This job aid has been created to assist providers in following the Centers for Medicare & Medicaid Services (CMS) guidelines regarding refunding money to Medicare beneficiaries.
In the agreement between CMS and a provider, the provider agrees to refund as promptly as possible any money incorrectly collected from Medicare beneficiaries or from someone on their behalf. Money incorrectly collected means any amount for covered services that is greater than the amount for which the beneficiary is liable because of the deductible and coinsurance requirements. Amounts are considered to have been incorrectly collected because the provider believed the beneficiary was not entitled to Medicare benefits but:
- The beneficiary was later determined to have been entitled to Medicare benefits
- The beneficiary’s entitlement period fell within the time the provider’s agreement with CMS was in effect
- Such amounts exceed the beneficiary’s deductible, coinsurance or non covered services liability
In summary, the provider must refund the patient when the Medicare Summary Notice (MSN) indicates that the patient has paid more than the amount indicated as owed for covered services’ copayments, deductibles and statutorily excluded services on the Remittance Advice (RA). If the provider chooses to appeal a medically necessary denial and the patient has already paid the portion as indicated that they owe, it is an amount owed the provider. If the provider collects from the patient and then appeals, until and only if the provider receives a favorable appeal decision at which time, if the appeal is favorable and Medicare submits additional monies, the provider must then refund the patient anything the patient paid over their responsibility after the appeal decision. Providers must refund any amount collected over the patient’s liability.
Reference: The Centers for Medicare & Medicaid Services (CMS) Internet Only Manual (IOM) Publication 100-04 (PDF, 1.52 MB), chapter 1, Section 30.1.2
Note: Palmetto GBA can not answer questions about refunds from secondary payers. Each secondary payer has their own rules about refunds.