US Code

Public Law 119-83 (04/13/2026)

42 U.S.C. § 1395pp

Limitation on liability where claims are disallowed

(a)

Conditions prerequisite to payment for items and services notwithstanding determination of disallowance

Where—
(1)
section 1395u(b)(3)(B)(ii) of this title a determination is made that, by reason of section 1395y(a)(1) or (9) of this title or by reason of a coverage denial described in subsection (g), payment may not be made under part A or part B of this subchapter for any expenses incurred for items or services furnished an individual by a provider of services or by another person pursuant to an assignment under , and
(2)
both such individual and such provider of services or such other person, as the case may be, did not know, and could not reasonably have been expected to know, that payment would not be made for such items or services under such part A or part B,
section 1395y(a)(9) of this titlethen to the extent permitted by this subchapter, payment shall, notwithstanding such determination, be made for such items or services (and for such period of time as the Secretary finds will carry out the objectives of this subchapter), as though section 1395y(a)(1) and did not apply and as though the coverage denial described in subsection (g) had not occurred. In each such case the Secretary shall notify both such individual and such provider of services or such other person, as the case may be, of the conditions under which payment for such items or services was made and in the case of comparable situations arising thereafter with respect to such individual or such provider or such other person, each shall, by reason of such notice (or similar notices provided before the enactment of this section), be deemed to have knowledge that payment cannot be made for such items or services or reasonably comparable items or services. Any provider or other person furnishing items or services for which payment may not be made by reason of section 1395y(a)(1) or (9) of this title or by reason of a coverage denial described in subsection (g) shall be deemed to have knowledge that payment cannot be made for such items or services if the claim relating to such items or services involves a case, provider or other person furnishing services, procedure, or test, with respect to which such provider or other person has been notified by the Secretary (including notification by a quality improvement organization) that a pattern of inappropriate utilization has occurred in the past, and such provider or other person has been allowed a reasonable time to correct such inappropriate utilization.
(b)

Knowledge of person or provider that payment could not be made; indemnification of individual

In any case in which the provisions of paragraphs (1) and (2) of subsection (a) are met, except that such provider or such other person, as the case may be, knew, or could be expected to know, that payment for such services or items could not be made under such part A or part B, then the Secretary shall, upon proper application filed within such time as may be prescribed in regulations, indemnify the individual (referred to in such paragraphs) for any payments received from such individual by such provider or such other person, as the case may be, for such items or services. Any payments made by the Secretary as indemnification shall be deemed to have been made to such provider or such other person, as the case may be, and shall be treated as overpayments, recoverable from such provider or such other person, as the case may be, under applicable provisions of law. In each such case the Secretary shall notify such individual of the conditions under which indemnification is made and in the case of comparable situations arising thereafter with respect to such individual, he shall, by reason of such notice (or similar notices provided before the enactment of this section), be deemed to have knowledge that payment cannot be made for such items or services. No item or service for which an individual is indemnified under this subsection shall be taken into account in applying any limitation on the amount of items and services for which payment may be made to or on behalf of the individual under this subchapter.

(c)

Knowledge of both provider and individual to whom items or services were furnished that payment could not be made

No payments shall be made under this subchapter in any cases in which the provisions of paragraph (1) of subsection (a) are met, but both the individual to whom the items or services were furnished and the provider of service or other person, as the case may be, who furnished the items or services knew, or could reasonably have been expected to know, that payment could not be made for items or services under part A or part B by reason of section 1395y(a)(1) or (a)(9) of this title or by reason of a coverage denial described in subsection (g).

(d)

Exercise of rights

In any case arising under subsection (b) (but without regard to whether payments have been made by the individual to the provider or other person) or subsection (c), the provider or other person shall have the same rights that an individual has under sections 1395ff(b) and 1395u(b)(3)(C) of this title (as may be applicable) when the amount of benefit or payments is in controversy, except that such rights may, under prescribed regulations, be exercised by such provider or other person only after the Secretary determines that the individual will not exercise such rights under such sections.

(e)

Payment where beneficiary not at fault

Where payment for inpatient hospital services or extended care services may not be made under part A of this subchapter on behalf of an individual entitled to benefits under such part solely because of an unintentional, inadvertent, or erroneous action with respect to the transfer of such individual from a hospital or skilled nursing facility that meets the requirements of section 1395x(e) or (j) of this title by such a provider of services acting in good faith in accordance with the advice of a utilization review committee, quality improvement organization, or fiscal intermediary, or on the basis of a clearly erroneous administrative decision by a provider of services, the Secretary shall take such action with respect to the payment of such benefits as he determines may be necessary to correct the effects of such unintentional, inadvertent, or erroneous action.

