HI 00820.130 Manual Processing of Withdrawals

AUDIENCE: BA, BATA, CCDIPS, ER, LCC, RECOVR, EE, EHS, EIE, IES

When the withdrawal or reversal action is not processable by PEPPER, the action must be processed through MADCAP for insured and special age 72 beneficiaries, and through MISCOR CIP R for uninsured individuals.

A. Insured and Special Age 72 Claims

A MADCAP action is required to effect a SMI termination for insured and special age 72 claims. HI/SMI coding on the MADCAP debit summary must include an SOC of “W” and a DTS entry reflecting the first month (and year) of non-coverage. If a premium refund is in order (i.e., an overage exists), the MADCAP program will automatically make the refund. The notice should be patterned after the HCFA-L325 or HCFA-L326 (see NL 00722.015 and NL 00722.017.), as appropriate.

B. Uninsured Claimants

The Form SSA-2652-U2 prepared for the uninsured individuals must contain the appropriate data described in SM 00613.000. Obtain a BCM informational to determine the correct PDA status prior to completing the Form SSA-2652-U2. Whenever the exception involves a civil service or group payer situation, and the claimant is either a “T” or “M,” prepare a feedback form to OS. (See HIIM 405.05). If a premium refund is in order for an uninsured claim, a one-check-only action, with a “PA” entry for the amount of the refund will be prepared outside the MADCAP system and the corresponding amount coded in the PDR field of the Form SSA-2652-U2. Prepare a Form SSA-666 to adjust the appropriate trust funds. Send a notice patterned after the HCFA-L326 or HCFA-2688 (see NL 00722.017 and NL 00722.035. to the claimant.

C. State Buy-In Involvement

When an individual is deleted from a State buy-in agreement, SMI coverage continues and the individual becomes liable for the premium payments. However, the law provides a special voluntary termination period for an RSDI or RR beneficiary.

1. SMI Termination when a state buy-out occurs April 1, 1981, or later

Effective April 1, 1981, if a beneficiary, or a nonbeneficiary, or a special age 72 beneficiary files a notice requesting termination of his SMI during the last month of buy-in coverage or during the 6 succeeding months, his SMI will be terminated at the end of the month in which his notice is filed.

NOTE: Prior to April 1, 1981, if such a beneficiary submitted a withdrawal request within 3 months following the deletion month, SMI coverage would terminate at the end of that 3-month period, or, for Special Age 72 or uninsured claimants, the end of the quarter after the last quarter of coverage.

2. Equitable relief

States are currently notifying beneficiaries of the termination of buy-in coverage after the termination has been processed. Therefore, equitable relief provisions have been made.

SMI can be terminated the month after the last month of buy-in coverage (TTDS) if the following conditions are met:

  1. The beneficiary submits a written request to have his SMI coverage end effective with the end of the buy-in coverage,

  2. The request is filed within 30 days of the date of the HCFA-1636 or other notice informing the beneficiary of his buy-in termination.

  3. The beneficiary certifies that he has incurred no medical services covered under SMI during the months after buy-in termination.

3. SMI termination when a state buy-out occurred prior to April 1, 1981

A beneficiary who filed for a SMI termination before April 1, 1981, would have had a termination effective with the earlier of:

  1. the date coverage would have terminated under prior law (before the 1980 Amendments), or

  2. April 30, 1981 (unless the beneficiary filed notice that he wanted coverage to terminate as in a. above).

If a beneficiary had his coverage terminated under a. above, his DOTS date was the third month after the TTDS or the end of the quarter after the quarter of his request. If he terminated under b. above, his DOTS date was 05/81.

A SMI withdrawal after a state buy-out can be processed through PEPPER, MADCAP, or MISCOR CIP R, as appropriate. See SM 00613.000 for coding instructions.

The deletion of an individual from State buy-in coverage is normally accomplished through the Third Party Annotation Operation (TPAO), and is reflected in the claims folder on an SSA-1596-C1).

Exceptions from TPAO are manually processed through MADCAP or MISCOR CIP R and will be reflected on debit Forms (SSA-2795-U3 or 2652-U2) in the claims folder. The processing of a withdrawal request under the special provision is dependent on the presence in the claims folder of documented evidence that the deletion action has been accomplished.

