TN 63 (11-24)

GN 02250.036 Fault Determinations for Overpayments due to Benefit Continuation During Medical Cessation Cases - Title II and Title XVI

CITATIONS: Social Security Act §§204(b), 223(g)(2)(B), 1631(a)(7)(B)(ii), (b)(1)(B) 20 C.F.R. §§ 404.506, 404.507, 404.1597a(j), 416.550, 416.552, 416.996(g)

A. Introduction

This section provides guidance for making a not at fault determination for a waiver request only for the portion of an overpayment resulting from a period of benefit continuation. We will find an overpaid individual not at fault for an overpayment due to benefit continuation if they appealed the medical cessation in good faith. We assume an individual appealed in good faith unless they did not cooperate during the appeal and did not have a good reason for the failure to cooperate.

B. Policy

When our final determination on a medical cessation affirms that an individual is no longer disabled, we will determine that the Statutory Benefit Continuation (SBC) payments made during the appeal are an overpayment. The individual has the right to ask for waiver of the overpayment.

When individual with an SBC overpayment requests a waiver, we first must determine if they appealed in good faith. We assume an individual appealed in good faith unless the individual failed to cooperate with us during the appeal process and did not have good reason for the failure to cooperate. For more information on determining SBC payment months, refer to DI 12027.020. For more information on SBC during a medical cessation appeal, refer to DI 40515.100.

Failure to cooperate may include when an individual fails (without good reason) to give us medical or other evidence we request or to go for a physical or mental examination when requested by us, in connection with the appeal.

When considering whether the individual had a good reason for not cooperating with their appeal, we will consider any physical, mental, educational, or linguistic limitations (including any lack of proficiency in the English language) that the individual may have, which may have caused the failure to cooperate.

If the individual had good reason for the failure to cooperate, we will find the individual appealed in good faith and was not at fault for the overpayment. After finding the individual is not at fault, we will then determine if they meet one of the other waiver provisions.

If the individual did not appeal in good faith because they failed to cooperate during the appeal process without good reason, we will propose to deny the waiver for the portion of an overpayment resulting from SBC payments and schedule a file review and personal conference. For more information on scheduling the file review and personal conference, refer to GN 02270.007.

Cooperation with an appeal only applies to situations involving SBC. If any portion of an overpayment is caused by a reason other than SBC, consider cooperation with the appeal when determining fault only for the portion of the overpayment caused by SBC. For any portion of the overpayment caused by a reason other than SBC, do not consider cooperation with the appeal when determining whether the individual is not at fault. Refer to Example 4 in GN 02250.036D in this section.

1. Appeal pursue in good faith (cooperates with appeals process or has good reason for failure to cooperate)

We will find that where the individual acted in good faith to pursue the appeal, the individual is not at fault in causing the overpayment.  Assume the appeal was made in good faith unless the individual did not cooperate in connection with the appeal and did not have a good reason for the failure to cooperate. We must then determine if the overpaid individual meets one of the other waiver provisions. Refer to Examples 1, 2, and 3 in GN 02250.036D in this section.

2. Appeal not pursue in good faith (failed to cooperate with appeals process without good reason)

Assume the appeal was made in good faith unless, without good reason, the individual did not cooperate in connection with the appeal. Before making such a finding, we will take into account the individual’s circumstances that may have caused the individual to not cooperate with the appeals process. These circumstances may include but are not limited to:

  • Any physical condition (which may include medical institutionalization during the appeals process);

  • Mental condition (which may include medical institutionalization during the appeals process);

  • Financial limitations (e.g., payment for medical records); and

  • Educational or linguistic limitations (including any lack of facility with the English language).

We may find an individual did not appeal in good faith only if they did not cooperate and did not have good reason for the failure to cooperate.

Examples of failure to cooperate may include:

  • Not giving us medical or other evidence we requested in connection with the appeal, without good reason; or

  • Not attending a physical or mental examination as we requested in connection with the appeal, without good reason.

If the appeal was not pursued in good faith because the individual failed to cooperate without good reason, we will find the overpaid individual is at fault for the overpayment, propose to deny the waiver, and schedule a file review and personal conference. Refer to GN 02270.007.

IMPORTANT: Failure to cooperate with an appeal is entirely different from failure to cooperate with a continuing disability review (CDR). For more information on CDRs, refer to DI 28075.005.

3. Full waiver development required

If we find the individual appealed the medical cessation determination in good faith, we will find the individual not at fault.  After determining the individual is not at fault, determine if you can approve the waiver under one of these provisions:

  • Deemed to defeat the purpose, refer to GN 02250.110; or

  • Against equity and good conscience, refer to GN 02250.150, or

  • Defeats the purpose of the Act, refer to GN 02250.100.

C. Procedure

Do not automatically approve or deny a waiver request for an overpayment resulting from SBC.  Before waiving any overpaid amounts from SBC, take these steps.

  1. 1. 

    Review the Master Beneficiary Record (MBR) and Supplemental Security Record (SSR) to determine whether the cause of the overpayment is due to SBC.  When you have an overpayment caused in part by SBC, complete steps 2 – 4 for that part of the overpayment, then proceed to Step 5 for the portion of the overpayment caused by a different reason.

  2. 2. 

