AC­COUNT­ING FOR BAD DEBT

Modern Healthcare - - Strictly Finance -

For the first time, not-for-profit hos­pi­tals must dis­close on the In­ter­nal Rev­enue Ser­vice Form 990 the cost of bad debt and how much of that ex­pense is from pa­tients who can­not af­ford med­i­cal care

Hos­pi­tals must:

Cal­cu­late bad debt at cost. Es­ti­mate how much bad-debt ex­pense is at­trib­ut­able to pa­tients el­i­gi­ble for free or dis­counted care un­der the or­ga­ni­za­tion’s char­ity-care pol­icy. Ex­plain the method used to come up with the fig­ures and any ra­tio­nale for in­clud­ing any other bad debt as com­mu­nity ben­e­fits.

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