Limitation on Liability is a very common phrase to appeal writers, specifically when dealing with government denials. It’s a crucial argument that is vital to a winning appeal argument. Have you ever stopped to think about what that phrase means? Have you ever dug deep into government regulations to really understand Limitation on Liability and how it should be used to support your winning argument?

Where it Comes From

Limitation on Liability comes from the Social Security Act § SEC. 1879. [42 U.S.C. 1395pp] to be exact. http://www.ssa.gov/OP_Home/ssact/title18/1879.htm. Remember, all things Medicare and Medicaid were born through the Social Security Act, and are formed through the Code of Federal Regulations, and interpreted by CMS. When you read the Limitation on Liability of Beneficiary Where Medicare Claims Are Disallowed, which is the full title, you see the phrase “provider of services … 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,” multiple times. This is the essence of the Limitation on Liability portion of the Social Security Act as it relates to denial of payment for services under Medicare.

Medicare considers that a provider should know when payment is made for certain services based on “experience, actual notice, or constructive notice. It is clear that the provider, practitioner, or supplier could have been expected to have known that the services were excluded from coverage on the basis of the following:

(1) Its receipt of HCFA [the “old” name for CMS] notices

(2) Federal Register publications

(3) Its knowledge of what are considered acceptable standards of practice by the local medical community.”

In short, CMS has supplied the provider with all kinds of information on what services are covered and what services are not covered. For example, custodial care is defined as “Nonskilled, personal care, such as help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom…includ[ing] care that most people do themselves, like using eye drops,” is not covered.

Knowing this, a provider should know better than to bill for services that are not covered and expect payment. However, did you see #3 above? There’s our favorite phrase, “considered acceptable standards of practice by the local medical community”. If your surgeons are amputating fingers for paper cuts, don’t expect to get paid for that. However, if you have provided care to a person based on the acceptable standards of care in the medical community and the documentation in the medical record supports that, you have a very strong argument for payment.

How are you using Limitation on Liability to win appeals?

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