Services Furnished Beginning October 1, 1987

140.2 - Services Furnished Beginning October 1, 1987 (Rev. 1186, Issued: 02-23-07; Effective: 01-01-06; Implementation: 05-23-07) Under §1842(l) of the Act, effective for services furnished on or after October 1, 1987, nonparticipating physicians who 1. Do not accept assignment, 2. Do not claim payment after the death of the beneficiary, and 3. Do not bill under the indirect payment procedure must refund to beneficiaries any amounts collected for physicians’ services which are denied because they are not reasonable and necessary under §1862(a)(1). This provision is applicable in any case in which the contractor denies payment or reduces the level of payment on the basis of §1862(a)(1). In the latter situation, there is, in effect, a denial of the more extensive service or procedure on the basis that it is not reasonable and necessary under §1862(a)(1), even though Medicare payment is made for the less extensive service or procedure (e.g., an intermediate office visit is allowed as a brief office visit). Where a reduction in the level of payment occurs, the physician must refund to the beneficiary any amounts he/she collects which exceed his/her maximum allowable actual charge (MAAC) for the less extensive procedure. Of course, in the unusual case where the physician’s MAAC for the less extensive service equals or exceeds his/her actual charge for the more extensive service, no refund is required. Section 1842(l) of the Act applies only to physicians’ services subject to the Medicare Economic Index (MEI). Certain services, such as those involving injections that can be given by a paramedical person other than a physician (e.g., pneumococcal and hepatitis vaccine injections) which may be denied under §1862(a)(1) are not physicians’ services for purposes of the MEI. Therefore, denials of payment on the basis of §1862(a)(1)(B) of the Act for those services are not subject to §1842(l) refund requirements. Additionally, services of physician extenders (e.g., physician’s assistants, nurse practitioners, MEDEXes, etc.) are not physicians’ services and are not subject to §1842(l) refund requirements. The application of §1842(1) refund requirements on the correct statutory basis, i.e., only on the basis of §1862(a)(1), and only to physicians’ services subject to the MEI, is essential. Incorrect application improperly takes away physicians’ rights to bill beneficiaries for denied services and incurs unnecessary expenses for review, development, and appeals.