Medicare bad debt

In current times, when everything is costly and prices are increasing rapidly, medical cost has not been left out of the list. People find it difficult to cope with exorbitant medical bills. At old age, it's more troublesome to spend money on their ailments. a health care plan is essential for senior citizens.

What is Medicare?
Medicare is a health insurance program which provides health care benefits. It is a medical plan for old age Americans (age 65 or older) that pay for medical expenses like hospital services, doctor visit, and drug treatments. After law amendment, Medicare also includes people under age 65 with certain disabilities and people of all ages with permanent kidney failure (known as "End stage renal disease").

What is Medicare Bad debt?
When the patient fails to make payments for Medicare facilities, it is considered as Medicare bad debt.

Initially, Medicare bad debt was reimbursed to 100%. But due to change of law, now you can only reimburse 70% Medicare revenues. The main defaulters for the Medicare bad debt are those patients who are eligible for both Medicare and Medicaid coverage.

What is allowable Medicare bad debt?
The Medicare patient account may be claimed as a bad debt only, when it meets certain criteria. They are:

The debt should be related to Medicare covered services.
The provider has to produce sufficient evidence of reasonable collection efforts.
The debt was uncollectible when it was claimed for its worthlessness.
There is no chance of recovery of the debt in the future.

There are so many instances of court and administrative decisions, when Medicare reimbursement has been disallowed. If the Medicare patient account remains at an outside collection agency, it can not be claimed as a bad debt. Because it is considered that if the patient account remains at a collection agency, it is actually not uncollectible. So Medicare bad debt will be disallowed if the provider writes off the patient account and claim for a bad debt while the patient account still remains at a collection agency unless the provider meets the certain criteria for the moratorium on bad debt disallowances.

Delay in issuing a bill to the Medicare patient can also cause the disallowance of the Medicare bad debt claim.

Medicare bad debt is a liability on the providers. In the today's time, when Medicare bad debt reimbursement is lessening, you must take necessary steps.

Closely observe your internal billing system and tighten the collection procedures. Try to send the bill on time for example just after the discharge of the patient or beneficiary. You must take intensive care towards patient's personal financial obligations by sending collection letters or by making telephone calls.
Try to take the help of collection agency for your uncollectible account.