CMS Pub. 100-04, ch. 30, § 140.4

Under §1842(1), a refund is not required of the physician if either of the following

conditions is met:

1. The physician did not know and could not reasonably have been expected to

know that Medicare would not pay for the services because they were not

reasonable and necessary. To determine whether the physician knew, or could

reasonably have been expected to know, use the rules for determining physician

liability under §1879. (See §30.2.); or

2. Before the service was furnished, the physician notified the beneficiary in writing

of the likelihood that Medicare would not pay for the specific service and, after

being so informed, the beneficiary signed a statement agreeing to pay the

physician for the service.

To qualify for waiver of the refund requirements of §1842(1), the advance notice to the

beneficiary must be in writing, must clearly identify the particular service, must state that

the physician believes Medicare is likely to deny payment for the particular service, and

must give the physician’s reason(s) for his/her belief that Medicare is likely to deny

payment for the service. The Advance Beneficiary Notice (ABN, Form CMS-R-131),

given in compliance with §40.3 and §50, satisfies the statutory requirements for the

physician’s advance notice and the beneficiary’s agreement to pay.