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Uncollectible Debt Analysis

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Ever evolving technology, scientific breakthroughs, extended life expectancy, and unemployment often involves leads to a high level of uncollectible accounts within the healthcare industry When a patient receive services provided by a healthcare facility or physician’s office patient financial services gather patient demographics, insurance information, and income information. The information provided by the patient is reviewed to determine their financial status thereby determining their ability to pay for healthcare services. When the patient is deemed, they cannot afford to pay for medical services they determine if the services would be categorized as free services, or a sliding scale/discounted services. If services are provided free of charge or on a discounted rate, then the services are exempt from tax and is categorized as a charitable item thereby the service is recordable under uncollectible items as charity services versus an uncollectible debt.
Patient financial personnel must consider various …show more content…

Patient financial services in managed care environments are now challenged with gauging the patient’s ability to pay with the increase of liability on high-deductible health plans. “The inability of many consumers to pay high deductibles is projected to produce outcomes that damage bottom lines of healthcare businesses” (Boland, PhD; Gibson, PhD; 2014).
Although gross uncollectible accounts are a combination of charity care and uncollectible debt, implications generally occur when recording on a healthcare institutions bottom line, further, charity care and bad debt uncollectible must be recorded and documented independently. Implications stem from recording and classification of uncompensated care. Improper classification of charity care is often mistaken for as bad debt in turn leads to bad debt amounts being over the profit amount when recorded on financial

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