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Preheat a large skillet over medium heat and melt the butter until bubbly.
Add frozen meatballs directly to the skillet and brown them on all sides for about 5 minutes.
Sprinkle flour over the browned meatballs, stirring continuously for one minute.
Gradually pour in beef broth while whisking to remove lumps.
Stir in sour cream and heavy cream until smooth. Season with onion powder, nutmeg, salt, and pepper.
Reduce heat and let the mixture simmer for about 10 minutes to meld flavors.
Serve warm over mashed potatoes or egg noodles, drizzling extra sauce on top.