CMS Pub. 100-06, ch. 5, § 400.14

The Federal Accounting Standards Advisory Board (FASAB) recommends through Statement of Federal

Financial Accounting Standard Number 1 (Paragraphs 44&45) that losses on receivables should be

recognized when it is more likely than not that the receivables will not be totally collected. The phrase

"more likely than not" means more than a 50 percent chance of loss occurrence. An allowance for estimated

uncollectible amounts should be recognized to reduce the gross amount of receivables to its net realizable

value. The allowance for uncollectible amounts should be re-estimated on each annual financial reporting

date (at a minimum) and when information indicates that the latest estimate is no longer correct. These

losses should be measured through a systematic methodology. The systematic methodology should be based

on analysis of both individual accounts and a group of accounts as a whole.

Accounts that represent significant amounts, i.e., greater than $1 million, should be individually analyzed to

determine the loss allowance. Loss estimation for individual accounts should be based on (a) the debtor's

ability to pay, (b) the debtor's payment record and willingness to pay, and (c) the probable recovery of

amounts from secondary sources, including liens, garnishments, cross collections and other applicable

collection tools.

The entire allowance for losses generally cannot be based solely on the results of individual account

analysis. In many cases, information may not be available to make a reliable assessment of losses on an

individual account basis or the nature of the receivables may not lend itself to individual account analysis.

In these cases, potential losses should be assessed on a group basis.

CMS has implemented FASAB's recommendations and has developed this protocol for Medicare contractors

to follow for estimating the allowance for uncollectible accounts. The following section outlines this

methodology.

Protocol for Estimating Allowance for Uncollectible Accounts

Medicare contractors must recognize an estimated amount for uncollectible debt in order to reduce the

gross amount of receivables to its net realizable value. Medicare contractors must recognize an Allowance

for Uncollectible Accounts for the Interest Fund-050720 in SGL 134701; and for the HI Fund-050961 and

SMI Fund-050960 in SGL 131901, on the trial balance and the balance sheet. Medicare contractors must

re-estimate the allowance for uncollectible amounts monthly at the end of each reporting period and when

information indicates that the latest estimate is no longer accurate.

Medicare contractors must measure potential losses due to uncollectible amounts through a systematic

method. This systematic method must be based on an analysis. The analysis requires that receivables be

further stratified into sub-groups (i.e., Cost Report Settlement Activity, Claims Accounts Receivable, Credit

Balances, Group Health Plan (GHP) MSP, Liability MSP and Other Accounts Receivables). The subgroups

are somewhat different for Group 1 - Fiscal Intermediaries, as compared to Group 2 - Carriers.

Group 1 (Fiscal Intermediaries)

Sub-Group 1

1. Cost Report Settlements Activity (Non MSP)

2. Claims Accounts Receivable, Credit Balances & Other Accounts Receivables (Non-MSP)

Sub-Group 2

1. Group Health Plan (Data Match/Non Data Match) MSP

2. Liability MSP

For Group 1, Subgroup 1, fiscal intermediaries must perform the following steps to calculate and validate

the allowance for uncollectible accounts.

1. Calculate the allowance based on the historical collection percentage (see detailed instructions

below) for Non-MSP as a whole.

2. Individual Account Analyses: For cost report settlement activity only, fiscal intermediaries will

identify and total those provider debts that meet certain risk characteristics (i.e., bankruptcy,

terminations, poor collection history, no collection activity for 6 months or more). These will be

considered risk accounts, and the fiscal intermediary should total all risk accounts identified through

this analysis.

3. Compute the total delinquencies exceeding 180 days.

4. Compare the three estimated amounts calculated in Steps 1, 2 & 3 and identify the amount that

ensures that the net receivable is reported at its realizable value.

For Group 1, Subgroup 2, the fiscal intermediary must perform the following steps to calculate and validate

the allowance for uncollectible accounts.

1. Calculate the allowance based on the historical collection percentage (see detailed instructions

below) for MSP as a whole.

2. Compute the total delinquencies exceeding 180 days.

3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount that ensures

that the net receivable is reported at its realizable value.

Historical Collection Percentage Calculation

A - Determine Total Receivables Eligible for Collection.

Required Formula:

Note: Amounts are from the TROR Supporting Reports

TROR Line Item HIGLAS Detail Activity Report/Register Line

A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance

(2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES

(3) Accruals (+) (New Interest Receivables)

Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT

CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT

(5) Adjustments

(A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT

(B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT

(C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT

(D) Foreclosure Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT

(E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT

(6) Amounts Written-Off (-)

(A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT

(B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT

Equals: Total Receivables Available to be Collected

B - Determine Rate of Collections

Line 4a, At Agency plus Line 4b, At Third Party plus Line 4c, Asset Sales plus Line 4d, Collections by Treasury through Offset and

Cross Servicing plus line 4e, Collections by Sales After Foreclosures plus Line 4f, Collections by Department of Justice plus Line 4g,

Other – must footnote divided by Total Receivables Available to be Collected (number calculated from Step A) multiplied times 100

determines the rate of collections percentage.

