Department of Health and Human Services

"Review of Medicare Bad Debts Claimed by the Baystate Medical Center for Fiscal Year Ended September 30, 1999," (A-01-02-00515)

January 27, 2003

Complete Text of Report is available in PDF format (608 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine the reasonableness of about $1.2 million in inpatient and outpatient Medicare bad debts claimed by the Baystate Medical Center (Hospital) during the fiscal year ended September 30, 1999.  We reviewed a sample of 138 Medicare bad debt claims totaling $151,858 and identified $54,986 which did not meet Medicare reimbursement requirements. Specifically, the Hospital claimed bad debts that lacked sufficient collection efforts, were for non-covered services, or were not adequately documented. We also found that the Hospital understated its bad debt recoveries and should have offset its Medicare bad debt claim by an additional $96,801. In total, the Hospital overstated its bad debt reimbursement by $151,787. We recommended that the Hospital strengthen it procedures to ensure that its claims for reimbursement of Medicare bad debts are properly reported in accordance with Medicare regulations and that the fiscal intermediary apply the net reduction of $151,787 to the Hospital's FY 1999 Medicare cost report. The Hospital generally agreed with our recommendations and instituted new policies to strengthen its policies and procedures for identifying and writing off bad debts.