"The transfer was made Trustee to Trustee."
That's a requirement for claiming an HSA Funding Distribution, not something that requires you to claim an HFD. There is no benefit to claiming an HFD after age 59½.
The deduction for the personal HSA contribution will exactly offset the increase in taxable income resulting from not claiming that the distribution was an HFD, resulting in no change to your Medicare IRMAA.
Report the IRA distribution as an ordinary distribution and enter a personal, deductible HSA contribution.