C - Determine the Allowance Rate

1.00 minus the percentage determined from Step B, equals the allowance rate

D - Average the Percentage Calculated in Step C with a 5-year Historical Allowance Rate (if

available, if not available, maintain statistical data to develop historical rate, and proceed to

Step E).

E - Calculate the Allowance

Multiply the allowance rate from Step C or Step D by the sum of Line 7, Ending Balance less

Line 2b, Accrued Receivables.

Group 2 (Carriers)

Sub-Group 1

1. Claims Accounts Receivable, Credit Balances & Other Accounts Receivables

(Non-MSP)

Sub-Group 2

1. Group Health Plan (Data Match/Non Data Match) MSP

2. Liability MSP

For Group 2, Subgroup 1, the carrier must perform the following steps to calculate and validate

the allowance for uncollectible accounts.

1. Calculate the allowance based on the historical collection percentage (see detailed

instructions below) for Non-MSP as a whole.

2. Compute the total delinquencies exceeding 180 days.

3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount

that ensures that the net receivable is reported at its realizable value.

For Group 2, Subgroup 2, the carrier must perform the following steps to calculate and validate

the allowance for uncollectible accounts.

1. Calculate the allowance based on the historical collection percentage (see detailed

instructions below) for MSP as a whole.

2. Compute the total delinquencies exceeding 180 days.

3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount that ensures that

the net receivable is reported at its realizable value.

Historical Collection Percentage Calculation

A. Determine Total Receivables Eligible for Collection.

Required Formula:

Note: Amounts are from the TROR Supporting Reports

TROR Line Item HIGLAS Detail Activity Report/Register Line

A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance

(2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES

(3) Accruals (+) (New Interest Receivables)

Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT

CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT

(5) Adjustments

(A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT

(B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT

(C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT

(D) Foreclosure Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT

(E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT

(6) Amounts Written-Off (-)

(A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT

(B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT

Equals: Total Receivables Available to be Collected

B - Determine Rate of Collections

Line 4a, At Agency plus Line 4b, At Third Party plus Line 4c, Asset Sales plus Line 4d, Collections by Treasury

through Offset and Cross Servicing plus line 4e, Collections by Sales After Foreclosures plus Line 4f,

Collections by Department of Justice plus Line 4g,

Other – must footnote divided by Total Receivables Available to be Collected (number calculated

from Step A) multiplied times 100 determines the rate of collections percentage.

C. Determine the Allowance Rate.

1.00 minus the percentage determined from Step B, equals the allowance rate

D. Average the percentage calculated in Step C with a 5-year historical allowance rate (if

available, if not available, maintain statistical data to develop historical rate, and go proceed to

Step E).

E. Calculate the Allowance

Multiply the allowance rate from Step C or Step D (Group 2, Carriers Section) by Line 7, Ending

Balance.

Medicare contractors are required to compare the results of the estimated allowance based on

the protocol and report the amount that ensures that the net receivable is reported at its

realizable value. The Medicare contactors are required to maintain supporting documentation

that includes the assumptions used to calculate the allowance amount reported. The

documentation must be available for review by CMS, OIG, GAO or other parties as required.

Note: Medicare contractors may apply the same method of results of the principal comparison

(Col. D, Example 400.14.3) to estimate the interest allowance amount (Col. E, Example

400.14.3) to be reported. For example, the method of results for the Non-MSP principal is

delinquencies exceeding 180 days. The Medicare contractor has the option to report on the

allowance matrix for interest (Sub-Group 1, Col. E) the amount equal to the delinquencies

exceeding 180 days from the interest column. The method of results for the MSP principal is the

historical collection percentage. The Medicare contractor has the option to report on the

allowance matrix for interest (Sub-Group 2, Col. E) the amount equal to the same percentage

calculated for MSP principal, multiplied by the interest balance from the CMS AR Overpayment

report. The method selected by the Medicare contractor used to estimate the interest allowance

shall ensure that the net interest receivable is reported at its realizable value.

Each Medicare contractor must complete the Allowance for Uncollectible Accounts Matrix

(Attachment I or Attachment II) monthly. The Allowance for Uncollectible Accounts Matrix is

due on the 5th business day following the close of the respective month and should be submitted

with the CFO certification packages. If the 5th business falls on a weekend of holiday, the

Allowance for Uncollectible Accounts Matrix is due the next business day.

Please submit your matrix(s) via email to ALLOWMATRIX@cms.hhs.gov.

