Medicare Financial Management Manual 
 
Chapter 12  Instructions for Medicare Credit Balance Report 
Activities 
 
Table of Contents 
(Rev. 315, 05-17-19) 
 
Transmittals for Chapter 12 
 
10 - Instructions to Fiscal Intermediaries (FIs) for the Medicare Credit Balance Report 
10.1- Medicare Credit Balance Report (CMS-838) 
10.1.1 - FI Internal Controls 
10.1.2 - Minimum Requirements for Internal Controls 
10.1.3 - Processing CMS-838 Claims Adjustments 
10.2 - Checks Submitted by Providers 
10.3 - Suspension Warning Letter (FI Action if a Credit Balance Report is not Submitted) 
10.3.1- Sample Suspension Warning Letter 
10.4 - Issuance of Notification/Rejection Letter to Providers Regarding Non-Payment of Medicare 
Credit Balances or Missing/Inaccurate Information on the CMS-838 Report 
10.4.1 - Sample Notification/Rejection Letter 
10.5 - FI Recovery of Non-MSP/MSP Accounts Receivables and Claims Accounts Receivables 
10.6 - FI Issuance of a Credit Balance Demand Letter 
10.7 - Interest Assessment for Non-MSP and MSP Medicare Credit Balances 
10.8 - Extended Repayment Schedule 
10.9 - Credit Balance Reporting Completion Standard and Backlog Issues 
10.10 - Medicare Credit Balance Summary Report 
10.10.1 - Instructions for Completing the Medicare Credit Balance Summary Report 
10.11 - Exhibit 3: Medicare Credit Balance Summary Report 
20 - Provider Instructions for the Medicare Credit Balance Report 
20.1 - Submitting the CMS-838 
20.2 - Completing the CMS-838 
20.3 - Payments of Amounts Owed Medicare 
20.4 - Records Supporting CMS-838 Data 
20.5 - Provider-Based Home Health Agencies (HHAs) 
20.6 - Exception for Low Utilization Providers 
20.7 - Compliance with MSP Regulations 
20.8 - Exhibit I: Medicare Credit Balance Report Certification Page 
20.9 - Exhibit II: Medicare Credit Balance Report Detail Page  10 - Instructions to Fiscal Intermediaries (FIs) for the Medicare Credit Balance Report 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
General 
 
In accordance with section 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, 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, providers are to complete a Medicare Credit Balance Report (CMS-838) to ensure that 
monies owed to Medicare are repaid in a timely manner. 
 
Fiscal intermediaries (FIs) are responsible for monitoring and ensuring provider compliance with the credit 
balance reporting process.  This responsibility includes the following activities: ensure that providers submit 
properly completed CMS-838 reports on time, claims adjustments to Medicare credit balances are properly 
made, payments to providers are suspended for untimely submission of CMS-838 reports, demand letters are 
appropriately issued to providers that have not repaid their Medicare credit balances, and outstanding 
Medicare credit balances are included in Medicare financial reports. 
 
10.1 - Medicare Credit Balance Report (CMS-838) 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Providers use the quarterly CMS-838 report to disclose Medicare credit balances.  They determine the 
number and amount of these balances for refunding the Medicare program.  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 money due to the program 
regardless of its classification in a providers accounting records.  For example, if a provider maintains 
credit balance accounts for a stipulated period such as 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 is responsible for identifying and repaying all of the monies from these credit balance 
accounts to the Medicare program. 
 
The current version of the Medicare Credit Balance Report (Certification Page and Detail Page) and 
instructions for its completion are available at www.cms.hhs.gov/forms.  This report is identified as CMS 
Form 838 on the CMS Web site, and a replica of this form is in section 20 of this chapter. 
 
FIs are charged with the responsibility for performing all necessary activities to implement these 
instructions. 
 
Providers must pay all amounts owed (column 9 of the Detail Page) at the time the credit balance report is 
submitted.  Payment must be submitted with the report and may be made by check or adjustment bill. 
 
  Submission of the completed Detail Page by itself does not constitute a claim adjustment.  The claim 
adjustment (i.e., adjustment bill) must be submitted separately, either electronically or by hard copy 
(e.g., UB-92).  The instructions for column 11 of the Detail Page reflect the type of payment made. 
 
  If the credit balances are repaid by check, the provider must still submit adjustment bills for any 
individual credit balances.  (The FI will ensure that the monies for these balances are not collected 
twice.) 
 
10.1.1 - FI Internal Controls 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
The FIs Chief Financial Officer for Medicare Operations shall ensure that all FI credit balance reporting 
related processes and activities are completed timely and accurately.   
10.1.2 - Minimum Requirements for Internal Controls 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
A.  A designated centralized area to receive Medicare credit balance reports. 
 
B.  FIs shall have all CMS-838 reports and accompanying documents retained in the centralized area. The 
sole exceptions are the originals of the accompanying check and/or accompanying claim adjustment bill. 
 
