CMS Pub. 100-06, ch. 4, § 70.16

An agency closes out a debt when it determines that further debt collection actions

are prohibited or the agency does not plan to take any future actions (either active or passive) to try to

collect the debt.

Contractors shall submit the following debts for close-out (termination of collection action).

• Non-MSP provider/supplier debts with a combined principal and interest balance of less than $25.

The HIGLAS Auto Write-Off Program (AWOP) will systematically close-out these particular

debts based on non-excluded transaction types that are 180 days old (from the demand

letter/determination date) with no collections within the last 60 days.

• MSP debt with a combined principal and interest balance of less than $25. The HIGLAS AWOP

will systematically close-out these MSP debts that are at least 120 days old (from the demand

letter/determination date) with no collections within the last 60 days.

• MSP debt where the debtor is deceased. The contractor shall not close-out these debts when the

debtor is deceased and the estate is still open or when the MSP claim arises from a wrongful death,

survival or other cause of action claiming medical damages incurred by the beneficiary where the

settlement, judgment or award is awarded to an individual or entity other than the beneficiary’s

estate. The contractor shall also not terminate collection action or close-out debts that are in

litigation and/or under negotiation by the Office of General Counsel (OGC) or the Department of

Justice (DOJ).

• Non-MSP beneficiary debts with a principal balance less than $50.

• Non-MSP beneficiary debts with principal balance between $50 and $999.99, over 425 days old,

the last payment date is greater than 365 days old, and the contractor has verified there are no

other collections for the same beneficiary.

• Non-MSP beneficiary debts greater than or equal to $1,000, have been referred to the Social

Security Administration (SSA), have no collections, over 425 days old, and the last payment date

is 365 days old.

• Debts greater than six years old that have been returned to agency (RTA) by Treasury and the

contractor has performed the required steps to resolve and/or research the debt to confirm the RTA

status. Debts with a combined principal and interest balance less than $25 do not require any

research. This includes debts that have been returned to agency (RTA’d) with a combined

principal and interest balance less than $25 but later exceeds $25 as a result of accrued interest

while awaiting close-out review.

• Certain debts that have not been referred to Treasury (non-RTA) for various reasons such as

bankruptcy or litigation. The contractor shall submit the justification and supporting

documentation, including OGC correspondence for such debt close-outs.

• Debts, of any amount, regardless of age that cannot be validated, should be recommended for

termination of collection action and close-out. For example, when debts are received as a result of

a contractor transition where no electronic or paper records are available, and other debts where no

records are available to support the balances. The contractor shall make a concerted effort to

validate the debts before selecting this option. A listing of this debt shall be forwarded to the

Office of Financial Management/Financial Services Group/Division of Financials Services and

Debt Management (OFM/FSG/DFSDM) Director for approval. The list should contain the reason

for termination of collection action and close-out recommendation that provides reasonable

evidence to substantiate that the claim is no longer available.

Delegations of Authority for Closing-Out Debts Less Than $25

• CMS has authority to terminate collection action and close-out debts that have a combined principal

and interest balance less than $25.

• The contractor not utilizing HIGLAS shall recommend termination of collection activity of debts, once

the debt is 180 days old (that is, 150 days delinquent) with no collection activity within the past 60 days.

Delegations of Authority for Closing-Out Debt That Was Not Eligible for Referral to Treasury (Non-RTA) and Non-Uncollectible (RU)/Out of Business (RN) RTA Debt

This delegation of authority only applies to debts not eligible for Treasury referral, such as, bankrupt

issuers/health plans/contributing entities or issuer/health plan/contributing entity debts and debts returned to

agency (RTA) with a code other than RU/RN (non-RU/RN).

• Debts with amounts $100,000 or less (exclusive of interest) may be approved for termination of

collection activity and close-out by CMS.

• Debts with amounts in excess of $100,000 (exclusive of interest) must be referred to the CMS with

the Office of General Counsel (OGC) concurrence for the approval process as described by 42 CFR

401.601(c).

Delegations of Authority for Closing-Out Returned to Agency Debt that is RU/RN

• Returned to Agency Debts classified as RU or RN with amounts of $500,000 or less (exclusive of

interest) may be approved by the CMS without OGC’s concurrence.

• Returned to Agency Debts classified as RU or RN greater than 6 years old and in excess of

$500,000 (exclusive of interest) must be referred to the CMS with OGC concurrence for the approval

process as described by 42 CFR 401.601(c).

Fraud Checks

A fraud check must be completed for ALL providers/suppliers who have a valid National Provider

Identifier (NPI) and has debts submitted for close-out. Before any debts can be submitted to the CO or

RO, the contractor shall submit a fraud check request to the Center for Program Integrity (CPI). Fraud

checks shall be performed through CPI’s Unified Case Management (UCM) system for

providers/suppliers that have an NPI.