Contractor Name: MAC XX A XXXXX Exhibit 1

Period Ending September 30, 20XX

Allowance for Uncollectible Accounts Matrix

Col E Col F Col G Col H Col I Col J

HI Principal HI Principal SMI Principal SMI Principal General Fund General Fund Fund TROR

Note: Amounts are from the TROR Supporting Reports MSP NON-MSP MSP NON-MSP MSP NON-MSP Total Report

TROR Line Item HIGLAS Detail Activity Report/Register Line

A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance 30,210 15,796,306 6,042 6,624,202 0 127,235 22,583,995 22,583,996

(2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES 87,127 319,224,892 95,780 114,366,311 0 0 433,774,110 433,774,110

(3) Accruals (+) (New Interest Receivables) 0 1,673,182 1,673,182 1,673,183

Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT 0 1,464,682 1,464,682

CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT 0 208,500 208,500

(5) Adjustments 0 (10,027,828) (223.000) (2,057,328) 0 856,490 (11,228,889) (11,228,889)

(A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT 0 (12,570,769) (223) (2,746,858) 0 (172,509) (15,490,359) (15,490,359)

(B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0

(C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0

(D) Forcloser Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0

(E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT 0 2,542,941 0.000 689,530 0 1,028,999 4,261,470 4,261,470

(6) Amounts Written-Off (-) 0 (1,169,402) 0 (1,467,386) 0 (97,315) (2,734,103) (2,734,103)

(A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT 0 (1,169,346) 0 (1,466,863) 0 (97,303) (2,733,512) (2,733,512)

(B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT 0 (56) 0 (523) 0 (12) (591) (591)

Receivable Available to Be Collected 117,337 323,823,968 101,599.000 117,465,799 0 2,559,592 444,068,295 444,068,297

B (4) Collections on Receivables (-) CMS AR Applied Collections 80,869 304,736,381 94,518.000 109,341,714 0 2,391,946 416,645,428 416,645,428

(A) At Agency (80,869) (304,354,835) (94,518) (108,922,507) 0 (2,311,324) (415,764,053) (415,764,053)

(B) At Third Party 0 0 0 0 0 0 0 0

(C) Asset Sales 0 0 0 0 0 0 0 0

(D) Collections by Treasury through Offset and Cross-Servicing (-) 0 (381,546) 0 (419,207) 0 (80,622) (881,375) (881,375)

(E) Collections by Sales After Foreclosure (-) 0 0 0 0 0 0 0 0

(F) Collections by Department of Justice (-) 0 0 0 0 0 0 0 0

(G) Other - must footnote (-) 0 0 0 0 0 0 0 0

Collection Percentage 68.92% 94.11% 93.03% 93.08% n/a 93.45% 93.82% 93.82%

C Allowance Percentage (1-collection %) 31.08% 5.89% 6.97% 6.92% n/a 6.55% 6.18% 6.18%

LEGEND

Warning: There could be an issue but there may not be.

Issue: There is an issue such as missing data that needs to be resolved.

This cell requires manual input

D

Av erage 41.80% 13.73% 20.43% 14.14% n/ a 6.55%

Current Period: Sep 30, 20XX 31.08% 5.89% 6.97% 6.92%

Sep 30, 2015 67.34% 30.55% 71.35% 34.58%

Sep 30, 2014 40.08% 7.03% 0.00% 8.21%

Sep 30, 2013 46.33% 10.42% 17.19% 8.80%

Sep 30, 2012 24.16% 14.78% 6.65% 12.19%

E (7) Ending Balance (TROR/Activity Registers) CMS AR Overpayments Report 36,468 19,074,029 7,081 8,137,641 0 167,648 27,422,867 27,422,870

Cost Report Settlements 0 10,414,230 0 2,459,012 0 139,825 13,013,067 13,013,066

Claims Accounts Receivable 0 3,490,148 0 1,369,240 0 18,633 4,878,021 4,878,021

Credit Balances 0 0 0 0 0 0 0 0

Other (if cost reports issues include with cost reports) 0 5,169,651 0 4,309,389 0 9,190 9,488,230 9,488,231

Physician/Supplier 0 0 0 0 0 0 0 0

Beneficiary 0 0 0 0 0 0 0 0

PIP Accrual 0 0 0 0 0 0 0 0

GHP(Data/non-Data Match) 0 0 0 0 0 0 0 0

MSP Prov/Phys/Supp/Bene 36,468 0 7,081 0 0 0 43,549 43,549

MSP Beneficiary (Liability) 0 0 0 0 0 0 0 0

Other MSP (Liability) 0 0 0 0 0 0 0 0

Check 0 -13558 0 13556 0 2 0 1

(X1) Allowance Amount (Collection Percentage) 15,243 2,619,796 1,447 1,150,599 n/a 10, 980 3,798,066

(X2) Individual Account Analysis-Not Applicable for Carriers (Part B)

(X3) Delinquencies Exceeding 180 Days CMS AR Overpayment Report where parameter "Allowance Calc(Over 180 Days Delinquent))"=Y 29,706 923,841 5,841 225,380 0 65, 653 1,250,421 1,250,420

