CMS Pub. 100-06, ch. 4, § 40.2

Medicare authority to withhold payment in whole or in part for claims otherwise determined to be payable is

found in federal regulations at 42 CFR 405.370-377, which provides for the suspension of payments.

Suspension may be used when the contractor possesses reliable information that:

• Fraud or willful misrepresentation exists;

• An overpayment exists but the amount of the overpayment is not yet determined;

• The payments to be made may not be correct; or

• The provider fails to furnish records and other requested information. (Some examples include cost

reports, credit balance reports, and form CMS-91.)

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.

50.1 – ERS Required Documentation --Physician is a Sole Proprietor (Rev. 12346;

Issued:11-01-23; Effective:10-30-23; Implementation:10-30-23)

A. The contractor shall require that the provider (physician/sole proprietor) furnish the following

for Extended Repayment Schedule (ERS) request of 15 months or less:

1. Signed Proposed Amortization Schedule – The CMS requires a signed request, including a

proposed monthly term and payment installment schedule, as a provider’s agreement to pay

its overpayment through installment payments. Signatures submitted in electronic form are

permissible.

2. Good Faith Payments – The CMS requires the provider to submit the first good faith

payment (per the proposed amortization schedule) with the ERS application, along with any

future payments due, while under review. Providers shall submit a good faith payment each

month until the ERS review is decided.

B. The contractor shall require that the provider (physician/sole proprietor) furnish the following for an

ERS request of 16 months or more:

1. Signed Proposed Amortization Schedule – The CMS requires a signed request, including a

proposed monthly term and payment installment schedule, as a provider’s agreement to pay

its overpayment through installment payments. Signatures submitted in electronic form are

permissible.

2. Good Faith Payments – The CMS requires the provider to submit the first good faith

payment (per the proposed amortization schedule), along with any future payments due

while under review. Providers shall submit a good faith payment each month until the ERS

review is decided.

3. CMS-379 Form - a completed CMS -379 Form. The information requested on this form is

necessary for the contractor to determine if the physician/sole proprietor will be able to make

installment payments on a claim.

4. Financial Statements - of Debtor.

5. Income Tax Return - a copy of the provider’s income tax filing for the most recent calendar

year.