CMS Pub. 100-04, ch. 30, § 150.8

The term Medicare beneficiary identifier (Mbi) is a general term describing a

beneficiary's Medicare identification number. For purposes of this manual, Medicare

beneficiary identifier references both the Health Insurance Claim Number (HICN) and

the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition

period and after for certain business areas that will continue to use the HICN as part of

their processes.

In any unassigned claim for medical equipment and supplies furnished on or after

January 1, 1995, in which the contractor denies payment on the basis of §1862(a)(1),

§1834(a)(17)(B), §1834(j)(1), or §1834(a)(15) of the Act, send separate notices to both

the beneficiary (a Medicare Summary Notice (MSN)) and the supplier (a remittance

advice (RA)).

NOTE: This instruction to send a remittance advice to the supplier in the case of denial

of an unassigned claim is a specific requirement of §1834(a)(18)(C) of the Act,

incorporated by reference into §1834(j)(4) and §1879(h) of the Act, applicable to denials

of claims for medical equipment and supplies furnished on or after January 1, 1995.

If the beneficiary signed an ABN which satisfies the requirements in subsection II.6 and

the supplier included a GA modifier on the claim to that effect, do not make an automatic

finding that the claim should be denied on the basis of §1862(a)(1), §1834(a)(17)(B),

§1834(j)(1), or §1834(a)(15) of the Act, merely because the supplier submitted a GA

modifier. The fact that an ABN was given to the beneficiary will in no way prejudice the

contractor’s determination as to whether there is or is not sufficient evidence to justify a

denial. In the case where there is an ABN, mail a standard denial MSN notice to the

beneficiary. If the beneficiary did not sign an ABN and the supplier included a GZ

modifier on the claim to that effect, include, in addition to one of the denial notices in

Chapter 21, “Medicare Summary Notices,” the following initial beneficiary notice in the

MSN sent to the beneficiary.

A. Initial Beneficiary Notice

(MSN 8.54)

If the supplier knew that Medicare wouldn’t pay and you paid, you might

get a refund unless you signed a notice in advance. Refunds may be

delayed if the provider appeals. Call your supplier if you don’t hear

anything within 30 days.

(MSN 8.54) - In Spanish

Si pagó por un servicio que su proveedor sabía Medicare no iba a pagar,

usted tiene derecho a un reembolso, a menos de que haya firmado un aviso

por adelantado. Los reembolsos se pueden demorar si el proveedor apela

la decisión. Llame a su proveedor si no escucha nada en 30 días.

B. Initial Supplier Notice

Include in the notice to the supplier the following;

• The patient’s name Medicare beneficiary identifier;

• A description of the item or service by procedure code, date and place

of service, and amount of the charge;

• The same denial notice included on the beneficiary’s MSN, (see

Chapter 21, “Medicare Summary Notices”); and

• If the supplier submitted a GA modifier (signed ABN obtained),

include in the notice to the supplier the following Notice 1. However,

if the supplier submitted a “-GZ” modifier (a signed ABN was not

obtained), include in the notice to the supplier the following Notice 2.

Notice 1. – Signed Advance Beneficiary Notice Obtained

(Remittance Advice Remark Code N124)

Payment has been (denied for the/made only for a less extensive)

service/item because the information furnished does not substantiate the

need for the (more extensive) service/item. The patient is liable for the

charges for this service/item as you informed the patient in writing before

the service/item was furnished that we would not pay for it, and the patient

agreed to pay.

Remittance Advice Remark Codes cannot be reported without a Claim

Adjustment Reason Code and a Group Code. For Notice 1 where ABN

has been obtained, use CARC 96 - Non-covered charge(s), and Group

Code – PR (Patient Responsibility).

Or

Notice 2. – Signed Advance Beneficiary Notice Not Obtained

(Remittance Advice Remark Code N125)

Payment has been (denied for the/made only for a less extensive)

service/item because the information furnished does not substantiate the

need for the (more extensive) service/item. If you have collected any

amount from the patient, you must refund that amount to the patient within

30 days of receiving this notice. The law permits exceptions to this refund

requirement in two cases: if you did not know, and could not have

reasonably been expected to know, that Medicare would not pay for this

service/item; or if you notified the beneficiary in writing before providing

it that Medicare likely would deny the service/item, and the beneficiary

signed a statement agreeing to pay.

Remittance Advice Remark Codes cannot be reported without a Claim

Adjustment Reason Code and a Group Code. For Notice 2 where ABN

has NOT been obtained, use CARC 96 - Non-covered charge(s), and

Group Code – CO (Contractual obligation).

If an exception applies to you, or you believe the contractor was wrong in

denying payment, you should request an appeal of this determination by

the contractor within 30 days of receiving this notice. Your request for

appeal should include any additional information necessary to support

your position. If you request an appeal within 30-days, you may delay

refunding to the beneficiary until you receive the results of the appeal. If

the appeal determination is favorable to you, you do not have to make any

refund. If the appeal is unfavorable, you must make the refund within 15

days of receiving the unfavorable appeal decision.

You may request an appeal of the determination at any time within 120

days of receiving this notice. An appeal requested after the 30-day period

does not permit you to delay making the refund. Regardless of when an

appeal is requested, the patient will be notified that you have requested

one, and will receive a copy of the determination.

The patient has received a separate notice of this denial decision. The

notice advises that he or she may be entitled to a refund of any amounts

paid, if you should have known that Medicare would not pay and did not

tell him or her. It also instructs the patient to contact your office if he or

she does not hear anything about a refund within 30 days.

The requirements for refund are in §1834(a)(18) of the Act (and in

§§1834(j)(4) and 1879(h) by cross-reference to §1834(a)(18)). Section

1834(a)(18)(B) specifies that suppliers which knowingly and willfully fail

to make appropriate refunds may be subject to civil money penalties

and/or exclusion from the Medicare program. If you have any questions

about this notice, please contact (contractor contact, telephone number).

Ensure that the telephone number puts the supplier in touch with a knowledgeable

professional who can discuss the basis for the denial or reduction in payment.

NOTE: These procedures do not apply where the contractor automatically denies Part B

services related to hospital inpatient services denied by the Quality Improvement

Organization (QIO). In those cases, the QIO is responsible for notifying the beneficiary

and supplier of the refund requirements of §§1834(a)(18), 1834(j)(4), and 1879(h) of the

Act and making the refund determination where appropriate.