Cost Report Settlements[180] 0 923,841 0 224,500 0 65,623 1, 213,964 1,213,963

Claims Accounts Receivable[180] 0 0 0 880 0 30 910 910

Credit Balances[180] 0 0 0 0 0 0 0 0

Other (if cost reports issues include with cost reports)[180] 0 0 0 0 0 0 0 0

Physician/Supplier[180] 0 0 0 0 0 0 0 0

Beneficiary[180] 0 0 0 0 0 0 0 0

PIP Accrual[180] 0 0 0 0 0 0 0 0

GHP(Data/non-Data Match)[180] 0 0 0 0 0 0 0 0

MSP Prov/Phys/Supp/Bene[180] 29,706 0 5,841 0 0 0 35,547 35,547

MSP Beneficiary (Liability)[180] 0 0 0 0 0 0 0 0

Other MSP (Liability)[180] 0 0 0 0 0 0 0 0

F Estimate d Allowance Amount ALLOWANCE USING THE MOST CONSERVATIVE AMOUNT 29,706 2,619,796 5,841 1,150,599 0 65,653 3,798,066

Amount Reported on Trial Balance per Allow ance Matrix (U sing the conserv ativ e amount):

Amount

HI MSP Allowance Amount (29,706)

HI NON-MSP Allowance Amount (2,619,796)

HI T otal A llowance (2,649,502)

Fund Acct# 05961 SGL#131901 SGL# 131901 - Allow For Loss on REC-PRINC (2,649,502.26)

SMI MSP Allowance Amount (5,841)

SMI NON-MSP Allowance Amount (1,150,599)

SMI T otal A llowance (1,156,440)

Fund Acct# 05960 SGL#131901 SGL# 131901 - Allow For Loss on REC-PRINC (1,156,440.42)

General Fund MSP Allowance 0

General Fund NON -MSP Allowance (65,653)

General Fund Total Allowance (65,653)

Fund Acct# 050720 SGL#134701 SGL# 134701 - Allow For Loss on REC-INT (65,653.00)

Note: HIGLAS Interest is not split betw een HI/SMI but MSP/non-MSP. Therefore, contractors shall compare the current interest collection percentage v s. the ov er 180 days delinquent amounts.

NOTES:

Average of Allowance (current instruction require Medicare contractors to use five year historical allowance rate

*The above amounts are the allowance estimates for loss on receivable for the period-to-date.

**Therefore, the estimated amounts are the calculated ending balances to be reported on the Summary 2 Trial Balance by SGL account by fund (Ending Balance Column).

***When Line A1, Receivables Available to be Collected by component is less then or equal to zero (0) the component estimated allowance amount must equal zero (0).

Contractor

Name:

MAC XX A

XXXXX

Exhib

it 2

Contractor

Number:

Period

Ending : September 30, 20XX

400.14 - Exhibit 14 - Protocol for Estimating Allowance

for Uncollectible Accounts

Fiscal Intermediary - Group 1

Allowance for Uncollectible

Accounts Matrix

Part A (HI)

Col. A Col. B Col. C Col. D Col. E

Sub-Group 1 (NonMSP) Cost Report

Settlements,

Claims A/R, Credit

Balance & Other

Accounts

Receivable

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance

for

Uncollectible

A/R

Estimated

Allowance

for

Uncollectible

A/R (Interest

Only)

Justific

ation

for

amount

recorde

d on

Summ

ary 2

Trial

Balanc

e

NONMSP

$

2,619,796

$

-

$

923,841

$

2,619,796

$

65,653

Total

$

2,619,796

$

-

$

923,841

$

2,619,796

$

65,653

Sub-Group 2

(MSP) Group

Health Plan (Data-Match & Non-Data

Match), Liability

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance

for

Uncollectible

A/R

Estimated

Allowance

for

Uncollectible

A/R (Interest

Only)

Justific

ation

for

amount

recorde

d on

Summ

ary 2

Trial

Balanc

e

MSP

$

15,243

$

-

$

29,706

$

29,706

$

-

Total

$

15,243

$

-

$

29,706

$

29,706

$

-

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance

for

Uncollectible

A/R

Estimated

Allowance

for

Uncollectible

A/R (Interest

Only)

Justific

ation

for

amount

recorde

d on

Summ

ary 2

Trial

Balanc

e

Sub-Group 1 (NonMSP) Cost Report

Settlements,

Claims A/R, Credit

Balance & Other

Accounts

Receivable

$

2,619,796

$

-

$

923,841

$

2,619,796

$

65,653

Sub-Group 2

(MSP) Group

Health Plan (Data-Match & Non-Data

Match), Liability

$

15,243

$

-

$

29,706

$

29,706

$

-

Total Part A

(HI)

$

2,635,039

$

-

$

953,547

$

2,649,502

$

65,653

Contractor

Name:

MAC XX A

XXXXX

Exhib

it 2

Contractor

Number:

Period

Ending : September 30, 20XX

400.14 - Exhibit 14 - Protocol for Estimating Allowance for

Uncollectible Accounts

Fiscal Intermediary - Group 1

Allowance for Uncollectible

Accounts Matrix

Part B/A (SMI)

