(Medicare Claims Processing Manual)

150.8 - Processing Initial Denials  (Rev. 4250; Issued: 03- 08-10; Effective: 04 -08-19; Implementation: 04 -08-19)  The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare identification number. For purposes of this manual, Medicare beneficiary identifier references both the Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition period and after for certain business areas that will continue to use the HICN as part of their processes.    In any unassigned claim for medical equipment and supplies furnished on or after January 1, 1995, in which 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, send separate notices to both the beneficiary (a Medicare Summary Notice (MSN)) and the supplier (a remittance advice (RA)).   NOTE:   This instruction to send a remittance advice to the supplier in the case of denial of an unassigned claim is a specific requirement of 1834(a)(18)(C)  of the Act, incorporated by reference into 1834(j)(4)  and 1879(h)  of the Act, applicable to denials of claims for medical equipment and supplies furnished on or after January 1, 1995.  If the beneficiary signed an ABN which satisfies the requirements in subsection II.6 and the supplier included a GA modifier on the claim to that effect, do not make an automatic finding that the claim should be denied on the basis of 1862(a)(1) , 1834(a)(17)(B) , 1834(j)(1) , or 1834(a)(15)  of the Act, merely because the supplier submitted a GA modifier.  The fact that an ABN was given to the beneficiary will in no way prejudice the contractors determination as to whether there is or is not sufficient evidence to justify a denial.  In the c ase where there is an ABN, mail a standard denial MSN notice to the beneficiary.  If the beneficiary did not sign an ABN and the supplier included a GZ modifier on the claim to that effect, include, in addition to one of the denial notices in Chapter 21, Medicare Summary Notices, the following initial beneficiary notice in the MSN sent to the beneficiary.   A. Initial Beneficiary Notice   (MSN 8.54)   If the supplier knew that Medicare wouldnt pay and you paid, you might get a refund unless you signed a notice in advance.  Refunds may be delayed if the provider appeals.  Call your supplier if you dont hear anything within 30 days.  (MSN 8.54) -  In Spanish   Si pag por un servicio que su proveedor saba Medicare no iba a pagar, usted tiene derecho a un reembolso, a menos de que haya firmado un aviso por adelantado.  Los reembolsos se pueden demorar si el proveedor apela la decisin.  Llame a su proveedor si no escucha nada en 30 das .  B. Initial Supplier Notice   Include in the notice to the supplier the following;    The patients name Medicare beneficiary identifier;    A description of the item or service by procedure code, date and place of service, and amount of the charge;    The same denial notice included on the beneficiarys MSN, (see Chapter 21, Medicare Summary Notices); and    If the supplier submitted a GA modifier (signed ABN obtained), include in the notice to the supplier the following Notice 1.  However, if the supplier submitted a  -GZ modifier (a signed ABN was not obtained), include in the notice to the supplier the fol lowing Notice 2.  Notice 1.  Signed Advance Beneficiary Notice Obtained  (Remittance Advice Remark Code N124)   Payment has been (denied for the/made only for a less extensive) service/item because the information furnished does not substantiate the need for the (more extensive) service/item.  The patient is liable for the charges for this service/item as you informed the patient in writing before the service/item was furnished t hat we would not pay for it, and the patient agreed to pay.   Remittance Advice Remark Codes cannot be reported without a Claim Adjustment Reason Code and a Group Code.  For Notice 1 where ABN has been obtained, use CARC 96 -  Non -covered charge(s), and Group Code  PR (Patient Responsibility).  Or  Notice 2.  Signed Advance Beneficiary Notice Not Obtained  (Remittance Advice Remark Code N125)   Payment has been (denied for the/made only for a less extensive) service/item because the information furnished does not substantiate the need for the (more extensive) service/item.  If you have collected any amount from the patient, you must refund that a mount to the patient within 30 days of receiving this notice.  The law permits exceptions to this refund requirement in two cases: if you did not know, and could not have reasonably been expected to know, that Medicare would not pay for this service/item; or if you notified the beneficiary in writing before providing it that Medicare likely would deny the service/item, and the beneficiary signed a statement agreeing to pay.  Remittance Advice Remark Codes cannot be reported without a Claim Adjustment Reason Code and a Group Code.  For Notice 2 where ABN has NOT been obtained, use CARC 96 -  Non -covered charge(s), and Group Code  CO (Contractual obligation).   If an exception applies to you, or you believe the contractor was wrong in denying payment, you should request an appeal of this determination by the contractor within 30 days of receiving this notice.  Your request for appeal should include any additional  information necessary to support your position.  If you request an appeal within 30- days, you may delay refunding to the beneficiary until you receive the results of the appeal.  If the appeal determination is favorable to you, you do not have to make any refund.  If the appeal is unfavorable, you must make the refund within 15 days of receiving the unfavorable appeal decision.   