CFR > Title 42 - Public Health > CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES > SUBCHAPTER A—GENERAL PROVISIONS (parts 400 to 403) > PART 401—GENERAL ADMINISTRATIVE REQUIREMENTS > SUBPART F—Claims Collection and Compromise (§401.601 to §401.625) > 401.613—Compromise of claims.

401.613—Compromise of claims.

(a) Amount of compromise. HFCA requires that the amount to be recovered through a compromise of a claim must—
(1) Bear a reasonable relation to the amount of the claim; and
(2) Be recoverable through enforced collection procedures.
(b) General factors. After considering the bases for a decision to compromise a claim under paragraph (c) of this section, CMS 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.
(c) Basis for compromise. Bases on which CMS may compromise a claim include the following—
(1) Inability to pay. CMS may compromise a claim if it determines that the debtor, or the estate of a deceased debtor, does not have the present or prospective ability to pay the full amount of the claim within a reasonable time.
(2) Litigative probabilities. CMS may compromise a claim if it determines that it would be difficult to prevail in a case before a court of law as a result of the legal issues involved or inability of the parties to agree to the facts of the case. The amount that CMS accepts in compromise under this provision will reflect—
(i) The likelihood that CMS would have prevailed on the legal question(s) involved;
(ii) Whether and to what extent CMS would have obtained a full or partial recovery of a judgment, depending on the availability of witnesses, or other evidentiary support for CMS's claim; and
(iii) The amount of court costs that would be assessed to CMS.
(3) Cost of collecting the claim. CMS may compromise a claim if it determines that the cost of collecting the claim does not justify the enforced collection of the full amount. In this case, CMS 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. CMS 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.