Processing Credit Balances

Title: Processing Credit Balances
Standard #:


Issued: Reviewed/Revision Date:


Overpayments are to be researched and refunded expeditiously to the patient or third party payer.

A credit balance listing provided by the USC Care Office of Billing Services should be vigorously researched and acted upon.  Each faculty practice group must review and document the information obtained as to why credit balances are occurring and should implement corrective measures to prevent continued overpayment trends.


A credit balance report will be generated for each group in IDX.  The report will be a tool for resolving credit balances on a monthly basis.  A copy of the credit balance report will be provided to the faculty practice group or provider with all other month end reports.  In addition, to comply with California Unclaimed Property Law, credit balances remaining unresolved for three years as of June 30 of any year will be remitted to the State Controller’s Office by November 1 of the same year.

Implementation Process

  1. The Client Representative will research the credit balance invoice within 30 days following the previous month end.  Each payment posted to the invoice will be reviewed for posting correctness.
    1. If the payment(s) was posted incorrectly, the payment(s) will be transferred to the correct invoice.
    2. If the payment(s) was posted correctly, the invoice should be assigned to one of the following Credit Balance Financial Status Classification (FSC) prior to the next month end.
      • FSC # 556 Government Credit Balance
      • FSC # 557 Insurance Credit Balance
      • FSC# 558 Patient Credit Balance
      • FSC # 559 Belongs to Other Department/Provider within USC
      • FSC # 560 Unidentified Credit Balance
  2. The terms and conditions of the refunds in response to credit balances will depend on the FSC.  The following applies to all FSC’s with the exception of FSC # 560.
    1. Refund requests will be prepared by the account representative.  The refund request form should include: (see Attachment 1)
      1. Date of Refund Request
      2. Patient Name
      3. Medical Record Number
      4. Date of Service
      5. Invoice number
      6. Reason for Overpayment/Credit
      7. Name and Phone Number of person completing form
      8. Comment Section
      9. Payee Name, Address and Phone Number
    2. Copies of all payments and adjustments associated with the invoice will be copied and attached to the refund requests.
    3. The Refund Request should be submitted to the Physician, Faculty Practice Group Administrator or Appointed Person for processing of the refund check.
    4. The Client Representative should retain a copy of the refund request for tracking purposes.
    5. If a refund check (or notification that a check was mailed) is not received within 30 days, the representative must follow up on the request.
    6. The Client Representative should report any missing refunds to the CFO or Chief Administration Officer after 45 days.
    7. The refund payment should be mailed with copies of all payments and an explanation as to why the payment is being refunded.
    8. The refund should be posted to the invoice in IDX and a copy of the refund check and all other pertinent documentation should be maintained in a batch envelope for reference.
    9. At no time shall a refund be posted to IDX prior to the check being mailed.
  3. The Client Representative should make every attempt possible to resolve overpayments and refund them to the appropriate source as defined above.  However, if a faculty practice group has held an unresolved credit balance for three years or more as of June 30 of any given year, California’s Unclaimed Property Law is triggered and the following steps must be taken (applicable to all FSCs):
    1. Pursuant to California Unclaimed Property Law, all unclaimed credit balances held for three years or more as of June 30 of a given year must be reported and remitted to the State Controller before November 1 of the same year.  If any faculty practice group does not timely report and remit unclaimed property in any given year it will face interest penalties on such unclaimed property at a rate of 12 percent per annum from the date the property was due.  The group may also accrue other penalties or fines.
    2. To help the faculty groups comply with California Unclaimed Property Law, each Client Representative should review all Credit Balance FSCs as of June 30 of each year to identify credit balances that have remained unresolved for three years or more.  For each such credit balance, the Client Representative must submit the following information on the Annual Report of Unclaimed Personal Property (see Attachment 2), to the extent available, within 30 days following June 30:
      1. The name of the owner(s) or apparent owner(s).  If the owner is not known, enter: “unknown.”  All credit balances that cannot be attributed to any owner should be aggregated as of June 30 in FSC # 560.
      2. The owner code, if applicable (see Attachment 3 for a list of codes).
      3. The business name of the account owner.  If the first word of the business name is “The” put “The” after the rest of the name.
      4. Enter the owner’s address.  If the last known address is unknown, leave this blank.
      5. Enter the owner’s city.  Leave blank if unknown.
      6. Enter the owner’s state.  Leave blank if unknown.
      7. Enter the owner’s zip code.  Leave blank if unknown.
      8. Enter the country code if the owner’s last known address is in a foreign country (see Attachment 4 for a list of country codes).  If the owner’s last known address was in the USA, leave field blank.
      9. Enter any name associated with the “in care of” mailing address.  Leave blank if not applicable.
      10. Enter the date of the last communication or activity initiated by the owner concerning the property, if applicable.
