The EFPR Group of Companies

For over 60 years, our knowledgeable and experienced team of CPAs and business consultants have been serving individuals and businesses in Western New York and around the nation.

Medicare Bad Debts – Are you leaving money on the table?

Many nursing facilities overlook the potential for Medicare reimbursement of bad debts. Medicare bad debts can be reported on your annual cost report and reimbursed to the facility during the settlement process.

What is a Medicare Bad Debt?

Medicare bad debts are unpaid co-pays/deductibles due from a Medicare beneficiary in the Traditional Medicare plan as a result of an inpatient Part A stay. This would NOT include bad debts arising from Medicare Managed Care Plans and any fee based Part B services.

What are the Criteria for Allowable Bad Debts?

  1. The services were rendered for a Traditional Medicare Part A stay.
  2. Required collection efforts and documentation of such efforts have been exhausted and retained by the facility. The SNF must be able to prove that it made a “Bona Fide Effort” to collect the co-pay, as defined by Medicare.
  3. The debt was actually uncollectible when written off.
  4. Sound business judgment established that there was no likelihood of recovery in the future.

How does a facility request reimbursement for Medicare Bad Debts?

A log of bad debts is submitted with the filing of a full Medicare Cost Report. Please note that a facility can not request bad debt reimbursement on a Low Utilization short report.  Medicare will reimburse 65% of the bad debts claimed on your Medicare Bad Debt filing.

Option to amend a previously filed cost report?

If you find that you have prior bad debts that may have been eligible for reimbursement you can reopen a cost report within three years from the Notice of Program Reimbursement. To be eligible for a reopening, the reimbursement impact must be at least $10,000.

Still need help?

Please don’t hesitate to contact us if you believe you have unclaimed Medicare Bad Debts for prior or current years, are wondering if you should file a full Medicare Cost Report for 2016, or are seeking any further information at this time. We would be more than happy to assist you.  For more information, please go to the RHCC website at http://www.RHCCllc.com

For more information call

800.546.7556