  A copy of any accompanying check or accompanying claim adjustment bills must be retained with 
the other original documents. 
 
  All other documents must be copied if the information they contain is needed by another area for the 
resolution of any matter involving provider credit balance reports. 
 
  The envelopes shall be retained or copied to substantiate the date of receipt of the CMS-838 report. 
 
NOTE:  FIs may convert these materials into image files (e.g., PDF files) for electronic storage and archival 
purposes. 
 
C.  Faxed credit balance reports that are within 30 calendar days of the close of each calendar quarter should 
be accepted as timely. 
 
  Retain the coversheet to substantiate the date of receipt of the CMS-838 report. 
 
NOTE:  When the FI accepts faxes, the FI shall ensure that these faxes are received over electronically 
secure transmission lines, and placed in a limited access work area. 
 
D.  The FI shall designate a point of contact for receipt and the resolution of credit balance reporting related 
issues. This individual is to verify that all FI activities related to credit balance reporting are completed 
timely and accurately in all areas of the FI. 
 
E.  The FI shall have a listing of all providers required for submitting the CMS-838.  FIs shall have written 
procedures to ensure this listing is reviewed and updated each calendar year quarter. 
 
F.  Written policies and procedures for monitoring and validating receipt of timely, accurate, and complete 
CMS-838s from all providers. 
 
For example: 
 
  Is the name and title of the certifying officer or administrator of the provider on the Certification 
Page, and are all data fields completed for Medicare credit balances on the Detail Page?  Did the 
Detail Page come with an accompanying check and/or appropriate hard copy or electronic 
adjustment bills? 
 
  Were the monies for the reported credit balances timely recouped to the Medicare Trust Fund? 
 
G.  FIs shall have appropriate tracking and/or reports for provider credit balances reporting related activities. 
 
For example: 
 
  Such as related claims adjustments, Suspension Warning Letters and suspensions, verification of low 
Medicare utilization providers with claims data, demand letters, financial reporting, credit balance 
summary reports, etc., that have been performed with respect to credit balance reports due or 
received for a given calendar year quarter.   
H.  The FI shall have internal controls in place to ensure the accurate and timely processing and reporting of 
credit balances. 
 
  The time frame for processing claims adjustments for Medicare credit balances from start to finish is 
90 days from the receipt date of acceptable credit balance reports.  (Contact your RO if you need 
additional time.) 
 
I.  A desk guide or manual with published internal control policies and standard operating procedures for 
implementing the credit balance reporting process. 
 
10.1.3 - Processing CMS-838 Claims Adjustments 
(Rev. 315, Issued: 05-17-19, Effective: 06-18- 19, Implementation: 06-18-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare 
identification number. For purposes of this manual, Medicare beneficiary identifier references both the 
Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new 
Medicare card transition period and after for certain business areas that will continue to use the HICN as 
part of their processes. 
 
A.  The FI shall review the reported credit balances to ensure that the claims were paid by Medicare and the 
amounts listed appear to be appropriate. 
 
  The FI shall accept electronic or hard copy adjustment bills for repayment of Medicare credit 
balances from providers. 
 
  Based on the FIs review of the credit balance, the FI should decide to do an adjustment or perform a 
canceled claim in FISS/HIGLAS to recoup the monies owed. 
 
For example: 
 
1.  Canceling-out the claim if the claim is entirely incorrect, a duplicate payment, a wrong Medicare 
beneficiary identifier, or if the Medicare credit balance resulted from an outpatient claim; or 
 
2.  Establish a claims adjustment if part of the claim needs modification and the remainder of the claim is 
correct; or 
 
3.  Perform a claims recoupment by withholding claim amounts from future Medicare claims.  These 
withheld amounts are to be included in remittance advices to providers. 
 
B.  Establish and maintain control of all adjustments and adjustment bills from the time you receive them. 
 
10.2 - Checks Submitted by Providers 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
If a check is submitted by a provider for repayment of Medicare credit balances, the provider must also 
submit a complete CMS-838 report (Detail and Certification Pages) with hardcopy UB-92s. 
 
  A check is necessary when a provider has terminated from the program and is no longer submitting 
claims. 
 
  When checks are deposited and adjustment bills are processed, the FI shall ensure that monies for 
these credit balances are not collected from the provider twice. 
  10.3 - Suspension Warning Letter (FI Action if a Credit Balance Report is not 
Submitted) 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
A.  The FI shall issue a Suspension Warning Letter if it does not receive a credit balance report from a 
provider by the 15th calendar day after 30 calendar days from the end of each calendar year quarter (45 
calendar days from the end of each calendar year quarter). 
 
  The Suspension Warning Letter shall state that the FI will suspend all claims payments at 100% in 
15 calendar days from the date of issuance of this letter if the credit balance report is not received 
during this time period. 
 
