Bad Debt Comparison

I am interested in learning an amount of bad debt in a 3 OR center performing 2,550 annual cases to use for benchmarking. Our facility is in the process of completing 2010 goals and I would like to gain some insight on what other center's are experiencing in order to evaluate our processes. Any offerings would be truly appreciated.

Started by: Karole Kent (Administrator/Director/Manager/Owner/Exec. Officer) at December 18, 2009 (3:20 pm)

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Karole - WE have 4 ORs but for comparison purposes we use a percentage calculation. I presume you are talking about the self-pay portion of the amount due the center after insurance has paid based on your contracts.

Our bad debt runs about 0.2% of the total charges but we also bill at our expected rate of reimbursement which means if Medicare is paying us $500 for a procedure then we bill Medicare for the $500 not $3,500. The $3,000 is a contractual allowance but we take it on the front end not the back end. The pateint in this case would owe us $100 as Medicare would pay $400. If the patient pays $80 of the $100 and we write off the $20 then we would have written off 4% for this patient.

The general rule of thumb is probably in the 1.0 to 1.5% of charges is billing at the usual and customary rate.

Does that help?

S. Katz (Administrator/Director/Manager/Owner/Exec. Officer) at December 22, 2009 (1:48 pm)

Yes. Thank you for your response.

Karole Kent (Administrator/Director/Manager/Owner/Exec. Officer) at January 5, 2010 (7:48 am)

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