When a premium refund is payable to a non-beneficiary on behalf of:

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  a deceased uninsured beneficiary (BIC T or M) or

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  beneficiary making direct remittances to the Center for Medicare & Medicaid Services (CMS) due to a non-payment status,

process the payment via the Single Payment System (SPS) using the instructions in SM 00834.435.

When a deceased beneficiary, uninsured or insured, is due a Part B premium refund payable to a Social Security beneficiary on the same or different record, process the payment through the Manual Adjustment Credit and Award Data Entry (MACADE) system. On the payment history (HST) screen;

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  Use an "AA" special entry equal to the premium refund amount with the special indicator code (SIC) “PH” to relieve the payee of any tax liability.

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  Explain the refund in the enclosure notice block (ENB) by using the appropriate ADJ paragraph found in NL 00720.004.

NOTE: When a manual adjustment credit and award process (MADCAP) action contains an “AA” entry with the “PH” SIC, a daily payment history update system (PHUS) alert with the “054 QUES CPDRD” exception will be generated. Correct the PHUS alert using instructions in SM 00630.254B and annotate the non-taxable payment with an EVNT 038 NONTAX PMT using instructions in SM 00630.238.

Once SSA pays the survivor(s) the excess Part B premiums, remove any previously posted direct billing system (DBS) overage by using a CMS-1592 and entering the appropriate record identification code (RIC). For information on the CMS-1592, see SM 00711.200. For information on RIC descriptions, see SM 00711.220.

When paying Medicare premiums from the Social Security Administration (SSA) trust fund to survivors using MADCAP or SPS, it is necessary to use an SSA-666 (Adjustment in Trust Fund Accounts) form to transfer the funds from CMS back to SSA. The type of benefit the deceased was receiving at the time of death (RIB or DIB) determines which SSA trust fund the money will be deposited to. For information on the SSA-666, see HI 01015.040.