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APR 12 1995
To: Lenders, Holders and
Servicers Participating in the Health Education Assistance Loan
(HEAL) Program
Subject: Permanent and Total
Disability
Lender Policy Memorandum L-95-10
The purpose of this policy
memorandum is to notify HEAL lenders, holders and servicers that the
Department of Health and Human Services is implementing new procedures to determine
the permanent and total disability status of a borrower. These procedures will
help facilitate the disability process for all parties involved. Enclosed are
step-by-step procedures to obtain a decision regarding the permanent and total
disability status of a borrower. In addition, suggested forms and letters
are included in the package for use by lenders/holders/servicers and
borrowers.
These procedures will become
effective May 1, 1995. If you have any questions concerning the
implementation of the disability process, please call Ms. Lorraine Evans of
the Student and Institutional Support Branch (SISB) at (301) 443-4776.
Sincerely yours,
Stephen J. Boehlert
Chief, HEAL Branch
Division of Student Assistance
PERMANENT AND TOTAL
DISABILITY PROCESS
1. Borrower notifies the
holder/servicer, via telephone, fax, or letter that he/she is totally
and permanently disabled.
2. The holder/servicer
places a collection stay on the borrower's account. The borrower is notified
by letter of this 60-day collection stay and is mailed the Physician's Certification
of Borrower's Total and Permanent Disability form. During this time, the borrower
must complete and return all requested documentation (see attachment A). The
collection stay on the borrower's account will remain in effect until the holder/servicer
receives a response from HHS concerning the permanent and total disability decision.
If the account is with a
litigation vendor but the suit has not been filed, the vendor will be instructed
to stop collection activity during the collection stay. If suit has been filed
against the borrower, the holder/servicer will not dismiss the suit but
will seek a postponement of further proceedings. If the court will not agree
to a postponement, the holder/servicer will contact the HEAL Branch to
obtain written directions on how to proceed further.
If documentation is received
within 60 days, the holder/servicer will forward a complete package
of information for the Surgeon General's Medical Review Board (SGMRB) to Room
834, HHS/SISB within 15 days of receipt, or at maximum 75 days from the initial
contact with the borrower. HHS reserves the right to deduct interest for any
time exceeding those time frames. In addition, a letter will be sent to the
borrower notifying him/her that the request has been forwarded to HHS (see attachment
B). Borrower's account should remain in the collection stay until a response
from HHS is given.
4. In the event a borrower
submits documentation that is obviously insufficient in content or timing, it
will nevertheless be forwarded to HHS after the holder/servicer has attempted
to get additional information from the borrower within the 60-day collection
stay (see attachment C). HHS is responsible for assessing the documentation
and deciding on its adequacy, not the holder/servicer.
5. If the borrower does
not respond within 60 days to the holder/servicer's request for documentation,
collection activity will resume from the point at which it was initially suspended
but any administrative forbearance will not be retroactively cancelled. However,
if some documentation is submitted by the borrower, the documentation will be
forwarded to HHS/SISB and the collection stay will continue pending a decision
from HHS.
6. SISB will evaluate the
documentation for completeness. Complete documentation will be forwarded to
the SGMRB for determination. Incomplete documentation will be returned to the
holder/servicer with a detailed letter identifying the missing items.
The holder/servicer will terminate the collection stay and collection
will resume at the point at which it was initially suspended but any
administrative forbearance will not be retroactively cancelled. If the borrower
wishes further
consideration, they may submit additional information and all previous documentation
at a later date for reconsideration as a new case (see attachment D).
7. Upon receipt of complete
documentation, the SGMRB will review the documents and SISB will send written
notice of the SGMRB decision to the holder/servicer. That letter will
then be forwarded to the borrower by the holder/servicer within 5 working
days. Depending on the decision, different letters and procedures will be required.
Please see the following examples:
Acceptance:
A generic letter will be sent by the holder/servicer to the borrower
stating that the disability has been approved and that a copy of HHS's
letter is enclosed. The holder/servicer may then submit the claim for
review (see attachment E).
Denial: A
generic letter will be sent by the holder/servicer to the borrower stating
that the disability has been denied and a copy of HHS's letter is enclosed.
The holder/servicer will terminate the stay on collection activity and
resume collection at the point at which it was initially suspended but any administrative
forbearance will not be retroactively cancelled. If the borrower wishes further
consideration, they may submit additional information and all previous documentation
at a later date for reconsideration as a new case (see attachment F).
Specific Documentation/Deferred:
The holder/servicer will send a letter to the borrower stating
that additional information is requested and a copy of HHS's letter will
be enclosed. The holder/servicer will inform the borrower that they must
supply the requested additional information to the holder/servicer within
30 days (see attachment G).
If the borrower does provide
the specific documentation requested within 30 days, The holder/servicer
will forward the information to HHS within 5 days of its receipt and the collection
stay will continue until the holder/servicer receives written notification
of a final decision.
If the borrower does not
provide the specific documentation requested within 30 days, the holder/servicer
will inform HHS of this and the collection stay will continue until the holder/servicer
receives written notification of a final decision from HHS.
Interest will continue
to accrue during the period of the collection stay. The interest will be capitalized
in accordance with the terms of the borrower's promissory note(s).