Col. A Col. B Col. C Col. D Col. E

Sub-Group 1 (NonMSP) Cost Report

Settlements,

Claims A/R, Credit

Balance & Other

Accounts

Receivable

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance for

Uncollectible

A/R

Estimat

ed

Allowan

ce for

Uncollec

tible A/R

(Interest

Only)

Justific

ation

for

amount

recorde

d on

Summa

ry 2

Trial

Balanc

e

NONMSP

$

1,150,599

$

-

$

225,380

$

1,150,599

$

-

Total

$

1,150,599

$

-

$

225,380

$

1,150,599

$

-

Sub-Group 2 (MSP)

Group Health Plan

(Data-Match &

Non-Data Match),

Liability

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance for

Uncollectible

A/R

Estimat

ed

Allowan

ce for

Uncollec

tible A/R

(Interest

Only)

Justific

ation

for

amount

recorde

d on

Summa

ry 2

Trial

Balanc

e

MSP

$

1,447

$

-

$

5,841

$

5,841

$

-

Total

$

1,447

$

-

$

5,841

$

5,841

$

-

Historical

Collection %

Total

Individual

Account

Analysis

Delinquencies

Exceeding 180

days total

Estimated

Allowance for

Uncollectible

A/R

Estimat

ed

Allowan

ce for

Uncollec

tible A/R

(Interest

Only)

Justific

ation

for

amount

recorde

d on

Summa

ry 2

Trial

Balanc

e

Sub-Group 1 (NonMSP) Cost Report

Settlements,

Claims A/R, Credit

Balance & Other

Accounts

Receivable

$

1,150,599

$

-

$

225,380

$

1,150,599

Sub-Group 2 (MSP)

Group Health Plan

(Data-Match &

Non-Data Match),

Liability

$

1,447

$

-

$

5,841

$

5,841

Total Part B/A

(SMI)

$

1,152,046

$

-

$

231,221

$

1,156,440

$

-

400.15 - Exhibit 15 - Protocol for Prorating Intermediary Time Account

Balances Between Form CMS-H750A (HI) and Form CMS-H750B

(SMI) - (Rev. 5, 08-30-02)

A1-1960.15, B1-4960.15

Protocol for Prorating Intermediary Time

Account Balances Between Form CMS-H750A (HI) and Form CMS-H750B (SMI)

The contractor selects a representative sample of checks and EFT payments issued and

determines the ratio of the number of HI checks/EFT payments to the number of SMI

checks/EFT payments. Checks or EFT payments for both HI and SMI will be split 50-50.

It uses this ratio to prorate the time account balance for the financial reports.

400.16 - Exhibit 16 - Electronic Certification - (Rev. 5, 08-30-02)

A1-1960.16, B1-4960.16

Electronic Certification

The Electronic Certification process requires that the Chief Financial Officer (CFO) enter

their password in the certifying official's current password field on the remarks page of

Form CMS-H750A/B and Form CMS-H751A/B. When the password is keyed in, the

CFO's name and title will appear on the document, and allow the document to be

submitted electronically through the CAFM. For security purposes, the new password

field is present to allow the certifying official to change the password assigned by CMS

to one only the CFO knows.

Two people are required to submit a certified report. The preparer may input the financial

data, but cannot certify the reports. The CFO may not input data. The preparer must

retrieve the report in order to allow certification.

1. From the CAFM Main Menu select option 2 - Data Entry

2. Select the type of report to certify

3. From the Data Entry Menu select option 5 - Update Remarks

4. Select the package (report) to certify

5. Enter the certifying official's current password

If there are no serious errors (use PF6 SHOW ERRS to show errors), the contractor may

submit the report (use PF2 SUBMIT to submit the report) and it will be accepted.

If the contractor is working in a worksheet and decides to certify and submit the report, it

may either use the function keys (PF7 PAGE- and PF8 PAGE+), enter FREM (find

remarks) on the transporter line or use the jump key (PF9 JUMP) to go to the remarks

page.

The contractor must re-enter its password if it reviews any portion of the report after

certification and prior to submission even if no changes are made. CAFM will not store

the contractor's password.

400.17 - Exhibit 17 - Instructions for the Transfer of Debt Between

Reporting Entities - (Rev. 5, 08-30-02)

A1-1960.17, B1-4960.10

Instructions for the Transfer of Debt Between Reporting Entities

CMS continues to receive criticism from the OIG and its financial statement auditors for

being inconsistent in methods of transferring accounts receivable cases to and from

Medicare contractors, and other CMS locations. This criticism is a direct result of the

lack of a formalized process and specific instructions for transferring accounts receivable

cases between reporting entities.

For financial reporting purposes, the term "referred" is used when a case is not physically

sent to the receiving entity for collection purposes. In a "referral" situation, the receiving

entity merely "advises and/or assists" the referring entity on what actions to take next

with respect to the debt. The responsibility to collect and report the accounts receivable

remains with the referring entity and must be reported as part of the ending accounts

receivable balance on their Form CMS-H751A/B, Status of Accounts Receivable report.

