When a beneficiary entitled to Supplementary Medical Insurance (SMI) receives a monthly
Social Security check, the premium is deducted from the check for each month of coverage.
In some instances, however, the amount of the monthly benefit may be lower than the
amount of the monthly premium. Thus, even after offsetting the monthly benefit for
premium collection purposes, a premium liability amount remains. In this situation,
the program service center (PSC) will bill the beneficiary directly for the remaining
liability amount. This billing is done once a year. (See SM 00850.475.)