In all cases, the initial premium notice will be sent to the claimant. If the claimant wishes to have premiums paid by a group willing to pay them, the premium billing notice will, by prearrangement, be turned over to the organization. Under the formal group payer arrangement, the enrollee turns the initial premium billing notice and the signed authorization form over to the group payer. Once the individual has been added to the group payer account, the enrollee will no longer receive a premium billing notice. CMS sends a single bill to the group for the premiums owed by all individuals included in the group. All premium payments are made via electronic funds transfer. The group must transmit and receive all data electronically. Under the informal arrangement, individuals submit their premium bills to the group payer as they are received. The group then forwards the bills and proper amount of payment to the premium collection center.

The group assumes responsibility for all premiums due, and the effective date of the arrangement begins with the claimant's SMI date of entitlement or, if later, the month following the month of suspension. However, in some cases the effective date may be later than the initial SMI entitlement date (or month following the suspension month), in which case there is a period of time for which the claimant is individually liable for premiums. If this should occur, and if any premiums for which the claimant has been billed are unpaid at the time the claimant is involved in the group plan, unless there is evidence to show subsequent payment by the claimant, there is a premium arrearage which must be withheld when benefit payments are later resumed.

When a group payer assumes the liability for premium payments, any special premium increase (penalty rate) applicable due to the individual's late enrollment or reenrollment will remain in effect.

When benefit payments are resumed or initiated for a beneficiary who is included in a contract group payment plan, the group liability for paying premium ceases. Therefore, it is assumed that the group has paid all premiums from the date of the agreement, or SMI third-party start date (SMTP-START), through the current operating month (COM). Any necessary adjustment in premiums paid by the group will be made by the Office of Systems based on the SMI third-party termination date (SMTP-STOP) and month coded on the debit summary. Therefore, an SMTP-STOP entry equal to the COM must be shown in these cases.

The contract group payment arrangement remains in effect through the first month that benefit payments are actually resumed. Therefore, if such an arrangement is in existence in any case where the beneficiary would normally go from conditional status to deferred status, the group payer remains liable for the premium payments through the maturity date of the deferred action. The Title II Redesign System will record an SMTP-STOP equal to the COM when benefits resume after the deferral.

In any case where a beneficiary in a conditional (suspense) status is to have benefit payments resumed in a known future month and a contract (not State) group payment arrangement is in force, do not place the beneficiary in deferred payment status. Leave the record in conditional status with the third-party billing code intact. Prepare a diary to mature around the 15^th of the month prior to the month for which the first benefit amount will be paid. When the diary matures, process a normal reinstatement action, including the coding of the SMTP-STOP equal to the current accrual month.

If, after benefits have been resumed and the group payer deleted, benefits are again placed in suspense status, the beneficiary remains responsible for premium payments until such time as a new arrangement is made with the group payer. That is, it is the beneficiary's responsibility to solicit third-party coverage from their group payer; it cannot be reestablished by SSA solely on the basis of the prior arrangement.

Premium remittances made by the contract group payer are credited to the claimant's Direct Billing record maintained by CMS. Any premiums due for months prior to the effective date of the claimant's inclusion in the group plan are reflected on the Direct Billing System (DBS), and are, until paid, a premium arrearage. If the SMI third-party entitlement date (SMTP-START) and the SMI-START date or the month following the suspension month (whichever is applicable) are the same, there is no premium arrearage.

The agency code used for identification and billing purposes is a three-character code consisting of one alphabetic and two numeric characters ranging from A01 through R99.

Those beneficiaries entitled to hospital insurance on a premium paying basis may have their HI premiums paid by a State or organization under a contract group arrangement. Agency codes will range from S01 through Z99. Codes from S01 through S99 represent State payers and are identified by the first two digits of the State codes listed at the end of HI 01001.205 (i.e., the premium-HI payer for Alabama is S01, for Arizona, S03, etc.).

A State and local government (surcharge payer) may enter into an agreement with CMS to receive a single bill and pay a lump sum for the SMI surcharges (penalties) due from a group of eligible individuals. Eligible individuals are individuals who are currently enrolled in Medicare Part B, who owe a Part B surcharge, and are either billed directly by CMS for their Part B premiums, or are eligible for Part B premium deduction from a social security or railroad retirement benefit or civil service annuity. The surcharge payer may not pay surcharges for enrollees whose Part B premiums are either being paid by a State Medicaid Agency under a State Buy-In Agreement or a Formal Group Payer under a Part B Formal Group Agreement.

If an enrollee wishes to have their surcharge paid by a surcharge payer, the enrollee signs a form authorizing the payment. Once the surcharge payer adds an enrollee to its surcharge account, the enrollee will only pay the basic monthly premium. The surcharge payer will pay the surcharge. CMS sends a single bill to the surcharge payer for the total amount of the surcharges owed by all enrollees included in its group.

Enrollees may be added to the surcharge billing account monthly. No retroactive additions are allowed. CMS’ third-party system will automatically generate an effective date for the addition. Where an addition is received in CMS by the 26^th day of a month, the effective date will be the next billing month. Once an enrollee is successfully added to the surcharge billing account, the surcharge payer assumes responsibility for surcharges due up until the time that the enrollee is removed from the surcharge billing account. If the enrollee is removed for reasons other than death, CMS will resume collecting the surcharge from the enrollee. The enrollee will be notified when a surcharge agency starts and stops paying the surcharge. (NL 00730.116, HIB 106 and HIB 107.)

The agency code used for identification and billing purposes is a 3-character code consisting of a “P” and two numeric characters. A current list of premium surcharge payers is shown at the end of HI 01001.271.