Collecting Interest on Medicare’s Claim

40.19 – Collecting Interest on Medicare’s Claim (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) Medicare assesses interest on MSP debts by exercising common law authority that is consistent with the FCCA and implementing regulations. (See 45 C.F.R. § 30.18). CMS requires that a beneficiary or other entity repay CMS within 60 calendar days of receiving insurance proceeds from a third-party payer. (See 42 C.F.R. § 411.24(h)). If CMS does not receive a full refund, or adequate proof that no overpayment exists, within 60 calendar days of notifying the beneficiary of CMS’s demand, the MSP Contractor begins assessing interest as of the date of the mailing of the demand letter. Interest will continue to accrue on delinquent debts until the debt is either paid in full or there is a determination to terminate the collection action by CMS. The following considerations apply in determining the amount of interest owed on an outstanding MSP debt: a) Interest can be charged only after the responsible entity has been notified of the debt and a demand for payment has been made, and has had sixty calendar (60) days in which to make repayment. Interest due is calculated beginning from the date of the original demand letter; b) Interest cannot be assessed on deductible and coinsurance amounts; and c) Even though MSP Contractors will be requesting repayment of the gross Medicare payment, interest can be charged only on the actual Medicare payment or the provider, physician, or other supplier’s charges, if less. Therefore, these amounts must be separated to determine the amount on which interest will be charged.