A "transfer" results when a copy of the up-to-date overpayment case file is physically

"transferred" to another reporting entity, i.e., the RO, CO or another Medicare contractor.

Along with the case file, the transferring entity must attach a "Transfer Request and

Notification of Acceptance" form (see Exhibit 17, Attachment I for intermediaries (parts

A and B transfers and Attachment II for carriers). This form will serve as both: 1) the

transferring entity's request to transfer the case(s), and 2) the receiving entity's

notification of acceptance of the transfer.

The transferring entity must complete the form and sign Line 1. The form summarizes the

case(s) requiring transfer approval. No entry will be made on Form CMS-751A/B at this

time. Upon receipt of the form, the entity receiving the request will sign Line 2 of the

form and forward a copy of the form back to the transferring entity. This will notify the

transferring entity of the receipt of the request. The receiving entity will process the

request within 30 days of receipt of the transfer, and will return a copy of the Transfer

Request and Notification of Acceptance form indicating the case(s) approved for transfer

by signing Line 3 of the form.

Only upon receipt of the form signed by the receiving entity, will the transferring entity

update its internal systems to reflect the transfer of the accounts receivable to the

receiving entity. The transferring entity will reflect the dollar amount of the case(s)

approved for transfer on the appropriate transfers out line of Form CMS-H751A/B (Line

5c, Transfers Out to Other Medicare Contractors; Line 5e, Transfers Out to Other CMS

Locations, POR/PSOR; Line 5g, Transfers Out to Other CMS Locations, Not on

POR/PSOR). Also upon receipt of the form, the transferring entity must sign Line 4 and

forward a copy to the receiving entity to acknowledge receipt of the formal approval for

transfer.

The receiving entity will update all internal systems, as well as the POR/PSOR to reflect

the transfer. The location or Medicare contractor number must also be updated in the

POR/PSOR system to reflect the transfer. In addition, the receiving entity will reflect the

dollar amount of the case(s) approved for transfer on the appropriate transfers in line of

Form CMS-H751A/B (Line 5b, Transfers In from Other Medicare Contractors; Line 5d,

Transfers In From Other CMS Locations, POR/PSOR; Line 5f, Transfers In from Other

CMS Locations, Not POR/PSOR).

Prior to submission of the quarterly Form CMS-H750/751A/B, reporting entities must

reconcile the transfers in and transfers out lines to ensure approved transfers are only

being reported. In addition to the requirement to maintain detailed transaction level

documentation to support these lines, reporting entities must also retain copies of the

signed Transfer Request and Notification of Acceptance forms.

Exhibit 17, Attachment I

TRANSFER REQUEST AND NOTIFICATION OF ACCEPTANCE FORM

INTERMEDIARY PART A OR PART B - ACCOUNTS RECEIVABLE (Indicate whether HI or SMI)

Provider

Name

Provider

Number

Cost

Report

Period

Overpayment

Determination

Date

Original

Amount

Outstanding

Principal

Balance

Outstanding

Interest

Balance

Acceptance

Of Transfer

Yes/No

Reason for

Rejection

Line 1:Requesting/Transferring Entity Official: (Signature required) Total Dollar Amount Requested for Transfer: $____________

Title:_____________________

Telephone:_________________ Date Requested:_________

Line 2: Acknowledgement of Receipt of (Signature required) (Date received)

Request Form

Line 3: Approving/Receiving Entity Official: (Signature required) Total Dollar Amount Approved for Transfer: $

Title:_____________________

Telephone:_________________ Date Approved:_________

Line 4: Acknowledgement of Receipt of (Signature required)___(Date received)___

Approved Form

Exhibit 17 - Attachment II

TRANSFER REQUEST & NOTIFICATION OF ACCEPTANCE FORM

CARRIER ACCOUNTS RECEIVABLE

Provider

Name

Provider

Number

Claim Number

Claim Paid

Date

Overpayment

Determination

Date

Original

Amount

Outstanding

Principal

Balance

Outstanding

Interest

Balance

Acceptance

Of Transfer

Yes/No

Reason for

Rejection

Line 1:Requesting/Transferring Entity Official: (Signature required) Total Dollar Amount Requested for Transfer: $

Title:_____________________

Telephone: Date Requested:

Line 2: Acknowledgement of Receipt of (Signature required) (Date received)

Request Form

Line 3: Approving/Receiving Entity Official: (Signature required) Total Dollar Amount Approved for Transfer: $____________

Title:

Telephone:_________________ Date Approved:_________

Line 4: Acknowledgement of Receipt of (Signature required)___(Date received)___

Approved Form

400.18 - Exhibit 18 - Collection Reconciliation/Acknowledgement Form - (Rev. 5, 08-30-

02)

A1-1960.18, B1-4960.11

Collection Reconciliation/Acknowledgement Form

There are instances where one reporting entity has received and deposited cash/check/offset/electronic funds

transfers (EFTs) for a receivable that is being reported by another entity. In this situation, accounts

receivable cases will not be transferred to the location where the deposit of the money is made. To ensure

proper matching and application of the collection of monies to the outstanding receivable, the "Collection

Reconciliation/Acknowledgement" form must be completed. This form must be completed by the entity

(Medicare contractor, CMS RO or CO) receiving a collection for an accounts receivable that is currently

being reported on the financial reports (Forms CMS-H751A/B-CMS-R751A/B) of another entity.