      11. Enter the owner’s Social Security number if the named owner is an individual, the federal employer identification number (FEIN) if the named owner is a business.  Leave blank if no owner is identified.
      12. Enter the account number used to identify the account.
      13. Enter the property code, which is 61 for credit balances.
      14. Enter the total amount of credit balance outstanding and unresolved for three years as of June 30.
      15. Enter the State abbreviation if the last known address of the owner was in any of the following states: Arkansas, Florida, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Washington, Wisconsin or Wyoming.
    3. The Client Representative must report all of the aforementioned information no later than August 1 of each year so that each faculty practice group may timely comply with California Unclaimed Property Law, as set forth below.
  4.  Each faculty practice group must take the following steps to comply with California’s Unclaimed Property Law.
    1. File an Annual Unclaimed Property Report with the State Controller’s Office by November 1 (see Attachment 2).
      1. If the Unclaimed Property Report identifies 50 or more owners, the group must submit its Report on a form of magnetic media (e.g. a disk or CD) that complies with the State Controller’s magnetic media requirements, which are:
        1. Before submitting an Unclaimed Property Report via diskette or CD, the group must first submit a test diskette or CD and receive the State Controller’s Office’s approval to ensure the State Controller’s Office can access the data on the medium.
        2. All diskettes must be standard high density, 3.5-inch, 1.44 MB diskettes.
        3. All CD’s must be CD-R formatted.
        4. The record format must consist of a fixed record length (600-byte) ACII file, and the data must be recorded in an uncondensed or non-compressed format, although it may be zipped using Pkunzip 2.04g or Winzip, when identified as zipped.
        5. Each CD or diskette submitted must contain no more than one file.
    2. The group must retain all records related to its unclaimed property for at least seven years after it reports the unclaimed property, unless the State Controller in writing consents to their destruction on an earlier date.
    3. Contemporaneously with submitting its Unclaimed Property Report, the group must remit all unclaimed property due to the state to the State Controller’s Office.  The State Controller requires that all holders of unclaimed property remit funds in an amount of $20,000 or greater using electronic funds transfer (EFT) and recommends that holders also remit lesser amounts using EFT.  The State Controller allows a holder of unclaimed property to use any of four EFT methods, after registering such method with the State Controller’s Office.  If the group chooses to submit unclaimed property via ACH Debit or ACH Credit Remittance, it should first complete the appropriate sections of form SCO-EFT-1, Authorization Agreement for EFT (see Attachment 5).  If the group chooses to remit property via Fedwire, it must first complete SCO EFT-3 Registration for Remittance by Fedwire (see Attachment 6).
      1. ACH Debit Remittance.  When remitting unclaimed property via ACH Debit Remittance, the group’s appointed person must call the State’s data collector at (800) 554-7500 and provide the following information:
        1. The group’s Federal Employer Identification Number (FEIN);
        2. The group’s Four-Digit Security Code, which the appointed person must call the State’s data collector to establish when it initiates the group’s first remittance;
        3. The group’s Branch Identification Number, which is a six-digit number that is used to further identify the group to the State Controller;
        4. The group’s Unclaimed Property Holder Type Code, which would be 05, for Business Association; and
        5. The Unclaimed Property Remittance Type Code, which is 20 for unclaimed property that is due in the November reporting period.  Interest payments for late reporting should be identified using code 30.
        6. After the remittance has been reported, the group will be provided a Reference Number, which the group must retain in its records.
        7. The State Controller’s Bank and Numbers are: Bank: Union Bank Sacramento Main Government Services 700 “L” Street Sacramento, CA 95814 Account Number: 702-0014436 Routing Number: 122000496 FEIN: 94-6001347
      2. ACH Credit Remittance.
        1. When remitting unclaimed property, the group must contact its financial institution and provide the State Controller’s bank and account number, the amount to be remitted and the other information specified in section i above.
        2. The group’s financial institution must originate the remittance using the Cash Concentration or Disbursement plus Tax Payment Addendum (CCD+/TXP) format.
        3. The group must attach a copy of the remitting instructions that it provided its financial institution, or other evidence of remittance, to its Holder Face Sheet (Form UFS-1, see Attachment 7) in order to enable the Bureau of Unclaimed Property to associate the group’s electronic remittance with its Unclaimed Property Report.  The Holder Face Sheet is a cover sheet that must be attached to the Unclaimed Property Report.  It identifies the group as the holder of unclaimed property and lists the aggregate amount of unclaimed property that the group is remitting to the State.
      3. Fedwire.
        1. When remitting unclaimed property, the group must contact its financial institution and provide the same information set forth in i and the State Controller’s bank and account number.
        2. The group must attach to its Holder Face Sheet a copy of the remitting instructions that it provided its financial institution, or other evidence of remittance, to enable the Bureau of Unclaimed Property to associate the group’s electronic remittance with its Unclaimed Property Report.


Attachment 1 (PDF)
Attachment 2 (PDF)
Attachment 3 (PDF)
Attachment 4 (PDF)
Attachment 5 (PDF)
Attachment 6 (PDF)
Attachment 7 (PDF)