TN 22 (11-01)

A. Procedure - When a Beneficiary will be Billed

When the beneficiary's benefit payments are suspended for a period of time, which will not permit collection of all premiums due from benefits for the current year, the beneficiary will be billed and expected to pay the premiums by direct remittance. For billing instructions if SMI entitlement is initially awarded after the year in which coverage begins.) When an individual goes from suspense status to deferred status (i.e., a definite date is set for resumption of benefits), premium billing continues until benefit payments actually begin. When benefit payments are resumed following a period of deferred status, any premiums owed are deducted from the first benefit(s) payable (e.g., where the enrollee has not remitted all premiums timely in response to direct billing).

Beneficiaries in suspense for an extended period are billed for 3 months' premiums at a time on a regular quarterly cycle beginning with the first, second, or third months of the calendar quarter, as explained below.

The billing notices are mailed in the month preceding the quarter. However, the enrollee may pay premiums for more than one quarter at a time. When a beneficiary pays his/her premiums in advance, the direct billing system will not send a bill until the premium liability exceeds $10.00.

If a beneficiary sends a payment that is less than what was billed, such payments will be accepted. If the payment received is less than the amount billed and the notice received was a delinquent notice, a termination will still occur if the remaining premium liability is more than $10.00.

When the beneficiary's payments are deferred, i.e., a definite date is set for resumption of benefits, premium billing will occur if the deferred date is not in the current year. If the deferred date is in the current year, any premiums owed will be deducted from the first benefit check(s) payable when the benefit payments are resumed.

B. Procedure - Beneficiaries in a Quarterly Billing Cycle

Uninsured beneficiaries and beneficiaries who are in suspense status are billed in three quarterly billing cycles for their SMI premiums. The cycles are divided equally to better manage the direct billing process. These quarterly billing cycles are identified as A, B, and C. The chart below indicates the months in which the billing notices are mailed for each cycle. Bills mailed in the months displayed will include premiums for the subsequent 3-month period:

NOTE: Records are selected for billing on the 27^th of the month preceding the month that the bill is being mailed.

Example: A bill mailed in July will include premiums for August, September and October. The next bill for this cycle will be mailed in October for the subsequent 3 months.

A monthly beneficiary entering into billable status upon suspension of benefit payment is placed in the first billing cycle feasible following the actual suspension of payments. He/she will remain in this billing cycle as long as he/she is in billable status. However, if the beneficiary finds that his/her billing cycle is financially inconvenient, and he/she makes a specific request, the cycle may be changed to monthly billing. (See HI 01001.075.) It is not necessary to routinely volunteer information about changing billing cycles since monthly billing is a more expensive process.

Example: Mr. Fothemiller, a monthly benefit beneficiary, has his benefit check suspended in 7/00 and owes premiums for months beginning in August. He is placed in billing cycle B and in August is billed for 4 months of premiums (August through November). After the initial bill, he will be routinely billed for 3 months' premiums and any arrearages if applicable, in November, February, and May.

C. Procedure - When a Beneficiary will not be Billed

When suspended benefit payments are scheduled to be resumed (e.g., a deferred case) for the current year with payments beginning in or before the following January, any premiums owed when benefits are resumed will be deducted from the first benefit(s) payable. In the meantime, the beneficiary is not billed but instead is advised that premiums due during the period for which benefits are suspended will be deducted from his/her benefit payments when his/her benefits resume.

Beneficiaries whose benefits are in suspense or in deferred payment status beyond the end of the current year are billed (see HI 01001.045A.).

Example: Frana Johnson, a 68-year-old beneficiary, is enrolled for SMI and has been in continuous work suspense status. In April, after having paid her premiums for April through June, she notified SSA that she was retiring in May and would have no further earnings.

Since her premiums were paid through June, the benefit check she receives in June will not be reduced; however, each benefit check beginning with the July check will have one month's premium deducted from it. If, at the time her June check is issued, she has not paid premiums for the April through June quarter or her record did not indicate such payment, her benefit check would be reduced by the premiums for April through June. If, after the check is issued, her record is credited with the payment she made in response to receipt of the Notice of Medicare Premium Payment Due (CMS-500), there would be a premium overpayment, which would be refunded in the next direct billing quarterly refund process.

Miss Johnson notified SSA in June that she would go back to work in August. Any premium overpayment that existed would not be refunded at that time because a current pay status would not be reflected until August.

D. Procedure - Periods for which Premiums are Due

Unless the enrollee is billed monthly, the initial notice of premiums due will cover a period of 3 months or, if greater, the period from the first month a premium is owed through the end of the third month after the month of billing. Premium billing notices are not necessarily received on a calendar quarter billing cycle. Some notices are mailed on an off-calendar quarter; e.g., February, March. The enrollee should be advised to set aside money for premiums, so that he/she will be prepared to pay for each month of coverage before he/she receives the bill plus the quarter after the bill. (HI 01005.803 further explains the methods of premium collection.)