HI 00830.035 Failure to Bill or Deduct Premiums
There are situations where a claimant has been awarded HI and/or SMI coverage and
notified of entitlement and then for any number of reasons SSA fails to deduct the
premiums from benefit payments or send any billing notices. This situation is usually
found in the billable cases (nonpayment status) but may occur as a deduction problem
in rare instances. Because a number of the alerts generated by the Direct Billing
System (DBS) system (e.g., SAC 11 or 12, questionable PDA, impossible-arrearage) prevent
billing, specialists in the area of health insurance processing should be particularly
alert to these provisions to ensure that the claimant is properly advised.
A claimant who received a notice of entitlement but no bills or deductions of premiums
from benefits (uninsured, insured, incurrent pay or suspense) must be informed of
his right to request relief from paying retroactive premiums if 6 months or more premiums
are due. He must also be informed of the amount of the arrearage and that this amount
will be deducted from his benefit payment (or he will be billed for it) unless he
contacts his social security office within 30 days to request waiver of the arrearage
or to discuss alternative payment arrangements. Use a paragraph similar to the following.
“Due to an error, premiums were not withheld from your benefits (you have not been
billed for premiums) for several months of past supplementary medical insurance coverage.
This error has now been corrected, and your benefits will be reduced to collect (you
will be billed for) unpaid past due premiums of $ within 30 days. If paying the past due amount will create a severe hardship for you,
you may request relief from this payment or arrange an alternate method of payment.
To make such a request, you should contact any social security office for assistance.
When you visit or telephone, please have this notice with you.”
Do not deduct or bill for the arrearage. Instead, if the arrearage is recorded in
the Direct Billing System (DBS) system, reduce the CPDA or CPDAH by the amount of
the arrearage with a RIC 3 or F. If a SMI QPDA or HI QPDA is involved use RIC of K
and RIC of H, respectively. Diary the case for 45 days. If the beneficiary responds
with a request for installment payments, see HI 00830.060. If after 45 days no response has been received from the claimant, deduct the arrearage
from his benefits or send a bill for the arrearage. If the arrearage is being deducted
from a benefit check, use a “PD” entry and prepare a SSA-666 from the FOASI Trust Fund to the FSMI Trust Fund since
the arrearage has already been deducted from the CPDA on the DBS record. (See SM 00848.390B).
If the beneficiary is being billed for the arrearage, record the arrearage on the
DBS record using a RIC 1 or a RIC D. Also, send a letter explaining the deduction
from benefits or the premium bill.