CMS Pub. 100-06, ch. 4, § 10

For purposes of these instructions, the term Provider, Physician and other Supplier will be referred to

as “Provider”.

The following collection activities are the minimum requirements the Medicare contractor (contractor) shall

follow for all Non-MSP provider overpayments. Where additional information is located elsewhere in the

manual chapter, an annotation of the specific section is included. (See Medicare Financial Management

Manual, Publication 100-06, Chapter 3, §40).

1. Initial Demand letter

The contractor shall send an initial demand letter within established timeframes of the identification or

notification of an overpayment. The contractor shall ensure the date of the initial demand letter is the date

the AR is established and the date the letter is mailed. The initial demand letter shall include all required

language and shall meet timeliness standards as outlined in chapter 3 §200 and/or chapter 4 §§20 and 90.

a. Dollar threshold

The threshold amount to send the initial demand letters is $25 (principal). The contractor shall aggregate all

of the overpayments to the provider to meet the threshold amount for the initial demand letter.

b. Undeliverable demand letter

If the contractor receives the initial demand letter back as undeliverable, the contractor shall attempt to reach

the provider by telephone within 10 business days of receiving the undeliverable letter.

If the contractor is unsuccessful at reaching the provider by telephone, the contractor shall at the minimum

attempt to locate the provider through other means including:

• Querying the Provider Enrollment Change of Ownership System (PECOS) to determine if there

is updated contact information (including an email address) for the provide);

• Contacting the medical review staff or fraud and abuse staff for possible updates on the debtor’s

whereabouts;

• Conducting research to see if the provider is in bankruptcy or litigation, and by using the name of

the owners, partners, or the corporation officers;

• Conducting an internet search site, including using Lexis-Nexis® or a similar program;

• Contacting the servicing regional office (RO) for assistance or further guidance, if the contractor

does not have access to a search engine.

The contractor shall document in the case file all attempts to contact the provider.

2. Recoupment

The contractor shall initiate recoupment of the debt, or any remaining balance of the debt, as outlined below,

except when the debt is in the following status: (1) appeal subject to the Limitation on Recoupment

provisions (redetermination/reconsideration), (2) bankruptcy, (3) Extended Repayment Schedule (ERS) or

(4) a pending ERS request.

For Part A (Non-935 Overpayments)

• Recoupment shall begin 16 days from the date of initial demand letter if the debt is not subject to

Limitation on Recoupment provisions of Section 935(f)(2) of the MMA. (See chapter 3, §200)

For Part B (935 and Non-935) and Part A 935 Overpayments

• Recoupment shall begin 41 days from the date of the initial demand letter.

• Recoupment shall continue until the debt is collected in full or is in a status that excludes

recoupment.

3. Interest

If the overpayment is not paid in full 30 days from the date of the initial demand letter, contractors shall

ensure that interest is assessed beginning on day 31. Simple interest shall be charged on the outstanding

principal balance of the debt starting with the date of the initial demand letter and for every 30-day period

thereafter, until the debt is paid in full. Refer to chapter 4, §30 and 42 CFR 405.378 for additional

information.

4. Telephone Contacts:

Contractors shall attempt to contact providers by phone, at least twice, as follows:

a. First telephone contact

• Providers who have been terminated/revoked/ or have withdrawn from the Medicare

program:

o The telephone contact shall be made within 10 business days of the contractor’s notification of

termination/revocation/withdrawal.

• Active Providers:

o The telephone contact shall be made when the debt is at least 60 days delinquent (90 days from the

date of the demand letter) and is not in an appeal, litigation, ERS, or bankruptcy status.

o The telephone contact may be made sooner if the contractor believes that earlier contact may result

in a collection.

o In situations where the provider cannot be reached by telephone the contractor shall leave a

voicemail as needed.

• Successful Phone Contact:

o The contractor shall inform the provider of repayment options (e.g. ERS) and explain that any unpaid

delinquent debt will be referred to Treasury for further collection activity. If the provider has a surety

bond, the contractor shall inform the provider that the debt will be collected through the surety, and

any remaining balance will be referred to Treasury.

o If the first call is successful, (second call would not be necessary) document the contact.

• Unsuccessful Phone Contact

o The contractor shall discontinue telephone efforts when a provider’s number is disconnected.

o The contractor shall at the minimum attempt to locate the provider through other means as listed in

discussion of undeliverable demand letters, section 1(b), above.

b. Second Phone Contact

The second phone call is only necessary if the contractor was unable to directly communicate with the

provider on the first call.