Medicare contractors are required to ensure that internal controls are in place over the cash/check receipts

process to ensure adequate accounting, recording and custody of Medicare assets.

Treatment of Collections Made by a Medicare Contractor for an Account Receivable at Another Medicare

Contractor Location (applies to Non-Medicare Secondary Payer (MSP) accounts receivables and MSP

accounts receivables)

If a Medicare contractor collects a debt on behalf of another Medicare contractor, whether the receipt was

solicited or unsolicited, then the collection must be forwarded to the Medicare contractor that has the

accounts receivable. In these instances, the Medicare contractor receiving the collection would deposit the

collection and re-issue that amount to the Medicare contractor that is reporting the accounts receivable. The

Medicare contractor reissuing the check should ensure that proper segregation of duties exist over the check

re-issuance (e.g., that the preparer is different from the check authorizer).

The re-issued check must be made payable to "Medicare." In addition, the check must be accompanied by a

completed Collection Reconciliation/Acknowledgement Form (see MIM §1960.18 and MCM §4960.11),

any correspondence received, and a copy of the original check including the postmark date. The CFO for

Medicare Operations for the Medicare contractor reporting the accounts receivable should be contacted and

informed of the pending check. A listing of CFO contacts has been issued to each Medicare contractor CFO.

The deposit and re-issuance of the collection will only affect the CMS-H750A/B of the Medicare contractor

that received the collection. The Collection Reconciliation/Acknowledgement Form will allow for tracking

of the payment.

Upon receipt of the check and Collection Reconciliation/Acknowledgement Form, the Medicare contractor

reporting the receivable will apply its normal cash receipt procedures. However, a signed copy of the

Collection Reconciliation/Acknowledgement Form must be returned to the Medicare contractor that sent the

collection.

MSP additional information: Medicare contractors should follow the deposit and re-issue process whenever

another Medicare contractor has the account receivable or another Medicare contractor is or should be the

lead Medicare contractor. If there is no account receivable established but Medicare contractor X is the lead

and Medicare contractor Y receives payment, Medicare contractor Y should follow the deposit/re-issue

process. If there is no lead established and Medicare contractor Y receives payment, Medicare contractor Y

should do an electronic referral via the Electronic Correspondence Referral System (ECRS) and follow the

deposit/re-issue process if another Medicare contractor is assigned lead. This rule should be followed even if

the non-lead Medicare contractor has an interest and/or has paid some of the claims at issue.

Treatment of Collections Made by a Medicare Contractor for an Account Receivable at a CMS Regional

Office Location (applies to Non-MSP accounts receivables and MSP accounts receivables.)

If a Medicare contractor collects a debt on behalf of a CMS RO location, whether the receipt was solicited or

unsolicited, then the account receivable balance must be transferred to the Medicare contractor that received

the collection. In these instances, the Medicare contractor receiving the collection would initiate the process

by completing the Collection Reconciliation/Acknowledgement Form and sending it to the CMS RO who is

reporting the receivable to notify them of the collection. The Medicare contractor that received the collection

would deposit any cash or checks received into unapplied receipts, which would be reported as a liability

until the transfer is complete.

In turn, the CMS RO reporting the receivable will complete the Transfer Request and Notification of

Acceptance Form (TRNA) described in §1960.17 of the MIM and §4960.10 of the MCM. (The use of the

TRNA is also discussed in question number 68.) Once both parties sign the TRNA, the transfer is considered

complete and the collection would then be applied to the account receivable. The CMS RO transferring the

receivable would record the account receivable on Line 5c, Transfer Out to other Medicare Contractors. The

Medicare contractor receiving the account receivable would record it on Line 5d/5f, Transfers In from other

CMS Locations POR/PSOR or Not on POR/PSOR and the applicable collection on either Line 4a,

Cash/Check Collections or Line 4b, Offset Collections.

Only in the instance where a collection is made by offset for an account receivable at a CMS RO location

can notification of the offset be e-mailed. The e-mail must be retained for audit trail purposes. The e-mail

notification must be followed-up with the actual Collection Reconciliation/Acknowledgement Form and the

Transfer Request and Notification of Acceptance form with all the appropriate signatures. Furthermore,

since offsets may only be identified after being applied, the offset transaction must be moved manually on

the Forms CMS-751A/B (i.e., the full amount of the accounts receivable prior to the offset must be shown as

a transfer in and the amount of the offset must be captured on Line 4b, Offset Collection.) To assist in

accounting for these offset transactions ONLY, Medicare contractors can prepare the Collection

Reconciliation/Acknowledgement Form(s) on a monthly basis.

