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Tip: Scrutinize credit balances to help ensure prompt Medicare repayment

Patient Financial Services Weekly Advisor, September 3, 2004

Even if Medicare or another insurer overlooks a credit balance, keeping improper or excess payments could lead to false-claims charges and whistleblower suits, says Anthony Almeda, CPA, senior internal auditor for Community Health Systems, Inc., in Brentwood, TN.

Almeda provides the following tips to verify that your organization timely and accurately returns credit balances:

1. Gather documents. Obtain the patient A/R credit balances in electronic form, if possible; the last quarter's Medicare Credit Balance Reporting Form (HCFA-838) to verify that the form was filed timely and properly; and your credit balance policy.

2. Select a sample. Choose a judgmental sample of accounts or use software to make a determination. Include inpatient and outpatient accounts and various financial classes, including self-pay patients and Medicare beneficiaries.

3. Identify reasons for the credit balance, which could include hospital posting errors, miscalculation of deductible coinsurance amounts, and miscalculation of contractual write-off amounts.

4. Assess common problem areas. Watch for the following red flags:

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