• The contractor shall make a second phone call to the provider at least 7 business days before

referring the debt to Treasury.

• The contractor shall leave a voicemail where the call is directed to voice messaging.

• Leaving the second voicemail message shall be sufficient for attempting to reach the provider by

telephone.

The contractor shall document, in the case file, all attempts to contact the provider.

5. Extended Repayment Schedule (ERS)

If the provider submits an application for an ERS, the contractor shall follow the instructions in

Chapter 4 §50. An ERS application may be requested at any time during the collection process.

6. Intent to Refer (ITR) letter

For providers who have been terminated/revoked or have withdrawn from the Medicare program:

The contractor shall send the ITR letter:

• If the initial demand letter was returned undeliverable and a better address cannot be located (see

below for Instructions Summary for Undeliverable Letters), or

• When the contractor has verified in the Shared System, PECOS, or Provider Enrollment that the

provider is terminated or out of business.

o The contractor utilizing HIGLAS shall apply the ‘PROVIDER-TERMINATED’ status

code at the customer level which will cascade the ‘PROVIDER-TERMINATED’ status to

all of the customer’s eligible accounts receivable. HIGLAS will not cascade the

‘PROVIDER-TERMINATED’ status code to the AR transaction status codes that are

exempt from Treasury referral. The contractor shall monitor the provider’s status

monthly, for two consecutive months, to determine if the provider has appealed a

revocation or has been removed from the Terminated/Revoked status. (Also see Chapter

4, §10.2)

o The contractor utilizing HIGLAS shall manually add a comment to the AR status

indicating that the provider has been terminated or out of business, when a provider has

been terminated or is out of business and has an AR with a status code that is ineligible

for Treasury referral”

o The contractor not utilizing HIGLAS shall manually create the ITR letter and send it as

soon as possible if an ITR letter has not been issued and the contractor learns that the

provider is terminated or out of business.

For active providers:

The contractor shall send the ITR letter when the debt is at least 30 days delinquent (60 days from the

determination date)* and is not in a status excluded from debt referral.

NOTE: In all cases, the contractor shall ensure that the ITR letter is sent in enough time to allow the debtor

60 days’ notice prior to referral to Treasury. In accordance with provisions of the Digital Accountability and

Transparency Act of 2014 (DATA Act) which amended the Debt Collection Improvement Act of 1996

(DCIA), eligible delinquent debts must be referred to Treasury by the 120th day of delinquency. (Refer to

chapter 4, §70 for further detail.)

* The Healthcare Integrated General Ledger Accounting System (HIGLAS) adds an additional 5 grace days

when determining when to generate the ITR letter to allow for interest accruals to appear on the ITR letter;

therefore, the ITR letter will be system generated on day 66.

* Instructions Summary for Undeliverable Letters

1. If the contractor utilizing HIGLAS cannot locate a better address within 10 business days of receipt

of the undeliverable demand letter, the contractor shall manually update the status code to ‘LTR-

UNDL-1ST.’

2. If the contractor locates a better address for the undeliverable initial demand letter, the contractor

shall send the provider a manual undeliverable demand notification letter, with the initial demand

letter attached, to the better address. The original initial demand letter date shall remain in effect.

3. If the contractor not utilizing HIGLAS cannot locate a better address within 10 business days of

receipt of the undeliverable initial demand letter, the contractor shall manually create the ITR letter

immediately and send it as soon as possible.

4. If the ITR letter is returned as undeliverable and a better address cannot be located within 10

business days of receipt, the contractor utilizing HIGLAS shall update the status code to ‘LTR-

UNDL-ITR.’

5. If the contractor locates a better address for the undeliverable ITR letter, the contractor shall send the

provider a manual undeliverable ITR notification letter, with the original ITR letter attached, to the

better address. The original ITR letter date shall remain in effect.

Note: The HIGLAS logic will review the letter history and the debt will become eligible for referral to

Treasury 66 days from the ITR letter date.

7. Surety Bond

Prior to referral to Treasury, DME contractors shall refer to instructions outlined in Medicare Program

Integrity Manual, Publication100-08, chapter 15, §21.7.1.

8. Record Keeping

The contractor shall keep records of all collection activities through all stages of the debt collection process.

This record shall be detailed and include all correspondence and conversations with the provider, checks,

and any other documents associated with debt collection processes.