TN 28 (01-05)
HI 01001.025 Payment by Remittance
Most uninsured beneficiaries and a substantial number of beneficiaries whose benefit payments are suspended must pay their premiums by direct remittance. (See HI 01001.045 for a detailed discussion of collection from beneficiaries whose benefits are suspended and HI 01001.065 through HI 01001.100 for a detailed discussion of collection from enrollees who are not entitled to monthly benefits.)
Safe, economical, and efficient premium collection is imperative. Occasionally, a beneficiary may opt to visit a FO in order to pay their Medicare premiums. Manual processing of premium remittances in the FO will result in increased processing costs and in a delay of 5 to 7 days in crediting the remittance. Therefore, premium payments should rarely be processed in the FO. Rather, the FO should assist the beneficiary in mailing the remittance directly to the Medicare Premium Collection Center (MPCC) (see HI 01001.090B.). In doing so, the remittance will be processed in an efficient manner and the enrollee will be credited with the amount paid. This will reduce the possibility of loss of the check or money order. The only time that premium payments should be made to the FO is when termination of Medicare is imminent due to non-receipt of a premium payment. Only then, should the FO process the remittance.
The following procedures apply to payment by remittance.
The Notice of Medicare Premium Payment Due - CMS-500 is the billing notice sent to beneficiaries who are directly billed for their Medicare premiums. It is available in both English and Spanish, and provides:
The period for which the premiums are due;
Payment information—the date and amount of the last payment received and processed;
Premium payment due date;
A credit card payment option;
The Medicare Premium Collection Center address on the portion of the notice retained by the beneficiary;
A phone number to call to sign up for Medicare Easy Pay (payment option for the automatic deduction from a checking or savings account); and
Generally, payment should be made by mail and only after the person is billed. (See exception in HI 01001.065 where a beneficiary offers to pay premiums at the field office (FO) in connection with his/her enrollment.) There are times when the enrollee contacts the FO because his/her premium bill is inaccurate or is overdue. In these cases, every effort should be made to determine the actual amount of premiums owed by reviewing the Health Insurance Query Response (HIQR) screens (see MSOM QUERIES 008.001 ). The enrollee should then be instructed to pay the amount due. If the premium bill is incorrect but the amount due cannot be determined, encourage the enrollee to pay the amount shown on the billing notice to avoid termination for nonpayment of premiums. Any necessary adjustments will be made to the direct billing system and the enrollee will be notified.
The enrollee should be encouraged to make payments directly to the: Medicare Premium Collection Center, P.O. Box 790355, St. Louis, MO 63179-0355. These payments may be made in the form of a check or money order payable to Medicare Insurance, or by credit card. Cash payments are to be discouraged. However, near the end of the grace period, payments of premiums in cash to an authorized SSA representative, in or outside the FO may be the only feasible way to avoid termination of the enrollee's coverage. If cash payments are made they should be handled in accordance with HI 01001.090C.
The beneficiary's name and Medicare claim number should be clearly shown on the check or money order. Payment should be mailed in the pre-addressed envelope furnished with the billing notice. To ensure proper credit to the beneficiary's record, the bottom scannable portion of the billing notice should also be returned with the payment.
If a beneficiary should request a premium billing notice because he/she did not receive it or it was lost, the request should be directed to the Servicing Program Service Center (PSC) for a manual billing notice to be sent. The PSC should prepare a bill using the CMS-500, dated 01/03. There is an English version (see GN 02403.030D.) and a Spanish version (see GN 02403.030E.).
C. PROCESS FOR CREDIT CARD PAYMENT OPTION
Beneficiaries can pay their premiums using their Visa, Discover, American Express, or MasterCard. Payments will only be accepted if the credit card portion of the Notice of Medicare Premium Payment Due (CMS-500) is submitted directly to the Medicare Premium Collection Center (MPCC). Credit card payments will not be processed if information is missing, invalid, or the signature is missing. Additionally, credit card payments cannot be accepted in the Social Security Administration field office or accepted over the phone.
A completed credit card payment request must be submitted each month a payment is to be processed. Automatic payment by credit card is not available at this time.
All credit card payments will be identified on the direct billing query screens (see MSOM QUERIES 008.005 for MDBQ, MSOM QUERIES 008.007 for MPBQ, and MSOM QUERIES 008.009 for MPPQ) with specific batch numbers ending in 600–699.
05/20/05 06 78.20- 78.20+ 133603/REMIT 0.00 0.00
If a credit card payment cannot be processed or is denied, a letter will be sent directly to the beneficiary from the Centers for Medicare & Medicaid Services, MPCC informing him/her of the reason the credit card payment could not be processed and requesting a payment by check or money order. The beneficiary will also receive a pre-addressed envelope for submitting the payment to the Medicare Premium Collection Center.
If a beneficiary brings or submits a Notice of Medicare Premium Payment Due (CMS-500) that contains the credit card information to the Social Security Administration Field Office, please instruct them to send it directly to the Centers for Medicare & Medicaid Services, Medicare Premium Collection Center, P.O. Box 790355, St Louis, MO 63179-0355. Please explain that it must be sent to this address directly to ensure the security of the credit card information and to ensure timely processing of the credit card payment.
