CMS Pub. 100-04, ch. 30, § 30.1

Beneficiary knowledge standards vary between the §1879 LOL provision and the two

Refund Requirement (RR) provisions as shown in the table below.

Provision Description Beneficiary Knowledge

Limitation On

Liability

§1879(a)(2) of the Act requires

that the beneficiary “did not

know, and could not reasonably

have been expected to know,

that payment would not be

made* * *,” for items or

services that are excluded from

coverage.

• Knowledge based on

written notice having

been provided to the

beneficiary.

• Knowledge based on

any other means from

which it is determined

that the beneficiary

knew, or should have

known, that payment

would not be made.

Medical Equipment

and Supplies RR

§1834(a)(18)(A)(ii) of the Act

[which is incorporated by

reference into §1834(j)(4) and

§1879(h) of the Act] requires

that “before the item was

furnished, the patient was

informed that payment under

this part may not be made for

that item and the patient has

agreed to pay for that item,” that

is, for medical equipment and

supplies denied on the basis of

§1834(a)(17)(B), §1834(j)(1),

§1834(a)(15), or §1862(a)(1) of

the Act.

• Knowledge must be

evidenced by a signed

written notice and

agreement to pay

personally in case of a

denial.

Physician RR §1842(l)(1)(C)(ii) of the Act

requires that “before the service

was provided, the individual

was informed that payment

under this part may not be made

for the specific service and the

individual has agreed to pay for

that service,” that is, for

physician services that are

denied because they were not

reasonable and necessary under

§1862(a)(1) of the Act.

• Knowledge must be

evidenced by a signed

written notice and

agreement to pay

personally in case of a

denial.

Knowledge is determined on a case by case basis. In certain circumstances, being in

receipt of a valid ABN or other written notice does not guarantee that the beneficiary had

knowledge that an item or service would not be covered. For instance, in a case where a

beneficiary received a valid ABN and then, upon initial determination, the claim was paid

as covered, that original ABN cannot be used as evidence of knowledge for future claims

relating to a similar or reasonably comparable item or service, since the original ABN

was belied by the favorable payment decision.

In reviewing a determination of liability on appeal, a beneficiary’s allegation that s/he did

not know, in the absence of evidence to the contrary, is acceptable evidence for LOL

purposes.