The contractor shall use the following instructions for requesting fraud check reports.

1. The contractor shall create an Excel spreadsheet listing the NPIs and names of the

providers/suppliers. The NPIs and provider/supplier names shall be obtained from the related debt

close-out spreadsheet. The contractor shall use the naming format FraudChk_Contractor-

Jurisdiction_Reviewer_Period Ending (example – FraudChk_ABC-J2_RO_FY19Q4) when

naming/saving the file(s).

2. The contractor shall email its fraud check request spreadsheet along with a completed CPI data

request form to CPIFraudcheck-OFMDebt@cms.hhs.gov with the subject line

“Contractor/Jurisdiction Fraud Check Request” (example – ABC/J2 Fraud Check Request).

3. The contractor shall expect to receive the fraud check report from CPI within one week of sending

the fraud check request to CPI. The contractor shall use the fraud check report to determine if the

provider/supplier has an open fraud case. Please note the following:

• The NPI is listed in column A (PRVDR_NPI_NUM).

• Column B (UCM_FRAUD_CHECK) will indicate a “Y” if the NPI was found in UCM.

An “N” in column B will indicate that there are no records listed for the NPI. Therefore, all

other fields will be blank.

• If there is a “Y” in column B, proceed to column P (RFRL_OPEN_IND) to determine if

the case is open or closed. If there is a “Y”, the case is open which means that the

provider’s/supplier’s debts are not eligible for close-out. An “N” indicates that the

provider’s/supplier’s fraud case is closed.

• If there are more than one open and/or closed fraud case for a given provider/supplier,

filter column P with the “Ys” only to get only those providers/suppliers with open fraud

cases. If all entries for a given NPI have an “N” in columns B or P, then the debt is eligible

for RO or CO close-out review/approval. However, if one or more of a given

provider/supplier NPI’s entries has a “Y” in column P, the NPI's debts are not eligible to

be submitted for RO or CO close-out review/approval.

The contractor shall include a copy of the fraud check report for the NPIs that are included on the

particular debt close-out spreadsheet that is sent to the CO or RO.

Debt Close-out Request Submission

The contractor shall submit two separate quarterly debt close-out reports utilizing the Debt Close-Out

Request template/spreadsheet. These reports shall be submitted to CMS no later than the first day of the

second month of each quarter (i.e., November 1, February 1, May 1, and August 1). If this day falls on a

weekend or federal holiday, the next business will be the due date. The contractor utilizing HIGLAS shall

only include new debts with a combined principal and interest balance greater than or equal to $25. The

contractor not utilizing HIGLAS shall include all eligible debts. Each debt shall be considered a separate

identifiable debt and shall not be aggregated with other debts. The contractor shall only include

provider/supplier debt that is associated with a valid National Provider Identifier (NPI).

The contractor shall include in the first report, debts that are not eligible for Treasury referral (e.g.,

beneficiary, deceased provider/supplier), referred to as non-Return to Agency (non-RTA) debts, and non-RU /RN debts (other than bankruptcy debts) with principal balances up to $100,000 and RU/RN debts

with principal balances up to $500,000. The debts listed on this report will be reviewed and approved by

the RO (CMS CO for Medicare Secondary Payer (MSP) debts).

The contractor shall include in the second report, which is for debts that will be reviewed by OGC, non-RTA and non-RU/RN debts (other than bankruptcy debts) with a principal balance greater than $100,000

and RU/RN debts with a principal balance greater than $500,000, provided that all categories of debts are

greater than 6 years old.

Debts that will be reviewed by OGC shall also include the following documentation:

Part A Debts

1. Notice of Program Reimbursement (NPR) - (cost report debts only)

2. Initial demand letter

3. Final appeal decision letter sent from contractor’s appeals department to overpayments department

(decision only, exhibits not required)

4. Intent to Refer (ITR) letter

5. Most recent Extended Repayment Schedule (ERS) – (if applicable)

6. A report from PECOS and/or copies of 855 Forms showing:

i. date the debtor’s Medicare enrollment ended; or

ii. identifying information on all owners/managing employees/directors; and

iii. whether there are owners/managing employees/directors of the debtor company who are

affiliated with a provider/supplier that is still operating in the Medicare

program. If so, the MAC shall also include identifying information from PECOS about the

company with which he or she is affiliated, including the interest he or she has in that

company.

Part B and MSP Debts

(Not required if the provider/supplier has more than more than ten debts requested to be closed out during

a quarter. But required for all extrapolated overpayments.)

