Code of Federal Regulations: Containing a Codification of Documents of ...

collection of the full amount. In this case, HCFA may adjust the amount it accepts as a compromise to allow an appropriate discount for the costs of collection it would have incurred but for the compromise.

(d) Enforcement policy. HCFA may compromise statutory penalties, forfeitures, or debts established as an aid to enforcement or to compel compliance, if it determines that its enforcement policy, in terms of deterrence and securing compliance both present and future, is adequately served by acceptance of the compromise amount. of compromise

§ 401.615 Payment amount.

(a) Time and manner of compromise. Payment by the debtor of the amount that HCFA has agreed to accept as a compromise in full settlement of a claim must be made within the time and in the manner prescribed by HCFA. Accordingly, HCFA will not settle a claim until the full payment of the compromise amount has been made.

(b) Effect of failure to pay compromise amount. Failure of the debtor to make payment, as provided by the compromise agreement, reinstates the full amount of the claim, less any amounts paid prior to the default.

(c) Prohibition against grace periods. HCFA will not agree to inclusion of a provision in an installment agreement that would permit grace periods for payments that are late under the terms of the agreement.

§ 401.617 Suspension of collection action. (a) General conditions. HCFA may temporarily suspend collection action on a claim if the following general conditions are met

(1) Amount of future recovery. HCFA determines that future collection action may result in a recovery of an amount sufficient to justify periodic review and action on the claim by HCFA during the period of suspension.

(2) Statute of limitations. HCFA determines that

(i) The applicable statute of limitations has been tolled, waived or has started running anew; or

(ii) Future collections may be made by HCFA through offset despite an applicable statute of limitations.

(b) Basis for suspension. Bases on which HCFA may suspend collection action on a particular claim include the following

(1) A debtor cannot be located; or (2) A debtor

(i) Owns no substantial equity in property;

(ii) Is unable to make payment on HCFA's claim or is unable to effect a compromise; and

(iii) Has future prospects that justify retention of the claim.

(c) Locating debtors. HCFA will make every reasonable effort to locate missing debtors sufficiently in advance of the bar of an applicable statute of limitations to permit timely filing of a lawsuit to recover the amount of the claim.

(d) Effect of suspension on liquidation of security. HCFA will liquidate security, obtained in partial recovery of a claim, despite a decision under this section to suspend collection action against the debtor for the remainder of the claim.

§ 401.621 Termination of collection action.

(a) General factors. After considering the bases for a decision to terminate collection action under paragraph (b) of this section, HCFA may further consider factors such as

(1) The age and health of the debtor if the debtor is an individual;

(2) Present and potential income of the debtor; and

(3) Whether assets have been concealed or improperly transferred by the debtor.

(b) Basis for termination of collection action. Bases on which HCFA may terminate collection action on a claim include the following

(1) Inability to collect a substantial amount of the claim. HCFA may terminate collection action if it determines that it is unable to collect, or to enforce collection, of a significant amount of the claim. In making this determination, HCFA will consider factors such as

(i) Judicial remedies available;

(ii) The debtor's future financial prospects; and

(iii) Exemptions available to the debtor under State or Federal law.

(2) Inability to locate debtor. In cases involving missing debtors, HCFA may terminate collection action if

(i) There is no security remaining to be liquidated;

(ii) The applicable statute of limitations has run; or

(iii) The prospects of collecting by offset, whether or not an applicable statute of limitations has run, are considered by HCFA to be too remote to justify retention of the claim.

(3) Cost of collection exceeds recovery. HCFA may terminate collection action if it determines that the cost of further collection action will exceed the amount recoverable.

(4) Legal insufficiency. HCFA may terminate collection action if it determines that the claim is legally without merit. (5) Evidence unavailable. HCFA may terminate collection action if—

(i) Efforts to obtain voluntary payment are unsuccessful; and

(ii) Evidence or witnesses necesary to prove the claim are unavailable.

§ 401.623 Joint and several liability.

(a) Collection action. HCFA will liquidate claims as quickly as possible. In cases of joint and several liability among two or more debtors, HCFA will not allocate the burden of claims payment among the debtors. HCFA will proceed with collection action against one debtor even if other liable debtors have not paid their proportionate shares.

(b) Compromise. Compromise with one debtor does not release a claim against remaining debtors. Furthermore, HCFA will not consider the amount of a compromise with one debtor to be a binding precedent concerning the amounts due from other debtors who are jointly and severally liable on the claim.

