This year, the Mississippi Legislature passed new legislation allowing community hospitals to offset an individual’s delinquent debts against future Mississippi income tax refunds. Under the amended Local Government Debt Collection Setoff Act, community hospitals, such as Covington County Hospital, will work with the Mississippi Department of Revenue to submit the debts owed by individuals for collection.
On October 13, 2023, Covington County Hospital (CCH) mailed out written notices to debtors informing them of the setoff process and options for response. The letters will be sent to individuals/guarantors with debts of at least $50 and for which no payments have been received after a 120-day collection process. CCH encourages letter recipients to contact the Hospital’s Business Office to pay the debt in full within 30 days of the date of the letter.
If the debt remains unpaid after 30 days, the owed balance will be submitted to the Mississippi Department of Revenue to be collected against their next state income tax refund. A state-mandated collection assistance fee of 25% will be added to the debt and collected by the State of Mississippi if it is submitted for setoff. Unpaid balances can be resubmitted each year against future tax refunds until fully paid through the setoff program.
CCH allows individuals to appeal the setoff if the debt is believed to be incorrect or invalid. A written request must be submitted for a hearing within 30 days of the notification date. Individuals who complete payment will avoid collection through their MS income tax refund as well as the mandatory collection fee. For more information, please call 601-765-6711.
SAMPLE DEBT SETOFF LETTER
DEBTOR’S NAME
ADDRESS
CITY, STATE ZIP
Dear DEBTOR’S NAME,
This year, the Mississippi Legislature passed new legislation allowing community hospitals to offset unpaid debts with a patient or patient guarantor’s Mississippi State Income Tax Refund. According to our records, you owe Covington County Hospital (“CCH”) a debt in the amount of $_____ for medical services (the “Debt”). As the Debt now exceeds sixty (60) days past due, you are hereby notified that in accordance with Mississippi Code § 27-7-801 et seq., the Debt will now be submitted to the Mississippi Department of Revenue to be collected against your Mississippi State Income Tax Refund. A state-mandated collection assistance fee of twenty-five (25%) will be added to the Debt and collected by the State of Mississippi if it is submitted for setoff.
CCH is requesting that you pay the amount owed within thirty (30) days of the date of this notice to avoid the recoupment process through the Department of Revenue, as well as the 25% collection assistance fee. CCH is requesting your payment because we have completed all efforts in our attempt to collect, which include, but are not limited to, sending multiple statements over a 120-day period.
If the amount of your State Income Tax Refund is less than the Debt and the 25% collection assistance fee, the remaining balance of the Debt may be submitted each year to the Department of Revenue for setoff until the balance of the Debt and collection assistance fee are paid in full. Any Mississippi State Income Tax Refund in excess of the Debt will be issued to you by the Mississippi Department of Revenue.
If you believe the Debt to be incorrect or invalid, you may appeal the setoff of the Debt by submitting a written request for a hearing within thirty (30) days of the date of this notice. Failure to request a hearing on a disputed Debt within this time period will result in the setoff of the Debt.
The hearing request must contain all of the following information: (1) Debtor’s full name; (2) address of primary residency; (3) valid phone number; (4) Social Security Number; (5) the type of debt being disputed; and (6) a detailed statement of all the reasons you disagree or dispute the Debt.
Your written request for a hearing must be mailed within 30 days of the date of this letter to:
Attention: Debt Setoff Program Coordinator
Covington County Hospital
Post Office Box 1149
701 S Holly Ave
Collins, MS 39428
To pay your Debt in full prior to the initiation of the debt setoff, please call (601) 765-6711. We are grateful for the opportunity to have served you and your healthcare needs.
Sincerely,
Covington County Hospital
Debt Setoff Program Frequently Asked Questions
1. Why am I (the Debtor/patient) receiving this letter?
We (CCH), the participant, tried to collect payment for medical services rendered at least 120 days in the past. No payments were received during this time. Multiple statements were mailed by CCH during the period to notify the Debtor/Patient, “the patient or patient guarantor” of the balance.
