SelectHealth AdvantageSM

Improper Use of Advance Notices of Non-Coverage

The Medicare Enrollment & Appeals Group (MEAG) and Medicare Drug 
& Health Plan Contract Administration Group (MCAG) have received 
reports of Medicare Advantage Organizations (MAOs) issuing notices to 
enrollees that advise of noncoverage for an item or service that do not 
comply with the requirements for such notices set forth under the 
organization determination process at 42 CFR Part 422, Subpart M. The 
notices being used by MAOs appear to be based on, and similar in purpose 
and content to, the advanced beneficiary notice of non-coverage (ABN) 
used in the Original Medicare program. Such notices are not applicable to 
the Medicare Advantage program, and are not appropriate for use by an 
MAO with respect to its enrollees. MAOs sending such notices should 
immediately cease this practice and instead follow the process for issuing 
a notice of a denial of coverage in accordance with 42 CFR §§​ 4422.568 
and 422.572.

Original Medicare ABN notices were established in order to allow a Medicare 
beneficiary to find out whether a service is covered by Medicare without 
having to receive services, and then submit a claim for reimbursement for 
the costs of such services. By their own terms, the ABN requirements in the 
statute and regulations do not apply in the Medicare Advantage context. This 
is because a Medicare Advantage enrollee has always had the right under the 
statute and regulations to an advance determination of whether services are 
covered prior to receiving such services. Specifically, section1852(g)(1)(A) 
requires MA organizations to “have a procedure for making determinations 
regarding whether an individual enrolled with the plan of the organization . . . is 
entitled to receive a health care service under this section.” The regulations at 
42 CFR §§ 422.568 and 422.572 set forth rules that apply to this 
determination procedure. These rules must be followed when an MAO is making 
a determination of coverage, including the requirements applicable  to the 
notice required upon making such a determination. Because these regulations 
are incorporated by reference for cost plans and HCPPs, the foregoing analysis 
applies to such plans as well.

Under the procedures at issue, when an MAO or cost plan or HCPP wishes to 
inform an enrollee that a service is not covered or that payment  is denied, in 
whole or in part, the decision is an organization determination under 42 CFR 
§422.566(b) and the appropriate notice must be used. 
 (notice for denials of payment and coverage). 
This is reflected in the self-referral provision, at  42 CFR §422.105(a), which 
states that when an enrollee receives an item or service of the plan that is 
covered upon referral or preauthorization by a contracted provider, the enrollee 
cannot be financially responsible for more than the normal cost-sharing if the 
enrollee correctly identified himself or herself as an enrollee of the plan to the 
contracted provider prior to receiving the item or service. This limitation on 
liability under § 422.105(a) applies unless the contracted provider can show 
that the enrollee received prior notice that the item or service would only be 
covered if further action was taken by the enrollee. Such prior notice is the 
issuance of an organization determination. The enrollee’s request for services 
from a contracted provider, whether such services are from that provider or 
from another provider in connection with a referral, is a request for an 
organization determination being made to an MAO representative. If the 
requested item or service is furnished to the enrollee, the furnishing of the item 
or service is a favorable organization determination made on behalf of the MAO. 
If the provider does not furnish the item or service (or does not make a referral) 
because the provider believes the item or service may not be covered, the 
contracted provider must advise the enrollee to request a preservice 
organization determination from the MAO or the provider can request the 
organization determination on the enrollee’s behalf.

This long standing CMS policy is reflected in Chapter 4, section 170, of the 
Medicare Managed Care Manual. Section 170 of Chapter 4, which states, in 
part, that services and referrals a contracted provider gives are considered plan 
approved  unless “notice is provided to the enrollee that the services will not be 
covered.” MAOs appear 
to be misinterpreting this statement to mean that 
providing an advance notice to 
an enrollee that an item or service is 
noncovered (i.e., providing a notice outside of 
the organization determination 
process) is a permissible means of holding the enrollee 
financially responsible 
for the cost of an item or service provided by a contracted provider 
or a 
noncontracted  provider on the basis of a 
referral from a contracted provider. 

However, these ABN-like notices are not compliant with the MA organization 
determination requirements.