D. Automated Clearing House (ACH) - Medicare Easy Pay
Effective February 2002, CMS implemented an Automated Clearing House (ACH) payment option for all direct-billed beneficiaries. This payment option called Medicare Easy Pay, allows direct-billed beneficiaries to sign up to have their Medicare premiums automatically deducted from their checking or savings account.
To begin Medicare Easy Pay, the beneficiary must complete an Authorization Agreement for Preauthorized Payments (Standard Form 5510). The authorization agreement may be obtained by calling 1-800-MEDICARE (1-800-633-4227). Upon request, 1-800-MEDICARE will mail a Medicare Easy Pay Packet directly to the beneficiary. The Medicare Easy Pay Packet includes a Medicare Easy Pay brochure, an Authorization Agreement for Preauthorized Payments, instructions for completing the authorization form, and a pre-addressed return envelope. All Authorization Agreements must be signed by the account holder and returned in the pre-addressed envelop to:Centers for Medicare and Medicaid Services
Medicare Premium Collection Center
P.O. Box 979098
St. Louis, MO 63197-9000
Processing of the authorization form may take between 30 to 60 days. If CMS receives the authorization form by the 15th of the month, the ACH deduction should occur the following month. When the authorization agreement has been processed and the bank information has been verified, the direct billing screen MDBQ will display the following:
BILL CYC CODE: ACH ACTIVE MONTHLY
When a beneficiary signs up for Medicare Easy Pay and they were billed quarterly for their premiums, their billing cycle will change to monthly and the premium deduction will occur on the 20th of each month. If the 20th falls on a holiday or weekend, the deduction will occur on the next business day.
A Notice of Medicare Premium Payment Due (CMS-500) will be sent to each beneficiary and should be received by the 10th of each month. This notice informs the beneficiary of the amount of the deduction and also the date the deduction will occur. This will allow beneficiaries time to ensure that sufficient funds are available in their bank account. The Notice of Medicare Premium Payment Due will display the following messages for automatic deductions:
The Direct Billing (DB) Query Screens contain specific information related to ACH payments. The DB system also displays various field values for the ACH payment option. Below is a brief description of the ACH transactions and values:
DB Cycle – This field will include the value of "H" to identify ACH. This field is also contained in the Social Security Administration HIQR query.
ACH Pending – This transaction shows that the ACH authorization form has been processed and DB is waiting for verification of the banking information. Verification of the banking data usually takes 8 working days.
ACH Start – This transaction shows that the ACH record has been set up for electronic payments and premium payments will be made electronically.
ACH STOP – This transaction shows that the ACH payment option has stopped.
ADJ/ACH REJ – This transaction shows that the ACH premium payment did not process (insufficient funds, closed account, etc) and the premium liability is being adjusted on the beneficiary's record.
NOTE: Beneficiaries should be encouraged to continue to pay their Medicare premiums until they receive the Notice of Medicare Premium Payment Due (CMS-500) stating that the premiums will be deducted from their bank account. The initial deduction from a bank account cannot exceed three months of premium. Subsequent monthly deductions will be for one-month premium and may not exceed a one-month premium plus $10.00. If the premiums are paid in advance, an automated deduction will not occur until the premium liability is $10.00 or more. Only “First” bills qualify for ACH premium collection. This means that all “Second” and “Delinquent” bills are mailed as non-ACH bills directly to the beneficiary.
Medicare premium payments that are received through automated deductions from a checking or savings account will show on the appropriate direct billing screens (MDBQ, MPBQ, and MPPQ) with batch numbers ending in 300–599.
03/20/05 05 108.00- 78.20+ 084400/REMIT 0.00 78.20-
If the bank does not process an ACH payment (e.g., bank account closed, insufficient funds, etc), the beneficiary's premium liability will be adjusted. Below is an example of an adjustment transaction:
03/20/05 04 0.00 78.20- BANK/ACH FAIL 0.00 78.20-
03/20/05 04 78.20- 78.20+ 074012/REMIT 0.00 0.00
The system credited a $78.20 remittance which is indicated with the transaction indicating “REMIT”. When the bank was unable to process the ACH payment, that remittance credit was adjusted with a second transaction indicating “BANK/ACH FAIL”.
A letter will be sent directly to the beneficiary from the Centers for Medicare and Medicaid Services that will provide a reason why the automated deduction did not process and requesting payment by check or money order. The beneficiary will also receive a pre-addressed envelope for submitting the payment to the MPPC. The beneficiary should also receive a notice from his or her bank that the ACH deduction did not process. The premium payment must then be made by check or money order and mailed to the following address:Centers for Medicare and Medicaid Services
Medicare Premium Collection Center
P.O. Box 790355
St. Louis, MO 63179-0355
NOTE: This address is for premium payments made by checks/money orders only.
If a beneficiary wishes to change or stop the monthly bank deduction, a new Authorization Agreement for Preauthorized Payments (Standard Form 5510) must be completed and mailed to:Centers for Medicare and Medicaid Services
Medicare Premium Collection Center
P.O. Box 979098
St. Louis, MO 63197-9000
NOTE: The authorization agreement may be obtained by calling 1-800-MEDICARE (1-800-633-4227).