Processing Initial Denials

140.6 - Processing Initial Denials (Rev. 1186, Issued: 02-23-07; Effective: 01-01-06; Implementation: 05-23-07) In any unassigned claim for physician’s services furnished on or after October 1, 1987, in which the contractor denies or reduces payment on the basis of §1862(a)(1), the contractor will send separate notices to both the beneficiary and the physician. In some cases, the beneficiary (or physician) may submit a copy of an ABN which satisfies the requirements in §140.4. The contractor should not make an automatic finding that the service is not reasonable and necessary merely because the beneficiary has submitted an ABN. The fact that there is an acceptable ABN must in no way prejudice the contractor’s determination as to whether there is or is not sufficient evidence to justify a denial under §1862(a)(1). In the case where there is an acceptable ABN, the contractor will mail a standard denial MSN notice to the beneficiary. In the absence of an acceptable ABN, and depending on whether there is a full denial or a partial reduction in payment, the contractor will include, in addition to one of the “medical necessity” denial notices, one of the following notices in the MSN sent to the beneficiary.