[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR401.613]

[Page 21]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 401_GENERAL ADMINISTRATIVE REQUIREMENTS--Table of Contents
 
               Subpart F_Claims Collection and Compromise
 
Sec.  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.