• 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.
Records Supporting CMS-838 Data
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.
Provider Based Home Health Agencies (HHAs)
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.
Exception for Low Utilization Providers
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.
Compliance with MSP Regulations
MSP regulations at 42 CFR 489.20(h) require 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 CMS’
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 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.
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid
OMB control number. The valid OMB control number for this information collection is 0938-0600. The time required to complete this information
collection is estimated to average 6 hours per response, including the time to review instructions, search existing data resources, gather the
data needed, and complete and review the information collection. If you have comments concerning the accuracy of the time estimate(s) or
suggestions for improving this form, please write to CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Baltimore, Maryland
21244-1850. DO NOT MAIL APPLICATIONS TO THIS ADDRESS. Mailing your application to this address will significantly delay application
processing.
Form CMS-838 INSTRUCTIONS (10/03) 4