100-24 State Payment of Medicare Premiums: Chapter 5 - Premium Billing

Premium Billing
Chapter 5
Table of Contents
(Rev. 4, 08-21-20)
Transmittals for Chapter 5
5.0 Introduction
5.1 State Billing for Medicare Part A and Part B Premiums
5.2 Listed Agency Billing (LAB) - Summary Sheet
5.3 Crediting of State Payments for Medicare Part A and Part B Premiums
5.4 Interest Assessment
5.5 Offset Against Medicaid Grant Award
5.6 Methods States May Use to Pay Medicare Premiums
5.6.1 Pay.gov
5.6.1.1 Pay.gov Background
5.6.1.2 Pay.gov Instructions
5.6.2 Fedwire
5.6.2.1 Fedwire Background
5.6.2.2 Fedwire Instructions
Appendix 5.A Medicare Part A Premium Amount
Appendix 5.B Medicare Part B Premium Amount
Appendix 5.C Summary Accounting Statement
Appendix 5.D Listed Agency Billing (LAB) - Summary Sheet

5.0 - Introduction
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
The Centers for Medicare & Medicaid Services (CMS) administers Medicare premium billing
and collections related to the state payment of Medicare premiums for individuals dually eligible
for Medicare and Medicaid (also known as state buy-in). Federal law authorizes CMS to
establish due dates for premiums owed by state Medicaid agencies and to assess interest on
outstanding balances. See the Federal Claims Collection Act of 1966, Pub. L. 104-134, codified
at Title 31 USC 3711; 42 CFR § 401(f). CMS can recover amounts due from states, including
interest, by direct collection or through offsets against Medicaid payments to states (specifically,
State Medicaid Grants). See 42 CFR §§ 401.607 and 408.6(c)(4).
This chapter describes state buy-in billing and collections procedures for states.
5.1 - State Billing for Medicare Part A and Part B Premiums
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
On or before the 10th of each month, CMS sends (via US Postal Service and email) each state a
bill called the Summary Accounting Statement (SAS) that CMS produces at the end of the prior
month (update month). See appendix 5.C for a sample SAS and a detailed explanation of the
SAS.
The SAS reflects the state’s Medicare premium liability for the upcoming month (billing month).
The SAS gives the first of the billing month as the “payable by” date (due date), but CMS grants
states a “grace period” up to the 25th day of that month.1
For example, on or before June 10th, CMS mails the state its SAS created after the end of the
update month of May. The SAS contains the state’s Medicare Part A or Part B premium liability
for the month of July. The SAS gives July 1st as the due date and the grace period lasts up to
July 25.
CMS considers a state’s Medicare premium liability to be satisfied once CMS receives the full
amount due. If outstanding balances remain after the grace period, they are assessed interest
and subject to collection through offset against the state’s Medicaid Grant Award.
A state Medicaid agency may appeal if it disagrees with the amount of their Medicare premium
liability, the amount of interest assessed, or the amount of the offset against the Medicaid Grant
Award. CMS must receive the appeal within 90 days of the billing date on the disputed SAS
billing notice. The state can submit a written request for review along with supporting
documentation to the Director of the Division of Premium Billing and Collections (DPBC)
through:
1 If the 25th day of the month falls on a federal holiday or weekend, states must pay their premium liability no
later than close of business on the last business day prior to the 25th
.

Mail:
CMS, OFM, AMG
Division of Premium Billing and Collections
Mailstop C3-13-08
7500 Security Boulevard
Baltimore, Maryland 21244-1850
Email: DPBCStateBuy-in@cms.hhs.gov
Type ‘Appeal Request’ and <state’s name> in the subject line of the email.
Within 30 days of receipt of the state’s appeal request, the Director of DPBC will send the state
a written acknowledgement confirming receipt. Pending the appeal, the state should pay the
disputed amount to avoid further interest charges and a possible offset.
CMS will send a written response to the state to communicate its decision. If CMS determines
that it owes the state a credit, the credit will appear as an adjustment in a subsequent SAS.
NOTE: If a state disagrees with the premium amount billed for a specific Health Insurance
Claim Number (HICN), the state should submit the record directly to the CMS Division of
Medicare Systems Exceptions and Inquiries (DMSEI) in accordance with procedures in chapter
6. To avoid interest assessment and possible offset, the state should pay the disputed amount
while CMS reviews the state’s request.
5.2 - Listed Agency Billing (LAB) - Summary Sheet
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
A LAB summary sheet is enclosed with each monthly SAS. The LAB summary sheet will only
reflect items included in the monthly billing file (RIC-B). For states that receive daily buy-in
response files, reply records (RIC-D) are not be reflected on the LAB summary sheet. For states
that do not receive daily reply files, all records processed in the update month are reflected on
the LAB summary sheet.
More specifically, the LAB summary sheet provides a breakdown of the number of records and
the credits and debits associated with each transaction code. See appendix 5.D for a sample
Agency LAB summary sheet.
5.3 - Crediting of State Payments for Medicare Part A and Part B Premiums
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
CMS applies Medicare premium payments to the most current unpaid Medicare premium
liability.
CMS may collect past due premiums through offset against the state’s Medicaid Grant Award
during the following update month. For example: for the June billing month, the Medicare
premium payment due date is June 1st, with the grace period through June 25th . If, after June
25th , a balance remains unpaid, CMS considers the unpaid balance as past due and collects it
through offset within the update month of July. CMS will credit the collection to the

