CMS Pub. 100-04, ch. 30, § 150.11

Upon completion of the appeal, the contractor will send the supplier an appeal notice.

Send a copy to the beneficiary. If the initial payment determination is reversed to

payment, include in the appeal notice the supplier notice language required in §150.9.

Otherwise, include one of the following paragraphs concerning refund.

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

and Agreed to Pay

Under §1834(a)(18) and under §1834(j)(4) of the Social Security Act, a

supplier which does not accept assignment and collects any amounts from

a Medicare beneficiary for medical equipment and supplies for which

Medicare does not pay on the basis of §1834(a)(17)(B), §1862(a)(1),

§1834(j)(1), or §1834(a)(15) of the Social Security Act, must refund these

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

furnishing the items or services, the supplier notified the beneficiary in

writing that Medicare would not pay for the items or 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 items or 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 - Supplier Did Not Know That Medicare Would Not

Pay For the Services

Under §1834(a)(18) and §1834(j)(4) of the Social Security Act, a supplier

which does not accept assignment and collects any amounts from a

Medicare beneficiary for medical equipment and supplies for which

Medicare does not pay on the basis of §1834(a)(17)(B), §1862(a)(1),

§1834(j)(1), or §1834(a)(15) of the Social Security Act, must refund these

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

supplier did not know, and could not reasonably have been expected to

know, that Medicare does not pay for the items or 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 items or 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 item or service) similar conditions. The beneficiary has

been sent a copy of this notice.

Paragraph 3. Adverse Action on Denial - Refund Required

Under §1834(a)(18) and §1834(j)(4) of the Social Security Act, a supplier

which does not accept assignment and collects any amounts from a

Medicare beneficiary for medical equipment and supplies for which

Medicare does not pay on the basis of §1834(a)(17)(B), §1862(a)(1),

§1834(j)(1), or §1834(a)(15) of the Social Security Act, must refund these

amounts to the beneficiary. A refund is not required if (1) The supplier did

not know, and could not reasonably have been expected to know, that

Medicare would not pay for the items or services; or (2) The supplier

notified the beneficiary in writing before furnishing the items or services

that Medicare would not pay for the items or 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 items or

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. The beneficiary has been sent a copy of this

notice.

Suppliers which knowingly and willfully fail to make appropriate refunds may be subject

to civil money penalties (up to $10,000 per item or service), assessments (three times the

amount of the claim), and exclusion from the Medicare program.

NOTE: For claims presented to the contractor prior to January 1, 1997, the amount of

the civil money penalty is up to $2,000 per item or service and the assessment is not more

than twice the amount claimed.