Line 4(a) through (e), Reclassified CNC Debt (Principal &

310.4 - Line 4(a) through (e), Reclassified CNC Debt (Principal & Interest) (Rev. 91, Issued: 02-17-06, Effective: 03-17-06, Implementation: 03-17-06) Reclassified CNC debt reported on Line 4a, Re-established as Active Accounts Receivable (A/R) Due to Collection of Cash; Line 4b, Re-established as Active A/R Due to Collection by Offset; and Line 4c, Re-established as Active A/R Due to Misstatement or Misclassification must agree with the total amount reported on Line 6b, Transfers In from CNC on Form CMS-H/M 751A/B. Medicare contractors must retain all documentation supporting any reclassified amounts. 4. The contractor reports in Lines: a. Re-established as Active Accounts Receivable (A/R) Due to Collection of Cash (Principal & Interest). The contractor enters the amount of CNC debt that is re-established as active debt because cash/checks have been collected on CNC debts during the FY. Simultaneously, the amount of the collection shall be reported on Line 6b, Transfers In from CNC and Line 4a, Cash/Check Collections on Form CMS-H/M751A/B. The effect of this transaction will reclassify the debt from an inactive memorandum entry to an active receivable that will be reported for financial statement purposes. Additionally, if the outstanding balance of the CNC debt was greater than the amount collected, the remaining balance of the debt shall remain in CNC. Medicare contractors shall continue to accrue interest for debt that has been reclassified as CNC. b. Re-established as Active A/R Due to Collection by Offset (Principal and Interest.) The contractor enters the amount of CNC debt that is re- established as active debt because offsets have been made on CNC debt during the FY. Simultaneously, the amount of the offset collection shall be reported on Line 6b, Transfers In from CNC and Line 4b, Offset Collections on Form CMS-H/M751A/B. The effect of this transaction will reclassify the debt from an inactive memorandum entry to an active receivable that will be reported for financial statement purposes. Additionally, if the outstanding balance of the CNC debt was greater than the amount collected, the remaining balance of the debt shall remain in CNC. Medicare contractors shall continue to accrue interest for debt that has been reclassified as CNC. c. Re-established as Active A/R Due to Misstatement or Misclassification (Principal & Interest). The contractor enters the amount of the CNC debt that has been re-established to be active debt because the CNC debt is now determined to be a misstatement or misclassification. Simultaneously, the amount of the misstatement or misclassification shall be reported on Line 6b, Transfers In from CNC on Form CMS-H/M751A/B. The effect of this transaction will reclassify CNC the debt from an inactive memorandum entry to an active receivable that will be reported for financial statement purposes. d. Written-off Closed (Principal & Interest). The contractor enters the number and amount of CNC debt that has been approved for written-off closed during the FY. The receivables will be "closed" in its internal systems. No further action will be taken on these debts. CNC debts that are written-off as closed will not be reported on the financial statements, and all collection activity (i.e., future offsets or interest accruals) and servicing of the debt will be terminated. The debts will be closed within the contractor's records, reports, and accounts receivable systems. These debts will be written-off and closed through Form CMS-C/MC751A/B, on line 4d. These debts shall not be reactivated on Form CMS-H/M751A/B. e. NOTE: Medicare contractors cannot write-off debt until formal approval has been received from the appropriate authorized official in accordance with the existing CMS delegations of authority. Other (Principal & Interest). The contractor shall use line 4e only to make corrections to Form CMS-C/MC751A/B beginning principal and interest FY balance. Medicare contractors must retain all documentation justifying any adjustments made to the beginning balance.