Provider Instructions for Medicare Credit Balance Report

20 - Provider Instructions for Medicare Credit Balance Report (Rev. 99, Issued: 06-30-06; Effective/Implementation Dates: 10-02-06) General The Paperwork Burden Reduction Act of 1995 was enacted to inform you about why the Government collects information and how it uses the information. In accordance with sections 1815(a) and 1833(e) of the Social Security Act (the Act), the Secretary is authorized to request information from participating providers that is necessary to properly administer the Medicare program. In addition, section 1866(a)(1)(C) of the Act requires participating providers to furnish information about payments made to them, and to refund any monies incorrectly paid. In accordance with these provisions, all providers participating in the Medicare program are to complete a Medicare Credit Balance Report (CMS-838) to help ensure that monies owed to Medicare are repaid in a timely manner. The CMS-838 is specifically used to monitor identification and recovery of "credit balances" due to Medicare. A credit balance is an improper or excess payment made to a provider as the result of patient billing or claims processing errors. Examples of Medicare credit balances include instances where a provider is: • Paid twice for the same service either by Medicare or by Medicare and another insurer; • Paid for services planned but not performed or for non-covered services; • Overpaid because of errors made in calculating beneficiary deductible and/or coinsurance amounts; or • A hospital that bills and is paid for outpatient services included in a beneficiary’s inpatient claim. Credit balances would not include proper payments made by Medicare in excess of a provider’s charges such as DRG payments made to hospitals under the Medicare prospective payment system. For purposes of completing the CMS-838, a Medicare credit balance is an amount determined to be refundable to Medicare. Generally, when a provider receives an improper or excess payment for a claim, it is reflected in their accounting records (patient accounts receivable) as a "credit". However, Medicare credit balances include monies due the program regardless of its classification in a provider's accounting records. For example, if a provider maintains credit balance accounts for a stipulated period, e.g., 90 days, and then transfers the accounts or writes them off to a holding account, this does not relieve the provider of its liability to the program. In these instances, the provider must identify and repay all monies due to Medicare. Only Medicare credit balances are reported on the CMS-838. To help determine whether a refund is due to Medicare, another insurer, the patient, or beneficiary, refer to the sections of the applicable provider manual that pertain to eligibility and Medicare Secondary Payer (MSP) admissions procedures.