CMS Pub. 100-04, ch. 30, § 50.15.4

Has Been Made

(Rev. 10862; Issued: 07-14-21; Effective: 10-14-21; Implementation: 10-14-21)

If the Medicare contractor denies Part B payment for an item of medical equipment or

supplies on the basis of §1862(a)(1), §1834(a)(17)(B), §1834(j)(1), or §1834(a)(15) of the

Act, and the beneficiary is relieved of liability for payment for that item under

§1834(a)(18) of the Act, the effect of the denial, subject to State law, cancels the contract

for the sale or rental of the item. If the item is resalable or re-rentable, the supplier is

permitted to repossess the item. Suppliers are strongly discouraged from recovering

items which are consumable or not fit for resale or re-rental.

If a supplier makes proper refund under §1834(a)(18) of the Act, Medicare rules do not

prohibit the supplier from recovering from the beneficiary items which are resalable or

re-rentable. When the contract of sale or rental is cancelled on the basis described above,

the supplier may enter into a new sale or rental transaction with the beneficiary as long as

the beneficiary has been informed of their liability. If the circumstances which preclude

payment for the item have been removed (e.g. the supplier has now obtained a supplier

number when that supplier did not have one before), the supplier may submit to the

Medicare contractor a new claim based on the resale or re-rental of the item to the

beneficiary. If payment is still precluded, the supplier can issue an ABN.

Under the capped-rental method, if the Medicare contractor determines that the supplier

is obligated to make a refund, the supplier must repay Medicare those rental payments

that the supplier has received for the item. However, the Medicare beneficiary must

return the item to the supplier.