Denial of Payment to Beneficiaries and Others

4.10.2.5.2 - Denial of Payment to Beneficiaries and Others (Rev. 11032; Issued: 09-30-21; Effective: 10-12-21; Implementation: 11-10-21) If claims are submitted after the effective date of the exclusion by a beneficiary for items or services furnished, ordered, or prescribed by an excluded provider in any capacity, ACs and MACs shall: • Pay the first claim submitted by the beneficiary and immediately give notice of the exclusion. • Not pay the beneficiary for items or services provided by an excluded party more than 15 days after the date of the notice to the beneficiary or after the effective date of the exclusion, whichever is later. The regulatory time frame is 15 days; however, CMS allows an additional 5 days for mailing. If claims are submitted by a laboratory or DME supplier for any items or services ordered by a provider in any capacity excluded under §1156, or any items or services ordered or prescribed by a physician excluded under §1128, ACs and MACs shall handle the claims as above. A. Notice to Beneficiaries To ensure that the notice to the beneficiary indicates the proper reason for denial of payment, ACs and MACs shall include the following language in the notice: “We have received your claim for services furnished or ordered by on . Effective , was excluded from receiving payment for any items and services furnished in any capacity to Medicare beneficiaries. This notice is to advise you that no payment will be made for any items or services furnished by if rendered more than 20 days from the date of this notice.” B. Notice to Others The Medicare Patient and Program Protection Act of 1987 provides that payment is denied for any items or services ordered or prescribed by a provider excluded under §§1128 or 1156. It also provides that payment cannot be denied until the supplier of the items and services has been notified of the exclusion. If claims are submitted by a laboratory or a DME company for any items or services ordered or prescribed by a provider excluded under §§1128 or 1156, ACs and MACs shall: • Pay the first claim submitted by the supplier and immediately give notice of the exclusion. • Do not pay the supplier for items or services ordered or prescribed by an excluded provider in any capacity if such items or services were ordered or prescribed more than 20 days after the date of notice to the supplier, or after the effective date of the exclusion, whichever is later. To ensure that the notice to the supplier indicates the proper reason for denial of payment, ACs and MACs shall include the following language in the notice: “We have received your claim for services ordered or prescribed by on . Effective , was excluded from receiving payment for items or services ordered or prescribed in any capacity for Medicare beneficiaries. This notice is to advise you that no payment will be made for any items or services ordered or prescribed by _ if ordered or prescribed more than 20 days from the date of this notice.”