TN 4 (01-17)

A. Policy for installment payments

Installment payments are acceptable in cases where beneficiaries are unable to pay an arrearage in a lump sum, waiver of the entire arrearage is not possible and a request to pay the retroactive premiums by installment has been received. The beneficiary may pay the installments directly to the Social Security Administration (SSA), or they will be deducted from monthly social security checks if the individual is in current pay status (see HI 00805.180).

B. Procedure for installment payments

Installment payments are intended for those individuals who have Supplemental Medical Insurance (SMI) or Premium-Hospital Insurance (PHI) coverage, for a retroactive period, that requires payment of an arrearage, but whose financial circumstances make it difficult to pay the premium arrearage in a lump sum. Only the Field Office (FO) can approve an installment plan to pay the retroactive premiums. The monthly installment must be at least $20.00 (this does not include the current monthly or quarterly premium due) and the arrearage must be paid off within 36 months (see HI 00805.180 and HI 01005.801). The FO will forward the initial request of the approved installment plan to the Program Service Center (PSC) of jurisdiction. The FO will forward all subsequent inquiries from individuals who are paying Medicare premiums by direct remittance to the Mid-Atlantic Program Service Center (MATPSC).

C. Installments by monthly deductions

The PSC technician will:

• verify that the installment payment is for at least $20.00 per month and lasts no longer than 36 months (see OS 00501.215);

• summarize monthly installments (see SM 00850.560 through SM 00850.580);

• if necessary, change the date of entitlement to SMI on the Master Beneficiary Record (MBR) to an earlier date via the Manual Adjustment Credit and Data Entry (MACADE) process taking into account any premium deductions the Manual Adjustment, Credit and Award Processing (MADCAP) process may make, and notify the individual of the new START date; and

• send a notice when the first deduction is made from the benefit payment stating the amount of the monthly deduction and the date of the last deduction. After this notice, monthly notifications are not necessary.

D. Installments by direct remittance

The PSC technician will:

• verify that the installment payment is for at least $20.00 per month and lasts no longer than 36 months;

• remove any outstanding amounts posted to the Direct Billing System (DBS), see SM 00711.200;

• if necessary, change the date of entitlement to SMI on the Master Beneficiary Record (MBR) to an earlier date via the MACADE process taking into account any premium deductions the MADCAP process may make and notify the individual of the new START date;

• post a special message on the MBR stating: HOTFILE CASE, CURRENT INSTALLMENT AMOUNT $$$.¢¢; and

• prepare a summary sheet, see OS 00501.215.

The MATPSC implemented the HOTFILE program to control for receipt of installment payments received from individuals who pay retroactive Medicare premiums by direct remittance. MATPSC is the only SSA Centralized Remittance Processing Unit that processes premium remittances.

HOTFILE will:

• release an initial notice to individuals, (notice includes information about when and where to send the monthly installment payment);

• control for the Medicare premium arrearage;

• release a monthly bill to individuals, who request direct remittance of Medicare premium arrearages;

• release a delinquent notice to individuals, who are delinquent in paying the monthly installment payment; and

• release a final installment notice when individuals have remitted all payments.

NOTE: You can view these notices using the Online Retrieval System (ORS).

E. Failure to continue installment payments

If an individual has not paid his or her installment premiums up-to-date when the next installment is due, the PSC technician will notify the individual that the missing premium must be remitted within 30 days or the period of SMI entitlement covered by the installment agreement will be removed as a period of coverage (see HI 00805.180D.) The individual must remit the current installment payment as well as the missing installment payment within 30 days of the notice.

The PSC technician will:

• control the case for 45 days for termination action if the installment has not been received. A notice using this language must be sent to the beneficiary explaining the consequences of not remitting the premium prior to the time limit.

  “Our records show that you have failed to remit the installment due in MM/YYYY for the Supplementary Medical Insurance premium payments you owe for the period of MM/YYYY to MM/YYYY.”

  As we previously informed you, the installments must be paid timely in order for you to retain the entitlement for the period covered by the installments. If we do not receive the past due installment within 30 days, you will not have Supplementary Medical Insurance for the period of MM/YYYY to MM/YYYY. We will refund you any premium installments you have already made for this period. If medical bills have been paid for these months, you must repay the money to the Centers for Medicare and Medicaid Services (CMS).

  We are enclosing a premium bill for $$$.¢¢. This includes the past due installment of $$¢¢ and the current installment of $$$.¢¢.”;

• prepare a Form CMS-500 (Notice of Medicare Premium Payment Due) by entering the total amount of the past due installment payment due, or instructions to complete the CMS-500; and

• if the past due installment payment has not been received after 30 days have expired, terminate the period of SMI coverage equal to the first month of retroactive SMI covered under the installment agreement. Record a subsequent occurrence of SMI equal to the first month of entitlement after the period covered under the installment agreement.

EXAMPLE:

A BIC T beneficiary had Part A and B entitlement beginning January 2005. It was determined that for the period of February 2006 to December 2006 that no bills were sent due to government error. The claimant agreed to pay $40.00 a month until the arrearage was paid. Therefore, his arrearage continued from January 2005, as well as the billing. The installment premium for January 2007 was not received within 30 days from receipt of the notice. The Part B is terminated February 2006 for non-payment of premiums. A subsequent occurrence of Part B coverage will be recorded effective January 2007. Part A coverage will continue from January 2005. See SMI Equitable Relief Code (EQUIT RELIEF) in SM 00850.150.

F. Beneficiary going from current pay to suspense

In situations where a beneficiary is having his installment payments deducted from his benefit payment, and he goes from current pay to suspense (or uninsured status) the PSC technician will maintain the summary form and handle the installments, which must now be remitted by mail.

G. References

• HI 00805.180 Payment of Premium Arrearage

• HI 01005.801 Premium Billing and Collection Entities and Responsibilities

• OS 00501.215 Processing Medicare Premium Remittances

• SM 00850.560 Premium Relief (RLF) Data

• SM 00850.570 Receivable (RCVABLE) Data

• SM 00850.580 Collection Control (COL) Data

• SM 00711.200 CMS 1592, SMI Premium Accounting Card

• HI 01005.800 CMS 500, Notice of Medicare Premium Payment Due

• SM 00850.150 SMI Equitable Relief Code (EQUIT RELIEF)