(f)

Presumption with respect to coverage denial; rebuttal; requirements; “fiscal intermediary” defined

(1)
A home health agency which meets the applicable requirements of paragraphs (3) and (4) shall be presumed to meet the requirement of subsection (a)(2).
(2)
The presumption of paragraph (1) with respect to specific services may be rebutted by actual or imputed knowledge of the facts described in subsection (a)(2), including any of the following:
(A)
Notice by the fiscal intermediary of the fact that payment may not be made under this subchapter with respect to the services.
(B)
It is clear and obvious that the provider should have known at the time the services were furnished that they were excluded from coverage.
(3)
The requirements of this paragraph are as follows:
(A)
The agency complies with requirements of the Secretary under this subchapter respecting timely submittal of bills for payment and medical documentation.
(B)
The agency program has reasonable procedures to notify promptly each patient (and the patient’s physician) where it is determined that a patient is being or will be furnished items or services which are excluded from coverage under this subchapter.
(4)
(A)
The requirement of this paragraph is that, on the basis of bills submitted by a home health agency during the previous quarter, the rate of denial of bills for the agency by reason of a coverage denial described in subsection (g) does not exceed 2.5 percent, computed based on visits for home health services billed.
(B)
For purposes of determining the rate of denial of bills for a home health agency under subparagraph (A), a bill shall not be considered to be denied until the expiration of the 60-day period that begins on the date such bill is denied by the fiscal intermediary, or, with respect to such a denial for which the agency requests reconsideration, until the fiscal intermediary issues a decision denying payment for such bill.
(5)
section 1395h of this title In this subsection, the term “fiscal intermediary” means, with respect to a home health agency, an agency or organization with an agreement under with respect to the agency.
(6)
The Secretary shall monitor the proportion of denied bills submitted by home health agencies for which reconsideration is requested, and shall notify Congress if the proportion of denials reversed upon reconsideration increases significantly.
(g)

Coverage denial defined

The coverage denial described in this subsection is—
(1)
section 1395f(a)(2)(C) of this titlesection 1395n(a)(2)(A) of this title with respect to the provision of home health services to an individual, a failure to meet the requirements of or in that the individual—
(A)
is or was not confined to his home, or
(B)
does or did not need skilled nursing care on an intermittent basis; and
(2)
with respect to the provision of hospice care to an individual, a determination that the individual is not terminally ill.
(h)

Supplier responsibility for items furnished on assignment basis

section 1395m(j)(5) of this titleIf a supplier of medical equipment and supplies (as defined in )—
(1)
section 1395m(j)(1) of this title furnishes an item or service to a beneficiary for which no payment may be made by reason of ;
(2)
section 1395m(a)(15) of this title furnishes an item or service to a beneficiary for which payment is denied in advance under ; or
(3)
section 1395m(a)(17)(B) of this title furnishes an item or service to a beneficiary for which no payment may be made by reason of ,
section 1395m(a)(18) of this titleany expenses incurred for items and services furnished to an individual by such a supplier on an assignment-related basis shall be the responsibility of such supplier. The individual shall have no financial responsibility for such expenses and the supplier shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected from the individual for such items or services. The provisions of shall apply to refunds required under the previous sentence in the same manner as such provisions apply to refunds under such section.
(i)

Hospice program eligibility recertification

section 1395f(a)(7)(E) of this titlesection 1395y(a)(1) of this titleThe provisions of this section shall apply with respect to a denial of a payment under this subchapter by reason of in the same manner as such provisions apply with respect to a denial of a payment under this subchapter by reason of .

Aug. 14, 1935, ch. 531 Pub. L. 92–603, title II, § 213(a)86 Stat. 1384 Pub. L. 96–499, title IX, § 956(a)94 Stat. 2648 Pub. L. 97–248, title I96 Stat. 393 Pub. L. 99–509, title IX100 Stat. 1991 Pub. L. 100–203, title IV, § 4096(b)101 Stat. 1330–139 Pub. L. 101–239, title VI, § 6214(a)103 Stat. 2252 Pub. L. 103–432, title I, § 133(b)108 Stat. 4421 Pub. L. 105–33, title IV, § 4447111 Stat. 424 Pub. L. 112–40, title II, § 261(a)(3)(A)125 Stat. 423 Pub. L. 113–185, § 3(b)128 Stat. 1969 (, title XVIII, § 1879, as added , , ; amended , , ; , §§ 145, 148(e), , , 394; , §§ 9305(g)(1), 9341(a)(3), , , 2038; , , ; , (b), , ; , , ; , , ; , (B), , ; , , .)

