Refund by Premium Adjustment or Lump Sum Payment or Both

40.4 - Refund by Premium Adjustment or Lump Sum Payment or Both (Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05) A Medicare cost plan may make refund by adjustment of future premiums, by lump sum payment, or by a combination of both methods, for: • Amounts that were incorrectly collected in the form of premiums; or • For amounts that were incorrectly collected through a combination of premium payments and other charges. If an enrollee has died or cannot be located after reasonable effort by the Medicare cost plan, the Medicare cost plan must make the refund in accordance with State law. If the Medicare cost plan does not make refunds in accordance with the above payment methods by the end of the contract period following the contract period during which an amount was determined to be due an enrollee, CMS reduces its payment to the Medicare cost plan by the amounts incorrectly collected or otherwise due, and arranges for those amounts to be paid to the Medicare enrollee.