TN 3 (01-13)

HI 00830.025 Erroneous Entitlement to Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) Coverage

A. Background

There are situations when a beneficiary becomes entitled to Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) coverage in error that is not due to any fraud or similar fault on the part of the beneficiary.

This most often occurs because:

  • we used an incorrect date of birth (DOB),

  • we established an incorrect date of entitlement to disability benefits (DOED), or

  • we did not process a SMI refusal request timely.

The cause of the erroneous entitlement can be due to:

  • a clerical error, or

  • we receive subsequent evidence that makes the earlier HI and SMI entitlement dates erroneous based on the earlier dates.

Currently, we have no authority to grant relief for erroneous entitlement to free HI coverage. Procedures outlined in this section will result in the deletion of any period of free HI coverage that is determined to be erroneous on both the Master Beneficiary Record (MBR) and Enrollment Data Base (EDB) record. If the beneficiary uses HI during the period now considered erroneous, and the Centers for Medicare & Medicaid Services (CMS) makes the payment, considering the resulting overpayment for waiver under special procedures used by CMS.

Once we determine erroneous entitlement to free HI and SMI, the corrective action depends on whether we discover the error before, during, or after the correct Initial Enrollment Period (IEP), as established by the new evidence. In all cases, the IEP referred to is the IEP established due to the changed DOB or newly established Date of Entitlement to Disability (DOED).

B. Error discovered during or after the IEP

Errors discovered during or after the IEP retain the erroneous entitlement date for SMI or Premium-HI. Change the Free-HI entitlement date (HI-START) to the correct date.

EXAMPLE:

MBR shows beneficiary’s DOB of 01/10/1945 with a HI-START and SMI-START of 01/2010. New evidence proves the DOB is 01/10/1946. The IEP based on the new DOB begins 10/2010 and ends 04/2011. Following are the corrective actions made during or after the IEP.

  1. If the beneficiary is insured and has free-HI, process a MACADE action.

    • Code a BEN screen with the correct DOB and Proof of Birth (POB).

    • Code HID screen overlaying the HI-START with the date based on correct DOB.

    • Code the SMI screen with an Equitable Relief Code of “C.” Do not change the SMI-START

  2. If the beneficiary is uninsured with or without premium-HI, process a MACADE action.

    • Code a BEN screen with the correct DOB and POB.

    • Code the HID screen with an Equitable Relief Code of “C.” Do not change the HI-START. This screen is only necessary if the beneficiary has premium-HI entitlement.

    • Code the SMI screen with an Equitable Relief Code of “C.” Do not change the SMI-START.

  3. If the beneficiary originally had free HI and due to the DOB correction, is now uninsured, the beneficiary is now entitled to Premium HI.

    • Process a MACADE action to correct the DOB.

    • If there are more than two months Premium HI involved, do not change the START.

    • Change the HI-TYPE to “P,” code Equitable Relief of “C.”

    • Leave the SMI-START date unchanged and code Equitable Relief of “C” (if less than two months of HI premiums are due, correct the HI-START, change the HI-TYPE to “P,” leave the SMI-START date unchanged and code Equitable Relief of “C”). See SM 00850.515C Processing Following an Action to Correct a DOB or DOED for more scenarios.

C. Error discovered before the IEP

A new DOB or DOED that establishes an IEP after the date of the corrective action will result in a termination or deletion of the erroneous entitlement based on the desires of the beneficiary.

1. Termination of erroneous entitlement

If we correct the erroneous DOB or DOED before the new IEP, but after we establish the erroneous HI-START and SMI-START on the MBR, terminate the coverage. Process the termination action through MACADE for insured and uninsured claims. See MACADE instructions in SM 00850.515C.2.b. and SM 00850.515C.3.b.

Depending upon the case characteristics, use the following instructions.

a. For DOB changes with free-HI, process a MACADE action.

  • Code a HID screen to delete HI-START and enter a HI NON COVER RSN of “V.”

  • Code a SMI screen with a SMI TERM date equal to Current Operating Month (COM) +1 and SMI NON COVER RSN of “I.”

  • If a third party is involved, code a S3P STOP equal to COM.

b. For DOB changes with premium HI and SMI, process a MACADE action.

  • Code a HID screen with a HI-TERM equal to COM+1 and a HI NON COVER RSN of “I.”

  • If a third party is involved, code a H3P STOP equal to COM.

  • Code a SMI screen with a SMI TERM date equal to COM+1 and SMI NON COVER RSN of “I.”

  • If third party is involved, code a H3P STOP equal to COM in addition to the coding in HI 00830.025C.1.a.

c. For DOB changes with SMI only, process a MACADE action.

  • Code a SMI screen with a SMI TERM equal to COM+1 and a SMI NON COVER RSN of “I.”

  • If third party is involved, code a S3P STOP equal to COM.

2.

Deletion of erroneous entitlement occurs when:

d. DOED changes with free HI and SMI, process a MACADE action.

  • Code a HID screen with a HI TERM date equal to the date of notice plus two months and a NON COVER RSN of “C.”

  • Code a SMI screen with a SMI TERM date equal to the date of notice plus two months and SMI NON COVER RSN of “C.”