  This suspension will continue until the FI receives a credit balance report. 
 
  The FI shall ensure that any necessary suspensions are implemented timely and maintained, as 
appropriate.  (Refer to Pub. 100-06, Chapter 4, 40 - 40.2).  In addition, Federal regulations at 42 
CFR 405.372 require that the provider be notified of the intention to suspend payment and the 
reasons for the suspension. 
 
B.  The FI shall have the responsibility to ensure that if providers change from submitting a low utilization 
cost report to a full cost report, then they shall comply with all credit balance reporting requirements. 
 
NOTE:  A provider with extremely low Medicare utilization does not have to submit the CMS-838 
form.  A low utilization provider is defined as a facility that files a low utilization Medicare cost report 
or files less than 25 Medicare claims per year. 
 
10.3.1 - Sample Suspension Warning Letter 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
This is a sample suspension warning letter, which the FIs may use to notify the provider. 
 
(Optional) 
 
Exhibit 1 - Sample Suspension Warning Letter 
 
Date: 
 
 
[Name], [Job Title] 
[Company Name], [Provider Number] 
[Address] 
[City], [State] [Zip] 
 
 
RE:  Past Due Quarterly Credit Balance Report 
  Suspension Warning Letter 
  Quarter Ended: _____________ 
 
 
Dear [Title] [Last Name]: 
 
The  Medicare  Credit  Balance  Report,  CMS-838,  for  the  quarter  ending______________  was  due  on 
______________________.  Our records show the Medicare Credit Balance Report for the quarter is 
overdue. 
  Since we have not received your report, this letter is notification that, fifteen (15) days from the above date 
of this correspondence, Medicare will implement a 100% withholding of your payments until the Credit 
Balance Report is received. 
 
If you have any questions regarding this matter, please contact ____________ at (___) _________. 
 
 
Sincerely, 
 
[Name] 
[Title] 
 
10.4 - Issuance of a Notification/Rejection Letter to Providers Regarding Non-Payment 
of Medicare Credit Balances or Missing/Inaccurate Information on the CMS-838 
Report 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
A.  The FI shall have a process in place to resolve non-payment of Medicare credit balances or missing/ 
inaccurate information on received CMS-838 reports. 
 
For example: 
 
  Review each credit balance entry individually on the CMS-838 report to determine whether it is 
missing information such as: is it being repaid by check or hardcopy adjustment bill? 
 
  Contacting the provider via telephone, to obtain missing information on the CMS-838 report.  (Phone 
calls should be documented). 
 
  If the FI is successful at reaching the provider, the provider may fax over the requested information 
at the FIs discretion. 
 
B.  If the FI is unsuccessful in reaching the provider within 30 calendar days from the due date of the CMS-
838 report, the FI should issue a letter on the thirtieth day after the due date of the CMS-838 report. 
 
  This letter shall state that the FI will place the provider on 100% withhold up to the total amount 
owed if the provider does not send a check or adjustment bills for these balances in 15 calendar 
days from the date of this letter. 
 
  After the Notification/Rejection letter has been sent and the provider is placed on 100% withhold up 
to the total amount owed and a balance remains outstanding 60 days after the due date of the CMS-
838, the FI must issue a demand letter to the provider.  Refer to Section 10.6 - FI Issuance of a Credit 
Balance Demand Letter. 
 
10.4.1 - Sample Notification/Rejection Letter 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
This is a sample notification letter, which FIs may use to notify the provider. 
 
(Optional) 
 
Exhibit 2  Notification/Rejection Letter 
 
Date:  
  [Name], [Job] 
[Company Name], [Provider Number] 
[Address] 
[City], [State], [Zip] 
 
 
 
RE:  Notification/Rejection Letter 
  Quarter Ended: ___________ 
 
Dear [Title], [Last Name]: 
 
During our review of your submitted Medicare Credit Balance Report (CMS-838) Detail Page for the 
quarter ending________________, we noted that __________ was not included with your report. 
 
In accordance with published Centers for Medicare and Medicaid Services (CMS) manual instructions, your 
office must include an adjustment bill for each reported credit balance listed in column 9 of the Detail Page.  
You should refer to your Provider Instructions for a detailed description of the published guidelines, or visit 
us on our Web site, www.__________.com. 
 
We must receive $________ for your payment of reported credit balances within fifteen (15) days from the 
date of this letter.  If we do not receive a check and/or hard copy adjustment bills (UB-92 claim form) or 
electronic adjustment bills for these balances within 15 days from the date of this letter, your facility will be 
placed on one-hundred percent (100%) withhold up to the total amount owed to recoup the above liability on 
day 16. 
 
Make sure to include your Medicare Provider Number on your check.  Your check should be mailed 
to the following address: _________________________________________________ 
____________________________________________________________________________ 
____________________________________________________________________________ 
 
If you have any questions related to this letter, please call me at (999) 123-4567. 
 
