Medicare Cost Report vs. Medicare Credit Balance Report

April 4, 2015
We receive many inquiries from new providers who are often confused on the difference between the Medicare cost report and the Medicare credit balance report. In order to clarify the differences, we have outlined some of them here. Both reports are required of Medicare reimbursable entities, such as Skilled Nursing Facilities (SNFs), Home Health Agencies (HHAs), Home Offices, Hospices, Rural Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs), and Hospitals.

What is a Medicare cost report?

Medicare cost reports are financial reports used to report expenses for different types of Medicare reimbursable entities. They are used to set reimbursement rates for providers.

What is a Medicare credit balance report?

Medicare credit balance reports are specifically used to monitor the identification and recovery of “credit balances” due the Medicare program. A credit balance is defined as an improper or excess payment made to a provider as the result of patient billing or claims processing errors. For example, if a provider is paid twice for the same service (e.g., by Medicare and another insurer), then a refund must be made to the secondary payer.