You may request an appeal of the determination at any time within 120 days of receiving this notice.  An appeal requested after the 30 -day period does not permit you to delay making the refund.  Regardless of when an appeal is requested, the patient will b e notified that you have requested one, and will receive a copy of the determination.   The patient has received a separate notice of this denial decision.  The notice advises that he or she may be entitled to a refund of any amounts paid, if you should have known that Medicare would not pay and did not tell him or her.  It also instructs the  patient to contact your office if he or she does not hear anything about a refund within 30 days.  The requirements for refund are in 1834(a)(18)  of the Act (and in 1834(j)(4)  and 1879(h)  by cross -reference to 1834(a)(18) ).  Section 1834(a)(18)(B) specifies that suppliers which knowingly and willfully fail to make appropriate refunds may be subject to civil money penalties and/or exclusion from the Medicare program.  If you have any questions about this notice, please contact (contractor contact, t elephone number).   Ensure that the telephone number puts the supplier in touch with a knowledgeable professional who can discuss the basis for the denial or reduction in payment.  NOTE:   These procedures do not apply where the contractor automatically denies Part B services related to hospital inpatient services denied by the Quality Improvement Organization (QIO).  In those cases, the QIO is responsible for notifying the beneficiary and supplier of the refund requirements of 1834(a)(18) , 1834(j)(4) , and 1879(h)  of the Act and making the refund determination where appropriate.   150.9 - Processing Beneficiary Requests for Appeal  (Rev. 4250; Issued: 03- 08-10; Effective: 04 -08-19; Implementation: 04 -08-19)  The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare identification number. For purposes of this manual, Medicare beneficiary identifier references both the Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition period and after for certain business areas that will continue to use the HICN as part of their processes.   Where a beneficiary requests an appeal of the initial denial, process the appeal in the normal fashion except that, where the appeal results in a reversal, include the following special paragraph in the appeal notice sent to the beneficiary:   The supplier which furnished this item or service has been informed of this decision and advised that it may collect its full charge for the item or service.   Send the supplier which furnished the item or service a separate notice which clearly identifies the item or service for which payment is being made (i.e., include the patients name, Medicare beneficiary identifier, a description of the item or service billed by procedure code, date and place of service, and amount of the charge. Include the following language:   You were previously advised that Medicare payment could not be made for this item or service. However, after reviewing this claim, we have determined that payment may be made. Therefore, if you have already refunded the amounts you collected from the benef iciary for this item or service, you may recollect these amounts.  150.10 - Processing Supplier Requests for Appeal  (Rev. 1186, Issued:  02- 23-07; Effective:  01 -01-06; Implementation:  05 -23-07)  Where a supplier requests an appeal, notify the beneficiary as discussed in 150.7 . The appeal process consists of three stages, even though the supplier may be contesting only one issue (e.g., the supplier may assert that it did not know, and could not have reasonably have been expected to know, that Medicare would not pay for the ite ms or services).   150.10.1 - Appeal of the Denial of Payment  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  The first stage of the appeal is a new, independent, and critical reexamination of the facts regarding the denial of payment. If the contractor finds that the initial denial of payment was appropriate, go on to 150.10.2.  150.10.2 - Beneficiary Given Advance Beneficiary Notice and Agreed to Pay (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  A supplier which 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 supplier claims to have given an ABN to the beneficiary, the contractor will ask the supplier to furnish a copy of the ABN. Examine the ABN to determine whether it meets the standards in 40.3 and 50.  In the absence of acceptable evidence of advance beneficiary notice, go on to 150.10.3.  150.10.3 - Supplier Knowledge  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  A supplier which did not know and could not reasonably have been expected to know that Medicare would not pay for the medical equipment or supplies is not required to make a refund. If the supplier claims not to have had any such knowledge, the contractor will determine whether the supplier knew, or could reasonably have been expected to know, that Medicare would not pay by applying the knowledge standards provided in 150.5.  150.11 - Guide Paragraphs for Inclusion in Appeal Determination  (Rev. 1587, Issued: 09- 05-08, Effective: 03 -03-08, Implementation: 03- 01-09)  Upon completion of the appeal, the contractor will send the supplier an appeal notice. Send a copy to the beneficiary. If the initial payment determination is reversed to payment, include in the appeal notice the supplier notice language required in 150.9. Otherwise, include one of the following paragraphs concerning refund.   Paragraph 1. Refund Not Required -  Beneficiary Was Given Advance Beneficiary Notice and Agreed to Pay