Waiver of Liability
Limitation of liability is a long-standing provision of
Medicare law protecting beneficiaries who are furnished
items or services on an assigned basis. The provision
waives the beneficiary's liability for payment when he
or she could not have known that items or services
rendered on an assigned basis were not reasonable and
necessary and therefore would not be paid under Medicare
If a beneficiary could have been expected to know
that an item or service furnished on an assigned basis
was not reasonable and necessary, liability for payment
must be accepted. A beneficiary is expected to know that
the item or service is not reasonable and necessary
after receiving a Medicare notice denying charges for
the same or similar item or service. A beneficiary also
is liable for payment if the physician or supplier
accepting assignment gave the beneficiary advance
written notice that Medicare is not likely to pay for an
item or service and the beneficiary agreed to pay.
Liability also is waived for a physician or supplier
who did not know and could not have been expected to
know that items or services provided on an assigned
basis were not reasonable and necessary.
A physician or supplier is expected to know the
coverage limitations for an item or service after a
Medicare notice is published. For example, a Medicare
publication to the provider community that Medicare does
not pay for a particular service for certain medical
conditions would constitute evidence that the physician
could have been expected to know the coverage
limitations for the service. Also, a previous denial
notice to a physician or supplier for an item or service
furnished in a given situation is considered evidence
that the coverage limitations were known.
When neither the beneficiary nor the
physician/supplier knew or could have been expected to
know that an item or service furnished on an assigned
basis was not reasonable and necessary, Medicare
reimburses under the limitation of liability provision.
A determination of the physicianís or supplierís
liability is made at the initial claim adjudication. If
the physician or supplier accepting assignment provided
advance written notice to the beneficiary that Medicare
was likely to deny payment for the item or service, and
the beneficiary agreed to pay, modifier GA, Waiver of
liability statement on file, should be submitted on
each detail line to which it applies. Waiver of
liability statements and the beneficiaryís signed and
dated agreement to pay should continue to be kept on
file in the providerís office and furnished to the
carrier upon request.
Liability for Medically Unnecessary Unassigned
The Omnibus Budget Reconciliation Act of 1986
requires that nonparticipating physicians must refund
any beneficiary payments for unassigned services that
are determined to not be reasonable and necessary.
The nonparticipating physician is not required to
make a refund if the physician did not know and could
not reasonably have been expected to know that the
services were not considered reasonable and necessary.
In this instance a Medicare publication or a previous
claim denial notice may be considered evidence for the
physician. A refund is also not required if the
physician notified the beneficiary of the likelihood
that Medicare would not pay for the specific service and
the beneficiary agreed to pay the physician.
A physician or supplier accepting assignment may
collect from the beneficiary for items or services
deemed not reasonable and necessary if advance notice
that Medicare is likely to deny payment was provided and
the beneficiary agreed to pay.
The advance notice must be in writing and must inform
the beneficiary of the likelihood that Medicare will
deny payment for the item or service to be furnished.
The statement must be more than routine notice of the
possibility that payment for the item or service will be
denied. In order to make an informed decision on
accepting liability for payment, the beneficiary needs
to be apprised of a definite reason for the likelihood
of Medicare denial. Some possible reasons for denial
- Medicare Part B usually does not pay for this many
visits or treatments.
- Medicare Part B usually does not pay for this
- Medicare Part B usually does not pay for this lab
- Medicare Part B does not pay for this treatment
because it has not yet been proven effective.
The language of the advance notice is important, and
the beneficiary's signed, dated agreement to pay is
A beneficiary cannot refuse to sign an advance
written notice of possible Medicare denial and expect to
have financial responsibility waived. If the beneficiary
or their representative refuses to sign the advance
written notice, the provider can still bill the
beneficiary when the refusal is witnessed and the
following information is documented in the
- date of the refusal;
- who refused (the beneficiary, their
- who witnessed the refusal and that personís
- the services and dates of service involved (as
they appear on the advance notice).
Providers may use modifier GA, Waiver of liability
statement on file, to report this circumstance. The
advance notice and the information above should be
documented in the beneficiaryís file and made
available to the carrier upon request.
Physician/Supplier Notice to Beneficiary
Medicare Part B pays only for services that are
determined to be reasonable and necessary under section
1862(a)(1) of the Medicare law. If a particular service
is not reasonable and necessary under Medicare
standards, although it would otherwise be covered,
Medicare Part B denies payment for that service. I
believe that, in your case, Medicare Part B is likely to
deny payment for (specify service/procedure)
_____________________________________________ on (give
date) _______________________ for the following reasons:
(give the assumed reason).
Beneficiary Agreement to Pay
- Medicare does not pay for this service for this
- Medicare does not pay for this many services in
this time period.
I have been notified by my physician that, in my
case, Medicare Part B is likely to deny payment for the
services identified above. I have read and understand
the above statement. I accept liability for those
services not paid by Medicare.
Extended Course of Treatment
An advance notice covering an extended course of
treatment is acceptable if the notice identifies all
services that the physician believes that Medicare will
not pay. If, as the course of treatment progresses,
additional services are furnished which the physician
believes Medicare will not pay, the beneficiary must be
separately notified of the likelihood of Medicare
nonpayment and the beneficiary must agree to pay.
Chiropractor Notice To Beneficiary
"Medicare will pay only for services that it
determines to be reasonable and necessary under Section
1862(a)(1) of Title XVIII of the Social Security Act. If
Medicare determines that a particular service, although
it would otherwise be covered, is not reasonable and
necessary under Medicare program standards, Medicare
will deny payment for that service. I believe that, in
your case, Medicare is likely to deny payment for
chiropractic manipulative therapy (A2000, 98940, 98941,
98942) for the following reason:
_____ 1. Medicare usually does not pay for this many
services in this time period.
_____ 2. Other
I will see this patient ____________ a week on an as
needed basis from (date)________ to (date)________.
I have been notified by my physician that he or she
believes that in my case Medicare is likely to deny
payment for the services identified above for the
reasons stated. If Medicare denies payment, I agree to
be fully and personally responsible for payment.
Signature __________________ (Beneficiary)