Managing Bankruptcy Debt at the Contractor

140.8.3 - Managing Bankruptcy Debt at the Contractor (Rev. 13825; Issued: 06-11-26; Effective: 07-13-26; Implementation: 07-13-26) All bankruptcy debts shall remain at the Contractor throughout the life of the debt. The servicing CMS Office will assume full ownership and responsibility for managing the debt at the Contractor. The Contractor and the servicing CMS Office establish communication procedures to ensure the Contractor staff adhere to the procedures. When chain providers are involved, the servicing CMS Office will contact the necessary contractors and set up procedures for timely and accurate information transfer as requested. During the bankruptcy, the Contractor is required to periodically review the Medicare Provider Bankruptcy Dashboard within the HIGLAS Business Intelligence (HBI). This review ensures that any transactions with discrepancies between the accounts receivable (AR) bankruptcy status and the Provider or Customer bankruptcy status are addressed and resolved. For instance, if a provider is in a bankruptcy status at the customer level and there are AR transactions not in a bankruptcy status, the Contractor investigates the discrepancy to determine if the AR transactions should be placed in a bankruptcy status. The Contractor shall research and rectify the issue when a provider has a bankruptcy in a hold status, in the Accounts Payable (AP) module but no bankruptcy status in the AR module. The HBI Data Dictionary is available for Contractors as a source of information to understand the definitions of the fields on the Medicare Provider Bankruptcy Dashboard. The Data Dictionary also describes the situations that need to be researched and resolved by the Contractor in coordination with the CMS Office. The CMS Office or CMS Counsel is responsible for management of the debt from the initial petition date through filing of the Proof of Claim, and the closure of the Bankruptcy. The Group Director or Deputy Group Director for the Financial Operations & Oversight Group will have the authority to terminate collection activity for cases that meet the criteria for being written off at the Group Director or Deputy Group Director level.