TN 33 (03-17)
HI 01001.325 Refunding Excess Medicare Premiums for Deceased Beneficiaries
A. Refunding excess Medicare premiums
The law requires the Centers for Medicare & Medicaid Services (CMS) to dispose of excess Medicare premiums paid by, or on behalf of, a deceased beneficiary. The excess premiums may be for supplementary medical insurance (SMI) or hospital insurance (HI). They could be the result of premiums paid for months of coverage following the individual’s death or be the result of retroactive premium adjustments for months of coverage before the individual’s death, such as:
removal or reduction of the Income Related Monthly Adjustment Amount (IRMAA);
third party buy-in;
application or adjustment of Variable SMI (VSMI); or
annotation or change in Medicare Advantage Reduction (MARD).
B. Policy for refunding excess Medicare premiums due a deceased beneficiary
1. No tolerance amount for refunds
A tolerance does not apply when refunding excess premiums due a deceased beneficiary. Refund the excess premiums regardless of the amount.
2. A formal claim for the refund not required
Process the refund with or without a formal claim. Notice of a refund due the deceased beneficiary may be an inquiry by the survivor, a direct billing system (DBS) alert, Title II Redesign (T2R) A80022 alert or a formal claim.
C. Policy for determining the proper recipient
The individual or entity that paid the excess Medicare premiums receives the refund. The payer may be:
the deceased beneficiary;
an individual who paid the premiums on behalf of the deceased beneficiary or;
an entity with a third party payer arrangement with CMS.
1. Beneficiary is the premium payer
When the Social Security Administration (SSA) records do not indicate that a third party payer or another individual paid the deceased beneficiary’s premiums, assume that the deceased beneficiary paid them. To process the refund, see HI 01001.325D of this section.
2. Excess Medicare premiums paid by another individual
When SSA records indicate that another individual paid the deceased beneficiary’s premiums, assume that the other individual paid them. To pay the refund, follow instructions in GN 02330.065.
NOTE: If someone other than the beneficiary paid the premiums with his or her own funds and that person is deceased, the legal representative of that person’s estate receives the refund. In the absence of a legal representative, a surviving relative of the beneficiary receives the refund following GN 01001.325D of this section.
3. Individual alleges payment of the deceased beneficiary’s premiums
There may be instances where an individual alleges that he or she paid the premiums on behalf of the deceased beneficiary, but the SSA record does not show an authorized Medicare premium payer. In this circumstance, secure evidence of payment, and the nature of the remittance, to verify the allegation when the amount is $50.00 or more. Evidence of payment includes a cancelled check, bank statement, or other document that clearly indicates the individual party paid the excess premiums. If the amount is less than $50.00, secure a signed statement from the individual. To pay the refund, follow instructions in GN 02330.065.
4. Third party payer agreement with CMS
Third party payers are typically organizations, municipalities, or other entities that pay premiums on behalf of a group of beneficiaries. These include:
a third party group payer as outlined in HI 01001.230;
a state that enrolled a beneficiary under a State Buy-in agreement, as outlined in HI 00815.000; or
the Office of Personnel Management (OPM).
Determine the recipient of the refund based on whether the excess Medicare premiums are for months of coverage the beneficiary paid or the third party paid. CMS handles refunds to third party payers.
In cases where there is an A80022 alert and SSA records indicate payment by the deceased beneficiary and a third party payer for the same months, pay the excess Medicare premiums to the deceased beneficiary, or the individual who paid premiums of behalf of the beneficiary. This is because the third party payer can retroactively pay the Medicare premiums for the months of coverage that the deceased beneficiary already paid.
Example of premium refund resulting from retroactive payment of premiums by a third party payer: Mr. Dance paid his Medicare premiums for the months of coverage from October 2013 through May 2014. He passes away on May 10, 2014. In August 2014, his state of residence determines that Mr. Dance was eligible for State Buy-in effective January 2014. The State paid the Medicare premiums for the months of coverage from January 2014 through May 2014, resulting in duplicate payments for these months. The state was the proper payer for the Medicare premiums, and the prior payments made by Mr. Dance for January through May 2014 are the excess premiums. An A80022 alert generates to refund the excess Medicare premiums Mr. Dance paid.
5. Railroad Retirement Board (RRB) where jurisdiction is indicated with RRHI-SMI START date, but STOP is blank
When a beneficiary not covered under a State buy-in agreement has entitlement to both a Social Security benefit and a Railroad Retirement annuity or pension, the beneficiary pays SMI premiums to the RRB. The RRB handles refunds to these deceased beneficiaries.
D. Procedure for determining the proper recipient and processing the Medicare premium refund when the refund is owed to the deceased beneficiary
In cases where the deceased beneficiary paid the premiums, use the steps outlined in this chart to determine who should receive the deceased beneficiary’s Medicare premium refund and how to process the payment:
Review the deceased beneficiary’s record for a legal representative of the deceased beneficiary’s estate. Does the record indicate there is a legal representative of the estate?
If the record does not list an estate representative, follow the statutory order for payment of Title II benefit underpayments outlined in the alpha list a. through f. per GN 02301.030 to determine who should receive the premium refund.
If the record shows a recipient of a Title II underpayment for the deceased beneficiary, pay the refund to that individual. Do not redevelop.
Use a SSA-1724-F4 (Claim for Amounts Due in the Case of a Deceased Social Security Recipient) or SSA-795 (Statement of Claimant or Other Person) to collect information to determine the proper recipient of the refund.
Did the development identify a recipient?
If yes, go to step 3.
If no, go to step 4.
NOTE: If the development identifies a legal representative of the estate of the deceased beneficiary, pay the refund to the legal representative according to the instructions in GN 02330.065.
Review the MBR. Does the MBR have the individual as a current or previous beneficiary?
If yes, pay the refund according to the instructions in GN 02330.065B.
If no, pay the refund according to the instructions in GN 02330.065A.
If the proper recipient is not found after developing according to GN 02301.030, annotate the MBR with the special message, “Unable to locate for premium refund ($ . )”. You do not need further development.
NOTE: Manual trust funding is required for all Medicare premium death underpayments processed using the Manual Adjustment Credit and Award Process (MADCAP) or Single Payment System (SPS). Prepare the SSA-666 (Adjustments in Trust Fund Accounts) to transfer funds from CMS to SSA. To view the SSA-666, see OS 15040.095.