HI 00830.050 Erroneous Premium Refund
Although erroneous premium refunds do not come under the equitable relief provisions, recovery will not be made in certain
instances as explained below.
An incorrect premium refund may be made because of incorrect information furnished
by a third party, a computer processing error, or because of incorrect data entered
into the SOBER system. When this is discovered, the program service center must determine
if the erroneous refund exceeds 3 months SMI premiums. If it does not exceed this
amount, take no recovery action; prepare a Form SSA-1592 using RIC “3” and a batch code of “ERRRFD” (for Erroneous Refund) to adjust the SOBER record.
If the amount does exceed the 3-month tolerance, notify the individual of the amount
erroneously received. If the claimant is in current payment status, state that a deduction
will be made from the monthly benefit payment unless a protest is received within
30 days of the release of this notice. If the claimant is in suspense status or in
uninsured (i.e., billable status), request payment of the amount of the erroneous
refund. If the beneficiary is terminated, request refund unless the individual died.
In both types of notices, the right to request relief must be included. To process
a deduction after 30 days for a person in payment status, prepare a diary. Diary and
Listing slip mature in 30 days in accordance with PEM 1650. For the beneficiary in
nonpayment status, annotate “Code 62” in red on top of the notice and on the white return special post office box envelope
furnished and request that the notice be mailed back with the remittance in the return
envelope. For both payment and nonpayment cases, annotate a Form SSA-1208, Flag—Keep
On Top, with the amount of erroneous refund and place on top of the left side of the
claims folder. When the deduction is made, remove the Form SSA-1208 from the folder
and cancel the diary in the payment cases.
Simultaneously with the mailing of the notice involving the erroneous refund, the
arrearage must be removed for all erroneous refund cases by preparing a Form SSA-1592
using a RIC “3” and a batch code of “ERRRFD.” These are not “unpaid premiums,” and will not jeopardize current Medicare coverage. Where an arrearage does not exist,
no RIC 3 is required.
When the individual requests relief, the DO is responsible for the development and
determination and should then forward documentation forms.In unfavorable decisions,
a Claims Authorizer should review the determination before sending a denial notification
to the enrollee which includes the reconsideration paragraph. If the decision is questionable,
the file may be returned to the DO for further consideration; however, if the DO reaffirms
its prior decision, the determination will not be questioned further.
After 30 days in a current pay case if no protest is made or the decision involving
relief from repayment is unfavorable, enter the amount of premium deduction (erroneous
refund) as an “UD” entry via MADCAP and transfer these funds from the FOASI trust fund to the FSMI collection
account via Form SSA-666 in accordance with HI 01015.035.
In a nonpayment case, repayment of an erroneous refund will be handled by the Premium
and Recovery Cash Collection Module. The remittance will only be deposited to the
FSMI collection account without entering it into the SOBER system. The Technician
will be requested to remove the Form SSA-1208 from the claims folder.