Establishing an Extended Repayment Schedule (ERS) - (formerly known as an Extended

50 - Establishing an Extended Repayment Schedule (ERS) - (formerly known as an Extended Repayment Plan (ERP)) (Rev. 13071; Issued: 03-13-25; Effective: 04-11-25; Implementation: 04-11-25) For purposes of these instructions, the term Provider, Physician and other Supplier will be referred to as “Provider.” For purposes of these instructions, the term Medicare Administrative Contractor (MAC) may be referred to as “Contractor.” For the purposes of these instructions, the following definitions apply; See 42 C.F.R. §401.607(c)(2) and (3) and The Debt Collection Improvement Act of 1996: Hardship exists when the total amount of all outstanding overpayments (principal and interest) not included in an approved, existing repayment schedule is 10 percent or greater than the total Medicare payments made for: (1) the cost reporting period covered by the most recently submitted cost report; or (2) the previous calendar year for a non-cost report provider (see below ‘additional factors to consider’ when determining eligibility). Extreme Hardship exists when a provider qualifies as being in “hardship” as defined in the previous paragraph and a 36 month to 60 month extended repayment schedule (ERS) is deemed eligible for approval consideration by Medicare. Delinquency is when a full installment payment is not made by the due date or the end of the “grace period” as established in a loan or repayment agreement, in the case of a debt being paid in installments. The date of delinquency is the payment due date. Default is when an ERS is deemed delinquent, and a consecutive full installment payment is not made by the due date as established in a loan or repayment agreement. Additional Factors to Consider: The contractor shall evaluate the request, based on the definitions written above, in conjunction with the requirements found in sections 50-50.3 of this chapter. For a provider whose situation does not meet the definitions written above, the contractor shall evaluate the ERS request based on the requirements found in sections 50-50.3 of this chapter and consider the information in (i) – (iii) below, when deciding whether to grant an ERS. If granted, the MAC shall continue to frequently monitor if the provider continues to qualify for the ERS throughout the term of the installment schedule. The contractor shall determine the number, amount, and frequency of installment payments based on the information submitted by the debtor and on other factors such as: (i) Total amount of the claim (overpayment); (ii) Provider's ability to pay; and (iii) Cost to CMS of administering an installment agreement. The contractor shall document evaluation factors, including communication with CMS, used during the decision-making process. A provider is expected to repay any overpayment promptly. If repaying an overpayment within 30 days would constitute a “hardship” on the provider, a request for an ERS should be submitted immediately. However, if the overpayment is outstanding and not referred to Treasury, the provider shall request an ERS beyond 30 days, and the contractor shall review that request. Instructions on how to apply for an ERS shall be available on the contractors’ website for provider reference. Medicare demand letters shall refer providers to the contractors’ website for detailed ERS instructions. Contractors shall include in the ERS instructions a form in which the provider can elect to have their underpayments or manual refunds automatically applied to their overpayment (see section B below). Providers shall be given the option to request a paper copy. A. The following steps shall be implemented upon receipt of an ERS: 1. A provider shall submit a signed ERS request which includes: i. the specific overpayment for which an ERS is being requested; ii. the number of months requested; iii. CMS required documents (see sections 50.1-50.2) and a good faith payment equaling one month’s payment of the providers requested terms with its request (ex. 36 month request = 1/36th minimum). Good faith payments shall not be considered monthly payments for the MAC approved ERS, but instead, shall be applied to reduce the overall balance of the overpayment. This is what constitutes a complete ERS. 2. Contractors shall evaluate all providers’ requests for an extended repayment schedule up to 60 months, and shall only approve/disapprove ERS requests up to 60 months. 3. Contractors should consider ERS requests for 6-15 months on a case-by-case basis. Approval should only be for cases where it is clear that the debt can be repaid in this short period. Requests for 6 -15 month ERSs do not require submitting financial documentation if the provider meets the hardship qualifications and does not fall within a scenario found in section 50.3(1). 4. When deemed appropriate, contractors may refer ERS requests that need additional guidance to the Regional Office (RO), along with a recommendation. 5. The RO will evaluate ERS requests as needed or requested by the contractor for further direction. (see 42 CFR 401-607(c)(2)(vi)). 6. CMS Central Office (CO) will evaluate ERS requests as needed or requested by the RO. 7. All ERS requests shall be reviewed and evaluated for approval, disapproval, or referral to RO/CO within 30 calendar days of receipt of the complete request. 8. Providers may request for an ERS under 16 months without submitting financial documentation if they meet the hardship qualifications and do not fall within a scenario found in section 50.3(1). 9. The Provider shall submit financial documentation for ERS request 16 months or longer. 10. The contractor shall determine eligibility qualifications and the duration of the ERS based on its review of the provider’s documentation and any other information acquired (such as fraud information, claims data, overpayment history, etc.). 11. If an ERS is approved and a provider misses one consecutive installment payment following a delinquent status, the provider is in default. (refer to 42 CFR §401.607(2)(v) and The Debt Collection Improvement Act of 1996). Delinquent loan status is when a provider misses one installment payment. Default loan status is when a provider misses one consecutive installment payment, following a delinquent loan status. The contractor shall send a notice of default to the provider, suspend the ERS agreement, and immediately resume normal debt collection procedures within 5 business days. 12. The contractor shall consider a providers’ request to reinstate the ERS, even after default. If reinstated, the provider shall be required to submit new documentation to determine eligibility. The contractor shall determine to reinstate the original ERS agreement or revise the schedule, if approved. If revised, the contractor shall ensure that the revised terms do not extend the original and revised schedule beyond 60 months. The ERS will be closed with no reopening, if the provider were to default again on the reinstated request. 13. The contractor should not grant an ERS to a provider where there is a previously defaulted ERS that was not resolved (reinstated, paid up to date, or paid in full). 