Refunds Due to Beneficiaries by Providers

In some situations providers are responsible for refunding monies to beneficiaries that have paid for services that providers have determined to be noncovered and nonpayable by Medicare. When an ABN has been issued to a beneficiary/representative and the beneficiary/representative signs and agrees to make payment, he/she is responsible for making payment on those services. The beneficiary/representative or their supplemental insurance company will be responsible for making payment to the provider.

However, if Medicare subsequently pays all or part of the claim previously paid for by the beneficiary/representative or if we find the provider liable; the provider must refund the monies to the beneficiary in a timely manner. Providers should reference the CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 30, Section 50.13 (1021 KB) for additional information.

Providers should also be aware that if a claim results in a denial, the provider is required to make a refund to the beneficiary for the amounts collected for the items or services. The provider should make this refund in a timely manner even if they are appealing the claim(s). Refunds are considered prompt/timely when made within 30 days of the Medicare denial OR within 15 days after a determination on an appeal if an appeal is made. There is language in the redetermination letter and at the Qualified Independent Contractor (QIC) level to make the beneficiary aware that they should be expecting a refund from the provider. Providers should reference CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 29, Sections 310.5.B and 320.9 (605 KB) for additional information.

Please share this information with the appropriate Medicare staff and update any internal policies or procedures to ensure compliance with the regulations.