Sincerely, 
 
[Name] 
[Title] 
 
10.5 - FI Recovery of Non-MSP/MSP Accounts Receivables and Claims Accounts 
Receivables 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
A.  Non-MSP Accounts Receivables (A/R)   
 
  When the credit balance adjustments are entered in the FIs claims processing system, they will 
remain in the system until the amounts for these adjustments are recouped. 
 
  These adjustments are normally recovered through the recoupment of future claims, and they are 
included in remittance advices to providers.  If the credit balance has not been recovered, the balance 
remains outstanding in the FIs financial reporting system and appears in the CMS-751 report. 
 
NOTE:  Refer to Pub. 100-06, chapter 4, 40 
 
B.  Non-MSP Claims ARs 
  The established A/R is included in the FIs balances of new receivables for Medicare credit balances, and 
these balances appear in Line 2a of the CMS-751. (Pub. 100-06, Chapter 5, 270.2) 
 
NOTE:  Follow your existing instructions for recovering MSP A/Rs. 
 
10.6 - FI Issuance of a Credit Balance Demand Letter 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
When a Medicare credit balance is not fully recovered to the Medicare Trust Fund through the adjustment 
bill process (or through check submission) and this balance remains outstanding 60 days after the due date 
of the CMS-838, the FI shall issue a demand letter to the provider. 
 
  The FI shall issue demand letters within 60 calendar days from the due date of the CMS-838 report. 
 
  If a full payment is not received 15 days after the date of the first demand letter, the FI shall start the 
100% withholding of claims payment up to the total amount owed on day 16, (if they havent already 
placed providers on 100% from their 1st Notification/Rejection letter) 
 
Refer to Pub. 100-06, Chapter 4, 40 and 40.1. 
 
  If no response is received from the provider within 30 days after the date of the first demand letter, 
follow the existing instructions in Pub. 100-06, Chapter 4, 10 and 20. 
 
  If the provider believes that prompt repayment of the amount owed Medicare is so large that it will 
cause financial hardship, the provider may complete a request for an extended repayment schedule in 
accordance with Pub. 100-06, Chapter 4, 50. 
 
  Contact your Regional Office (RO) for guidance on specific provider issues as needed. 
 
Refer to Pub. 100-06, Chapter 3, 40.2 for sample Demand Letter for Claims Accounts Receivables.  For 
MSP, refer to Pub. 100-05, Chapter 7, 60.10.1 Intent to Refer letter. 
 
10.7 - Interest Assessment for Non-MSP and MSP Medicare Credit Balances 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Calculation of Interest on Medicare Credit Balances 
 
Effective October 1, 2004, 42 CFR  405.378 and 411.24 (m) (l) was amended to change how interest is 
calculated on Non-MSP/MSP recoveries.  Section 1862(b)(2)(B)(i) of the Act provides express authority to 
assess interest on MSP debts.  Under this new rule, interest is assessed for each full 30-day period that 
payment is not made on time.  This change applies to debts established on or after October 1, 2004. 
 
A.  Assessment of Interest on Non-MSP Credit Balances 
 
Interest on Non-MSP debts established prior to October 1, 2004 will continue to be assessed under the 
former method, until the debt is recovered in full. 
 
NOTE:  Refer to Pub. 100-06, Chapter 4, 30.3  Non-MSP (Debt Collection). 
 
B.  Assessment of Interest on MSP Credit Balances 
 
Refer to Pub. 100-05, Chapter 7, revised 30.1.5- Interest on MSP Recovery Claims for information on 
the calculation of interest. 
  For MSP recovery demand letters involving credit balances, there is an exception to the general rule that 
interest accrues from the date of the recovery demand letter.  Federal regulations at 42 CFR 489.20(h) state 
that if the provider receives payment for the same services from Medicare and another payer that is primary 
to Medicare, the provider has 60 days to make repayment to Medicare.  For MSP credit balances, interest 
accrues from the later of either the date of the demand letter for the credit balance due or 60 days from the 
date the provider received the credit balance.  If the provider does not specify the date of receipt of the MSP 
credit balance, accrue interest from the date of the demand letter. 
 
10.8 - Extended Repayment Schedule 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
If, at the time of submitting the CMS-838 report, the provider believes that the repayment of the amount 
owed Medicare is so large that it will cause financial hardship, a request can be made for an extended 
repayment schedule in accordance with Pub. 100-06, Chapter 4, 50. 
 
10.9 - Credit Balance Reporting Completion Standard and Backlog Issues 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
All FIs shall notify their RO regarding whether or not they are current with respect to their credit balance 
reporting workload.  Current is defined as meeting the specific time frames set forth in these instructions, 
and the completion of all activities associated with credit balance reporting for a given calendar year quarter 
which is 90 calendar year days after the receipt date of acceptable CMS-838s for that quarter. 
 