4. Evidence of deletion is not in file

If an SSA-1596-C1 effective date of State deletion is not in file when the withdrawal request is received, the total action to be taken depends upon the State involved. In certain States, buy-in eligibility will be determined by SSA based on the beneficiary's eligibility to receive supplementary security income (SSI) payments under title XVI (See HI 01001.205).

These States are:

AlabamaMontana
ArizonaNew Jersey
ArkansasNew Mexico
1 CaliforniaNew York (until 9/1/80)
DelawarePennsylvania
1 District of ColumbiaRhode Island
FloridaSouth Carolina
GeorgiaSouth Dakota
IowaTennessee
KentuckyTexas
MaineVermont (7/1/74)
Maryland (4/30/79)Washington (7/77)
Massachusetts (11/75)West Virginia
Michigan (9/76)Wisconsin (11/75)

1 In these States, when title XIX is involved, the deletion determination may be made by the State.

Regardless of the State involved, forward an SSA-5075 to the residential district office (the one servicing the beneficiary's address), indicating the receipt of the withdrawal request and the current buy-in status, and asking whether entitlement under title XVI (SSI) and the buy-in coverage has been or should be terminated. Refer to district office to HI 00815.088. File the withdrawal request on the right side of the claims folder. If the State involved is one of those listed above, other than California, District of Columbia, or Montana, diary the case for a followup at the end of 60 days if a reply has not been received. In all other instances, diary the case for recall at the end of 90 days to see if evidence of the deletion is in the claims folder.

a. Determination by SSA—60-Day Diary Case

If the district office reply indicates that title XVI entitlement and concurrent buy-in coverage has been terminated (or will be terminated soon) and gives the effective date, process a credit/debit action to record the deletion and withdrawal. Send the beneficiary an appropriate notice.

If the district office reply indicates that title XVI entitlement has not terminated and is ongoing, do not terminate the buy-in status or process the withdrawal request. Send the beneficiary a notice stating that the request for withdrawal cannot be honored since the State is covering premium liability. Do not include the reconsideration paragraph.

b. Determination by State—90-Day Diary Case

If the district office indicates that title XVI entitlement has been terminated and that a State deletion has been or will be initiated, but the evidence of deletion is not yet in the claims folder, file the reply and wait for the maturity of the 90-day diary.

Upon maturity of the diary, examine the claims folder for evidence that the deletion has been processed. If so, prepare a credit/debit action to record the withdrawal and send the beneficiary an appropriate notice.

If evidence of deletion is not in the claims folder when the diary matures, cancel the diary and send the beneficiary a notice that we cannot honor the request for a withdrawal at this time because our records show that the State is covering his or her premium liability. If the beneficiary should subsequently reiterate the desire to withdraw, and evidence of a deletion is in the claims folder at that time, the effective date of withdrawal will be based on the effective date of deletion. For example, if the effective date of deletion is equal to or prior to the date of the initial request for withdrawal, that request will be honored.

5. Evidence of Deletion Is In File

When the withdrawal is requested in the deletion month or in any of the 6 months following the deletion month and evidence of a processed deletion is in file, process a credit/debit action to record the withdrawal.

HI/SMI coding for MADCAP must include the BIC, a SOC of “W,” and the effective month and year of the voluntary withdrawal in the DTS field. If the withdrawal is processed through PEPPER, code the A/N, BIC, TOA of “8,” Decision Code of “G,” and the Date of Filing equal to the DOTS.

D. Cancellation of a Withdrawal Request

When a timely written request to cancel a previously processed withdrawal is received, cancel the withdrawal by entering the appropriate code (i.e., an “8,” “C,” or “D,” depending on whether the cancellation of the withdrawal pertains to SMI, premium-HI or both) in the type of action field, and a “V” in the decision code field of the Form SSA-1598. If the FWTD is earlier than COM (i.e., the withdrawal has already been effectuated), process through MADCAP.

When a timely written request to cancel a previously processed withdrawal request is not processable by PEPPER (an exception occurred), process the reversal through MADCAP for insured and special age 72 beneficiaries and through MISCOR CIP R for uninsured beneficiaries.

The MADCAP summary form for the insured and special age 72 claims must contain the appropriate HI/SMI coding showing the date of entitlement and option code in effect prior to the withdrawal action.

The SSA-2652-U2 prepared for the uninsured individuals should contain the appropriate data.


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HI 00820.130 - Manual Processing of Withdrawals - 01/07/2013
Batch run: 01/07/2013
Rev:01/07/2013