1. Initial demand letter

2. Intent to Refer (ITR) letter

3. Final appeal decision letter sent from contractor’s appeals department to overpayments department

(decision only, exhibits not required)

4. Most recent Extended Repayment Schedule (ERS) – (if applicable)

5. A report from PECOS and/or copies of 855 Forms showing:

i. date the debtor’s Medicare enrollment ended; or

ii. identifying information on all owners/managing employees/directors; and

iii. whether there are owners/managing employees/directors of the debtor company who are

affiliated with a provider/supplier that is still operating in the Medicare

program. If so, the MAC shall also include identifying information from PECOS about the

company with which he or she is affiliated, including the interest he or she has in that

company.

For debts that are submitted to CMS that CMS in turn may forward to OGC with CMS’s

recommendation, the contractor shall provide a separate debt close-out report and certification statement

signed by its Chief Financial Officer in accordance with Financial Management Manual, Ch. 4, § 70.17.2

for the debts serviced by a particular OGC Regional Office (RO). The certification statement must state

that it covers the listed debts and then list: (1) the number of debts; (2) the total principal balance of the

debts; and (3) total interest balance of the debts. The MAC shall use the provider’s/supplier’s address to

determine the OGC RO. Below is the list of the OGC ROs and the states that each RO services. The list

can also be found at https://www.hhs.gov/about/agencies/ogc/key-personnel/regional-offices/index.html.

• Region I (Boston) - Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

• Region II (New York) - New Jersey, New York, Puerto Rico, Virgin Islands

• Region III (Philadelphia) - Delaware, District of Columbia, Maryland, Pennsylvania, Virginia,

West Virginia

• Region IV (Atlanta) - Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South

Carolina, Tennessee

• Region V (Chicago) - Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin

• Region VI (Dallas) - Arkansas, Louisiana, New Mexico, Oklahoma, Texas

• Region VII (Kansas City) - Iowa, Kansas, Missouri, Nebraska

• Region VIII (Denver) - Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming

• Region IX (San Francisco) - American Samoa, Arizona, California, Guam, Hawaii, Nevada

• Region X (Seattle) - Alaska, Idaho, Oregon, Washington

CMS shall respond within 30 days after receipt of the close-out request, except for cases exceeding the

CMS’ delegated authority. For those cases exceeding the CMS authority, the CMS shall forward the case

to the Office of General Counsel (OGC) with the CMS’ recommendation, within 30 days of receipt of the

contractor’s request.

Upon receipt of the CMS RO/OGC close-out response, the contractor shall complete the close-out process

by making the necessary adjustments in HIGLAS to formally close-out the debt(s) and assign the

appropriate AR write-off status code to terminate collection activity. The contractor shall complete the

process no later than 30 days from receipt of the response.

70.17 - Debts Returned to Agency (RTA) by the United States Department of the Treasury

(Treasury) (Rev. 11787; Issued:01-19-23;

Effective: 04-21-23; Implementation:04-21-23)

The Treasury returns to agency (RTA) debts to the Centers for Medicare & Medicaid Services (CMS)

using the following reasons:

RTA Debt Status

Code

Federal Debt Return Description

(FDRETDSC)

HIGLAS AR Status

Code

RB In Bankruptcy RTA-RB

RC Small Balance RTA-RC

RC Account Settled/Compromise RTA-RC

RC Satisfied Compromise RTA-RC

RD Congressional Dispute RTA-RD

RD Debt Amount Incorrect RTA-RD

RD Other RTA-RD

RD Manual RTA RTA-RD

RD Proof of Debt Validated RTA-RD

RD Recalled RTA-RD

RD Miscellaneous Dispute RTA-RD

RD VDPP - Previously Paid RTA-RD

RD Complaint RTA-RD

RD Wrong Debtor RTA-RD

RD Disability/Inability to Pay RTA-RD

RD Recall Approved RTA-RD

RN Entity Out of Business RTA-RN

RP Satisfied Payment Agreement RTA-RP

RP Previously Paid RTA-RP

RP Paid in Full RTA-RP

RP Previously Resolved RTA-RP

RU Uncollectible RTA-RU

RU Debtor Death RTA-RU

RU Inability to Pay RTA-RU

RX Claim Not Substantiated RTA-RX

RX No Disposition Desc Found RTA-RX

HIGLAS shall systematically update an RTA debt's AR status code with the appropriate temporary

HIGLAS AR RTA Status Code. The contractor shall use the appropriate HIGLAS responsibility to

generate the weekly RTA report.

The contractor not utilizing HIGLAS shall also download the report, add a column, and indicate what

status the debt was updated to and post in a secure drive where CMS can access the updated

spreadsheet. The contractor shall also add any applicable comments to the spreadsheet.