8 401.625 Effect of HCFA claims collection decisions on appeals.

Any action taken under this subpart regarding the compromise of a claim, or suspension or termination of collection action on a claim, is not an initial

§ 403.200 Basis and scope.

(a) Provisions of the legislation. This subpart implements, in part, section 1882 of the Social Security Act. The intent of that section is to enable Medicare beneficiaries to identify Medicare supplemental policies that do not duplicate Medicare, and that provide adequate, fairly priced protection against expenses not covered by Medicare. The legislation establishes certain standards for Medicare supplemental policies and provides two methods for informing Medicare beneficiaries which policies meet those standards:

(1) Through a State approved program, that is, a program that a Supplemental Health Insurance Panel determines to meet certain minimum re

quirements for the regulation of Medicare supplemental policies; and

(2) In a State without an approved program, through certification by the Secretary of policies voluntarily submitted by insuring organizations for review against the standards.

(b) Scope of subpart. This subpart sets forth the standards and procedures HCFA will use to implement the voluntary certification program.

GENERAL PROVISIONS

§ 403.201 State regulation of insurance policies.

(a) The provisions of this subpart do not affect the right of a State to regulate policies marketed in that State.

(b) Approval of a policy under the voluntary certification program, as provided for in § 403.235(b), does not authorize the insuring organization to market a policy that does not conform to applicable State laws and regulations.

§ 403.205 Medicare supplemental policy.

(a) Except as specified in paragraph (d) of this section, "Medicare supplemental policy” (policy) means a health insurance policy or other health benefit plan

(1) That a private entity offers to a Medicare beneficiary; and

(2) That is primarily designed, or is advertised, marketed, or otherwise purported to provide payment for expenses incurred for services and items that are not reimbursed under the Medicare program because of deductibles, coinsurance, or other limitations under Medicare.

(b) Unless otherwise specified in this subpart, the term "policy" includes both policy form and policy.

(1) "Policy form" means the form of health insurance contract that is approved by and on file with the State agency for the regulation of insurance. (2) "Policy" means the contract— (i) Issued under the policy form; and (ii) Held by the policyholder. (c) Medicare supplemental policy includes the following—

(1) An individual policy. (2) A group policy.

(d) Medicare supplemental policy does not include any of the following

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(ii) The debtor's future financial prospects; and

(iii) Exemptions available to the debtor under State or Federal law.

(2) Inability to locate debtor. In cases involving missing debtors, HCFA may terminate collection action if

(i) There is no security remaining to be liquidated;

(ii) The applicable statute of limitations has run; or

(iii) The prospects of collecting by offset, whether or not an applicable statute of limitations has run, are considered by HCFA to be too remote to justify retention of the claim.

(3) Cost of collection exceeds recovery. HCFA may terminate collection action if it determines that the cost of further collection action will exceed the amount recoverable.

(4) Legal insufficiency. HCFA may terminate collection action if it determines that the claim is legally without merit. (5) Evidence unavailable. HCFA may terminate collection action if(i) Efforts to obtain voluntary payment are unsuccessful; and

(ii) Evidence or witnesses necesary to prove the claim are unavailable.

§ 401.623 Joint and several liability.

8 401.625 Effect of HCFA claims collection decisions on appeals.

Any action taken under this subpart regarding the compromise of a claim, or suspension or termination of collection action on a claim, is not an initial

403.306 Additional requirements for State

systems-mandatory approval. 403.308 State systems under demonstration projects-mandatory approval.

403.310 Reduction in payments. 403.312 Submittal of application. 403.314 Evaluation of State systems. 403.316 Reconsideration of certain denied

applications.

403.318 Approval of State systems. 403.320 HCFA review and monitoring of State systems.

403.321 State systems for hospital outpatient services.

403.322 Termination of agreements for Medicare recognition of State systems.

Subpart D-Demonstration Project to Develop a Uniform Hospital Cost Reporting System

403.400 Basis and scope. 403.402 Definition.

403.406 Selection of States to participate in the demonstration.

403.408 Requirements for hospitals in States participating in the demonstration.

403.410 Payments to hospitals participating in the demonstration.

Subpart A-[Reserved]

Subpart B-Medicare Supplemental Policies

AUTHORITY: Secs. 1102, 1871, 1874(a), and 1882 of the Social Security Act (42 U.S.C. 1302, 1395hh, 1395kk(a), and 1395ss). SOURCE: 47 FR 32400, July 26, 1982, unless otherwise noted.