  • If a third party is involved, code a S3P STOP equal to SMI TERM date minus one.

2. Deletion of erroneous entitlement

  • the beneficiary protests the erroneous entitlement before the coverage begins or within six months after the month of notice regarding the entitlement; or

  • we discover the erroneous entitlement and complete the correction before the new IEP and before the erroneous HI and SMI coverage begins.

EXAMPLE:

In 01/2006, a beneficiary receives an award of disability benefits based on a DOED of 08/2005. In 07/2007, the beneficiary returns the Medicare card included in the CMS IEP package to the program service center with a letter questioning the Medicare entitlement. A review of the record indicates we made an error of coding 08/2005 instead of 08/2006 during the award action. Because the beneficiary could not use this Medicare coverage until 08/2008, delete all of the HI and SMI data from the MBR.

For DOED changes with deletion of Medicare, process a MACADE action.

  • Code a Disability DM/MR screen with the correct MEDICARE DOED. (If the disability data no longer applies, code a pound “#” sign in the DAC field that pertains to the erroneous Date of Disability Onset (DDO) field.

  • Code HID and SMI screens with a “#” in the first position to delete all Medicare data on the MBR and EDB. (See SM 00850.515)

D. Unprocessed refusals

Process untimely SMI Refusals as follows:

1. Erroneous period of coverage

A beneficiary may protest a period of erroneous SMI. Remove the coverage if the beneficiary submits a protest within six months after the month of the notice of SMI entitlement or termination and the beneficiary has not utilized the coverage.

EXAMPLE:

Mrs. Jones receives notice of a correction to her disability onset. The notice is dated 04/2011. We inform her that we changed her entitlement to disability benefits from 07/2008 to 05/2009, and that Medicare will continue from 07/2010. The MBR and EDB show HI/SMI effective 07/2010. There were deductions of premiums from her benefits beginning 06/2010.

Her new IEP begins 02/2011 and ends 08/2011. The beneficiary contacts our local office in 07/2011 to protest the Medicare entitlement from 07/2010 through 04/2011, stating she did not use the coverage. We can remove the coverage because she protested within six months of the notice and did not use the coverage.

Process a MACADE action.

  • Code a HID screen with a HI NON COVER RSN of “V,” removing the HI START relating to the erroneous period of coverage.

  • You need a new occurrence of HI data relative to the correct data.

  • Code a SMI screen with a SMI NON COVER RSN of “V,” removing the SMI START relating to the erroneous period of coverage.

  • You need a new occurrence of SMI data relative to the correct.

  • MADCAP will refund premiums deducted for 07/2010 through 04/2011.

For processing of various scenarios including new DOB, DOED is earlier, new DOB is later, new Date of Entitlement to SMI (DOES) is later, or if fraud is involved see examples in SM 00850.515C.

2. All coverage refused

We may have failed to process a refusal of Medicare coverage. If the beneficiary files a protest within six months after the month in which we send a notice of Medicare entitlement, overlay the SMI entitlement with a SMI refusal using a NON-COVER RSN code of ”R.” This action will generate a refund of paid premiums. We may process the refusal through the Postentitlement Online System (POS). (See SM 03040.080 Processing SMI Refusals and MSOM ICD 003.002 HIHI.)

EXAMPLE 1

Although Mrs. Jones refused SMI coverage, we mistakenly established a SMI-START of 07/2007 based on her DOB of 07/20/1942. The date on the SMI entitlement notice was 05/10/2007. On 11/20/2007, Mrs. Jones protested the SMI coverage. She protested within six months after a notice of SMI entitlement. Process a SMI refusal and refund all premiums withheld.

EXAMPLE 2

If the beneficiary protests the erroneous entitlement more than six months after we send the notice of SMI entitlement, treat the protest as a request for voluntary withdrawal according to HI 00820.045. We will not refund any withheld premiums. The beneficiary can reenroll during the next General Enrollment Period (GEP) or Special Enrollment Period (SEP) if covered by a Group Health Plan through employment. The beneficiary may have a delayed entitlement date or be subject to a premium surcharge.

For the situations in Examples 1 and 2 in HI 00830.025C.2. the beneficiary must sign a letter or a Form SSA-795 (Statement of Claimant and Other Person). The written document must show that he or she either does not want SMI coverage during the erroneous period but does want SMI now or does not want SMI for any period. The beneficiary must agree to repay any SMI benefits received during the erroneous period, if he or she wishes no coverage during the period and all premiums refunded. The beneficiary may contact a field office (FO) or the Program Center (PC).

E. Beneficiary notification

We must notify the beneficiary of the actions taken: that we terminated or deleted coverage and when the beneficiary may enroll. The notice may be a separate letter because no payment adjustment is involved or a paragraph added to an adjustment notice when we need to change the payment amount.

F. References

  • SM 03040.080 Processing SMI Refusals

  • SM 00850.310 HI Termination Date (TERM)

  • SM 00850.515 Processing Following an Action to Correct a DOB or DOED

  • MSOM ICD 003.002 Health Insurance (HIHI)

  • HI 00820.045 Voluntary Termination of SMI


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HI 00830.025 - Erroneous Entitlement to Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) Coverage - 07