Editorial Notes

Amendments

Pub. L. 113–1852014—Subsec. (i). added subsec. (i).

Pub. L. 112–40, § 261(a)(3)(A)2011—Subsec. (a). , substituted “quality improvement” for “utilization and quality control peer review” in concluding provisions.

Pub. L. 112–40, § 261(a)(3)(B)Subsec. (e). , substituted “quality improvement” for “quality control and peer review”.

Pub. L. 105–331997—Subsec. (g). substituted “subsection is—” for “subsection is,”, redesignated remaining text as par. (1) and former pars. (1) and (2) as subpars. (A) and (B), respectively, of par. (1), realigned margins, substituted “; and” for period at end, and added par. (2).

Pub. L. 103–4321994—Subsec. (h). added subsec. (h).

Pub. L. 101–239, § 6214(a)(1)1989—Subsec. (f)(1). , struck out “with respect to any coverage denial described in subsection (g) of this section” before period at end.

Pub. L. 101–239, § 6214(a)(2)Subsec. (f)(4). , designated existing provisions as subpar. (A) and added subpar. (B).

Pub. L. 101–239, § 6214(b)Subsec. (f)(6). , added par. (6).

Pub. L. 100–2031987—Subsec. (b). struck out “, subject to the deductible and coinsurance provisions of this subchapter,” after “(referred to in such paragraphs)” and inserted at end “No item or service for which an individual is indemnified under this subsection shall be taken into account in applying any limitation on the amount of items and services for which payment may be made to or on behalf of the individual under this subchapter.”

Pub. L. 99–509, § 9305(g)(1)(A)1986—Subsec. (a). –(C), inserted in par. (1) “or by reason of a coverage denial described in subsection (g)”, and in concluding provisions inserted “and as though the coverage denial described in subsection (g) had not occurred” and “or by reason of a coverage denial described in subsection (g)”.

Pub. L. 99–509, § 9305(g)(1)(D)Subsec. (c). , inserted “or by reason of a coverage denial described in subsection (g)”.

Pub. L. 99–509, § 9341(a)(3)section 1395ff(b) of this titlesection 1395u(b)(3)(C) of this titleSubsec. (d). , substituted “sections 1395ff(b) and 1395u(b)(3)(C) of this title (as may be applicable)” for “ (when the determination is under part A) or (when the determination is under part B)”.

Pub. L. 99–509, § 9305(g)(1)(E)Subsecs. (f), (g). , added subsecs. (f) and (g).

Pub. L. 97–248, § 1451982—Subsec. (a). , inserted provisions relating to imputing knowledge to provider or other person furnishing items or services for which payment may not be made that payment may not be made if the provider or other person has been notified that a pattern of inappropriate utilization has occurred in the past and there has been a reasonable time for correction of such utilization.

Pub. L. 97–248, § 148(e)Subsec. (e). , substituted “quality control and peer review organization” for “professional standards review organization”.

Pub. L. 96–4991980—Subsec. (e). added subsec. (e).

Statutory Notes and Related Subsidiaries

Effective Date of 2011 Amendment

Pub. L. 112–40section 261(e) of Pub. L. 112–40section 1320c of this titleAmendment by applicable to contracts entered into or renewed on or after , see , set out as a note under .

Effective Date of 1997 Amendment

Pub. L. 105–33section 4449 of Pub. L. 105–33section 1395d of this titleAmendment by applicable to benefits provided on or after , except as otherwise provided, see , set out as a note under .

Effective Date of 1994 Amendment

Pub. L. 103–432section 133(c) of Pub. L. 103–432section 1395m of this titleAmendment by applicable to items or services furnished on or after , see , set out as a note under .

Effective Date of 1989 Amendment

Pub. L. 101–239, title VI, § 6214(c)103 Stat. 2252

“The amendments made by subsection (a) [amending this section] shall apply to determinations for quarters beginning on or after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1987 Amendment

Pub. L. 100–203section 4096(d) of Pub. L. 100–203section 1320c–3 of this titleAmendment by applicable to services furnished on or after , see , set out as a note under .