  FIs are responsible for documenting the current status of their credit balance workloads for all 
quarters from January 1, 1999 to date. 
 
  Those FIs who do not have current credit balance workloads must submit a plan to their RO for 
bringing their workloads into compliance within 30 days of the issuance of this manual instruction. 
 
10.10 - Medicare Credit Balance Summary Report 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
  FIs shall prepare their summary reports in Excel (an electronic file of this report is available from 
Central Office (CO) by e-mail to: CMS_SCBR@cms.hhs.gov), and to include their five digit FI 
number in the file name (i.e., CBSFI#####.xls).  In addition, FIs shall complete the 
Prepared/Approved by: section at the bottom of their reports. 
 
  See Exhibit 3 below for a sample Medicare Credit Balance Summary Report. 
 
  FIs shall submit their Medicare credit balance summary reports to CO via e-mail 
(CMS_SCBR@cms.hhs.gov) no later than 45 days after provider credit balance reports are due. 
 
10.10.1 - Instructions for Completing the Medicare Credit Balance Summary Report 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Below are FI instructions for completion of the Medicare Credit Balance Summary Report. 
 
Credit Balance Activities by Type of Provider for This Quarter 
 
No. of Providers Required to Submit CMS Form 838 for This Quarter -- Show the total number of 
providers, by type of provider, which were required to submit a credit balance report for the reporting 
quarter.  Do not include low utilization providers or any other providers that were not required to submit a 
credit balance report. 
  No. of Providers With Submission of CMS Form 838 for This Quarter -- Show the total number of 
providers, by type of provider, that submitted a credit balance report for the reporting quarter. 
 
Number of Identified Medicare Credit Balances by Provider on CMS Form 838 For This Quarter - 
Count the number of identified Medicare credit balance amounts that were reported, by type of provider, 
from column 9 of the providers CMS-838 Detail Page for this quarter. 
 
Amount of Identified Medicare Credit Balances by Provider on CMS Form 838 For This Quarter - 
Show the total amount of identified Medicare credit balances that were reported, by type of provider, from 
column 9 of the providers CMS-838 Detail Page for this quarter. 
 
Total - Sum all columns.  10.11 - Exhibit 3:  MEDICARE CREDIT BALANCE SUMMARY REPORT 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Fiscal Intermediary: (Name and Number) 
 
Quarter Ended: 
 
Credit Balance Activities by Type of Provider for This Quarter 
 
 
Number of  Amount of  
Identified   Identified  
No. of Providers  No. of Providers  Medicare Credit  Medicare Credit  
Required to Submit  That Submitted  Balances on    Balances on 
Type of  CMS Form 838  CMS Form 838  CMS Form 838  CMS Form 838 
Provider  For This Quarter  For This Quarter  For This Quarter  For This Quarter 
Hospital                                                                     $                        
SNF                                                                                                
HHA                                                                                                
ESRD                                                                                               
Other                           
 
TOTAL                       $                        
 
 
 
NOTE:  See the next page for a sample of a completed summary report. 
 
 
 
 
 
 
 
Prepared by: ___________________  Date Prepared: ___________________ 
 
Approved by: ___________________  Date Approved: ___________________  Exhibit 3 (Continued) 
SAMPLE REPORT 
 
MEDICARE CREDIT BALANCE SUMMARY REPORT 
 
Fiscal Intermediary: Blue Cross Blue Shield of Xxxxxxx  00xxx 
Quarter Ended: 9/30/2004 
 
Credit Balance Activities by Type of Provider for this Quarter: 
 
 
Number of  Amount of  
Identified  Identified 
No. of Providers  No. of Providers  Medicare Credit  Medicare Credit 
Required to Submit  That Submitted a  Balances on    Balances on 
Type of  CMS Form 838  CMS Form 838  CMS Form 838  CMS Form 838 
Provider  For This Quarter  For This Quarter  For This Quarter  For This Quarter 
Hospital                    300                    257          1,348     $643,278 
SNF                      278                    215             288         86,441 
HHA                          0                        0                 0                  0 
ESRD                       21                      21                 0                  0 
Other                      34                      33               15           3,065 
 
TOTAL                    633                      526          1,651       $732,784 
 
 
 
 
 
 
Prepared by: ___________________  Date Prepared: ___________________ 
 
Approved by: ___________________  Date Approved: ___________________ 
 
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 beneficiarys inpatient claim. 
 
Credit balances would not include proper payments made by Medicare in excess of a providers 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. 
 
20.1 - Submitting the CMS-838 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Submit a completed CMS-838 to your fiscal intermediary (FI) within 30 days after the close of each 
calendar quarter.  Include in the report all Medicare credit balances shown in your accounting records 
(including transfer, holding or other general accounts used to accumulate credit balance funds) as of the last 
day of the reporting quarter. 
 