corresponding billing month of September and the collection will be on the September SAS.
5.4 - Interest Assessment
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
CMS assesses interest on past due Medicare premium amounts when the month’s premium
liability is not paid in full by the end of the grace period.
CMS assesses interest in 30-day increments. Interest assessment on Medicare premiums that
remain unpaid by the end of the grace period in which they were due begins with the first day of
the billing month and is calculated on a 30-day basis.
The interest rate for past due Part A and Part B Medicare premiums is the Federal
Supplementary Medical Insurance (SMI) Trust fund rate as computed for new investments in
accordance with section 1841(c) of the Social Security Act (“the Act”). This rate approximates
the actual loss to the SMI trust fund and derives from the average yield on all marketable
obligations to the U.S. Department of the Treasury as of the last day of the month.
5.5 - Offset Against Medicaid Grant Award
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
CMS will offset the state’s Medicaid Grant Award for the interest assessed on amounts not paid
by the end of the grace period and past due Medicare premiums (i.e., premiums not paid by the
end of the month).
A subsequent SAS will show the amount of past due premiums collected through offset. The
state’s Medicaid Grant Award will reflect the amount of the offset.
The offset does not constitute a disallowance of FFP. The offset is an accounting adjustment
that reduces the amount owed by CMS to the state.
5.6 - Methods States May Use to Pay Medicare Premiums
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
States can use either of the following electronic funds transfer methods to pay the Medicare
premiums on behalf of dually eligible beneficiaries:
• 	The U.S. Department of the Treasury (“the Treasury”) Internet Collections Application
(Pay.gov); or
• 	The Treasury’s electronic funds transfer service system, the Fedwire.

5.6.1 - Pay.gov
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
5.6.1.1 - Pay.gov Background
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
The Treasury developed Pay.gov to meet its commitment to process collections electronically
using internet technologies. Pay.gov is a secure, web-based collection portal and states can use
it to make Medicare premium payments to CMS. Users can access the portal from any computer
with internet access.
When states pay their Medicare premiums using Pay.gov, the transactions are processed as an
Automated Clearing House (ACH) direct payment debit. ACH collections are processed by the
Federal Reserve Bank of Cleveland with settlement usually occurring the next business day.
5.6.1.2 - Pay.gov Instructions
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
Pay.gov requires a user ID and password to access the CMS Medicare Part A and Part B
Payment forms on the portal. States electing to use Pay.gov must first enroll through CMS. As
part of the enrollment process, CMS will facilitate and authorize the Treasury to issue each state
a user ID and password. To set up a user ID and password, send an email to DPBC resource
mailbox at DPBCStateBuy-in@cms.hhs.gov.
Pay.gov provides customer service to states concerning use of the portal, payment processing,
and other topics. States can contact a Pay.gov customer service representative at
https://www.pay.gov or by using the contact information provided below.
Phone: 1 (800) 624-1373 Option #2
Fax: 1 (216) 579-2813
Email: pay.gov.clev@clev.frb.org
Hours (ET): 7:00 a.m. – 7:00 p.m.
5.6.2 - Fedwire
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
5.6.2.1 - Fedwire Background
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
Fedwire (formally known as the Fedwire Funds Service) is a real-time funds transfer system
operated by the United States Federal Reserve Banks that allows financial institutions to
electronically transfer funds between its participants.
When states pay their Medicare premiums using Fedwire, the settlement of funds is immediate,
final, and irrevocable.

