Limitation of Liability Determinations

3.6.2.3 - Limitation of Liability Determinations (Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) This section applies to MACs, CERT, Recovery Auditors, and UPICs, as indicated. Section 1879(a)-(g) of the Act limits the financial liability of beneficiaries, providers, and suppliers by permitting Medicare payments, or requiring refunds, for certain services and items for which Medicare payment would otherwise be denied. The purpose of this provision is to protect beneficiaries from liability in certain cases of denied services. The limitation of liability provisions apply only to claims for services not statutorily excluded, that are denied for the following reasons: • The service or item did not meet the reasonable and necessary criteria; • The beneficiary or provider did not know, or could not have been reasonably expected to know that the service or item would not be covered; and • The beneficiary receives certain screening tests and preventive services in excess of the guidelines. (See IOM Pub. 100-04, chapter30, §20 for more information). The MACs, CERT, and UPICs shall first examine benefit categories and statutory exclusions to determine if a service or item is covered. Recovery Auditors shall examine categories and exclusions as outlined in their SOW. If the item or service meets the requirements of the appropriate benefit category and is not excluded by statute, the next consideration is whether the service was reasonable and necessary. When a claim is denied, in full or in part, because an item or service is not reasonable and necessary, MACs, CERT, Recovery Auditors, and UPICs shall make and document determinations as appropriate to §§1879, 1870, and 1842(l) of the Act. Because the determinations can be appealed, it is important that the rationale for the determination be documented initially and at each level of appeal. Limitations of liability provisions do not apply if there is a statutory exclusion, even if the service meets the reasonable and necessary criteria.