CMS Pub. 100-06, ch. 4, § 30.6

A. Waiver of Interest Charges

Interest charges shall be waived if the overpayment is completely liquidated within 30 days from the date of

final determination, or if the contractor or the RO determines that the administrative cost of collection would

exceed the amount of interest.

For institutional providers serviced by FIs, interest shall not be waived for the period of time during which

the cost report was due but remained unfiled as specified in Chapter 4, §30.1. Also, interest shall not be

waived where a cost report is timely filed indicating an amount due CMS and is not accompanied by

payment in full as specified in Chapter 4, §30.1 unless the provider and the FI agree in advance to liquidate

the overpayment through a reduction in interim payments over the next 30-day period.

For bankrupt providers and interest see Chapter 3, §140.

B. Adjustment of Interest Charges

1. Reopenings-FI

When the FI reopens a final settlement pursuant to 42 CFR 405.1885 - 1887(a) and such reopening reverses

some or all adjustments, whereby the previous overpayment is reduced or eliminated, it makes an

appropriate adjustment to previously assessed and recovered interest to reflect the proper interest chargeable

under 42 CFR 405.378 and the policies set forth.

Should the reopening action establish or increase an overpayment, the rate of interest on the additional or

new overpayment is the rate in effect as of the date of the new notice of final determination.

If the original cost report was not submitted timely, any reopening action, which results in an adjustment to

the previously determined overpayment, shall also include an appropriate adjustment to the late filing

interest assessment.

2. FI and Provider Reimbursement Review Board Hearings - Institutional Providers Serviced by FIs

If an overpayment or underpayment determination is reversed administratively by the FI or by the PRRB,

and the reversal is the final decision in the case, it is necessary to recalculate the correct amount of interest

to be assessed. If any excess interest or principal has been collected, the FI refunds it to the debtor. No

interest accrues on the refunded amount unless payment is not made within 30 days from the date of

notification of the corrected overpayment or underpayment amount.

If the hearing results in an additional overpayment, the FI assesses interest on the additional amount at the

rate in effect on the date of the revised final determination. Interest does not accrue until the FI notifies

the provider of the revised overpayment or underpayment amount.

Example of Application

On 07/18/05, the intermediary completes a final settlement and issues a NPR and a written demand showing

an amount due the program of $16,000. On 09/15/05, the provider pays the $16,000 overpayment plus one

30-day period of accrued interest.

As a result of a hearing on 12/l0/05, the PRRB reverses the intermediary's findings and determines that the

correct amount due the program was $4,000. The excess $12,000 in principal and the accrued interest on

$12000 that was assessed and collected must be returned to the provider.

3. Judicial Review

The policies and procedures of this section do not apply to the time period for which interest is payable

under 42 CFR 413.64(j) because the provider seeks judicial review of an adverse decision by the PRRB or

the decision of the Administrator. Section 1878(f) of the Social Security Act authorizes a court to award

interest in favor of the prevailing party on any amount due as a result of the court’s decision. The interest is

payable for the period beginning on the first day of the first month following the 180-day period which

began on either the date the intermediary made a final determination or the date the intermediary would have

made a final determination had it been done on a timely basis. The interest rate assessed is the rate on

obligations issued for purchase by the Federal Hospital Insurance Trust Fund. This rate of interest can be

found at http://cms.hhs.gov/statistics/trust-fund-interest-rates/. If the FI withheld any portion of the amount

in controversy prior to the date the provider seeks judicial review by a Federal court, and the Medicare

program is the prevailing party, interest is payable by the provider only on the amount not withheld.

Similarly, if the Medicare program seeks to recover amounts previously paid to a provider, and the provider

is the prevailing party, interest on the amounts previously paid to a provider is not payable by the Medicare

program since that amount had been paid and is not due the provider. However, if the Medicare program

had recovered any of the amount in controversy interest would be payable from the time of recovery through

the date of payment.)