Blog, Reimbursement, The Hospital Finance Podcast®

Medicare Bad Debts Webinar [PODCAST]

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In this episode, we’re pleased to welcome back Christina Brown, BESLER’s Director of Reimbursement Services, to give us a glimpse into the upcoming Reimbursement Best Practices webinar series on Medicare Bad Debts on Wednesday, April 5, at 1 PM ET.

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Highlights of this episode include:

  • Overview of what Medicare bad debts
  • Why are bad debts important?
  • What are the rules surrounding Medicare bad debts
  • Difference between Medicare bad debt and S-10
  • Transmittal 18

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Christina Brown, BESLER’s Director of Reimbursement Services. In this episode, Christina will give us a glimpse into the upcoming BESLER webinar. The next in our reimbursement best practices webinar series on Medicare Bad Debts that we’re hosting on Wednesday, April 5th at 1 PM Eastern Time. Thank you for joining us today, Christina.

Christina Brown: Thank you, Kelly. It’s a pleasure to be here.

Kelly: All right. Well, let’s jump in. Can you give us an overview of what Medicare bad debts are?

Christina: Sure thing. Yes. Bad debt amount would be the amount of patient responsibility that has been written off as uncollectible by the provider. The patient responsibility would be the amount of deductible and co-insurance owed by the patient that has been deemed as uncollectible. And specifically, when we refer to Medicare bad debt, we are really only referring to patients who have Medicare for insurance.

Kelly: Got it. And why are bad debts important?

Christina: Sure. Yeah. In particular, Medicare bad debts are important due to the reimbursement that a provider receives based on what is reported on the cost report on Worksheets E part A and E part B for inpatient and outpatient Medicare bad debts. Now, Medicare will reimburse 65% of the amounts claimed for Medicare bad debt. So, as you can imagine, the guidelines and audits related to bad debts are quite particular. So having the proper policies and processes in place when processing bad debt write-offs is really imperative to ensure optimal reimbursement for the population of Medicare bad debt.

Kelly: Great. And what are some of the rules surrounding Medicare bad debts?

Christina: I mean, that’s a great question. And I’ll actually go further in the specific regulations during the webinar. But in summary, reasonable collection efforts must be established. And once efforts have been exhausted after the appropriate amount of minimum time of 120 days in collection has elapsed, then the account can be written off as bad debt. And as mentioned, the amount of the write-off that can be claimed should only relate to patient responsibility of deductible and co-insurance. And while it might be tempting to only pay particular attention to Medicare patients when writing off bad debt, the regulations are actually very specific in that collection practices must be consistent between all payers. And this means that providers must follow the same process for Medicare bad debt write-offs that is used for other payers and vice versa.

Kelly: Makes sense. And so what is the difference between Medicare bad debt and bad debt reported on worksheet S-10?

Christina: Sure, yeah. Another great question. And as I mentioned, the same process must be followed regardless of payer. So, the process for total bad debt should be somewhat similar in practice. And this is why when we process Medicare bad debt and S-10 for providers, that we use the same methodology for processing the listing, with the exception of a few distinctions. So, while Medicare bad debt should, for the most part, be a subset of what is reported for total bad debt on worksheet S-10, the main two differences would be the utilization of the Medicare bad debt– or sorry, the Medicare detailed PSNR to ensure the runoff amounts do not exceed patient responsibility. And the other difference would be the need to report patients who are dual eligible for Medicaid, and that they get reported as such in the listing and totaled on E part A and E part B.

Kelly: Sounds good. And so there were some significant changes in the Transmittal 18. Can you tell us if there was anything in Transmittal 18 that impacts Medicare bad debts?

Christina: Yes, I’m actually glad you asked. As you may or may not be aware, Medicare released Transmittal 18 in late December to be effective for cost reports beginning on or after October 1st, 2022. So not only did the transmittal cover new forms and form updates, but it also included new exhibits for DSH S-10 and Medicare bad debt. And in the webinar, I will show the exhibit and go over the instructions for each of the columns outlined on the form. What’s important to take away here would be that providers must submit exhibit 2A, which is what they’ve named it, with the cost report. This exhibit requires data such as patient demographic data as well as the Medicare and Medicaid remittance detail and also the collection information and any amounts that were recovered.

Kelly: Well, it sounds like you’re going to cover a lot of great information on this upcoming webinar.

Christina: Yes, definitely.

Kelly: Well, thanks so much for joining us today, Christina, and for sharing all this great information leading up to the upcoming webinar, Medicare Bad Debts on April 5th, 1 PM Eastern. Join Christina live, and you can earn CPE. Thanks again, Christina. We really appreciate you joining us today.

Christina: Thanks so much. It’s been my pleasure.

Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.


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