CMS Pub. 100-16, ch. 4, § 160

Organization Determinations: An enrollee, or a provider acting on behalf of the enrollee,

always has the right to request a pre-service organization determination if there is a

question as to whether an item or service will be covered by the plan. If the plan denies

an enrollee’s (or his/her treating provider’s) request for coverage as part of the

organization determination process, the plan must provide the enrollee (and provider, as

appropriate) with the standardized denial notice (Notice of Denial of Medical Coverage

(or Payment)/CMS-10003). For the requirements related to organization determinations

and issuance of the standardized denial notice (CMS-10003), see chapter 13 of the

MMCM located at: https://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/downloads/mc86c13.pdf.

Limitations on Enrollee Liability: CMS considers a contracted provider an agent of the

MAO offering the plan. As stated in the preamble to the January 28, 2005 final rule

(CMS-4069-F):

“MA organizations have a responsibility to ensure that contracting physicians and

providers know whether specific items and services are covered in the MA plan in which

their patients are enrolled. If a network physician furnishes a service or directs an MA

beneficiary to another provider to receive a plan-covered service without following the

plan’s internal procedures (such as obtaining the appropriate plan pre-authorization),

then the beneficiary should not be penalized to the extent the physician did not follow

plan rules.”

Consequently, when a contracted provider furnishes a service or refers an enrollee for a

service that an enrollee reasonably believes is a plan-covered service, the enrollee

cannot be financially liable for more than the applicable cost-sharing for that service. If

a contracted provider believes an item or service may not be covered for an enrollee, or

could be covered only under specific conditions, the appropriate process is for the

enrollee or provider to request a pre-service organization determination from the plan.

If a contracted provider refers an enrollee to a non-contracted provider for a service that

is covered by the plan upon referral, the enrollee is financially liable only for the

applicable cost-sharing for that service. Contracted providers are expected to coordinate

care or work with plans prior to referring an enrollee to a non-contracted provider to

ensure, to the extent possible, that enrollees are receiving medically necessary services

covered by their plan. Furthermore, plans are expected to work with their contracted

providers to ensure that clear processes are in place and providers are educated about

those processes, including appropriate documentation, to substantiate that a referral has

been made.

If a service is never covered by the plan and the plan’s Evidence of Coverage (EOC)

provided to the enrollee is clear that the service or item is never covered, the plan is not

required to hold the enrollee harmless from the full cost of the service or item. For a

service or item that is typically not covered, but could be covered under specific

conditions (e.g., dental care that is necessary to treat an illness or injury), the EOC, in

and of itself, is not adequate notice of non-coverage for purposes of determining enrollee

liability. In such instances, the appropriate process is for the enrollee, or the provider

acting on behalf of the enrollee, to request a pre-service organization determination. If

the plan denies the service, the plan must issue the standardized denial notice with

appeal rights. The enrollee has the right to appeal any denial of a service or item. Plans

also must educate their contracted providers about the limits of plan coverage and the

need to correctly advise enrollees when providing referrals for covered services. This

will prevent confusion related to plan coverage and enrollee financial liability as well as

ensure coordination of the care furnished.

When the provider, or the plan acting on behalf of the provider, can show that an

enrollee was notified (via a clear exclusion in the EOC or the standardized denial notice)

prior to receipt of the item or service that the item or service is not covered by the plan or

that coverage is available only if the enrollee is referred for the service by a contracted

provider but the enrollee nonetheless receives that item or service in the absence of a

referral, the regulation at §422.105(a) does not require the MA plan to hold the enrollee

harmless from the full cost of the service or item charged by the provider.