5.6.2.2 - Fedwire Instructions
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
The information below is required to successfully transmit a Medicare premium payments to
CMS via Fedwire:
Fedwire Field Name 	Information Needed
Amount:
(Format must be properly
punctuated with a dollar sign,
comma(s), and decimal point -
(e.g., $999,999.99).)
Enter payment amount.
Sending Bank Routing Number: 	Enter sending bank’s routing number
Receiver ABA Number: 	021030004
Receiver ABA Short Name: 	TREAS NYC
Beneficiary Account Number:
(CMS Agency Location Code
(ALC))
875050080000
U.S. Agency Name: 	CMS
Originator: 	Input state name
Originator to Beneficiary
information:
• 	Enter the three-character agency code that CMS
assigned to the state
• 	Enter corresponding Medicare Program:
o 	if agency code starts with “S”,
corresponding Medicare Program is
Medicare Part A;
o 	if agency code is all numbers,
corresponding Medicare Program is
Medicare Part B
IMPORTANT: If the state combines the Medicare
Part A and Part B premiums into one payment, the
electronic funds transfer transmission must specify
the amount that applies to the Part A premium
liability and the amount that applies to the Part B
premium liability. If no designation appears, CMS
will apply the total premium payment to the Part B
premium payment which could result in an offset of

Fedwire Field Name 	Information Needed
the Part A premium liability amount.
Appendix 5.A - Medicare Part A Premium Amount
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
Section 1818 of the Act specifies that the Secretary of Health and Human Services shall
determine the amount of the monthly Medicare Part A premium to be paid on behalf of each
individual who is entitled to Premium-Part A. See 42 CFR § 406.32(d). Surcharges for late
enrollment do not apply to the payment of Medicare Part A premiums on behalf of QMBs in Part
A buy-in states. A ten percent surcharge for late enrollment, if applicable, applies to Medicare
Part A premiums paid on behalf of QMBs in group payer states and on behalf of QDWIs in all
states as they must use the group payer arrangement to pay QDWI premiums. For a description
of the Part A premium surcharge, see chapter 1, section 1.1.
Monthly Medicare Part A Premium Amounts
Effective Date 	Part A Premium
Base Rate
10%
Surcharge
01/89 - 12/89 	$156.00 	$171.60
01/90 - 12/90 	$175.00 	$192.50
01/91 - 12/91 	$177.00 	$194.70
01/92 - 12/92 	$192.00 	$211.20
01/93 - 12/93 	$221.00 	$243.10
01/94 - 12/94 	$245.00 	$269.50
01/95 - 12/95 	$261.00 	$287.10
01/96 - 12/96 	$289.00 	$317.90
01/97 - 12/97 	$311.00 	$342.10
01/98 - 12/99 	$309.00 	$339.90
01/00 - 12/00 	$301.00 	$331.10
01/01 - 12/01 	$300.00 	$330.00

Effective Date 	Part A Premium
Base Rate
10%
Surcharge
01/02 - 12/02 	$319.00 	$350.90
01/03 - 12/03 	$316.00 	$347.60
01/04 - 12/04 	$343.00 	$377.30
01/05 - 12/05 	$375.00 	$412.50
01/06 - 12/06 	$393.00 	$432.30
01/07 - 12/07 	$410.00 	$451.00
01/08 - 12/08 	$423.00 	$465.30
01/09 - 12/09 	$443.00 	$487.30
01/10 - 12/10 	$461.00 	$507.10
01/11- 12/11 	$450.00 	$495.00
01/12 - 12/12 	$451.00 	$496.10
01/13 - 12/13 	$441.00 	$485.10
01/14 - 12/14 	$426.00 	$468.60
01/15 - 12/15 	$407.00 	$447.70
01/16 - 12/16 	$411.00 	$452.10
01/17 - 12/17 	$413.00 	$454.30
01/18 - 12/18 	$422.00 	$464.20
01/19 - 12/19 	$437.00 	$480.70
01/20 - 12/20 	$458.00 	$503.80
Section 1818(d) of the Act provides for reduced Medicare Part A premiums for individuals who
have at least 30 Social Security work credits.

Monthly Reduced Medicare Part A Premium Amounts
Effective Date 	Part A Premium
Reduced Rate
10%
Surcharge
01/94 - 12/94 	$184.00 	$202.40
01/95 - 12/95 	$183.00 	$201.30
01/96 - 12/96 	$188.00 	$206.80
01/97 - 12/97 	$187.00 	$205.70
01/98 - 12/99 	$170.00 	$187.00
01/00 - 12/00 	$166.00 	$182.60
01/01 - 12/01 	$165.00 	$181.50
01/02 - 12/02 	$175.00 	$192.50
01/03 - 12/03 	$174.00 	$191.40
01/04 - 12/04 	$189.00 	$207.90
01/05 - 12/05 	$206.00 	$226.60
01/06 - 12/06 	$216.00 	$237.60
01/07 - 12/07 	$226.00 	$248.00
01/08 - 12/08 	$233.00 	$256.30
01/09 - 12/09 	$244.00 	$268.40
01/10 - 12/10 	$254.00 	$279.40
01/11 - 12/11 	$248.00 	$272.80
01/12 - 12/12 	$248.00 	$272.80
01/13 - 12/13 	$243.00 	$267.30
01/14 - 12/14 	$234.00 	$257.40
01/15 - 12/15 	$224.00 	$246.40
01/16 - 12/16 	$226.00 	$246.40

