Criteria for MSP Based Debts to Qualify for Write-off/Closed

60.7 – Criteria for MSP Based Debts to Qualify for Write-off/Closed (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) In accordance with the Digital Accountability and Transparency Act of 2014 (DATA Act) which amended the DCIA of 1996, MSP AR which are 120 calendar days delinquent must be referred to Treasury for cross- servicing, which includes referral to the Treasury Offset Program. Where an MSP Contractor has issued a 60-day notice of CMS’s intent to refer the AR to Treasury, the AR may not be recommended for Write- off/Closed until the AR has been referred to Treasury and after lengthy recovery attempts Treasury returns the debt to agency (to CMS). a) Debt Close Out Reports The MSP Contractor shall submit two (2) separate quarterly debt close out reports. These reports shall be submitted to CMS no later than the first day of the second month of each quarter (i.e., November 1, February 1, May 1, and August 1). These reports shall not include debts with a combined principal and interest balance less than $25. CMS will determine which referred debts shall be written off as closed and shall notify the MSP Contractor as appropriate. The first report shall include debts that are not eligible for Treasury referral (for example, beneficiary fraud, deceased provider), referred to as Non-Return to Agency (RTA), and RTA debts that are non-RU (uncollectable)/RN (not in business) debts (other than bankruptcy debts) with principal balances up to $100,000 and RU/RN debts with principal balances up to $500,000. The debts listed on this report will be reviewed and approved by CMS. The second report shall include non-RTA and non-RU/RN debts (other than bankruptcy debts) with a principal balance greater than $100,000 and RU/RN debts with a principal balance greater than $500,000. HHS OGC will provide legal advice on the debts listed on this report. b) Referral for Cross Servicing No debt shall be recommended for Write-off/Closed without having first been referred for cross-servicing (see above in this section) and subsequently “returned to agency” (CMS) by Treasury, unless one of the exceptions set forth below exists. Regardless of the existence of an exception, an approval for Write- off/Closed will not be granted in all instances. With the above limitations, debts which can be recommended for Write-off/Closed without having first been referred to Treasury for cross-servicing are: i. Debt equaling $100 or less (principal and interest) in which there is no Tax Identification Number (TIN); ii. Debt is less than $25 (principal and interest), where no adjustment/recovery has occurred in the past 60 days. Write-off of this type of debt is automated in HIGLAS and it does not require CMS approval. iii. Debt in which the debtor is deceased (**Remember that the deceased beneficiary is not the debtor in a wrongful death action). iv. MSP Contractor cannot find a Tax Identification Number (TIN) and development for the TIN has been unsuccessful. (Write-off of this type of debt is automated in HIGLAS if the debt balance is $1,000 or less, and it does not require CMS approval). v. Debts that are discharged/forgiven by the bankruptcy court are to be recommended for Write- off/Closed. vi. Debts greater than 10 years old, regardless of amount, shall be recommended and submitted to CMS for termination of collection action and Write-off/Closed. NOTE: Debts excluded from cross-servicing do not qualify for Write-off/Closed without having CMS approval. c) Litigation, CMS Identified Exclusion and Pending Bankruptcy Debtors currently excluded from consideration for Write-off/Closed due to litigation in which the Department of Health and Human Services/CMS is a party or debts excluded due to a CMS Identified Exclusion will be communicated to MSP Contractors via a joint signature memorandum. (See § 70 of this Chapter). Debts involved in a pending bankruptcy cannot be recommended or approved for Write-off/ Closed. If there are questions about the documentation regarding discharge, MSP Contractors shall consult CMS. All debts which are excluded from DCIA referral due to litigation or a CMS identified exclusion are also subject to exclusion from Write-off/Closed absent specific instructions. d) MSP Beneficiary Debt For MSP beneficiary debt, Medicare reserves its right to recoup from (1) future Medicare paid claims where the payment is issued directly to the beneficiary, or (2) the beneficiary’s Social Security (SS) benefit payments. However, as a practical matter, this is generally an insufficient manner of recovery, particularly as the Social Security Administration does not generally accept the referral of debts less than $1,000. Additionally, beneficiaries often delay consideration of repayment until all appeals have been exhausted. Therefore, before recommending a beneficiary debt for Write-off/Closed, the MSP Contractor shall follow appropriate debt referral procedures (see Section 70). In the event the debt is actively being appealed, respond to the appeal. After the appeal has been completed, if there remains a balance owing, refer the debt to Treasury for cross-servicing after issuance of a proper intent to refer letter. e) Write-off/Closed of Less than Full Amount is Not Permitted MSP Contractors may not recommend Write-off/Closed of less than the full amount of an outstanding debt. See § 70.3 of this Chapter for definition of the term “debt.”