Effective Date of 1986 Amendment

Pub. L. 99–509, title IX, § 9305(g)(3)100 Stat. 1993 Pub. L. 100–360, title IV, § 426(c)102 Stat. 814 Pub. L. 101–508, title IV, § 4207(b)(3)104 Stat. 1388–118 Pub. L. 103–432, title I, § 160(d)(4)108 Stat. 4444

“The amendments made by paragraph (1) [amending this section] shall apply to coverage denials occurring on or after , and before .”
, , , as amended by , , ; , formerly § 4027(b)(3), , , renumbered , , , provided that:

section 9341(a)(3) of Pub. L. 99–509section 9341(b) of Pub. L. 99–509section 1395ff of this titleAmendment by applicable to items and services furnished on or after , see , set out as a note under .

Effective Date of 1982 Amendment

Pub. L. 97–248section 149 of Pub. L. 97–248section 1320c of this titleAmendment by effective with respect to contracts entered into or renewed on or after , see , set out as an Effective Date note under .

Effective Date of 1980 Amendment

Pub. L. 96–499, title IX, § 956(b)94 Stat. 2648

“The amendment made by subsection (a) [amending this section] shall take effect on .”
, , , provided that:

Effective Date

Pub. L. 92–603, title II, § 213(b)86 Stat. 1386

42 U.S.C. 1395c“The amendments made by this section [enacting this section] shall be effective with respect to claims under part A or part B of title XVIII of the Social Security Act [ et seq., 1395j et seq.], filed with respect to items or services furnished after the date of the enactment of this Act [].”
, , , provided that:

Provisions Relating to Advance Beneficiary Notices; Report on Prior Determination Process

Pub. L. 108–173, title IX, § 938(c)117 Stat. 2415

“(1)

Data collection .—

The Secretary [of Health and Human Services] shall establish a process for the collection of information on the instances in which an advance beneficiary notice (as defined in paragraph (5)) has been provided and on instances in which a beneficiary indicates on such a notice that the beneficiary does not intend to seek to have the item or service that is the subject of the notice furnished.
“(2)

Outreach and education .—

The Secretary shall establish a program of outreach and education for beneficiaries and providers of services and other persons on the appropriate use of advance beneficiary notices and coverage policies under the medicare program.
“(3)

report on use of advance beneficiary notices GAO .—

42 U.S.C. 1395ff(h)42 U.S.C. 1395Not later than 18 months after the date on which section 1869(h) of the Social Security Act [] (as added by subsection (a)) takes effect, the Comptroller General of the United States shall submit to Congress a report on the use of advance beneficiary notices under title XVIII of such Act [ et seq.]. Such report shall include information concerning the providers of services and other persons that have provided such notices and the response of beneficiaries to such notices.
“(4)

report on use of prior determination process GAO .—

42 U.S.C. 1395ff(h)Not later than 36 months after the date on which section 1869(h) of the Social Security Act [] (as added by subsection (a)) takes effect, the Comptroller General of the United States shall submit to Congress a report on the use of the prior determination process under such section. Such report shall include—
“(A)
information concerning—
“(i)
the number and types of procedures for which a prior determination has been sought;
“(ii)
determinations made under the process;
“(iii)
the percentage of beneficiaries prevailing;
“(iv)
in those cases in which the beneficiaries do not prevail, the reasons why such beneficiaries did not prevail; and
“(v)
changes in receipt of services resulting from the application of such process;
“(B)
an evaluation of whether the process was useful for physicians (and other suppliers) and beneficiaries, whether it was timely, and whether the amount of information required was burdensome to physicians and beneficiaries; and
“(C)
recommendations for improvements or continuation of such process.
“(5)

Advance beneficiary notice defined .—

42 U.S.C. 1395pp(a)42 U.S.C. 1395c42 U.S.C. 1395In this subsection, the term ‘advance beneficiary notice’ means a written notice provided under section 1879(a) of the Social Security Act () to an individual entitled to benefits under part A or enrolled under part B of title XVIII of such Act [ et seq., 1395j et seq.] before items or services are furnished under such part in cases where a provider of services or other person that would furnish the item or service believes that payment will not be made for some or all of such items or services under such title [ et seq.].”
, , , provided that:

Reports to Congress on Denials of Bills for Payment

Pub. L. 99–509, title IX, § 9305(g)(2)100 Stat. 1992 , , , directed Secretary of Health and Human Services to report to Congress annually in March of 1987 and 1988 information on frequency and distribution (by type of provider) of denials of bills for payment under this subchapter for extended care services, home health services, and hospice care, by reason of section 1395y(a)(1) or (9) of this title, and coverage denials described in subsec. (g) of this section, and such other information as appropriate to evaluate the appropriateness of any percentage standards established for the granting of favorable presumptions with respect to such denials.