Agreement reached to resolve automatic Social Security check deductions for Medicare Prescription Drug Benefit premiums

[Oct 02, 2006]—CMS and Social Social Security Administration officials CMS and Social Security Administration officials have agreed on a plan that will prevent Medicare beneficiaries from losing the entire value of their Social Security checks to pay Medicare prescription drug premiums, CQ HealthBeat reports. CQ HealthBeat reports.

Some Medicare beneficiaries have their prescription drug premiums deducted directly from their Social Security checks, but federal computer systems do not allow premiums to be deducted from the checks immediately after enrollment or switching drug plans.

As a result, some beneficiaries might not receive any Social Security payments in subsequent months in order to make back payments. Senate Special Committee on Aging Chair Gordon Smith (R-Ore.) on Friday said he met with CMS Deputy Administrator Leslie Norwalk and SSA Commissioner Joanne Barnhart, who drafted a plan to correct the problem.

Smith said CMS and SSA have agreed that seniors at risk of losing the entire value of their checks will receive notification about the issue before it occurs and will be given the option of paying the back premiums over a longer duration.

Norwalk said one step CMS will take to reduce the number of beneficiaries with back payment issues will be to make direct payment from bank accounts the first option on a form that beneficiaries fill out to choose a payment arrangement.

A Smith aide said that 80% of beneficiaries at risk of losing an entire month's Social Security check owe premiums totaling less than $200. He said he asked CMS how many beneficiaries are at risk of losing their entire check, but the agency has not provided a number. Smith added that recent glitches in the payment system beneficiaries illustrated that SSA needs a new computer system.

Smith said SSA's scheduled $200 million cut for fiscal year 2007 should be reversed to fund computer improvements (Reichard, CQ HealthBeat, 9/29).