(Medicare Claims Processing Manual)

b. The item or service is ordinarily covered, but a question is raised as to whether it is reasonable and necessary in treatment of a particular diagnosis. Neither the provider, practitioner, or supplier nor the medical community has been advised that the item or service is not covered for that diagnosis. The case requires a determination by the contractors medical consultant or is referred to CMS for guidance. As in example (a), the liability of both parties should be limited.   c. The provider, practitioner, or supplier is newly arrived in the contractor service area, and the contractor has not yet communicated to the provider, practitioner, or supplier information in an existing general notice that the item or service is not cov ered, always or under certain circumstances.   NOTE:   If any provider, practitioner, or supplier could reasonably be expected, by virtue of normal medical knowledge, to know that the service was unneeded, the presumption suggested in the above examples would not apply.   The requester for indemnification has paid the provider, /practitioner or supplier all or some of the charges for items and services for which the beneficiarys liability has been waived under 1879 of the Act; and    The requester seeks indemnification by filing a written statement prior to the end of the sixth month following:   o The month in which payment was made to the provider, practitioner or supplier; or   o The month in which the contractor advised the beneficiary that the beneficiary was not liable for the noncovered items or services, whichever is later.   The contractor extends the six month time limit if good cause is shown. The contractor uses the principles for determining good cause outlined in Chapter 29, Appeals of Claim Decisions.   100.3 - Development and Documentation of Indemnification Requests  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  When the contractor receives a request or inquiry concerning indemnification directly from the beneficiary or the beneficiarys authorized representative, it must obtain the following information and documentation:    Identifying information sufficient for the contractor to locate the claim(s) for noncovered items or services for which payment has been made to the provider, practitioner, or supplier by the beneficiary or other person and for which the liability of the  beneficiary was limited. Ordinarily, the initial MSN or appeal determination suffices.    A statement on Form SSA -795, Statement of Claimant or Other Person, (see 100.10, Exhibit 4 ) to the effect that the requester paid the provider, practitioner, or supplier all or some of the charges for the noncovered items or services for which the beneficiarys liability was limited. The statement must specify the amount the requester has paid the provider, practitioner, or supplier. If the requester submits this information in a letter, the letter serves as the signed statement.   100.3.1 - Proof of Payment  (Rev. 1, 10- 01-03)  The following types of documentation are sufficient to establish that payment was made in the amount alleged:    An itemized bill from the provider, practitioner, or supplier reflecting the items and services for which the provider, practitioner, or supplier has been found liable and has received payment along with the payers cancelled check, money order receipt, or statement of receipt from the provider, physician, or supplier;    A summary bill from the provider, practitioner, or supplier which pertains to the items and services for which the provider, practitioner, or supplier has been found liable and has collected from the beneficiary or other person along with the payers cancelled check, money order receipt, or a statement of receipt from the provider, practitioner, or supplier showing the same total amount;    The payers cancelled check, money order receipt, or the statement of receipt from the provider, practitioner, or supplier if the contractors records reflect the provider, practitioner, or suppliers charges for the items and services for which the provider, practitioner, or supplier has been found liable and these equal the total of the amount paid; or    If the requester alleges that the provider, practitioner, or supplier did not furnish an itemized bill or a receipted statement and no other proof of payment is available, the contractor obtains a statement on Form SSA -795 to this effect from all parties involved, including the provider, physician, or supplier if possible. The statement should describe the circumstances, such as the manner of payment, and the reasons for not obtaining a receipt or any proof of payment. If there were any witnesses to the pay ment, the contractor obtains their statements on Form SSA-795. The contractor refers any questions as to the acceptability of proof of payment to the RO.  When the beneficiary or other person on behalf of the beneficiary initially contacts the SSO, that office sends the statements and evidence relevant to the indemnification claim to the appropriate contractor. If future contact with the beneficiary or other  person is necessary, the contractor proceeds with a direct contact unless the assistance of the SSO is needed.   100.4 - Beneficiary Requests Indemnification, but Had No Financial Interest in the Claim  (Rev. 1, 10- 01-03)  If a request for indemnification is received from the beneficiary but the beneficiary did not have full financial interest in the claim, then any other person(s) who made full or partial payment to the provider, practitioner, or supplier must be contacted to ascertain if that person wishes to file for indemnification.   If the individual declines to file for the indemnification payment, the SSO or contractor staff should assist in preparing a statement to that effect for the individuals signature. No payment is made in this instance; however, the contractor notifies all involved parties.   If more than one person helped pay the bill; e.g., sons and daughters of the beneficiary got together and each paid a portion of the bill; the contractor must determine the indemnification amount for each payer unless they all agree in writing that payment  is to be made to one person.  Explain this to the requester for indemnification in such instances.   100.5 - Questionable Indemnification Requests Procedure  (Rev. 1, 10- 01-03)  If the contractor receives a request for indemnification that does not appear to meet the conditions outlined in 100.2, and there is some uncertainty concerning the indemnification claim, it undertakes development to resolve the issues. If the issues cannot be adequately resolved, it obtains the assistance of the RO.   100.6 - Determining the Amount of Indemnification  (Rev. 1, 10- 01-03)  In accordance with 1879(b)  of the Act, the contractor indemnifies the beneficiary or other person(s) for actual charges paid to a provider, practitioner, or supplier, rather than the usual allowable charges as determined by the Medicare program, PPS amounts, or established per diem  rates that apply to certain provider, practitioner, or suppliers.  