(Medicare Claims Processing Manual)

The beneficiary, healthcare provider, or supplier has the right to appeal both the issue of coverage for the claim and determination of liability.  For purposes of determining the amount in controversy for an appeal of the coverage determination, payment m ade under 1879 of the Act should be disregarded.  For more information see Chapter 29 of this manual, Appeals of Claims Decisions. 30.4 - Fraud, Abuse, Patently Unnecessary Items and Services  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)  Generally, the protection under the FLP provisions cannot be afforded to a healthcare provider or supplier if a formal finding of fraud or abuse has been made with regard to a healthcare providers or suppliers billing practices.  In cases where a formal finding of fraud or abuse is made, an immediate finding of liability for the healthcare provider or supplier results.  Abuse exists when a healthcare provider or supplier furnishes item and/or service that are inconsistent with accepted sound medical pract ices, are clearly not within the concept of reasonable and necessary as defined by law or regulations, and, if paid for, would result in an unnecessary financial loss to the program.  The Medicare contractor will also make an immediate finding of liability  in situations where a healthcare provider or supplier furnishes items and/or services that are so patently unnecessary that all healthcare providers or suppliers could reasonably be expected to know that they are not covered.         40 - Written Notice as Evidence of Knowledge  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)  One regulatory basis for determining beneficiary knowledge can be found at 42 CFR 411.404.  Under these regulations, there is a presumption that the beneficiary knew, or could reasonably have been expected to know, that Medicare payment for an item or service would be denied if written notice was given to the beneficiary that the items or services were not covered.  A written notice that a beneficiary received may be considered as evidence of prior knowledge with respect to such same or similar item(s) and/or service(s) that is denied Medicare payment for the same reason in both cases.   In accordance with 42 CFR 411.404, a written notice of Medicare denial of payment must contain sufficient information to enable the beneficiary to understand the basis for the denial of the item and/or service that otherwise might be paid for, that Medicare certainly or probably will not pay for in that particular occasion.   The written notice allows the beneficiary to:    make an informed decision whether or not to receive the item and/or service, and    better participate in his/her own health care treatment decisions.    If the healthcare provider or supplier expects payment for the item and/or service to be denied by Medicare, the healthcare provider or supplier must advise the beneficiary in advance that, in its opinion, the beneficiary will be personally and fully responsible for payment.  To be personally and fully responsible for payment means that the beneficiary will be liable to make payment out -of-pocket, through other insurance coverage (e.g., employer group health plan coverage), or through Medicaid or other Federal or non -Federal payment source.    40.1 - Sources of Written Notice  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)  Generally, the written notice of the likelihood of Medicare payment denial (e.g. an ABN, Form CMS -R-131) should be furnished to the beneficiary:    By a healthcare provider or supplier before the item and/or service is furnished;    After the Medicare contractor, during the course of the beneficiarys stay, advised the healthcare provider or supplier that covered care had ceased;    By a healthcare provider or supplier utilization review committee that, on admission or during the patients stay, advised that the beneficiary  no longer required covered care;    By the Medicare contractor; or    By a qualified notifier so that the beneficiary may have confidence in and rely upon the accuracy and credibility of the notice.  40.2 - Written Notice Standards  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)   The healthcare provider or supplier should issue a written notice each time, and as soon as, it makes the assessment that Medicare payment certainly or probably will not be made in order to transfer potential financial liability to the beneficiary.  A healthcare provider or supplier, should notify a beneficiary by means of timely and effective delivery of a written notice document to a qualified recipient.  Any written notice should meet the following written notice standards as evidence of the beneficiary s knowledge for the purposes of the FLP provisions, except as otherwise explicitly specified.  A notification which does not meet the following written notice standards may be ruled invalid and may not serve to protect the interests of the notifier.    A written notice will not be considered as acceptable evidence of knowledge if the written notice is:   Unreadable, illegible, or otherwise incomprehensible, or the individual beneficiary is incapable of understanding the written notice due to the particular circumstances (even if others may understand);    Given during any emergency, or the beneficiary is under great duress, or the beneficiary is, in any way, coerced or misled by the notifier, by the contents of the written notice, and/or by the manner of delivery of the written notice;    Routinely given to all beneficiaries for whom the notifier furnishes items and/or services;    No more than a statement to the effect that there is a possibility that Medicare may not pay for the items or services; or    Delivered to the beneficiary more than one year before the items and/or services are furnished.   NOTE:  A previously furnished written notice is acceptable evidence of written notice for current items and/or services if the previous written notice cites similar or reasonably comparable items and/or services for which denial is expected on the same basis in both cases.  A written denial (on the same basis in both cases) of payment from a Medicare contractor for a claim for the same or similar item and/or service received by the beneficiary is acceptable evidence of written notice for current item and/or servi ce.  Written Notice Standard  Description  Proper Written Notice Documents   An approved standard form (e.g., Form CMS -R-131); or   A CMS approved model notice language (e.g., Form CMS -10055)  Qualified Notifiers  Notifiers are generally the healthcare provider or supplier that furnished or ordered the item(s) and/or service(s).  Capable Recipient  The beneficiary must:   Be able to read, understand, act on his/her rights, and comprehend the notice;    Be issued the written notice in a manner that allows her/him to comprehend the contents of the written notice.  (e.g., when the  beneficiary (or authorized representative) is unable to read the notice due to a disability such as blindness, visual impairment or deafness) This can be done by  a verbal or electronic reading of the notice, by providing the written notice in Braille or large print, or by the use of other assistive technology.  The notifier should document any actions taken to assist with the delivery of the written notice on the notice; and   Be afforded the verbal or written assistance in other languages to assist in understanding the notice.  If a translator who can speak the beneficiarys language is not available, the notifier should assist by calling 1 -800-MEDICARE so a customer service re presentative can connect the beneficiary with the Language Line for translation services.   Identification of Notifier  The header of the written notice must identify the notifier or notifier(s).  In situations where the notifier is not the billing entity, it is permissible to enter the names of more than one entity in the header of the notice.   Written Notice Standard  Description   If the header identifies the entity or person that obtained the written notice, rather than the entity or person that is billing for the item and/or service, the Medicare contractor will consider the written notice form to be valid so long as it was otherw ise properly executed.   40.2.1 - Other Written Notice Standards  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)  A.  Timeliness   Written notice delivery:    Must be issued far enough in advance of an event (e.g., receiving a medical service) so that the beneficiary can make a rational, informed decision without undue pressure; or   Should take place before a procedure is initiated and before physical preparation of the patient (e.g., disrobing, placement in or attachment of diagnostic or treatment equipment) begins. Written notice is permissible:   If a situation arises when a notifier sees a need for a previously unforeseen item or service and expects that Medicare will not pay for it only in certain specific denial reasons, provided that the beneficiary is capable of receiving notice and has a mean ingful opportunity to act on it (e.g., the beneficiary is not under general anesthesia); or    Where it is foreseeable that the need for service for which Medicare likely would not pay may arise during the course of an encounter, and the beneficiary is either certain or likely not to be capable of receiving notice during the initial service (e.g., t he beneficiary will be under anesthesia).   NOTE:   Last minute notification can be coercive, and a coercive notice is an invalid notice.   B.  Written Notice Delivery   A written notice:    Should be delivered in person to the beneficiary or authorized representative whenever possible.  Delivery is the notifiers responsibility;    Must be prepared with an original and at least two copies.  The notifier should retain the original and give the copy to the beneficiary or authorized representative.  Legible duplicates (carbons, etc.), fax copies, electronically scanned copies, or photocopies will suffice;      Copy should be given to the beneficiary (or authorized representative) immediately after the beneficiary (or authorized representative) signs it.    If a beneficiary is not given a copy of the written notice and if the beneficiary later alleges that the written notice presented to the Medicare contractor by the notifier is different in any material respect from the written notice s/he signed, the Medic are contractor will give credence to the beneficiarys allegations.  If the notifier is unable to deliver the notice to the beneficiary, the Medicare contractor will hold that the beneficiary did not receive proper written notice and will hold the notifier  liable.   In a case where the notifier that gives a written notice is not the entity which ultimately bills Medicare for the item(s) and/or service(s), (e.g., when a physician draws a test specimen and sends it to a laboratory for testing) the notifier should give a  copy of the signed written notice to the billing entity as well as the beneficiary.     C.  Reason for Predicting Denial   The written notice must give the beneficiary a reasonable idea of why the notifier is predicting the likelihood of Medicare denial so that the beneficiary can make an informed decision whether or not to receive the item or service and pay for it.  Statements of reasons for predicting Medicare denial of  payment at a level of detail similar to the approved Medical Necessity messages for Medicare Summary Notices are acceptable for written notice purposes.  If more than one reason for denial could apply (e.g., exceeding a frequency limit and same day du plication; cases where the reason for denial could depend upon the result of a test; etc.), the Medicare contractor will not invalidate a written notice on the basis of citing more than one reason for denial.  The following could result in an invalid written notice:   Simply stating medically unnecessary or the equivalent is not an acceptable reason, as it does not explain why the healthcare provider or supplier believes the item and/or service will be denied as not reasonable and necessary.    Listing several reasons which apply in different situations without indicating which reason is applicable in the beneficiarys particular situation generally is not an acceptable practice.   40.2.2 - Written Notice Special Considerations  (Rev.: 4197; Issued: 01- 11-19; Effective: 04 -15-19; Implementation: 04 -15-19)  A.  Responsiveness to Inquiries    A notifier must answer any questions from a beneficiary regarding the written notice.  This includes requests for further information and/or assistance in understanding and responding to a notice.  The Medicare contractor will hold that a beneficiary did not receive proper written notice in any case where it finds that the notifier refused to answer inquiries.    B.  Dealing With Beneficiary Refusals   A beneficiary who has been given a written notice may decide to receive the item(s) and/or service(s).  In this case, the beneficiary should indicate that s/he is willing to be personally and fully responsible for payment.  When a beneficiary decides to de cline an item or service, s/he should so indicate.  If a beneficiary refuses to sign a valid written notice, the notifier should consider not furnishing the item or service, unless the consequences (health and safety of the patient, or civil liability in c ase of harm) are such that this is not an option.  Additionally, the notifier may annotate the written notice indicating the circumstances and persons involved.  The notifier should have the annotation witnessed.