Are you struggling to understand Medicare Credit Balance Reports? Maybe you've received a suspension warning for missing a submission deadline, or you're unsure how to complete the form accurately. Many home health (HHAs) and hospice (HSPs) agencies face challenges navigating this reporting requirement.
With over 20 years of experience supporting HHAs and HSPs, we at The Home Health Consultant understand the nuances of credit balance reporting, from regulatory compliance to practical submission tips.
This guide breaks down everything you need to know about Medicare Credit Balance Reports. You will learn what credit balances are, why they matter, and how to complete and submit the CMS-838 accurately.
We also offer practical advice to help you avoid common mistakes and penalties. By the end of this guide, you will have the tools and insights needed to master credit balance reporting and stay compliant.
What is a Medicare Credit Balance?
A Medicare credit balance occurs when an HHA or HSP receives more money than it should for a service. These improper payments often arise from billing errors or processing mistakes and must be repaid to Medicare. Common causes of credit balances include duplicate payments, such as when Medicare pays twice for the same claim.
They also occur when payment is issued for planned but unprovided services. Or, when there are miscalculations of the beneficiary’s deductible or coinsurance amounts.
Additionally, overlapping claims often result in credit balances. These can be payments for outpatient services that are already covered in an inpatient claim. Understanding these scenarios is critical to ensuring accurate reporting.
Why Are Credit Balance Reports Required?
Medicare requires credit balance reporting under §§1815(a), 1833(e), and 1866(a)(1)(C) of the Social Security Act. These regulations mandate that providers identify and return overpayments promptly. The CMS-838 form ensures Medicare funds are used appropriately. The reporting also helps identify improper payments that need to be recouped.
Failure to comply with these requirements can result in severe penalties.
Providers who fail to submit their CMS-838 risk payment suspensions. Medicare will withhold 100% of payments until compliance is achieved. Non-compliance can also lead to other financial penalties. These include accrued interest on outstanding balances, and possibly jeopardizing a provider’s participation in the Medicare program.
Who Must Submit the CMS-838?
As of December 1st, 2024, HHA or HSPs are only required to submit Medicare credit balance reports if there is an outstanding balance. This means that quarterly credit balance reports are no longer required.
While agencies without an outstanding balance are not required to submit the form, they must still maintain accurate records of any credit balances for internal tracking and potential audits.
How to Complete the CMS-838
The CMS-838 consists of two key components: the Certification Page and the Detail Page. The Certification Page must be signed and dated by an officer or administrator of the agency. This confirms the accuracy and completeness of the report.
The Detail Page provides a line-by-line breakdown of all credit balances. It requires details such as the beneficiary’s name and Medicare Beneficiary Identifier (MBI), as well as the type of bill and the dates of service. An MBI is a unique, 11-character alphanumeric code used to identify individuals enrolled in Medicare.
Agencies must also specify the amount of the credit balance, the reason for the balance, and the method of repayment. For each reported balance, the form must clearly indicate whether repayment has been made via check or an adjustment bill, or if an outstanding balance remains. Ensuring accuracy on every field is essential to avoid rejections or follow-up requests.
If repaying the full amount of a Medicare credit balance within the standard 30-day period poses a financial hardship, HHAs can apply for an ERS. An ERS is an Extended Repayment Schedule.
This arrangement allows for repayment over an extended period, easing the immediate financial burden. To find the ERS form relevant to your agency, reach out to your MAC.
When and How to Submit the CMS-838
Previously, agencies were required to submit the CMS-838 within 30 days after the end of each calendar quarter. Now, agencies are only required to submit a credit balance report if they have an outstanding balance. Agencies have 60 days after the overpayment is identified to submit their credit balance report.
Agencies can submit the form electronically via secure transmission or through paper submission to their Medicare contractor. We at The Home Health Consultant recommend submitting these reports through fax and also mailing a copy. There are numerous cases every quarter when NGS does not receive the reports even though they were faxed.
You’ll find a list of MACs and their credit balance report fax numbers below.
If there’s any confusion about which MAC serves your agency, check out this CMS map of HH and HSP MAC jurisdictions.
You will also likely be able to confirm your report's submission through your MAC’s portal. Many MACs provide online tracking systems or customer support to verify receipt.
When submitting the report, all credit balances must be repaid at the same time. Payment can be made using checks or adjustment bills. If using adjustment bills, ensure they are submitted separately from the CMS-838 form.
Avoiding Common Errors and Pitfalls Reporting Your Credit Balance
Errors in credit balance reporting are common but avoidable. Many agencies submit incomplete forms, such as missing beneficiary or claim details. They may also misclassify claims by failing to separate Part A and Part B credit balances.
To avoid these pitfalls, agencies should reconcile accounts regularly, ideally on a quarterly basis, to identify credit balances promptly. Staff should be trained on CMS-838 requirements to ensure accuracy in reporting.
What Happens if You Miss the 60 Day Deadline?
Previously, if an agency missed the CMS-838 submission deadline, Medicare would respond by issuing a Suspension Warning Letter. This letter notifies the provider that they have 15 days to submit the overdue report before payment suspensions begin.
If the report is still not submitted, Medicare may withhold 100% of payments until compliance is restored. To resolve this issue, agencies should submit the overdue CMS-838 immediately, repay any outstanding balances, and communicate promptly with their Medicare Administrative Contractor (MAC) to address any lingering concerns.
At this time, there is little information available on what would happen if you do not submit a self-identified credit balance report. However, we can assume that the consequences would be similar.
Why Is It Important to Self-Identify and Submit Medicare Credit Balance Reports?
Timely submission of the CMS-838 benefits agencies in several ways. It helps maintain uninterrupted cash flow by preventing payment suspensions and financial penalties. It also demonstrates a commitment to compliance, which enhances the agency’s reputation with regulators and payors. Additionally regular reconciliation and reporting streamline operations and help agencies find mistakes in their favor.
What You Need to Know About Medicare Credit Balance Reports in 2025
Mastering Medicare Credit Balance Reports may seem challenging, but understanding the process ensures compliance and financial stability. By identifying and repaying overpayments promptly, your agency can maintain uninterrupted Medicare payments and demonstrate accountability.
To streamline your reporting process, consider consulting a billing expert or reviewing the CMS guidelines on the CMS-838 form.
With years of expertise in home health and hospice compliance, The Home Health Consultant is here to help your agency stay informed and successful. If you want to learn more about regulations that can affect your Medicare payments in 2025, check out our article on Value Based Purchasing.
*This article was written in consultation with Mariam Treystman.
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