Letter to Medicare Beneficiaries Regarding Processing Error

Letter to Medicare Beneficiaries Regarding Processing Error

The Centers for Medicare and Medicaid Services (CMS) has sent letters (see letter) to a relatively small number of beneficiaries about a refund they received in error with respect to Part D premiums withheld in their Social Security checks. These beneficiaries are continuing to receive their drug coverage through their Part D plans without any interruption.

CMS recently learned that, as a result of a Medicare processing error, some beneficiaries' drug plan premiums, which are withheld from their Social Security checks at their request, have been incorrectly processed. Some beneficiaries received a separate extra payment, refunding the amount of their premiums withheld to date, via electronic fund transfer or by check in mid-August. In short, they have received money from Medicare that they should have not received and they will be asked to pay it back to the government. The average amount in the extra payment is around $215 with most beneficiaries receiving under $200 in error.

This situation affects a subset--about 230,000 people or 5 percent--of the 4.6 million beneficiaries who have their drug plan premiums withheld by the Social Security Administration (SSA). The affected beneficiaries reside in all states in the U.S. and in the territories. No beneficiary enrolled in the limited-income subsidy (LIS) is affected.

These beneficiaries are now receiving letters from CMS informing them of the error.
The letter makes four points:

1) Beneficiaries still have their Medicare drug coverage and Social Security has already paid the premium for the coverage;
2) Beneficiaries should set aside the extra payment they received;
3) The extra payment must be returned through a process to be communicated by CMS; and
4) Medicare will re-start withholding premium payments from Social Security checks on October 1.

The letter also reminds beneficiaries that Medicare will not ask them to provide any personal, Social Security, or banking information and asks beneficiaries to continue to protect their personal information. CMS is currently examining options about recoupment of the erroneous payments. Once CMS has a plan for this recoupment that minimizes any potential burden or disruption to beneficiaries, we will notify the beneficiaries how to return the money. Attached for your review is a copy of the letter that has been sent to those Medicare beneficiaries affected.