CMS Pub. 100-04, ch. 4, § 240.6

Beneficiary Liability

(Rev. 2877, Issued: 02-07-14, Effective: 10-01-13, Implementation: 04-07-14)

When Part A payment cannot be made for a hospital inpatient admission and the hospital,

not the beneficiary, is liable under section 1879 of the Act for the cost of the Part A items

and services, the hospital must submit a provider-liable “no pay” Part A claim (110 TOB)

(see chapter 3 §40.2.2, “Charges to Beneficiaries for Part A Services” of this manual).

Submission of this claim cancels any claim that may have already been submitted by the

hospital for payment under Part A. When a Medicare review contractor denies a Part A

claim for medical necessity, the claims system converts the originally submitted 11X

claim to a 110 TOB on behalf of the hospital.

When the hospital and not the beneficiary is liable for the cost of the Part A services

(pursuant to the limitation on liability provision in Section 1879 of the Social Security

Act), the beneficiary is not responsible for paying the deductible and coinsurance charges

related to the denied Part A claim and the beneficiary’s Medicare utilization record is not

charged for the services and items furnished. The hospital must refund any payments

(including coinsurance and deductible) made by the beneficiary or third party for a

denied Part A claim when the provider is held financially liable for that denial (see

section 1879(b) of the Act; 42 CFR § 411.402; and chapter 30 §§ 30.1.2, “Beneficiary

Determined to Be Without Liability” and 30.2.2, “Provider/Practitioner/Supplier is

Determined to Be Liable” of this manual).

Medicare beneficiaries are liable for their usual Part B financial liability for services

covered under Part B when Part A payment cannot be made, including Part B

copayments for each payable Part B inpatient or Part B outpatient service. The

beneficiary is also liable for the cost of services not covered under Part B.