14. If the provider applies for an ERS and discontinues the approval process after asserting an inability to make the proposed monthly payments; the provider is approved for an ERS and asserts difficulty with making monthly payments; or the provider advises the MAC of closing or has closed the business; they may be considered for a debt compromise. MACs shall refer these debts to cmsdebtresolution@cms.hhs.gov immediately, for further review. B. The following steps shall be implemented when reviewing and establishing an ERS: 1. If a complete ERS request and a good faith check payment (see note a. below) are received, the contractor shall start reviewing the request immediately. The contractor shall accept the good faith payment(s) and suspend any recoupment during the review of the ERS. 2. Contractors shall review the complete ERS package to make a final decision within 30 calendar days of receipt. If the contractor needs additional time to review an ERS request, it shall work with their RO to determine a reasonable timeframe to complete. 3. If an ERS request is received with all documentation but no good faith payment, (see note a. below) the contractor shall immediately place the provider on 30% recoupment during the review of the ERS. 4. Contractors shall review the ERS documents in detail to determine if there are any other documents needed. If additional documents are needed the contractors shall request additional documentation. 5. If an incomplete ERS request is received, the contractor shall review the submitted documentation, determine and request all missing documents. If a good faith payment was not received, the MAC shall immediately place the provider on no less than 30% recoupment. If the contractor requests additional documentation and the information is not received by the 16th calendar day after the contractor’s request, the contractor should close the request and resume normal collect activities. 6. Contractors shall review the ERS documents in detail to determine if there are any other documents needed. If additional documents are needed the contractors shall request additional documentation. 7. Contractors should extend an additional 15 calendar days to receive the documentation from the provider before closing the request. Upon receipt, the contractor shall complete its review of the additional documentation within 5 calendar days. 8. Contractors shall ensure that requesting additional documentation will not unnecessarily extend the decision-making period. 9. If the contractor needs additional time to conduct the review, they shall work with their RO to determine a reasonable timeframe to complete. 10. Contractors shall NOT refund any payments received or recouped that occurred while processing an ERS but shall apply such amount(s) to the outstanding overpayment(s) (apply to interest first then principal), unless CMS directs otherwise. 11. If the ERS request is approved, the contractor shall establish an ERS to recover the remaining balance of an overpayment. 12. Pre-accrued interest shall be recovered first before applying any payments to principal. Pre- accrued interest can either be recovered in one lump sum or over multiple months (not to exceed 3 months, unless directed by CMS), depending on a provider’s ability to pay in full or over time. 13. Contractors shall ensure that interest continues to accrue on the overpayment until it is paid in full. While recovering the pre-accrued interest amounts, the contractor shall also recover the interest that continues to accrue on the outstanding principal balance. 14. Once the pre-accrued interest is paid in full, the ERS (recovering principal and accruing interest) shall begin. 15. Approved ERS requests will run from the ERS approval date. 16. If the ERS request is denied, the contractor shall continue with normal debt collection activities. Providers shall be permitted one additional ERS request for an overpayment, where a previous ERS was denied. 17. If both ERS requests are denied, any additional ERS requests for that overpayment (that a contractor deems should be considered) shall be forwarded to the RO for review. 18. Contractors shall include in the ERS instructions an option in which the provider can elect to have all of its underpayments or manual refunds automatically applied to its overpayment. Subject to section B below, a provider can rescind its consent to automatic recoupment or offset of underpayments and manual refunds, with further written notice to the contractor. 19. Any underpayments or manual refunds applied to an overpayment shall reduce the term of the ERS and shall not affect the installment amounts due under any amortization schedule. 20. Unless the provider has submitted a request asking the MAC to automatically apply underpayments and manual payments to the ERS payments, contractors shall not automatically apply an underpayment due to a cost report or a manual refund due to over collection to the ERS overpayment. 21. If the contractor determines a Medicare underpayment or manual refund after establishing an ERS, the contractor shall notify the provider in writing of the underpayment or manual refund. 22. The contractor shall permit the provider 15 calendar days following the date of notification to submit a request (with justification) to refund the underpayment. 23. If the provider does not respond in the required timeframe or has not submitted a form asking the contractor to automatically apply the underpayment or manual refund to the ERS payments, the contractor shall immediately apply this amount to the ERS payments (with the exception of #20 above). 24. If the provider responds timely, the contractor has 15 calendar days from the receipt date to determine if the provider’s justification is in the best interest of the Medicare program. The contractor should either apply the underpayment or refund the amount to the provider. 25. If a provider does not submit such a justification, the contractor shall deny the request and shall immediately apply this amount to the ERS payments. 26. If the provider fails to provide accurate current financial information, including certifying that no material change has occurred, the contractor shall apply the underpayment or manual refund to the ERS. 27. If a refund request is denied, the contractor shall send written notice of the determination to the provider, explaining the rationale for the determination. The determination is not an initial determination and is not appealable. NOTE(S): a. Good faith payments are monthly payments submitted by the provider while an ERS is in review. They should equal one (1) month’s payment of the providers requested terms; ex., 36- month request = 1/36th minimum good faith payment. Payments less than this amount are not considered a good faith payment. Payments shall continue to be submitted monthly while the ERS is being reviewed. b. If under a 935 appeal, the provider shall continue to submit good faith payments or ERS installment payments. These payments are considered voluntary payments and not 935 recoupments.