Treatment of Collections Made by A Medicare Contractor for an Account Receivable at CO

Non-MSP: If Medicare contractors receive collections on debt that is at the Debt Collection Center (DCC),

and that debt is being reported by CO, the Medicare contractor must notify the CO by submitting the

Collection Reconciliation/Acknowledgement form (refer to §1960.18 of the MIM and §4960.11 of the

MCM). In addition, the receipt should be deposited into unapplied receipts until the actual account

receivable is transferred back to the Medicare contractor.

Once CO receives the Collection Reconciliation/Acknowledgement form, it will perform the necessary steps

to update the collection information in the Debt Collection System (DCS) and the Provider Overpayment

Reporting (POR) system or the Physician/Supplier Overpayment Reporting (PSOR) system. CO will change

the accounts receivable location code in DCS from "H," which means CO is reporting the account receivable

to "C," which means the Medicare contractor is reporting the account receivable. CO will also update the

POR/PSOR with the appropriate location code of "IDC," which means the fiscal intermediary at debt

collection or "CDC," which means the carrier at debt collection (i.e., the debt has been forwarded to debt

collection but the debt is still on the books of the fiscal intermediary or carrier). If a balance is remaining

after posting the collection, the debt will remain at DCC for cross servicing/TOP.

To allow the Medicare contractors to properly apply the collection in their internal systems, CO will then

transfer the receivable back to the Medicare contractor using the TRNA (refer to §1960.17 of the MIM and

§4960.10 of the MCM). Upon CO receiving the signed TRNA from the Medicare contractor, CO will cease

to report the receivable on its Form CMS-R751A/B. Once the TRNA has been signed and the receivable has

been transferred, the Medicare contractor will record the transfer in of the receivable on Line 5d, Transfers

In from other CMS Locations, POR/PSOR, or Line 5f, Transfers In from other CMS Locations, Not

POR/PSOR. The receipt would then be applied to the account receivable and the collection would be

recorded on Line 4a, Cash/Check Collections or Line 4b, Offset Collection on the appropriate Form CMS-H751A/B.

MSP: If Medicare contractor X has an account receivable other than a debt which has been referred to the

Department of Health and Human Services (DHHS) Program Support Center (PSC) under the DCIA and the

CO/RO receives payment, the Medicare contractor should use Line 4c, Collections Deposited at Another

Location and footnote in the comments section of the Form CMS-M751A/B that the CO/RO received the

payment. An example of this type of receipt would be coordination of benefits contractor misrouted checks.

Usage of the Collection Reconciliation/Acknowledgement Form

In the instance where a Medicare contractor, RO or CO receives a collection (whether cash, checks, offset or

EFT) the entity receiving the collection must complete lines 1 through 10 of the form and attach all

documentation showing the collection and the re-issued check, if applicable. In the instance where a RO

receives cash/checks and does not maintain a Medicare bank account to deposit the funds received, the RO

must complete lines 1 through 10 of the form and attach the cash/check. This form should be forwarded to

the reporting entity no later than (15) fifteen days before the end of the quarter. The entity receiving the form

and the check must sign the form on line 11 and forward a copy of the form to the official who signed line

10, no later than (15) fifteen days after receipt of the form. This will acknowledge the receipt of the form

and the check.

Collection Reconciliation/Acknowledgement Form

1. Location of A/R_________________________(i.e., Medicare contractor, RO, or CO)

2. Location of the Collection _________________(i.e., Medicare contractor, RO, or CO. If RO

Collection, indicate such even though actual deposit is made at Central Office)

3. Region_________ Medicare contractor Name and Number_________________________

4. Non-MSP Accounts Receivable

Provider/Physician/Supplier) Number_______________

Provider/Physician/Supplier Name__________________________________

Provider/Physician/Supplier Name__________________________________

Overpayment Determination Date__________________

Claim Number_________________

Cost Report Year ___________________

MSP Accounts Receivable

Debtor Name ______________________________________

HIC # / Report ID___________________________________

Determination Date__________________

Beneficiary Name ___________________________________

5. Was debt in CNC status prior to this collection:__________________(Yes/No)

6. Date of Collection (Postmark or Government Collection date)______________

7. Type of Collection ____________________ (i.e., cash/check or offset)

Check Number or Government Collection Number _____________________________

Amount of Collection $__________________

Amount Applied to Principal $__________________

Amount Applied to Interest $__________________

8. Collection Reported in quarter ending__________________

9. A/R Reported in quarter ending_______________________

_____________________________ _____________________________

10. Signature of Official at Location

Where Collection is Reported

11. Signature of Official at Location Where

Reduction of A/R is Recorded

Phone #________________________

Fax #__________________________

Phone #________________________

Fax #__________________________