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.