Interest Assessment for Non-MSP and MSP Medicare Credit Balances

10.7 - Interest Assessment for Non-MSP and MSP Medicare Credit Balances (Rev. 99, Issued: 06-30-06; Effective/Implementation Dates: 10-02-06) Calculation of Interest on Medicare Credit Balances Effective October 1, 2004, 42 CFR § 405.378 and 411.24 (m) (l) was amended to change how interest is calculated on Non-MSP/MSP recoveries. Section 1862(b)(2)(B)(i) of the Act provides express authority to assess interest on MSP debts. Under this new rule, interest is assessed for each full 30-day period that payment is not made on time. This change applies to debts established on or after October 1, 2004. A. Assessment of Interest on Non-MSP Credit Balances Interest on Non-MSP debts established prior to October 1, 2004 will continue to be assessed under the former method, until the debt is recovered in full. NOTE: Refer to Pub. 100-06, Chapter 4, §30.3 – Non-MSP (Debt Collection). B. Assessment of Interest on MSP Credit Balances Refer to Pub. 100-05, Chapter 7, revised §30.1.5- “Interest on MSP Recovery Claims” for information on the calculation of interest. For MSP recovery demand letters involving credit balances, there is an exception to the general rule that interest accrues from the date of the recovery demand letter. Federal regulations at 42 CFR 489.20(h) state that if the provider receives payment for the same services from Medicare and another payer that is primary to Medicare, the provider has 60 days to make repayment to Medicare. For MSP credit balances, interest accrues from the later of either the date of the demand letter for the credit balance due or 60 days from the date the provider received the credit balance. If the provider does not specify the date of receipt of the MSP credit balance, accrue interest from the date of the demand letter.