CMS Pub. 100-04, ch. 30, § 40

One regulatory basis for determining beneficiary knowledge can be found at 42 CFR

411.404. Under these regulations, there is a presumption that the beneficiary knew, or

could reasonably have been expected to know, that Medicare payment for an item or

service would be denied if written notice was given to the beneficiary that the items or

services were not covered. A written notice that a beneficiary received may be

considered as evidence of prior knowledge with respect to such same or similar item(s)

and/or service(s) that is denied Medicare payment for the same reason in both cases.

In accordance with 42 CFR 411.404, a written notice of Medicare denial of payment must

contain sufficient information to enable the beneficiary to understand the basis for the

denial of the item and/or service that otherwise might be paid for, that Medicare certainly

or probably will not pay for in that particular occasion.

The written notice allows the beneficiary to:

• make an informed decision whether or not to receive the item and/or service, and

• better participate in his/her own health care treatment decisions.

If the healthcare provider or supplier expects payment for the item and/or service to be

denied by Medicare, the healthcare provider or supplier must advise the beneficiary in

advance that, in its opinion, the beneficiary will be personally and fully responsible for

payment. To be “personally and fully responsible for payment” means that the

beneficiary will be liable to make payment “out-of-pocket,” through other insurance

coverage (e.g., employer group health plan coverage), or through Medicaid or other

Federal or non-Federal payment source.