The holder/servicer
will be the sole contact with the borrower. The borrower should not be referred
to HHS. If the holder/servicer needs further clarification, they should
contact HHS and then relay the response to the borrower.
ATTACHMENT A
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
We received your request
to discharge your Health Education Assistance Loan(s) (HEAL) due to total and
permanent disability. To be considered for loan discharge, you must complete
the enclosed forms and provide additional documentation within 60 days
from the date of this letter. The documentation provided cannot be more than
four months old (except for background information). Please follow these
steps:
STEP ONE: Fill out
the borrower's section of the Certification of Borrower's Total and Permanent
Disability form.
STEP TWO: Ask your
doctor to:
A. complete and certify
the Certification of Borrower's Total and Permanent Disability form; and
B. provide a copy
of your complete medical and/or hospital records. (include copies
of all pertinent past medical records, a prognosis and rehabilitation
plan)
STEP THREE: Return
all requested information as soon as possible to: HOLDER/SERVICE ?????Address?????
When we receive your documentation,
we will forward your request to the Department of Health and Human Services
(HHS) for consideration. Their medical review board will review your documents
to determine your eligibility for discharge of your HEAL loans. Pending a response
from HHS on your permanent and total disability status, we will suspend collection
activities; however, interest will continue to accrue throughout the process.
You must complete your documentation
within 60 days from the date of this letter, since the entire process may take
from four to eight weeks.
If you have any questions
or need help completing the forms, please call us toll-free at (XXX) XXX-XXXX.
Thank you.
Name
Claims Department
HOLDER/SERVICER
Enclosure: Certification
of Borrower's Total and Permanent Disability
ATTACHMENT B
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
You recently submitted a
request for discharge of your HEAL loan(s) due to total and permanent disability.
Your request and the supporting documentation have been forwarded to the Department
of Health and Human Services (HHS) where they will be reviewed by a medical
review board.
The review process may take
from four to eight weeks. The collection "stay" will remain in effect until
a decision is received from HHS; however, interest will continue to accrue throughout
this process. We will notify you when the decision is made by the medical review
board. Meanwhile, if you have any questions, please contact us toll-free at
(XXX) XXX-XXXX.
Claims Department
HOLDER/SERVICER
ATTACHMENT C
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
You recently submitted a
request for discharge of your HEAL loan(s) due to total and permanent disability.
The documentation that was received is not complete. The missing documentation
is as follows:
Your request for discharge
cannot be processed until all documentation is received. Please forward this
information to our office by *
Once a complete package
is received, your request will be forwarded to the Department of Health and
Human Services. Meanwhile, if you have any questions, please contact us toll-free
at CXXX) XXX-XXXX.
Claims Department
HOLDER/SERVICER
Supply the date that is
60 days from the date Attachment A was sent to the borrower
This letter can be used
for: Incomplete documentation (within the 60 days/before package is sent to
HHS).
ATTACHMENT D
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
A decision has been made
concerning your request to have your HEAL loans discharged due to total and
permanent disability. Your request has been denied due to incomplete documentation.
Collection activity will resume at the point it was initially suspended. A letter
from the Department of Health and Human Services regarding the decision is enclosed.
If you wish further consideration,
you may submit additional documentation along with all previous documentation
for reconsideration as a new case.
If you have any questions,
please contact us toll-free at (XXX) XXX-XXXX.
Claims Department
HOLDER/SERVICER
Enclosure(s)
This letter can be used
for: Incomplete Documentation
ATTACHMENT E
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
A decision has been made
concerning your request to have your HEAL loans discharged due to total and
permanent disability. Your request has been accepted. A letter from the Department
of Health and Human Services regarding the decision is enclosed.
If you have any questions,
please contact us toll-free at (XXX) XXX-XXXX.
Claims Department
HOLDER/SERVICER
Enclosure(s)
This letter can be used
for: Acceptance
ATTACHMENT F
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
A decision has been made
concerning your request to have your HEAL loans discharged due to total and
permanent disability. Your request has been denied. Collection activity will
resume at the point it was initially suspended. A letter from the Department
of Health and Human Services regarding the decision is enclosed.
If you wish further consideration,
you may submit additional documentation along with all previous documentation
for reconsideration as a new case.
If you have any questions,
please contact us toll-free at (XXX) XXX-XXXX.
Claims Department
HOLDER/SERVICER
Enclosure(s)
This letter can be used
for: Denial
ATTACHMENT G
James H. Jones
123 Main Street
Anywhere, USA 11111
Dear Mr. Jones:
The Department of Health
and Human Services' medical review board has requested additional information
on your request to have your HEAL loans discharged due to total and permanent
disability. A letter from the Department of Health and Human Services regarding
their request is enclosed.
In order to fulfill the
medical review board's request, you must provide the requested information within
30 days from the date of this letter. Collection activities will be suspended
during the 30 days; however, interest will continue to accrue throughout this
process.
If you have any questions,
please contact us toll-free at (XXX) XXX-)CKXX.
Claims Department
HOLDER/SERVICER
Enclosure(s)
This letter can be used
for: Specific Documentation/Deferred
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