CMS Pub. 100-04, ch. 30, § 120.5.1

Applicable at the Redetermination Level

(Rev. 12758; Issued: 08-01-24; Effective: 10-02-24; Implementation: 10-02-24)

The contractor uses the following paragraphs (in addition to other required appeal

decision paragraphs) where the limitation on liability provision applies at the appeal level

in the various situations shown below:

Situation I - To the provider, practitioner, or supplier when neither the provider,

practitioner, or supplier nor the beneficiary is determined liable (program payment made

under §1879 of the Act)

Paragraph(s):

Section 1879 of the Social Security Act permits Medicare payment to be made on behalf

of a beneficiary to a physician/supplier who has accepted assignment for certain services

for which payment would otherwise not be made under Medicare, if neither the

beneficiary nor the physician/supplier knew, or could reasonably have been expected to

know, that the services were excluded. The services affected by this provision are those

that are not reasonable and necessary for the diagnosis or treatment of illness or injury or

to improve the functioning of a malformed body member. After reviewing (beneficiary’s

name’s) claim for (description of services), we have concluded that these services are

excluded under Medicare. However, since we find that neither (beneficiary’s name) nor

you knew, or could reasonably have been expected to know, that the services were

excluded from coverage, the Medicare program will reimburse you under this provision

of the law for the reasonable charge for the services, less any deductible and coinsurance.

(Beneficiary’s name) is responsible for any deductible and coinsurance amounts. Upon

receipt of this notice, it will be considered that you now have knowledge of the exclusion

of (description of service) for similar conditions, and this limitation of liability will not

apply to future claims for the same or substantially similar services.

cc: Beneficiary

Situation II - To provider, practitioner, or supplier when the provider or practitioner or

supplier is held liable

Paragraph(s);

Section 1879 of the Social Security Act permits Medicare payment to be made on behalf

of a beneficiary to a provider or practitioner or supplier who has accepted assignment for

certain services for which payment would otherwise not be made under Medicare.

Medicare may make payment under this situation if neither the beneficiary nor the

provider, practitioner, or supplier knew, or could reasonably have been expected to know,

that the services were excluded. The services affected by this provision are those that are

not reasonable and necessary for the diagnosis or treatment of illness or injury or to

improve the functioning of a malformed body member. After reviewing (beneficiary’s

name’s) claim for (description of services), we have determined that (beneficiary’s name)

did not know and could not have been expected to know, that these services were

excluded from coverage. However, we find that (select applicable phraseology from the

following): (l) based upon the claim of (date) which was a similar claim in which

payment was denied; (2) (our notification to you of (date) that such services are

excluded); (3) (or any other basis used to determine the provider, practitioner, or supplier

to be liable)), you knew, or could have been expected to know, that these services were

excluded. We also find that you did not notify the beneficiary in writing, before the

services were furnished, that Medicare likely would not pay for the services. Because of

this, you are held liable for the full charges for the services.

We have also reviewed the claim with regard to the issue of whether the services were

not reasonable and necessary. We found that the services were not reasonable and

necessary.

If you disagree with this determination regarding your liability, on the basis that the

services were necessary, or on the basis that you did not know, and could not reasonably

have been expected to know, that Medicare would not pay for the services, or on the basis

that you notified the beneficiary in writing, before the services were furnished, that

Medicare likely would not pay for the services, you may request a reconsideration within

180 days of receipt of this notice, at which time you may present any new evidence that

would have a material effect on this determination. Our office, or your social security

office, will assist you if you need help in requesting a reconsideration.

cc: Beneficiary

Situation III - To the beneficiary when the beneficiary is held liable

Paragraph(s):

We have reviewed your claim for (description of the services). When we reviewed your

claim, we considered two things. First, we considered whether the service you received

was reasonable and necessary. Medicare will only pay for reasonable and necessary

services. We found that the service was not reasonable and necessary.

Second, we considered whether you knew, or were told, that Medicare would not pay.

Medicare would not hold you liable if you did not know and your (doctor/supplier) did

not tell you in advance, in writing, that Medicare would not pay. Our review shows that

(choose one of the following to complete the sentence: (the (doctor/ supplier) told you in

writing, before giving the service, that Medicare would not pay); (this service had been

denied on other claims for you); OR (we told you in a letter dated (DATE) that Medicare

would not pay for this service)). Since we have determined that you knew Medicare

would not pay for this service, you are liable for the charges. (See, Section 1879 of the

Social Security Act; 42 CFR 405.411)

If you do not agree with our decision, ask for a reconsideration from a Qualified

Independent Contractor (QIC). The QIC will decide whether the service was reasonable

and necessary. The QIC will also decide whether you knew, or were told, Medicare

would not pay. You must ask for a reconsideration within 180 days of the date you

receive this notice. At the reconsideration, you may present any new evidence which

would affect our decision. If you need help, your social security office will help you

request a reconsideration.

cc: Physician/Supplier

Situation IV - Rider paragraph to be included in the copy of the notice to the beneficiary

when the physician/supplier is held liable.

If you paid any amounts to (physician’s/supplier’s name) for this service, Medicare will

pay you back the amount you paid. To get this payment, bring or send to this office three

things. (1) A copy of this notice. (2) Your (doctor’s/supplier’s) bill. (3) A receipt or other

proof you have paid the bill.

(See §§120.4 for handling requests for indemnification where payment has been made to

a liable practitioner or supplier.)