, nor with respect to any different frequency- limited item or service.)   D.  Any claim for an item or service for which there is a coverage frequency limit and on which there is a payment denial on any basis other than exceeding the frequency limit. (Since the notifier can be reasonably expected to have given routine notice on the basis of the frequency limit, and since an ABN specifying a frequency- limit as the expected reason for denial would not be applicable to the liability determination with respect to any item or service on such a claim that is denied on any basis other t han that particular frequency limit, such ABNs need to be reviewed for their correct application to any denial.)   E.  Any claim about which there is any suspicion of fraud or abuse, whether with respect to the notifier, the category of notifiers, or the class of items or services involved.  110.5.3 - Other Reasons for Contractor Request for Copies of ABNs  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  Other good reasons for contractors to request submission of copies of ABNs include, but are not limited to, the following:   A - Any need that arises from the appeals processes for documentation.  B - Any practical need to identify the particular items and/or services, dates of service, reasons for predicting Medicare denial of payment, or other pertinent facts about the beneficiary notification.