TN 2 (10-22)

GN 02335.030 General Provisions for DO Development of Underpayment Claims on Paid Bills

A. General

Experience has shown that in most underpayment claims the proper recipient is readily apparent, and that as a result of DO development, a claim will be filed by the qualified person. Therefore, the carriers have been instructed that, if the DO has assisted in the development of the case, they may assume that the claimant meets the requirements to receive the underpayment. Accordingly, the DO should not forward to the carrier a claim involving an underpayment without the evidence or statements necessary for payment.

Upon receipt of an inquiry in the DO, ascertain whether the services in question have been paid for. If they have not, see GN 02335.020. Where the bill has been paid, inform the individual of the requirements under which payment can be made and offer assistance in filing if it appears the individual is the proper recipient of the underpayment.

If another person is the potential payee, explain that the other person should file the claim. Subject to the tolerance in B., below, contact the qualified party, or if the circumstances permit, ask the inquirer to have the qualified party contact the DO. Do not take a claim from an inquirer who is not qualified unless the inquirer still wishes to file after having received a full explanation.

If the potential claimant resides in another service area, transfer the carrier assistance request to the proper DO. If regional guidelines require it, notify the carrier of the transfer.

B. Tolerance for Developing Underpayments, and Returned Check Procedures

Carriers have been instructed not to routinely initiate development in any underpayment situation where the amount payable is less than $50. However, where a claim for the underpayment is actually received by the carrier, it will be processed—or necessary development will be requested from the DO—regardless of the amount. If an unnegotiated check for less than $50 is returned to the carrier and there is no accompanying request for the underpayment, the carrier will void the check and take no further action.

The DO should generally take a claim regardless of the amount if an unnegotiated check is returned by an individual who is claiming the underpayment or requesting information about how to do so. However, if the amount of the check is very small, the individual may not wish to file. In this event, void the check and return it to the carrier with an explanation. If a check for less than $50 is returned by a person who is not qualified to receive the underpayment, explain the underpayment provisions, but do not solicit a claim from a qualified person. The check should be returned to the carrier and no further action taken until a claim or inquiry is received in the DO.

C. Filing of Claim

Aside from the issue concerning the person qualified to receive an underpayment, all other aspects of a claim for reimbursement will be developed in the same manner as if filed by a living beneficiary. Accordingly, if the beneficiary had not filed a claim prior to death, a HCFA-1490S (Request for Medicare Payment) or HCFA-1450 (Inpatient and/or Outpatient Billing) depending on the type of service rendered the beneficiary, is required. The claimant should sign the claimant's own name in the space provided. If the beneficiary had filed a claim before death, it is not necessary for a person claiming the underpayment to complete another. Any written request for the underpayment will suffice.

D. Evidence of Payment

Request evidence which shows that the services have been paid for and by whom. This evidence might be:

  1. 1. 

    A receipted bill showing who paid for the service, or,

  2. 2. 

    A cancelled check, or

  3. 3. 

    A written statement from the physician, supplier, or provider.

E. Evidence of Services Rendered Where Bill Not Paid by Beneficiary Before Death

If a bill was paid by the beneficiary before death, evidence that the services were rendered is not needed because the payment is evidence that the services were rendered. However, in cases where the beneficiary did not pay the bill before death, each claim must be substantiated by evidence submitted to the carrier that the services were rendered to the decedent enrollee.

F. Multiple Payees

Where more than one person is entitled to share in the underpayment (e.g., the services were paid by two or more persons, or there are several surviving children who qualify for the payment) application or payment request for the total payable to all will be required from only one member of such a group. Where payment is made to survivors, the underpayment amount will be divided equally among all qualified parties. (See GN 02335.045.) Obtain and record on a Report of Contact the name and address of each payee. Except as specified in G. below, the carrier will issue a separate check to each individual entitled to share in the payment. Where the charges have been paid by more than one person, each person who paid is entitled to only the individual's own proportionate share of the reimbursement. The carrier will include with the check to each payee an explanation that a claim for the payment was made by (claimant's name) on behalf of all persons entitled, and the check represents the payee's share.

G. Total Amounts Payable to Two or More Claimants Do Not Exceed $200

Where the total program benefit payable to multiple claimants is $200 or less, the person who files as agent for himself and all others entitled will be issued a check unless one of the parties objects. (But see GN 02335.045 for exception to this rule.) Obtain from the applicant an agreement in writing to divide the payment in the proper amounts among the other entitled individuals. If one of the parties objects to this method of disbursement, a separate check will be issued to each qualified individual.

H. Partially Paid Bill

Where only a portion of a bill has been paid, develop a claim on the paid portions as on any paid bill. Follow the instructions in GN 02335.020 C. for developing a claim on the unpaid portion.

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GN 02335.030 - General Provisions for DO Development of Underpayment Claims on Paid Bills - 10/28/2022
Batch run: 10/28/2022