Review of Medicare Bad Debts For Florida Hospital For The Fiscal Year Ended December 31, 1999

EXECUTIVE SUMMARY:

The final report points out that of the $1,154,650 in inpatient Medicare bad debts claimed by the hospital for its fiscal year ended December 31, 1999, $131,698 did not comply with the Medicare reimbursement criteria and was therefore unallowable.  In addition, the hospital understated by $93,798 the amount of recoveries of previously written off bad debts that should be offset against the bad debts claimed on the cost report, and also understated recoveries in the three fiscal years prior to our audit period by a combined total of $558,807.  We recommended that the hospital file an amended cost report for FY 1999 to reduce allowable bad debts.  We also recommended that the hospital establish clear written policies to ensure that Medicare and non-Medicare accounts will be treated consistently and that reasonable collection efforts will be used, in accordance with the Medicare guidelines.  In addition, we recommended that the hospital establish procedures for identifying all Medicare recoveries and report actual recoveries instead of using estimates.