Q&A: Bad debt policy and procedure

Q: What should be covered in a hospital's bad debt reporting compliance policy and procedure?

A: A hospital should have a mechanism to review the following:

• Whether the hospital properly reports bad debts to Medicare
• All Medicare bad debt expenses claimed, to ensure that the hospital’s procedures are in accordance with applicable federal and state statutes, regulations, guidelines, and policies
• Whether the hospital has appropriate and reasonable mechanisms in place regarding beneficiary deductible or copayment collection efforts and has not claimed as bad debts any routinely waived Medicare copayments and deductibles

If questions arise, the hospital may consult with the appropriate fiscal intermediary as to bad debt reporting requirements.

For more information, see The Compliance Officer’s Handbook, Fourth Edition.