TN 1 (07-87)
GN 02335.035 Special Provisions Regarding Development of Underpayment Claims From Person Who Paid for the Services
A. Identification of Person or Persons Who Paid for Services
Any person who paid part or all of the charges with his own funds may apply for the underpayment by submitting evidence of payment (see GN 02335.030 D.) which identifies him as the "payer." If more than one person paid the charges and the evidence of payment does not clearly show the identity of all “payers” and the amount each paid, this information should be obtained on an SSA-795.
B. Payment From Own Funds
Payment based upon a receipted bill will be made to each person who paid all or part of the charges with his own funds. It will be considered that the charges were paid from funds of the decedent's estate, and a “payer” will not qualify to receive payment under this paragraph if:
He paid the charges in settlement of a debt or obligation to the decedent or his estate, or
He paid the charges from funds of an insurance policy on which the decedent or his estate was the beneficiary, or
He paid the charges as an employer under a plan or contract of employment. However, there are some employer, union, insurance, and welfare plans that are liable only for deductibles and coinsurance but pay the beneficiary's entire medical bill with the understanding that they will receive the Medicare reimbursement. (See HI 01201.550.) Where such an organization has been determined to qualify to receive a Medicare payment during the lifetime of the beneficiary, the beneficiary's death does not affect the right of the organization to claim the payment.
In the absence of some indication that payment was made under one of the three conditions listed above, the DO need not develop this issue. If there is an indication that the individual did not pay the charges with his own funds, an explanation should be obtained from him. The statement and any documentary evidence of the basis for payment should be forwarded with the claim.
C. Payment by Estate
If the services were paid with funds of the estate, payment may be made to the legal representative of the estate.
D. Charges Paid by More Than One Person
If the services have been paid for by more than one person, each payer is entitled only to his proportionate share of the Medicare reimbursement. Where one (or more) of the group has died, his share of the payment is settled under GN 02335.025 B.
E. Charging the Part B Deductible
Where the deductible has not been met, it will be charged in the same manner as in any other case. Where the charges were paid by two or more persons and the deductible has not been met, it will be prorated among the payers. Example: A beneficiary died without meeting the $75 deductible and without paying a medical bill of $500. After his death, but before the claim was submitted to the carrier, “A”, a brother of the beneficiary, paid $300 of the bill, and another brother, “B” , paid the remaining $200. The carrier determined the reasonable charge to be $500. The deductible will be prorated according to the amounts paid by the two brothers; i.e., 3/5 to brother “A”, ($45) 2/5 to brother “B” ($30); therefore, the payment to the two payers will be 80 percent of $255 and $170 respectively.