Effective Date 	Part A Premium
Reduced Rate
10%
Surcharge
01/17 - 12/17 	$227.00 	$249.70
01/18 - 12/18 	$232.00 	$255.20
01/19 - 12/19 	$240.00 	$264.00
01/20 - 12/20 	$252.00 	$277.20
Appendix 5.B - Medicare Part B Premium Amount
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
Section 1839 of the Act specifies that the Secretary of Health and Human Services shall
determine the amount of the standard monthly Medicare Part B premium to be paid by or on
behalf of each individual who is enrolled in Medicare Part B. From July 1966 through
December 1983, the premium period usually spanned July through the following June.
Beginning in January 1984, the premium period became January through December. Medicare
Part B premiums paid on behalf of individuals enrolled in Part B buy-in are not subject to a
surcharge for late enrollment. The following table reflects the premium amounts in effect since
the beginning of the Medicare program.

Monthly Medicare Part B Premium Rates
Effective Date 	Part B Premium
Base Rate
7/66 - 3/68 	$3.00
4/68 - 6/70 	$4.00
7/70 - 6/71 	$5.30
7/71 - 6/72 	$5.60
7/72 - 7/73 	$5.80
8/73 - Only* 	$6.10
9/73 - 6/74 	$6.30
7/74 - 6/76 	$6.70
7/76 - 6/77 	$7.20
7/77 - 6/78 	$7.70
7/78 - 6/79 	$8.20
7/79 - 6/80 	$8.70
7/80 - 6/81 	$9.60
7/81 - 6/82 	$11.00
7/82 - 12/83 	$12.20
1/84 - 12/84 	$14.60
1/85 - 12/86 	$15.50
1/87 - 12/87 	$17.90
1/88 - 12/88 	$24.80
1/89 - 12/89 	$31.90
1/89 - 12/89** 	$27.90
1/90 - 12/90 	$28.60

Effective Date 	Part B Premium
Base Rate
1/91 - 12/91*** 	$29.90
1/92 - 12/92 	$31.80
1/93 - 12/93 	$36.60
1/94 - 12/94 	$41.10
1/95 - 12/95 	$46.10
1/96 - 12/96 	$42.50
1/97 - 12/97 	$43.80
1/98 - 12/98 	$43.80
1/99 - 12/99 	$45.50
1/00 - 12/00 	$45.50
1/01 - 12/01 	$50.00
1/02 - 12/02 	$54.00
1/03 - 12/03 	$58.70
1/04 - 12/04 	$66.60
1/05 - 12/05 	$78.20
1/06 - 12/06 	$88.50
1/07 - 12/07 	$93.50
1/08 – 12/08 	$96.40
1/09 – 12/09 	$96.40
1/10 – 12/10 	$110.50
1/11 – 12/11 	$115.40
1/12 – 12/12 	$99.90
1/13 – 12/13 	$104.90

Effective Date 	Part B Premium
Base Rate
1/14 – 12/14 	$104.90
1/15 – 12/15 	$104.90
1/16 – 12/16 	$121.80
1/17 – 12/17 	$134.00
1/18 – 12/18 	$134.00
1/19 – 12/19 	$135.50
1/20 – 12/20 	$144.60
*Due to Presidential price freeze
**Applicable to beneficiaries who have "Medicare Part B only" under a provision of the Medicare Catastrophic Coverage
Act (MCCA) and was applicable only during 1989.
***Section 103 of P.L. 100-360 set the Medicare Part B premium rate through 1995.

Appendix 5.C - Summary Accounting Statement
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)

Appendix 5.D - Listed Agency Billing (LAB) - Summary Sheet
(Rev. 4, Issued: 08-21-20, Effective: 09-08-20, Implementation: 09-08-20)
LAB LISTING FOR AGENCY CODE 000 (state name)
mm/03/yyyy
TOTAL ITEMS PROCESSED –
DEBIT 	CREDIT 	MISC.
ITEMS 	MONEY 	ITEMS 	MONEY 	ITEMS 	MONEY
CODE
11
CODE
14
CODE
20
CODE
41
CODE
15
CODE
21
CODE
43
CODE
16
CODE
22
CODE
45
CODE
17
CODE
23
TOTAL 	CODE
42
CODE
24
CODE
44
CODE
25
TOTAL 	CODE
26
CODE
27
CODE
28
CODE
29
CODE
30

CODE
49
CODE
86
CODE
87
TOTAL

Transmittals Issued for this Chapter
Rev # 	Issue Date 	Subject 	Impl Date CR#
R4SPMP 08/21/2020 	New State Payment of Medicare Premiums,
(SPMP)
09/08/2020 N/A
R1SBI5 	10/01/2003 	Initial Release of Chapter 	N/A 	N/A