Our Manual guidance in Chapter 4, section 170 means the notice provided as 
part of the organization determination processes set forth at 42 
CFR §§422.566 – 422.576 is necessary for an MAO to deny coverage or 
payment. With respect to properly notifying enrollees regarding matters of non-coverage, MAOs are prohibited from circumventing the organization 
determination process. The use of noncompliant advance notices of 
noncoverage by MAOs diminishes the enrollee protections that are part of the 
organization determination process. In circumstances where thereis a question 
whether or not the plan will cover an item or service, the enrollee has the right 
to request an organization determination. If coverage is denied, the plan must 
provide the enrollee with a standardized written denial notice 
(form CMS-10003) that states the specific reasons for the denial and informs 
the enrollee of his or her appeal rights. Unless a plan notifies an enrollee that 
an item or service will not be covered by issuing standardized denial notice 
CMS-10003, the MAO has not complied with the applicable regulations in 
42 CFR Part 422, subpart M; the failure to provide a compliantdenial to the 
enrollee means that the enrollee is not liable for services provided by a 
contracted provider or upon referral from a contracted provider. To enhance 
understanding of and compliance with these requirements, CMS plans to issue clarifications to Chapter 4 of the Medicare Managed Care Manual, consistent with 
this memorandum.

Any concerns an MAO may have with the provision or referral of services should 
beaddressed under its contractual arrangements with its network providers, not 
by going outside of the organization determination process and related notice 
requirements that protect beneficiaries.

As noted above, MAOs that are currently issuing advance notices of noncoverage outside of the organization determination process are to immediately cease 
from doing so. Continuation of this practice may result in compliance action. 
Plans that havequestions regarding this memorandum should contact their 
account manager.

To view the original notification, please click here.

Utah Notice of Medicare Non Coverage

Idaho Notice of Medicare Non Coverage

Updated Process for SelectHealth Advantage Claims Needing Documentation

Some services require additional information from the rendering provider before we can review and process the claim appropriately. Effective February 1, we are modifying our process for SelectHealth Advantage claims. If a claim for one of these services is received without the necessary documentation, we will pend the claim for 15 days and send the provider a request for the needed information. If records are not received within 15 days of the date posted on the letter, the claim will be denied for lack of documentation until we receive the required information.

Please return the records with the requesting letter, not with a new claim. This will expedite processing of the original claim and avoid having it mistakenly entered as a corrected or duplicate claim.

For more information about our documentation requirements, refer to Policies and Procedures​ or read the Provider Responsibilities section in the Provider Reference Manual.

“As a nonprofit insurance carrier, our goal is to serve all segments of the community,” says SelectHealth Medicare director Mark Richardson. “We look forward to using our long history of care management and administrative efficiencies to benefit Medicare members.”

For more information about SelectHealth Advantage, call 855-442-9900  or visit SelectHealth representatives and appointed agents are available to help with online applications, neighborhood meetings, or home visits. 

Medicare Advantage Plan Marketing by Providers

Marketing in the Medicare program extends beyond the general concept of advertising materials. Centers for Medicare and Medicaid Services (CMS) has determined that marketing includes any activities or materials created and targeted to Medicare beneficiaries that are conducted or distributed by parties covered by CMS rules. CMS is concerned with provider marketing activities for the following reasons:

  • Providers may not be fully aware of all plan benefits and costs
  • Providers may confuse the beneficiary if the provider is perceived as acting as an agent of the plan versus acting as the beneficiary's provider
  • Providers may face conflicting incentives when acting as a plan representative. 

Click here to review the dos and don'ts of Medicare Advantage Plan Marketing.

Restructuring of the Quality Improvement Organization Program and the Impact to Medicare Advantage Organizations and Prescription Drug Plans

Effective August 1, 2014, the existing Quality Improvement Organization (QIO) contractors will be replaced by two Beneficiary and Family-Centered Care Quality Improvement Organizations (BFCC-QIOs) contractors that will be responsible for conducting quality of care reviews, discharge and termination of service appeals, and other areas of required review in the various provider settings.Click here to read the complete memorandum. 
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