Blog · Eye care · Credit balances
A credit balance is either someone else's money or a posting error.
Multi-site eye groups build credit balances fast: duplicate payer payments, capitation overlap, and patient deposits for premium lenses. Some must be refunded on a federal clock. Some are not owed at all. Here is how to tell them apart and clear them.
By ASP-RCM Editorial, Healthcare RCM Practice · Updated
The question for your finance team
How many of your credit balances are older than 60 days, and how many are real?
To report and return a Medicare overpayment
After it is identified (42 CFR 401.305)
Maximum suspension for an investigation
While a timely, good-faith review looks for related overpayments
Medicare lookback
Overpayments identified within 6 years of receipt must be returned
California unclaimed property
Money owed and unclaimed for more than 3 years escheats to the state (CCP 1520)
Where eye practice credit balances come from
Duplicate payer payments
Two payers pay as primary, or one payer pays a corrected claim and the original. Common after coordination of benefits changes.
Capitation overlap
A capitated IPA member's visit is also paid fee-for-service, or a member's assignment changes mid-month.
Premium IOL deposits
Patients prepay the non-covered lens portion allowed under CMS Rulings 05-01 and 1536-R. A cancelled case or a switch to a conventional lens leaves a credit.
Medi-Cal found later
Once Medi-Cal pays for a covered service, the provider must return the patient's payments (W&I Code 14019.3(e)).
Posting errors
Payments applied to the wrong patient, visit or site, or adjustments posted twice. These are not owed to anyone.
Do not refund what is not owed
A refund sent in error is hard to get back. Work the cause before you cut the check.
Refund on sight
- Refund the credit as shown on the report
- Ignore open charges on the same patient at other sites
- Refund a payer that later recoups the same money
- Leave posting errors on the books as fake credits
Research, then refund
- Match each credit to the payment, the claim and the remittance
- Check open balances for the same patient across every site
- Fix misposted payments and reversed adjustments first
- Refund the true owner, with the claim detail they need
A refund workflow for a multi-site eye group
Pull the list weekly
All credit balances by payer, site and age. Date each one the day it appears.
Research the cause
Duplicate payment, coordination of benefits, capitation, patient deposit or posting error.
Correct posting errors
Move misapplied payments and reverse duplicate adjustments. Most of these clear without a refund.
Refund the owner
Medicare through the MAC's claim adjustment or refund process. Plans and IPAs per their notice. Patients by check or card refund.
Escheat what nobody claims
Track refunds that are uncashed or unreachable and report them under state unclaimed property law.
Who is owed, and on what clock
| Credit owed to | Rule | Clock |
|---|---|---|
| Medicare (Part B, ASC) | Report and return through a claims adjustment, credit balance, self-reported refund or other MAC process (42 CFR 401.305) | 60 days after identification, up to 180 days suspended for a good-faith review |
| California plan or IPA | Must send a separate written notice naming the claim, patient and date of service (28 CCR 1300.71(d)) | Repay or contest in writing within 30 working days |
| Medi-Cal patient | Return the patient's payments for covered services once Medi-Cal pays (W&I Code 14019.3(e)) | On receipt of the Medi-Cal payment |
| Unreachable owner | Unclaimed money held in the course of business escheats to California (CCP 1520) | More than 3 years after it became payable |
The quarterly CMS-838 Medicare Credit Balance Report is for institutional providers billing a fiscal intermediary; CMS says it does not cover physician and supplier claims. The 60-day rule still applies to physicians.
The Medicare 60-day clock
- Day 0
Overpayment identified. Under the rule, that is when you knowingly receive or retain it.
- Up to 180 days
Good-faith investigation. The deadline is suspended while a timely review looks for related overpayments, up to 180 days.
- Day 60
Report and return. Counted from identification, or from the end of the suspension.
- After day 60
Retained overpayment. Money kept past the deadline becomes an obligation under the False Claims Act definition.
Score your credit balance process
Research every credit before you refund it. Fix posting errors, refund true overpayments to the right owner on the right clock, and escheat what nobody claims. For IPA overpayment demands, see the California delegated model guide.
Questions operators ask next
How long do I have to refund a Medicare overpayment?
Under 42 CFR 401.305, report and return it within 60 days after it is identified. The deadline is suspended while you run a timely, good-faith investigation for related overpayments, for up to 180 days. The lookback is 6 years from receipt. Use the MAC's claim adjustment, credit balance or self-reported refund process to report it.
Do physician practices file the CMS-838 credit balance report?
The CMS-838 is filed by institutional providers that bill a Medicare fiscal intermediary. CMS instructions say its Part B section does not cover physician and supplier services billed to carriers. Physician groups still must report and return Medicare overpayments within 60 days under 42 CFR 401.305, using the MAC's refund or adjustment process.
When does a patient credit balance become unclaimed property in California?
Under Code of Civil Procedure 1520, money held or owing in the ordinary course of business that has stayed unclaimed by its owner for more than three years after it became payable escheats to the state. Uncashed patient refunds and unresolved patient credits are the usual examples. Holders must give notice and report to the State Controller.
Can a patient be charged extra for a premium intraocular lens?
Yes, within limits. CMS Ruling 05-01 for presbyopia-correcting lenses and Ruling 1536-R for astigmatism-correcting lenses let Medicare patients pay the portion of the charge that exceeds a conventional lens, plus extra fitting and testing. If the case is cancelled or a conventional lens is used, any deposit for the premium portion becomes a credit to refund.
Clear your credit balance list without refunding money you earned.
Send us your current credit balance report. A senior eye care billing lead sorts true overpayments from posting errors by payer and site, and walks you through the refund and unclaimed property exposure in a free 30-minute call.
Keep reading
Sources
- eCFR, 42 CFR 401.305, Requirements for reporting and returning of overpayments
- CMS, Medicare Financial Management Manual, Chapter 12, Medicare Credit Balance Report
- California Code of Civil Procedure section 1520 (as amended by SB 822, effective 1 Jan 2026)
- California Welfare and Institutions Code section 14019.3
- CMS Ruling 05-01, presbyopia-correcting intraocular lenses
- CMS, Laser-Assisted Cataract Surgery and CMS Rulings 05-01 and 1536-R
- DMHC, Claims Technical Assistance Guidance, January 2026 (28 CCR 1300.71(d))
Checked November 6, 2026. Federal and California rules from public sources checked today. Other states have their own unclaimed property periods; confirm yours. General information, not legal or accounting advice.