CMS Pub. 100-06, ch. 4, § 90.3

When a claim adjustment creates an overpayment the beneficiary who received the services will normally

receive a Medicare Summary Notice (MSN) notifying the beneficiary about the specifics of the

adjustment and the beneficiary’s appropriate appeal rights. The MSN uses codes with accompanying

descriptions to update the beneficiary. Through a MSN code, the MSN can also be used to inform the

beneficiary that the provider may be requested to repay the difference in the amount paid and the

adjustment to Medicare.

In situations where the claim adjustment creates an overpayment and a MSN is generated, a separate

notice to the beneficiary is not required whenever recovery is sought from the provider.

However, if a MSN is not generated a separate notice to the beneficiary is required whenever recovery is

sought from the provider. Some reasons a MSN may not generate include, but are not limited to, if the

claim has been purged from the system or if the overpayment is because of a mass adjustment. In these

situations a separate notice to the beneficiary is required whenever recovery is sought from the provider.

(See Chapter 3, §§100 & 110ff when recovering from the beneficiary.)

The following instructions apply if a separate notice to the beneficiary is required.

The contractor shall include in the notification to the beneficiary a copy of the letter sent to the provider

unless the letter to the provider mentions more than one beneficiary or deals with overpayments which do

not concern the particular being notified. In such cases, a copy of the initial demand letter sent to the

provider should not be attached to the beneficiary notice.

Where overpayments to a provider have been determined by means of a sample study, the Contractor

shall send a notice only to the beneficiaries identified in the overpayment notice sent to the provider as

individuals on whose behalf the provider was overpaid a specified amount. It shall not send the notice to

the beneficiaries until it has been established that recovery action will be taken.

In all cases the notice to the beneficiary should contain the following:

• The name and address of the provider and dates of service for which the overpayment was

made.

• A clear explanation of why the payment was incorrect.

• A statement that the provider has been requested to refund the overpayment and, if the

provider is liable for medically unnecessary services or (FIs only) custodial care, the

following additional information, as applicable:

• If the error is discovered subsequent to the third calendar year after the year the payment

was approved, and the other conditions described in Chapter 3, §80 apply, the Contractor

shall advise the beneficiary that the provider is prohibited, by law, from requesting

payment for the services; or

• If the beneficiary is determined to be without fault, the Contractor shall state that if the

beneficiary pays for the services, the beneficiary may request that the Contractor

indemnify the beneficiary for such payment. Any indemnification paid to the beneficiary

will be recovered from the provider. (See Medicare Claims Processing Manual, Chapter

30, Financial Liability Protections.)

• In all other cases, Medicare law does not prohibit the provider from requesting the

beneficiary to pay.

An explanation of the beneficiary's appeal rights. (See Medicare Claims Processing Manual, Chapter 29,

Appeals of Claims Decisions.) In the notice to the beneficiary, however, the Contractor shall not mention

waiver since there is no provision for waiver when the physician is liable for the overpayment.