Report all Medicare credit balances shown in your records regardless of when they occurred.  You are 
responsible for reporting and repaying all improper or excess payments you have received from the time you 
began participating in the Medicare program.  Once you identify and report a credit balance on the CMS-838 
report, do not report the same credit balance on subsequent CMS-838 reports. 
 
20.2 - Completing the CMS-838 
(Rev. 315, Issued: 05-17-19, Effective: 06-18- 19, Implementation: 06-18-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare 
identification number. For purposes of this manual, Medicare beneficiary identifier references both the 
Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new 
Medicare card transition period and after for certain business areas that will continue to use the HICN as 
part of their processes. 
 
The CMS-838 consists of a certification page and a detail page.  An officer (the Chief Financial Officer or 
Chief Executive Officer) or the Administrator of your facility must sign and date the certification page.  
Even if no Medicare credit balances are shown in your records for the reporting quarter, you must still have 
the form signed and submitted to your FI in attestation of this fact.  Only a signed certification page needs to 
be submitted if your facility has no Medicare credit balances as of the last day of the reporting quarter.  An 
electronic file (or hard copy) of the certification page is available from the CMS web site (e.g., 
www.cms.hhs.gov/forms) or your FI. 
 
The detail page requires specific information on each credit balance on a claim-by-claim basis.  This page 
provides space to address 17 claims, but you may add additional lines or reproduce the form as many times  as necessary to accommodate all of the credit balances that you have reported.  An electronic file (or hard 
copy) of the detail page is also available from the CMS Web site or your FI. 
 
You may submit the detail page(s) on a diskette/CD or by secure electronic transmission to your FI as long 
as the transmission method and format are acceptable to your FI. 
 
Segregate Part A credit balances from Part B credit balances by reporting them on separate detail pages. 
 
  NOTE:  Part B pertains only to services you provide which are billed to your FI.  It does not pertain 
to physician and supplier services billed to carriers. 
 
Begin completing the CMS-838 by providing the information required in the heading area of the detail 
page(s) as follows: 
 
  The full name of the facility; 
 
  The facility's provider number (if there are multiple provider numbers for dedicated units within the 
facility (e.g., psychiatric, physical medicine and rehabilitation), complete a separate Medicare Credit 
Balance Report for each provider number); 
 
  The month, day and year of the reporting quarter, e.g., 12/31/02; 
 
  An "A" if the report page(s) reflects Medicare Part A credit balances, or a "B" if it reflects Part B 
credit balances; 
 
  The number of the current detail page and the total number of pages forwarded, excluding the 
certification page (e.g., Page 1 of 3);and 
 
  The name and telephone number of the individual who may be contacted regarding any questions 
that may arise with respect to the credit balance data. 
 
Complete the data fields for each Medicare credit balance by providing the following information (when a 
credit balance is the result of a duplicate Medicare primary payment, report the data pertaining to the most 
recently paid claim): 
 
Column   1 - The last name and first initial of the Medicare Beneficiary, (e.g., Doe, J.) 
 
Column   2 - The Medicare beneficiary identifier of the Medicare Beneficiary. 
 
Column   3 - The multiple-digit Internal Control Number (ICN) assigned by Medicare when the claim is 
processed. 
 
Column   4 - The 3-digit number explaining the type of bill, e.g., 111 - inpatient, 131 - outpatient, 831 - 
same day surgery.  (See the section(s) for the Uniform Billing instructions in the applicable 
provider manual.) 
 
Columns  5/6 - The month, day and year the beneficiary was admitted and discharged, if an inpatient claim; 
or "From" and "Through" dates (date service(s) were rendered), if an outpatient service.  
Numerically indicate the admission (From) and discharge (Through) date (e.g., 1/1/02). 
 
Column   7 - The month, day and year (e.g., 1/1/02) the claim was paid.  If a credit balance is caused by a 
duplicate Medicare payment, ensure the paid date and ICN number correspond to the most 
recent payment. 
  Column   8 - An "O" if the claim is for an open Medicare cost reporting period, or a "C" if the claim pertains 
to a closed cost reporting period.  (An open cost report is one where an NPR has not yet been 
issued.  Do not consider a cost report open if it was reopened for a specific issue such as 
graduate medical education or malpractice insurance.) 
 
Column   9 - The amount of the Medicare credit balance that was determined from your patient/accounting 
records. 
 
Column  10 - The amount of the Medicare credit balance identified in column 9 being repaid with the 
submission of the report. (As discussed below, repay Medicare credit balances at the time you 
submit the CMS-838 to your FI.) 
 
Column  11 - Choose one of the following: 
A "C" when you submit a check with the CMS-838 to repay the credit balance amount shown 
in column 9; 
An "A" if a claim adjustment is being submitted in hard copy (e.g., adjustment bill in UB-92 
format) with the CMS-838; 
A Z if payment is being made by a combination of check and hard copy adjustment bill 
with the CMS-838; or 
An X if an adjustment bill has already been submitted electronically or by hard copy. 
 
