Interim Payment

The Interim Payment process is a method the Plan Sponsor uses to submit interim cost reports and make interim payment requests for Qualifying Covered Retirees (QCRs) on an approved RDS application.

NOTE: All RDS applications have a maximum payment frequency of monthly interim payments, consistent with the general payment rules regarding timing set forth in 42 C.F.R. 423.888(b)(1). Although 12 interim payment requests are permitted, a Plan Sponsor may choose to submit fewer than 12 interim payment requests, or forego interim payments and instead choose to submit one final payment request during Reconciliation as described in 42 C.F.R. 423.888(b)(2)(ii).

The interim payment agreement is the agreement for payment authorization that displays for the Payment Requester when submitting an interim payment request. The interim payment agreement must be completed in the RDS Secure Website. The text of the interim payment agreement is available for reference on the Agreements page.

Interim cost reports may be submitted on applications that meet all of the following conditions:

• Application must be approved.
• Payment Setup must be complete for the application.
• The first plan month has passed.

NOTE: All RDS applications have a maximum payment frequency of monthly interim payments, consistent with the general payment rules regarding timing set forth in 42 C.F.R. 423.888(b)(1). Although 12 interim payment requests are permitted, a Plan Sponsor may choose to submit fewer than 12 interim payment requests, or forego interim payments and instead choose to submit one final payment request during Reconciliation as described in 42 C.F.R. 423.888(b)(2)(ii).

After Payment Setup is complete for the application, the Report Costs action is available in the Left Navigation menu of the application.

Interim Costs can be submitted by two different sources: Plan Sponsors and Vendors. A Cost Reporter may be the Account Manager, Plan Sponsor Designee, Vendor, or Vendor Designee. A Vendor may report costs using the Data Entry submission method on the RDS Secure Website, or by the Connect:Direct transmission method. For additional information about who can submit interim costs, refer to User Roles and Responsibilities for Submitting Interim Costs.

During the Interim Payment process, Cost Reporters submit interim costs to CMS' RDS Center by either manual Data Entry on the RDS Secure Website, or by Connect:Direct to RDS Center Connect:Direct through CMS Extranet. For more information, refer to Submit Interim Costs.

An interim payment may be requested on an application when the following conditions are met:

• The application is approved.
• Payment Setup is complete.
• The maximum number of twelve (12) interim payment requests for a plan year has not been reached.
• New interim costs were submitted for at least one Benefit Option since the last payment request, and the Payment Requester completed the review for the new interim costs.
• At least 16 business days have passed since the last payment approval, or 31 business days have passed since the last payment request; whichever is later.
• To request another interim payment, the Next Payment Request status displays "Payment Can Now Be Requested." If a payment request is in progress, the Plan Sponsor cannot request payment.

NOTE: All RDS applications have a maximum payment frequency of monthly interim payments, consistent with the general payment rules regarding timing set forth in 42 C.F.R. 423.888(b)(1). Although 12 interim payment requests are permitted, a Plan Sponsor may choose to submit fewer than 12 interim payment requests, or forego interim payments and instead choose to submit one final payment request during Reconciliation as described in 42 C.F.R. 423.888(b)(2)(ii).

The Account Manager, Authorized Representative, and Designee can be designated as a Payment Requester by being assigned the Request Payment privilege. For more information about Payment Requesters and the Request Payment privilege, refer to User Roles and Responsibilities for Submitting an Interim Payment Request.

For step-by-step instructions to complete review of Benefit Option interim costs and build and submit an interim payment request, refer to Submit an Interim Payment Request.

Pursuant to 42 C.F.R. 423.888, there are multiple scenarios during the Payment Validation process that can delay or stop a payment request from being processed. Furthermore, payments that remain on hold for 60 days and are not resolved by the Plan Sponsor are subject to cancellation by the RDS Center.

For a list of common reasons that a payment request may be placed on hold and what the Plan Sponsor should do to resolve the issue, refer to Payment Requests Placed on Hold.