Spotlight on TOP Program: Offsets Hit 9/11 Fund

September 17, 2020

When Medicare conditional payment demands go unpaid, the debt is referred to the U.S. Department of Treasury for direct collection and offset. The Treasury Department’s offset program – known as TOP – allows the government to recover debts owed to the Federal Government by simply reducing or eliminating government payments to those debtors. To achieve this goal, TOP matches Federal Tax ID numbers and eliminates debts by reducing outgoing Federal payments.

TOP made national news last week when a number of outlets reported that Medicare conditional payment offsets over several years had eliminated almost two million dollars of payments to the FDNY World Trade Center Health Program.  As is outlined below, it’s quite likely that much of this debt was improperly offset.  Here’s a brief explainer on TOP and how claims payers can avoid this particularly frustrating scenario.

How does TOP work?

TOP is a deceptively simple program.  By matching Federal Tax ID numbers, TOP is able to wipe out debts owed to the government by simply eliminating or reducing payments owed by the government.  Because TOP reduces debt by eliminating payments, the entities that are heavily impacted by TOP typically receive a large volume of payments from the Federal Government.  Universities, state and local governments, and large corporations that have government contracts can all be impacted. 

Treasury offsets can be applied to individuals as well, typically via reduced tax refunds or reduced Social Security payments.  Social Security payments may be reduced by a maximum of 15%, so large debts can lead to a near-permanent reduction of Social Security benefits unless they are quickly and aggressively addressed.

Medicare conditional payments provide the Treasury with significant opportunities for offset.  Medicare issues thousands of conditional payment demands every month.  Although most large and sophisticated claims payers respond to these demands quickly and aggressively, the sheer volume of them can lead some debts to fall through the cracks. 

Moreover, Medicare’s prior Commercial Repayment Center (CRC) contractor was inconsistent– often directing demands to old addresses and not properly responding to appeals.  While the current CRC has improved in these areas, debts identified by the prior contractor were notoriously unreliable.  In its FY 2018 report to Congress, Medicare acknowledged that of the $69.49M in direct collections and offsets recovered by the Department of Treasury, $39.18M had to be refunded to the identified debtors.  Medicare explained in its report that, “excess collections can occur when the Treasury offsets against a payment due to the debtor by another Federal program at the same time that a debtor makes direct payment to the CRC.”

How can TOP be addressed?

The simplest way to avoid the Department of Treasury and TOP is to ensure that your Section 111 data is accurate, aggressively respond to any conditional payment notices and demands, and promptly address Treasury inquiries before they hit TOP. 

Medicare and the Treasury can only initiate recovery based on the data that is supplied, typically through the Section 111 mandatory insurer reporting process.  Insurers and self-insureds should take care to make sure that the Tax IDs provided in Section 111 reporting are accurate and understand that entities filing under that Tax ID reflect the full range of possible “delinquent obligors” that could be targeted by the Treasury. 

Insurers and self-insureds should report only ICD-9 and ICD-10 codes directly associated with the underlying injury, should timely report dates associated with settlement and the end of medical responsibility, and should promptly update claims where data is inaccurate.  All insurers and self-insureds should have the ability to report claims “off-cycle” to quickly address claims in need of immediate updates.

To avoid Treasury collections, conditional payment correspondence must be timely addressed.  Ideally, insurers and self-insureds will employ a centralized process to quickly triage the conditional payment demand, file any available appeal, and ensure payment (if necessary) is processed appropriately.  Decentralized processes can distribute conditional payment demands to many different areas of an organization, leading to lost mail, missed deadlines, and a higher likelihood of Treasury collection. 

Debtors are not defenseless against a Treasury recovery action.  A number of avenues of appeal remain available even after the Treasury has begun to collect, but the appeals process can be complicated and time consuming.  Offsets can be reversed, but they require experienced personnel familiar with the intricacies of both the Treasury and Medicare’s conditional payment contractors. 

Where does this leave us?

Treasury collection and offset is one of the most frustrating aspects of Medicare compliance.  As with the FDNY fund, the offset often harms people and entities that have nothing to do with the underlying debt. States and local governments, universities, and large Federal contractors are particularly at risk of offsets due to a large volume of payments from the Federal government. A centralized program can increase responsiveness, reduce the risk of Treasury collection and offset, provide transparency and accountability to the entire organization.

ECS offers a full range of program offerings to mitigate and eliminate conditional payment and Treasury risk.  To learn more about our Conditional Payment Services contact Lou Porrazzo, Esq. at 678-256-5085 or

Lou Porrazzo

Lou Porrazzo

Lou Porrazzo, Esq. is Vice President, National Accounts at ECS. Lou is responsible for the implementation and roll out of all national MSP programs. An attorney licensed to practice law in Massachusetts, Lou can be reached at 678-256-5085 or