CMS Pub. 100-04, ch. 30, § 140.9

The contractor, upon completion of its appeal, will send the physician an appeal notice

and send a copy to the beneficiary. If the initial payment determination is reversed to full

or partial payment, the contractor will include in the appeal notice the physician notice

language required in §140.7. Otherwise, the contractor will include one of the following

paragraphs concerning refund.

Paragraph 1. Refund Not Required - Beneficiary Was Given Advance Beneficiary Notice

and Agreed to Pay

Under §1842(l) of the Social Security Act, a physician who does not accept assignment

and collects any amounts from a Medicare beneficiary for services for which Medicare

does not pay on the basis of §1862(a)(1) of the Social Security Act, must refund these

amounts to the beneficiary. However, a refund is not required if, prior to furnishing the

services, the physician notified the beneficiary in writing that Medicare would not pay for

the services and the beneficiary signed a statement agreeing to pay for them. After

reviewing this claim, we have determined that you informed the beneficiary in advance

that Medicare does not pay for the above services and the beneficiary agreed to pay for

them. Therefore, you are not required to make a refund in this case. The beneficiary has

been sent a copy of this notice.

Paragraph 2. Refund Not Required - Physician Did Not Know That Medicare Would Not

Pay For the Services

Under §1842(1) of the Social Security Act, a physician who does not accept assignment

and collects any amounts from a Medicare beneficiary for services for which Medicare

does not pay on the basis of §1862(a)(1) of the Social Security Act, must refund these

amounts to the beneficiary. However, a refund is not necessary if the physician did not

know, and could not reasonably have been expected to know, that Medicare does not pay

for the services. After reviewing this claim, we find that you did not know, and could not

reasonably have been expected to know, that Medicare would not pay for the above

services. Therefore, you are not required to make a refund in this case. Upon your receipt

of this notice, it is considered that you now have knowledge of the fact that Medicare

does not pay for (description of services) for similar conditions. The beneficiary has been

sent a copy of this notice.

Paragraph 3. Adverse Action on Denial - Refund Required

Under §1842(1) of the Social Security Act, a physician who does not accept assignment

and collects any amounts from a Medicare beneficiary for services for which Medicare

does not pay on the basis of §1862(a)(1) of the Social Security Act, must refund these

amounts to the beneficiary. A refund is not required if (1) the physician did not know,

and could not reasonably have been expected to know, that Medicare would not pay for

the services; or (2) the physician notified the beneficiary in writing before furnishing the

services that Medicare would not pay for the services and the beneficiary signed a

statement agreeing to pay for them. After reviewing this claim, we have determined that

neither of these conditions is met in this case. You must therefore refund any amount you

collected for these services within 15 days from the date you receive this notice. A refund

must be made within 15 days from receipt of this notice for you to be in compliance with

the law. If we paid for a less extensive procedure, you need refund only the amount

which exceeds your maximum allowable actual charge (MAAC) for the less extensive

procedure. The beneficiary has been sent a copy of this notice. Physicians who

knowingly and willfully fail to make appropriate refunds may be subject to assessments

of double the violative charges, civil money penalties (up to $2000 per violation), and/or

exclusion from the Medicare program for a period of up to 5 years.