TO 

FROM 

SUBJECT 

U NITED STATES GOVERNMENT 

MEMORANDUM 

Walter A. Barrows 

Labor Member 

~ 

Karl T. Blank J ,!_£,7-

General Coun8'8 

RRB Medicare Premiums 

Waivers of Recovery of Overpayments 

FORM G-115f (1-92) 

RAILROAD R ETIREMENT B OARD 

August 25, 2016 

L-2016-39 

This memorandum is in response to the request by your staff for my opm10n 

regarding the authority of the Board to issue a blanket waiver of recovery with 

regard to overpayments made to annuitants as the result of incorrect calculations of 

Medicare Part B premiums. As a general matter, you asked if the passage of the 

Improper Payments Improvement Act of 2002 (IPIA) (31 U.S.C. §3321 note) and 

subsequent amendments to that Act impacted the waiver authority of the Board as 

stated in Legal Opinion L-1975-409. As discussed below, it is my opinion that the 

Board may issue a mass adjustment of Medicare premiums under the authority of 

Section 7(d)(l) of the Railroad Retirement Act (RRA) (45 U.S.C. §231f(d)(l)) 

without invoking the waiver of recovery provisions in Section 10 of the RRA ( 45 

U.S.C. §23 li). It is also my opinion the Board retains authority under the reasoning 

in Legal Opinion L-197 5-409 to exercise its discretion to waive recovery of 

overpayments as to a number of cases with common characteristics in a single 

decision. However, in light of the reporting requirements contained in IPIA as 

amended, in my opinion the Board is now required to calculate the total amount of 

overpayments to be waived within the class of similarly situated cases. 

On December 10, 2015, the Board's Office of Programs issued Informational 

Bulletin 16-24, stating that the Board had miscalculated the Medicare Part B 

premium rate. After review, the Office of Programs determined that 1,329 living 

railroad retirement beneficiaries were overpaid benefits because the correct amount 

of Medicare Part B premium was not withheld during the period 1989 through 

2013. On June 16, 2016, the Board issued payment to the Centers for Medicare 

and Medicaid Services (CMS) in the amount of $4,362,604.20 for the arrearage in 

premiums owed but not collected from these railroad retirement beneficiaries 

during the 1989 - 2013 period. The Board has also determined it will reimburse 

CMS in the amount of $1,681 ,237.00 for the arrearage in premiums owed but not 
2 

collected during this time from railroad retirement beneficiaries who are deceased 

as of2015. 1 

Section 7(d)(l) of the RRA provides that the Board shall have the same authority 

to determine the rights of individuals eligible for railroad Medicare as the 

Secretary of Health and Human Services has under section 226 (42 U.S.C. §426) 

and parts A and E of Title XVIII ( 42 U.S.C. § 1395c et seq. and 42 U.S.C. § 1395x 

et seq.) of the Social Security Act with respect to individuals covered by those 

sections. Under its authority contained in Section 1871 of Part E of Title XVIII of 

the Social Security Act (42 U.S.C. § 1395hh), the Secretary of Health and Human 

Services has promulgated the following regulation at 42 CFR §407.32: 

§407.32 Prejudice to enrollment rights because of Federal 

Government misrepresentation, inaction, or error. 

If an individual's enrollment or nonenrollment m SMI 

[ supplemental medical insurance] is unintentional, inadvertent, or 

erroneous because of the error, misrepresentation, on inaction of a 

Federal employee or any person authorized by the Federal 

Government to act in its behalf, the Social Security Administration or 

CMS may take whatever action it determines is necessary to provide 

appropriate relief. The action may include: 

(a) Designation of a special initial or general enrollment 

period; 

(b) Designation of an entitlement period based on that 

enrollment period; 

( c) Adjustment of premiums; 

(d) Any combination of actions under paragraphs (a) through 

(c) of this section; or 

( e) Any other remedial action that may be necessary to correct 

or eliminate the effects of the error, misrepresentation, or 

inaction. 

Because the Secretary's authority to make adjustments under this regulation is 

based in Part E of Title XVIII of the Social Security Act, Section 7(d)(l) of the 

RRA grants the Board equivalent authority. 

Failure to pay premiums for Medicare Part B supplemental medical insurance will 

end an individual's entitlement to insurance benefits. See 42 CFR §407.27(d). In 

this case, the Board's error in miscalculating the required premium for 2015 would 

have impacted the enrollment status of affected beneficiaries if left unremediated. 

1 Section 1840{b) of the Social Security Act (42 U.S.C. §1395s) imposes upon the Board the duty 

to transfer premiums withheld "from time to time." See L-2012-36. 
3 

Because this change in status would have occurred due to errors by Board 

employees, the Board may take remedial action under the authority of Section 

7( d)(l) of the RRA to adjust premiums of the affected beneficiaries to equal the 

amount those beneficiaries actually paid, leaving no amount owed to the Board 

from those individuals. Likewise, the Board's remedial action in making payment 

from the Railroad Retirement Account to CMS for the arrearage in premiums is 

necessary to eliminate the effects of the error. Nothing in 42 CFR §407.32 

prohibits the remedial actions anticipated by that section from being exercised on a 

class or group basis. Therefore, it is my opinion that the Board may make a mass 

adjustment of premiums under the authority of Section 7(d)(l) of the RRA, such 

that beneficiaries whose premiums were miscalculated for 2015 have the premiums 

amounts owed adjusted to be equal to the premium amounts actually paid during 

2015. 

Although it is my opinion that the Board may adjust Medicare premiums without 

resorting to waiving recovery of annuity overpayments under Section 10 of the 

RRA for the reasons described above, other instances may arise in the future where 

the Board may wish to issue mass waivers of recovery of overpayments not 

involving Medicare premiums, and for which Section 7(d)(l) of the RRA would 

not be applicable. Therefore, I have reviewed Legal Opinion L-1975-409 to 

determine whether the Board's authority to determine mass waivers of recovery of 

overpayments is affected by the passage of the IPIA as currently amended. IPIA as 

amended does not alter or restrict the scope of the Board's power to waive 

recovery of overpayments under Section 10 of the RRA, nor does it alter the 

criteria which must be met to issue such a waiver. It is my opinion that the Board 

may still consider cases which have common characteristics together when 

evaluating if overpaid individuals are without fault and whether recovery would be 

contrary to the purpose of the Acts or would be against equity and good 

conscience, as explained in Legal Opinion L-1975-409. However, IPIA imposes 

reporting requirements on agencies with regard to improper payments; because of 

these reporting requirements, the Board must identify the specific amount of its 

improper payments, independent of waiving recovery. As a result, the Board may 

not waive recovery of an overpayment of unknown value, whether on an individual 

or group basis. The Board may identify the total value of overpayment for a class 

or group of related cases, if such amount can be ascertained without investigation 

of each individual case, and waive recovery of the overpayment for the entire 

group of related cases in a single decision or order. 

cc: Director of Programs 

Management Member Steven J. Anthony