Bad Debts

Although the CMS regulations governing this reimbursement area have seen very few revisions since their implementation, the interpretation and application of these regulations by the Medicare regulatory agencies have seen numerous revisions during the past few years. Our experience from the Intermediary side has allowed us to be part of the process that implemented these changes.

The intermediaries audit technique is based on sampling, where $1 disallowed will have a multiple effect. Therefore it is just as important to not over claim bad debts as it is to claim what you are entitled. This reimbursement area continues to be under constant review and change from Congress and the regulatory agencies. We maintain constant review of these changes to ensure that you will continue to receive complete reimbursement for Medicare bad debts.

We can provide assistance for complete Medicare reimbursement for bad debts claimed on the cost report through the following:

  • Proper bad debt policy for write-offs for all payer classes
  • Proper preparation of bad debt claims listing
  • Proper reporting of bad debt claim amount (deductible/coinsurance for covered Medicare services)
  • Proper documentation of 120 days of collection efforts for non-indigent patients
  • Review of collection processes for 'in-house' and collection agency practices for consistency with current Fiscal Intermediary policies
  • Proper documentation for handling of Medicare as secondary payer claims
  • Proper documentation for supporting determination of indigent status
  • Use of a collection agency for documenting proper collection efforts, including application of the recent Sutter-Merced Appeal policy implementation
  • Proper reporting of recoveries related to prior years claimed bad debts
  • Proper treatment of dual-eligible (Medicare / Medicaid) patients