    Assume the individual appealed in good faith unless there is evidence that the individual failed to cooperate without a good reason. Review the file to determine whether there is evidence that the individual failed to cooperate without good reason. When the teleservice center (TSC) receives a waiver request, they must contact the FO to secure additional information regarding whether the individual pursued in good faith their medical cessation appeal. For more information, refer to TC 26001.080 and TC 26010.130.

  3. 3. 

    If the appeal was made in good faith, find the individual not at fault and complete full waiver development, per GN 02250.036B.3.

  4. 4. 

    If there is evidence that the appeal was not made in good faith, we will determine that the overpaid individual is at fault, propose to deny the waiver, and schedule a file review and personal conference. Refer to GN 02270.007.

  5. 5. 

    If part of the overpayment that was caused by a reason other than SBC, determine whether the individual is not at fault for that part of the overpayment, per GN 02250.005 through GN 02250.025. If you find the individual not at fault, follow the instructions in GN 02250.036B.3.

D. Examples

These are waiver determinations involving an SBC overpayment.

Example 1: Full cooperation

Ruth received a notice of medical cessation.  They filed an appeal and elected to receive SBC payments through the hearing level where the administrative law judge (ALJ) upheld the denial decision. After Ruth did not appeal and the decision became final, we issued the notice of overpayment for the SBC payments received during the appeal process.  Ruth requested a waiver for the SBC overpayment. We reviewed Ruth’s file and found that they appealed in good faith because they cooperated during the appeals process by submitting requested documentation and otherwise cooperating during the appeal.  We found Ruth not at fault, and uncovered that Ruth has two children. The family receives Temporary Assistance for Needy Families (TANF), and the household receives Supplemental Nutrition Assistance Program (SNAP) benefits.  We waived recovery of the SBC overpayment because Ruth is not at fault in causing the overpayment and recovery is deemed to defeat the purpose.

Example 2: Full cooperation

Lily received a medical cessation notice. Lily filed an appeal and elected to receive SBC payments while they awaited the decision on the appeal.   Lily completed all forms that we sent to them for the appeal process.  Lily attended the hearing with the state agency for the reconsideration and received an affirmation of the original decision on their disability appeal. Lily requested and attended a new hearing before an ALJ.  The ALJ issued their unfavorable decision to Lily.  After Lily did not appeal and the decision became final, we issued the notice of SBC overpayment to Lily, and they requested a waiver. We found Lily cooperated during the appeals process.

We completed full waiver development. Although we found Lily not at fault because they cooperated during appeals process, we cannot approve the waiver because Lily has the ability to repay the overpayment, and recovery is not against equity and good conscience.  We will propose a waiver denial and schedule a file review and personal conference.

Example 3: Good reason for failure to cooperate

James received a medical cessation notice. They filed a timely request for reconsideration and benefit continuation during the appeal process. James received paperwork to complete but failed to return it timely because they were hospitalized due to their medical condition. We denied their reconsideration. Then, James filed a timely request for a hearing with an ALJ and elected benefit continuation again. James showed up for the hearing and provided all of the requested information (including proof of hospitalization) and otherwise cooperated during the hearing level of the appeals process. The ALJ upheld the decision to cease James’ disability benefits. After 65 days passed, we sent James an overpayment notice for the months of benefit continuation during the reconsideration and hearing. James requested waiver of the overpayment, stating that they had no income or resources.

Although James did not cooperate during all levels of appeal, there is an indication that James had limitations preventing them from cooperating. Because James had a good reason for not cooperating, we found James not at fault for causing the overpayment. We waived the overpayment because they are not at fault and recovery would defeat the purpose.

Example 4: Overpayment partly caused by a reason other than SBC

Same details and outcome as Example 1. We found Ruth was not at fault in causing the overpayment because they cooperated during the appeal, and recovery was deemed to defeat the purpose. However, during the appeal period while receiving benefit continuation, Ruth started a job working one day a week at a local grocery store to help with household expenses, but they did not report the earned income timely. The late discovery and verification of the wages caused an overpayment for 2 months during the same period of the SBC months. Because part of the overpayment in those 2 months is not related to the SBC, we cannot consider Ruth’s cooperation during the appeal for the overpayment caused by the late reported wages when evaluating whether Ruth is not at fault. Instead, we must determine whether Ruth is not at fault for those 2 months by following the guidance in GN 02250.005-GN 02250.025. If we find Ruth at fault for those 2 months, we will not waive the overpayment for that portion. However, we can still waive the portion related to the SBC months.

Example 5: Failure to cooperate without good cause

Ivory received a medical cessation notice.  They filed an appeal and elected to receive SBC payments while awaiting an ALJ hearing.  Ivory provided us with their parent’s mailing address for business with us.  We sent Ivory a notice for the date of the hearing, but they did not appear at the hearing. The ALJ dismissed the request for hearing.  After receiving the notice of overpayment, Ivory requested a waiver.  Ivory told us that they periodically pick up their mail from their parent’s residence. Ivory told us that they picked up the hearing notice only after the hearing had already passed. They read the notice but did not attempt to contact the hearing office to request that we reschedule the hearing.  We will find Ivory at fault for the overpayment because they did not cooperate during the appeal process and did not provide a good reason for not cooperating. We will refer the case to an independent decision maker so they can schedule a file review and personal conference.

 


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GN 02250.036 - Fault Determinations for Overpayments due to Benefit Continuation During Medical Cessation Cases - Title II and Title XVI - 11/22/2024
Batch run: 11/22/2024
Rev:11/22/2024