< Back to Thought Leadership

Medicare Bad Debts Regulations Update: October 2020

In these unprecedented times, protecting your Medicare bad debt reimbursement is more important than ever.

With decreases in patient volume due to COVID-19, hospitals will certainly feel the effect on their wallet. Coupled with the release of Centers for Medicare and Medicaid Services’ (CMS) final rule, NOW is the time to safeguard your Hospital’s reimbursement.

What are the Benefits of a Thorough Review of Bad Debts and Collection Policies?

A thorough review of bad debt and collection policies will ensure alignment with your current practices and CMS guidelines.

Experience has shown turnover, overburdened staff, lack of knowledge, system limitations and now COVID can unleash an assortment of problems during Medicare Administrative Contractor (MAC) audits.

Updates to Finalized Medicare Bad Debts Regulations

There were several key updates in the finalized regulations regarding the traditional Medicare bad debts.

One of the updates now says that hospitals MUST maintain copies of bills sent to patients. This differs from past MAC audit practices, as contractors accepted examples of hospital billing cadences versus physical copies of bills. Hospitals must ensure these requirements are being met to protect their Medicare bad debt reimbursement.

Medicare has also updated the time frame you have to send the first statement to the patient. Once the patient receives their statement, you must collect on the account for a minimum time frame before writing off the account. The collection period must restart after each payment is received on the account.

Key Questions to Ask Yourself and Your Team

  1. Is your facility setup for this type of document retention?
  2. Are you getting your statements out timely?
  3. Do you collect on your accounts long enough to meet CMS regulations?
  4. Are you attempting to collect too long and unable to timely capture your Medicare bad debt reimbursement?

Is this making your head hurt?

Lucky for you our skilled and informed advisors can help you.

To safeguard and maximize your Medicare bad debt reimbursement or for more information on Medicare Bad Debt Regulations, please contact your local Blue & Co. advisor.

Blue & Co., LLC acquires Alerding CPA Group

Blue & Co., LLC acquires Alerding CPA Group

Carmel, Ind. (November 23, 2022) – The accounting and consulting firms of Alerding CPA Group (Indianapolis, Ind.) and Blue & Co., LLC (Carmel, Ind.) have announced their merger. The combined firm will operate as Blue & Co., LLC (Blue & Co.), effective December 1, 2022. This acquisition will provide Blue & Co. with greater market […]

Learn More

Not-for-Profit Single Audit Requirements – Evaluation of Revenue Sources

By: Holly Fields, CPA, Senior Manager Not-for-profit organizations (NFPs) that receive federal financial assistance over certain levels, either directly from a federal agency or indirectly through state or local agencies, may be required to have a single audit performed under Federal Uniform Guidance. Single Audit Requirements A single audit includes not only an audit of […]

Learn More

Occupational Mix Survey: What You Need to Know

Every three years, the Centers for Medicare and Medicaid Services (CMS) requires any Hospital that is subject to the Inpatient Prospective Payment System (IPPS) to complete an Occupational Mix Survey (OMS). This data is then used to calculate an Occupational Mix Adjustment Factor (OMAF). The occupational mix adjustment impacts a hospital’s average hourly wage and […]

Learn More