Column  12 - The amount of the Medicare credit balance that remains outstanding (column 9 minus column 
10).  Show a zero (0) if you made full payment with the CMS-838 or a claim adjustment 
has been submitted and has been fully processed to recoup the Credit Balance. 
 
Column  13 - The reason for the Medicare credit balance by entering a 1" if it is the result of duplicate 
Medicare payments, a "2" for a primary payment by another insurer or a "3" for "other 
reasons".  Provide an explanation on the detail page for each credit balance with a 3. 
 
Column  14 - The Value Code to which the primary payment relates, using the appropriate two digit code as 
follows:  (This column is completed only if the credit balance was caused by a payment when 
Medicare was not the primary payer. If more than one code applies, enter the code applicable 
to the payer with the largest liability.  For code description, see the section(s) in the 
applicable provider manual for the listed codes.) 
 
12 - Working Aged 
13 - End Stage Renal Disease 
14 - Auto No Fault 
15 - Workers' Compensation 
16 - Other Government Program 
41 - Black Lung 
42 - Department of Veterans Affairs (VA) 
43  Disability 
44  Conditional Payment 
47 - Liability 
 
Column  15 - The name and billing address of the primary insurer identified in column 14. 
 
NOTE:  Once a credit balance is reported on the CMS-838, it is not to be reported on a subsequent 
period report.   
20.3 - Payments of Amounts Owed Medicare 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Providers must pay all amounts owed (column 9 of report) at the time the credit balance report is 
submitted.  Providers must submit payment, by check or adjustment bill. 
 
  Payments by check must also be accompanied by a separate adjustment bill for all 
individual credit balances.  The FI will ensure that the monies are not collected twice. 
 
  Submission of credit balance information on the CMS-838 detail page will not be 
accepted by the FI as a substitute for adjustment bills. 
 
  Claim adjustments, whether as payment or in connection with a check, must be submitted 
as adjustment bills (electronic or hard copy).  If the claim adjustment was submitted 
electronically, this must be shown on the CMS-838 (see instructions for column 11). 
 
  There is a limited exception for MSP credit balances.  Federal regulations at 42 CFR 
489.20(h) state that if a provider receives payment for the same services from Medicare 
and another payer that is primary to Medicare... the provider must identify MSP related 
credit balances in the report for the quarter in which the credit balance was identified, 
even if repayment is not required until after the date the report is due.  If the provider is 
not submitting a payment (by check or adjustment bill) for an MSP credit balance with 
the CMS-838 because of the 60-day rule, the provider must furnish the date the credit 
balance was received.  Otherwise, the FI must assume that the payment is due and will 
issue a recovery demand letter and accrue interest without taking this 60-day period into 
consideration. 
 
  If the amount owed Medicare is so large that immediate repayment would cause financial 
hardship, you may contact your FI regarding an extended repayment schedule. 
 
20.4 - Records Supporting CMS-838 Data 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Develop and maintain documentation that shows that each patient record with a credit balance 
(e.g., transfer, holding account) was reviewed to determine credit balances attributable to 
Medicare and the amount owed, for the preparation of the CMS-838.  At a minimum, your 
procedures should: 
 
  Identify whether the patient is an eligible Medicare beneficiary; 
 
  Identify other liable insurers and the primary payer; 
 
  Adhere to applicable Medicare payment rules; and 
 
  Ensure that the credit balance is due and refundable to Medicare. 
 
  NOTE:  A suspension of Medicare payments may be imposed and your eligibility to 
participate in the Medicare program may be affected for failing to submit the CMS-
838 or for not maintaining documentation that adequately supports the credit balance 
data reported to CMS.  Your FI will review your documentation during 
audits/reviews performed for cost report settlement purposes.   
 
20.5 - Provider-Based Home Health Agencies (HHAs) 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Provider based HHAs are to submit their CMS-838 to their Regional Home Health Intermediary 
even though it may be different from the FI servicing the parent facility. 
 
20.6 - Exception for Low Utilization Providers 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Providers with extremely low Medicare utilization do not have to submit a CMS-838.  A low 
utilization provider is defined as a facility that files a low utilization Medicare cost report as 
specified in PRM-I, section 2414.4.B, or files less than 25 Medicare claims per year. 
 
20.7 - Compliance with MSP Regulations 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
Federal regulations at 42 CFR 489.20(h) requires you to pay Medicare within 60 days from the 
date you receive payment from another payer (primary to Medicare) for the same service.  
Submission of the  
CMS-838 and adherence to CMSs instructions do not interfere with this rule.  You must repay 
credit balances resulting from MSP payments within the 60-day period. 
 
Report credit balances resulting from MSP payments on the CMS-838 if they have not been 
repaid by the last day of the reporting quarter.  If you identify and repay an MSP credit balance 
within a reporting quarter, in accordance with the 60-day requirement, do not include it on the 
CMS-838, i.e., once payment is made, a credit balance would no longer be reflected in your 
records. 
 
