Certified Revenue Cycle Representative (CRCR) Practice Exam

What are hospitals required to do for Medicare credit balance accounts?

1. Report all accounts monthly

2. They result in lost reimbursement and additional cost to collect

3. Clear the balance within 30 days

4. Transfer the funds to a reserve account

The correct answer is: They result in lost reimbursement and additional cost to collect

The understanding that a Medicare credit balance account can result in lost reimbursement and additional costs to collect is crucial for hospitals. When there are credit balances on a Medicare account, it indicates that the hospital has received more payments than what is actually owed for services rendered. This situation can lead to complications in the revenue cycle, as it implies that the hospital may need to conduct further investigations to resolve account discrepancies, which costs resources and time. Moreover, the presence of credit balances can draw scrutiny from Medicare auditors, leading to audits that may further complicate the revenue cycle. These potential audits can also represent a risk for the hospital, as improperly managed credit balances could affect future reimbursements, requiring careful management and reconciliation of accounts. Therefore, understanding the implications of credit balances, including financial impacts and administrative burdens, is vital for maintaining a healthy revenue cycle for a healthcare organization.