Medicare reimbursement

Medicare Reimbursement | Bad Debt Recovery Recommendations

For hospitals, Medicare reimbursement from the recovery of bad debts is a vital source of reimbursement for unclaimed payments. Understanding bad debts and Medicare reimbursement can better equip your organization to claim payments.

What Are Medicare Bad Debts?

The Medicare program has safeties so that the program won’t be abused by patients over-utilizing services. For instance, Medicare requires that patients have amounts to be paid out of pocket. These amounts are the patient’s deductible and co-insurance. Furthermore, the amount that is due from the patient for the deductible and co-insurance amount is subtracted from the provider’s payment.

It is not the responsibility of the Medicare reimbursement program to collect these amounts. Instead, it is the responsibility of the provider to bill and collect these amounts from the patients. When patients do not pay the provider the respective deductible or co-insurance amount, this amount can then be determined to be a Medicare bad debt and is reimbursable to the provider if certain conditions are met.

What Are the Requirements for Claiming Medicare Bad Debts?

Medicare Reimbursement Regulations state the criteria for an allowable bad debt is:

  • The debt must be related to covered services and derived from deductible and coinsurance amounts.
  • The provider needs to establish that they made reasonable collection efforts.
  • The debt was actually uncollectible when claimed as worthless.
  • Sound business judgment must establish that there was no likelihood of recovery at any time in the future.

Why Are Hospitals Missing Medicare Reimbursement?

First of all, many strategies are involved in the proper adjustment and collection of Medicare bad debts. Unfortunately, many hospitals do not take the time to adequately train their staff to make Medicare bad debt recovery a priority. Negative audit results compound when providers do not properly maintain logs. We have found these common mistakes on many bad debt logs:

  • Failing to document collection efforts.
  • Failing to follow your own policies on collection efforts. It is better not to have a policy than to have one and not follow it.
  • Not monitoring the OCA’s (Outside Collection Agencies) and how they are performing their collections. Also, failure not to monitor the accounts placed with the OCA’s.
  • Writing off accounts prior to the 120-day collection period and not proving the beneficiary is indigent.
  • Waiting to the last minute to try and complete the Medicare bad debt logs.

Our Recommendations For
Medicare Reimbursement

  • First, each hospital should review their Medicare bad debt policies and procedures. Ensure policies are up to date with the latest Medicare regulations and guidelines.
  • Second, hospitals should engage a knowledgeable third-party to review their Medicare bad debt logs and collection procedures. Keith Williams & Associates will check for compliance with the Medicare regulations.
  • Finally, staff education is the key to being successful in your Medicare bad debt reimbursement results.

How We Provide Service for Medicare Bad Debts

Our process reviews your Medicare bad debt report. Additionally, we look for areas for improvement and refinement. We want to ensure your hospital is effective at managing the Medicare bad debt process. Our services have helped provide Medicare bad debt education many times. As a result, we can help your hospital increase and verify your Medicare reimbursement from the recovery of bad debt write-offs.

Furthermore, we work to educate your key staff members on maintaining your Medicare bad debt policies and logs. Additionally, we help put processes in place to make data collection and documentation a seamless part of your daily operations.

Ready to get your Medicare bad debt consulting started? You’ve got nothing to lose and everything to gain. Contact us to start your review and improvements today: 615-390-8006.

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