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Hospital Collection Effort for Medicare Bad Debt Basic Health Program Eligibility Determinations

Medicare allows providers to claim reimbursement for a portion of these uncollectible deductibles and coinsurance (known as "bad debt") once the provider establishes that reasonable collection efforts were made, that the debt was uncollectible, and that there was no likelihood of future recovery based on sound business judgment. Reasonable collection efforts can include billings, followup letters, phone calls, and personal contact. We plan to select a random sample of hospitals and review the policies and procedures in place related to collecting deductibles and coinsurance, offering financial assistance, identifying bad debt, and accounting for the receipt of previously reimbursed bad debt. In addition, we will select a judgmental sample of claims with high-dollar bad-debt amounts (coinsurance or deductible) and determine how the hospitals adhered to Federal criteria in treating these bad debts. Our audit will determine whether hospitals' policies and procedures for collecting Medicare deductible and coinsurance amounts from beneficiaries are in compliance with Federal regulations for the reimbursement of bad debt.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
July 2020 Centers for Medicare and Medicaid Services Hospital Collection Effort for Medicare Bad Debt Basic Health Program Eligibility Determinations Office of Audit Services W-00-20-35849 2021