Review of Medicare Bad Debts at the University of Alabama at Birmingham Hospital

EXECUTIVE SUMMARY:

This final report points out that the University of Alabama at Birmingham Hospital (UAB Hospital) claimed $7,203,293 in Medicare bad debts on its 1997 cost report.  Of that amount, only $1,775,045 represented allowable Medicare bad debts because UAB Hospital had not fully developed a patient accounts receivable system to accumulate complete, accurate, and timely Medicare bad debts.  We recommended that UAB Hospital improve its patient accounts receivable system and claim only $1,775,045 as Medicare bad debts on its 1997 cost report.