Conditions for Indemnification

100.2 - Conditions for Indemnification (Rev. 1186, Issued: 02-23-07; Effective: 01-01-06; Implementation: 05-23-07) A beneficiary or any person(s) who assumed financial responsibility for payment is indemnified for claims filed if all of the following conditions are met: • The contractor has determined that the beneficiary is without liability under authority of §1879 of the Act for items and services furnished by a provider, practitioner, or supplier; • The contractor or the QIO has determined that the provider, practitioner, or supplier is liable under §1879 for the items and services furnished to the beneficiary. A provider, practitioner, or supplier is considered to have knowledge that payment will not be made under Medicare for items or services in a particular claim where the following evidence is established regarding the provider, practitioner, or supplier; (1) Evidence that a provider, practitioner, or supplier knew, or could reasonably be expected to have known, of exclusion of items or services o General notice to the medical community regarding exclusion of certain items or services: e.g., colonic irrigation, acupuncture. o General notice to the medical community that services exceeding certain frequencies would be denied or subject to additional review, e.g., vitamin B12 injections, or nursing home visits more frequent than once a month. o Written notice to the particular provider, practitioner, or supplier that a type of service or item would be noncovered in all or certain circumstances. A distinction must be maintained between coverage rules that specify that a type of service or item would be not reasonable or necessary in all or certain circumstances, and utilization guidelines the contractor established to identify excessive services. Any written policies or other internal edits that are disclosed to a provider, practitioner, or supplier would not be considered as a “notice” of exclusion, since they are used for referring claims for further development rather than as rules to make a contractor coverage decision. In addition to instances when the Medicare program has given notice, the allegation of a provider, practitioner, or supplier is not accepted without further verification in situations of potential program abuse involving a pattern of unnecessary services by a provider, practitioner, or supplier to a number of beneficiaries. When a provider, practitioner, or supplier frequently renders unnecessary services, i.e., services that significantly exceed the frequency with which the general medical community renders them, it is reasonable to expect the provider, practitioner, or supplier to know that such a pattern deviates from the standard practice. (2) Evidence that provider, practitioner, or supplier did not have knowledge of exclusion of services. In contrast to subsection 1, there may be situations where an assumption can be made that neither the beneficiary nor the provider, practitioner, or supplier had knowledge of exclusion, and liability can be limited by the reviewer without a statement by either party. In the following situations, further development would not be necessary: a. The service is for a type of treatment that can be rendered only by a physician, but the contractor has not previously denied payment for the treatment, and it is not unreasonable that a particular physician might consider the treatment appropriate. In order to determine whether the services are reasonable and necessary, the contractor requests its physician consultant or CMS to advise whether the services are covered. This is a case for which there are no general coverage guidelines for the services; the contractor has not advised either the physician or the medical community regarding the coverage of the services; and the contractor is uncertain without expert consultation. In such a case, it may be presumed that neither the beneficiary nor the physician could have known that the services would be noncovered. b. The item or service is ordinarily covered, but a question is raised as to whether it is reasonable and necessary in treatment of a particular diagnosis. Neither the provider, practitioner, or supplier nor the medical community has been advised that the item or service is not covered for that diagnosis. The case requires a determination by the contractor’s medical consultant or is referred to CMS for guidance. As in example (a), the liability of both parties should be limited. c. The provider, practitioner, or supplier is newly arrived in the contractor service area, and the contractor has not yet communicated to the provider, practitioner, or supplier information in an existing general notice that the item or service is not covered, always or under certain circumstances. NOTE: If any provider, practitioner, or supplier could reasonably be expected, by virtue of normal medical knowledge, to know that the service was unneeded, the presumption suggested in the above examples would not apply. • The requester for indemnification has paid the provider, /practitioner or supplier all or some of the charges for items and services for which the beneficiary’s liability has been waived under §1879 of the Act; and • The requester seeks indemnification by filing a written statement prior to the end of the sixth month following: o The month in which payment was made to the provider, practitioner or supplier; or o The month in which the contractor advised the beneficiary that the beneficiary was not liable for the noncovered items or services, whichever is later. The contractor extends the six month time limit if good cause is shown. The contractor uses the principles for determining good cause outlined in Chapter 29, “Appeals of Claim Decisions.”