There continues to be confusion and controversy surrounding Medicare Bad Debt regulations. During FY 2008, CMS introduced new pronouncements regarding the treatment of Medicare Bad Debts and when they can be claimed by providers. In addition, there have been recent court cases that speak to the same issues. The primary issue deals with when a Medicare bad debt can be claimed on a Medicare cost report for reimbursement. CMS's latest position is that if a bad debt is sent to an outside collection agency it still has value and there is a likelihood of collection; thus, the provider cannot claim the debt until it is returned from the collection agency. This clarification is contrary to the previous policy, which allowed some providers to be eligible for the 1987 moratorium. The moratorium stated that providers could continue to claim the bad debt when it was sent to the collection agency as long as they had not changed their policy since 1987 and it met the other specified guidelines. The moratorium has been upheld in some court cases. However, CMS has decided to continue with a narrower interpretation despite the court cases. In addition, these changes in interpretation have created new issues for providers as they relate to their collection agency's actions such as credit reporting(ie Who can report to credit agency? The Hospital or the collection Agency?), equal treatment among payors by different collection agencies, and what constitutes a return of an account from a collection agency. These recent developments have created issues for providers on how to respond. This presentation will present an overview of the history of Medicare bad debt regulations but will focus specifically on the recent developments. It will outline the alternatives that providers have to respond, assist in developing strategies to design their collection and bad debt policies to comply with regulations, and offer specific examples of what other providers are doing regarding these same issues. This presentation was presented at the 2009 ANI in Seattle. This issue is still very relevant for all hospital providers. Many providers continue to deal with this issue during Medicare audits. In addition, recent court case have developed as late as August 2009. Thus, the presentation will continue to be updated with the latest relevant information.
In addition to the overview presented above, listed below is a brief outline. 1. Introduction/Overview of Medicare Bad Debt Regulations 2. Explanation of CMS's Recent Clarifications on Medicare Bad Debt Policies and Summary of Current Court Cases. 3. Outline Choices for Providers Response to Recent Clarifications A. Advantages and Disadvantages of Choices B. Outline of process for each choice 4. Specific Strategies for collection and bad debt policies A. Credit Reporting B. Differentiation Based on Account Balance C. Selling(Factoring) Of Bad Debts? 5. Overview of Charity/Care Indigent Care Rules 6. Outline of Cost Report Years at Risk and Strategy for working with Medicare Auditors 7. Case Study from specific providers 8. Question and Answer