Additionally, 4096 of P.L. 100- 203 (OBRA of 1987) revises certain limitation on liability requirements for indemnification under 1879(b) of the Act. A beneficiary qualifying for indemnification for denied items and services furnished on or after January  1, 1988 is no longer responsible for paying deductible and coinsurance charges related to the denied claim. Where such indemnification is made, the contractor may not charge the beneficiarys Medicare utilization record for the denied items and services furnished.   100.7 - Notifying the Provider, Practitioner, or Supplier  (Rev. 1, 10- 01-03)  After the contractor has reviewed the claim for indemnification and the indemnification amount has been determined, it notifies the provider or physician/supplier of the proposed indemnification action. (A sample letter for these situations is contained in  100.10, Exhibit l .) The essential elements of this written notice are:    An explanation of the items and services for which the provider or physician/supplier is liable with reference to the original notice to the provider or physician/supplier;    A statement of the provision of 1879 which allows the program to indemnify the beneficiary and recover an overpayment from the provider, practitioner, or supplier;    An explanation of the amount determined payable to the requester for indemnification;   A statement that the amount the contractor has determined to be payable is paid to the requester and that it constitutes an overpayment to the provider, practitioner, or supplier which is to be recovered from future Medicare payments made to it;    A statement encouraging the provider, practitioner, or supplier to refund any amount(s) already collected; and    A reminder to the provider, practitioner, or supplier of his/her/its Medicare appeal rights.  If the provider, practitioner, or supplier does not respond to this notice within 15 days, the contractor makes payment to the requester in accordance with 100.8. If the provider, practitioner, or supplier disputes the indemnification or the amount to be paid, the contractor resolves any discrepancies before making payment. The payment process takes place even if the provider, practitioner, or supplier might appeal the contractors initial determination which held the provider, practitioner, or physician liable and that appeal is still pending at the time payment of the indemnification amount is to take place. If the appeal decision reverses the initial determination, then adjustments are to be made at that time in the contractor and provider, practitioner, or suppli er records. In all cases, the contractor encourages the provider, practitioner, or supplier to refund any and all amounts collected to this point. If the provider, practitioner, or supplier chooses to refund any money collected, the contractor verifies tha t such a refund has actually been made to the requester.   100.8 - Making Payment Under Indemnification  (Rev. 1, 10- 01-03)  The contractor pays the indemnification amount if the provider, practitioner, or supplier does not make refund. It takes action to recover this amount as an overpayment from the provider, practitioner, or supplier. Also, it issues a letter of explanation t o the requester for indemnification. (See 100.10, Exhibit 2 and Exhibit 3.) It sends a copy of this notice to the provider, /practitioner or supplier. The fundamental points of the notice include:    Name of the provider, practitioner, or supplier and dates the services in question were rendered; and    the amount of the indemnification check that the requester is to receive.   100.9 - Limitation on Liability Determination Does Not Affect Medicare Exclusion  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  A determination to limit the liability of the beneficiary, as well as a finding that the physicians or suppliers liability may be limited and program payment made, does not change noncovered items or services into covered items or services. This means th at the coverage question can still be raised as an issue at a level subsequent to an appeal determination that authorized program payment under 1879.  It also means that, for purposes of determining an amount in controversy for an appeal, payment made under 1879 should be disregarded because coverage is still at issue and the amount charged is still in controversy.  100.10 - Exhibits  (Rev. 1, 10- 01-03)  1.   Letter to Provider (Institutional Services).  2.   Letter to Beneficiary Who Requests Indemnification (Institutional Services).  3.   Letter to Someone Other Than Beneficiary Who Requests Indemnification.  4.   Letter to Practitioner or Supplier (Noninstitutional Services)  5.   Letter to Beneficiary Who Requests Indemnification (Noninstitutional Services)  6.   Letter to Someone Other Than Beneficiary Who Requests Indemnification (Noninstitutional Services)  7.   Form SSA -795, Statement of Claimant or Other Person.   Exhibit 1 - Letter to Provider  (Rev. 1, 10- 01-03)  To: Provider   Dear Administrator:  Under 1879 of the Social Security Act, a Medicare beneficiary is relieved of the liability for certain noncovered services if the beneficiary did not know and could not reasonably have been expected to know that the items or services were not covered. Fur ther, the law provides that the provider is liable if it is found that the provider knew or could reasonably have been expected to know that the items or services were not covered by Medicare.   On (date of limitation on liability notice), your facility was notified that the services provided to (beneficiarys name) during the period (_________) to (_________) were not covered under Medicare and that you were liable for these items and services.   (Requesters name) has submitted evidence that establishes that he paid your facility (amount paid) for the services received by (beneficiarys name). Because your facility has collected payment from (requesters name) after being determined liable for the se services, 1879(b) of the Act requires that the Medicare program make direct payment (indemnification) to him for this amount, for which (beneficiarys name) is responsible.   A check in the amount of (amount of check) is being sent to (requesters name). This indemnification payment represents an overpayment to your facility and it will be withheld from future Medicare payments due you unless you advise this office that refund of the incorrect amount(s) has been made to (requesters name).   If you do not agree with the amount determined to have been paid you, please contact this office in writing within 15 days of the date of this letter.   Sincerely yours,