2. How can the Debtor/patient pay the past due balance?
To pay, please call 601-765-6711. Debtors/patients may also pay in person at the CCH Business Office. If paid in full directly to CCH within 30 days of receiving the letter, there is no 25% processing fee added to the balance.
3. What happens if the Debtor/patient pays the debt immediately upon receipt of the letter?
If the Debtor/patient pays his or her debt at any time during the 30-day notice period, then CCH will remove the Debtor/patient from the Mississippi Department of Revenue (MS DOR) filing. The 25% processing fee will not be applied to any debts paid in full prior to filing with MS DOR.
4. What if the Debtor/patient pays a partial balance?
If the Debtor/patient only pays a partial amount, the remaining balance will be sent to MS DOR for processing and include a 25% processing fee.
Example: Debtor/patient owes $600 and makes a $300 payment to CCH during the 30-day period. The $300 remaining balance after the 30-day period will be sent to MS DOR with a 25% fee added.
5. Can the Debtor/patient set up a payment plan?
Although we recommend the Debtor/patient pay the owed balance in full, he/she can immediately begin making payments on the owed balance. After 30 days from the date of the letter, any remaining unpaid balance will be sent to the MS DOR. Any payments after 30 days will be updated with the DOR to reduce the balance that will be set off against the debtor’s/patient’s future tax refund. However, the state-mandated 25% processing fee will remain due to the DOR.
Example: Debtor/patient owes $1,500 and makes a $200 payment during the 30-day period. The remaining $1,300 balance will be sent to the MS DOR with a 25% fee added. If the debtor/patient makes an additional $200 payment 60 days after the letter, CCH will update the balance with the MS DOR to reflect the newly owed balance of $1,100. Once sent to the MS DOR, the 25% is implemented.
6. How are the debts determined?
The debt due is over $50, which may include multiple statements to reach the $50 threshold. Anything for which a person is guarantor. No payment was received for medical services rendered during a collection period of at least 120 days.
7. If the debt is not paid within 30 days, what will happen?
CCH will submit all past due balances to the MS DOR to apply to the individual’s Mississippi state income tax refund. A state-mandated 25% processing fee will be added to the balance of the debt. The State will collect the additional fee.
8. What if the Mississippi state income tax refund does not cover the entire amount of the debt?
If the Debtor’s/patient’s income tax refund does not sufficiently cover the outstanding medical debt at CCH, the remaining balance is held in the MS DOR system and will be applied to subsequent tax returns filed by the Debtor/patient until paid in full.
9. How will I know when my (the Debtor/patient) outstanding balance is paid in full to the Participant?
Once the MS state income tax refund has been processed, the MS DOR will send a letter to the Debtor/patient stating that his or her refund has been received as payment for the debt. The letter will include a summary of the refund balance applied to the debt and any remaining refund to be paid to Debtor/patient, if any.
10. What if the Debtor/patient files taxes jointly?
The MS DOR will intercept funds based on the Debtor’s/patient’s social security number, regardless of whether the return is for a single taxpayer or joint return.
11. What if the Debtor/patient believes the debt is incorrect or invalid?
Debtors/patients may appeal the setoff of the debt by submitting a written request for a hearing within 30 days from October 16, 2023. The hearing request must contain all of the following items:
a. Debtor’s/patient’s full name
b. Address of primary residency
c. Valid phone number
d. Social Security Number
e. The type of debt being disputed
f. Detailed statement of all the reasons you disagree or dispute the debt
The written request must be mailed to:
Attention: Debt Setoff Program Coordinator Covington County Hospital
PO Box 1149
701 S Holly Ave
Collins, MS 39428
Covington County Hospital’s Hearing Officer will contact the Debtor/patient for a hearing date once the letter is received and reviewed.