If an MSP credit balance occurs late in a reporting quarter, and the CMS-838 is due prior to the 
expiration of the 60-day requirement, include it in the credit balance report.  However, payment 
of the credit balance does not have to be made at the time you submit the CMS-838, but within 
the 60 days allowed. 
  20.8 - Exhibit I: Medicare Credit Balance Report Certification Page 
(Rev. 99, Issued:  06-30-06; Effective/Implementation Dates:  10-02-06) 
 
 
DEPARTMENT OF HEALTH AND HUMAN SERVICES    Form Approved 
CENTERS FOR MEDICARE & MEDICAID SERVICES    OMB No. 0938-0600 
MEDICARE CREDIT BALANCE REPORT 
CERTIFICATION PAGE 
 
The Medicare Credit Balance Report is required under the authority of Sections 1815(a), 1833(e), 
1886(a)(1)(C) and related provisions of the Social Security Act.  Failure to submit this report may result 
in a suspension of payments under the Medicare program and may affect your eligibility to participate in 
the 
Medicare program. 
 
ANYONE WHO MISREPRESENTS, FALSIFIES, CONCEALS OR OMITS ANY ESSENTIAL 
INFORMATION MAY BE SUBJECT TO FINE, IMPRISONMENT OR CIVIL MONEY 
PENALTIES UNDER APPLICABLE FEDERAL LAWS. 
 
CERTIFICATION BY OFFICER OR ADMINISTRATOR OF PROVIDER 
 
I HEREBY CERTIFY that I have read the above statements and that I have examined the accompanying 
credit balance report prepared by 
 
 
Provider Name                                                                        Provider 6-Digit Number 
 
for the calendar quarter ended                                                  and that it is a true, correct, and complete 
statement prepared from the books and records of the provider in accordance with applicable Federal 
laws, regulations and instructions. 
 
 
  (Sign) 
Officer or Administrator of Provider 
 
(Print) 
                Name and Title 
 
(Print) 
                Date 
 
 
 
CHECK ONE: 
    Qualify as a Low Utilization Provider. 
    The Credit Balance Report Detail Page(s) is attached. 
    There are no Medicare credit balances to report for this quarter.  (No Detail Page(s) attached.) 
 
 
 
 
Contact Person                                                                                                      Telephone Number 
 
Form CMS-838 (10/03)  INSTRUCTIONS FOR COMPLETING THIS PAGE ARE IN MEDICARE CREDIT BALANCE 
REPORT  PROVIDER INSTRUCTIONS, FORM CMS-838 20.9 - Exhibit II: Medicare Credit Balance Report Detail Page 
(Rev. 315, Issued: 05-17-19, Effective: 06-18- 19, Implementation: 06-18-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare identification number. For 
purposes of this manual, Medicare beneficiary identifier references both the Health Insurance Claim Number (HICN) and the 
Medicare Beneficiary Identifier (MBI) during the new Medicare card transition period and after for certain business areas that will 
continue to use the HICN as part of their processes. 
 
 
Department of Health & Human Services  Form Approved 
Centers for Medicare & Medicaid Services  OMB No. 0938-0600 
 
Medicare Credit Balance Report 
Detail Page 
 
Provider Name:                                                                                          Page            of              
 
Provider Number:                                                                                       Contact Person:                                                        
 
Quarter Ending:                                                                                          Phone Number (            )  -   
Medicare Part:                 (Indicate A or B) 
 
(1)  (2)  (3)  (4)  (5)  (6)  (7)  (8)  (9)  (10)  (11)  (12)  (13)  (14)  (15) 
                  Amount    Amount of  Reason     
                Amount  of    Medicare  for     
      Type  Admission  Discharge      of  Medicare   Method  Credit  Medicare     
  Medicare  ICN  of  Date  Date  Paid Date  Cost Report  Medicare   Credit  of  Balance  Credit  Value  Primary Payer 
Beneficiary  beneficiary  Number  Bill  (MM/DD/YY)  (MM/DD/YY)  (MM/DD/YY)  (Open/Closed)  Credit  Balance  Payment  Outstanding  Balance  Code  (Name & Billing 
Name  identifier  Balance  Repaid  Address) 
                             
                             
                             
                             
                                                           
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
Form CMS-838 (10/03)  INSTRUCTIONS FOR COMPLETING THIS PAGE ARE IN MEDICARE CREDIT BALANCE REPORT  PROVIDER INSTRUCTIONS, FORM CMS-8   Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R315FM 05/17/2019 Update to Publication (Pub.) 100-06 to Provide  06/18/2019 11211 
Language-Only Changes for the New Medicare 
Card Project 
R99FM  06/30/2006 Initial Issuance of Chapter Instruction for  10/02/2006 5084 
Medicare Credit Balance Reporting Activities 
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