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More Undermaintained Hospitals Due to Bad Debt?

On this blog in the past, we have written posts that discuss what bad debt is.  In case you need a refresher, though, bad debt is that which a hospital or medical facility is unlikely to collect.  In many cases, the gap between Medicare and Medicaid coverage plays a big part in the accumulation of bad debt.  Patients who are eligible for both services see the majority of their healthcare expenses paid by the government-funded programs.  However, they are not all-inclusive.  There are some services and some expenses that are simply not covered.  That gap in coverage between what Medicare covers and what Medicaid covers is, in essence, a black hole.  These patients are rarely able to afford the out-of-pocket expense.  They are too busy trying to afford food, shelter, and other basic necessities.  That leaves little- or no- money for hospital bills.

Bad debt has long been a big problem in this nation, but it is now being blamed for a much larger situation – transfer of hospital ownership.  Facing too much bad debt, there have been many hospital administrations that have been forced to sell out.  Unfortunately, those transfers do not always result in the same level of hospital maintenance and patient care.

The investors who come in and buy up failing medical facilities are not always bad.  In many cases, the hospitals are able to turn the corner into profitability without foregoing proper care and maintenance.   .  Patients, though, can give very bad ratings to the hospitals, but, in many cases, are still forced to seek care there because the next closest facility is too far away.

The way to stop this before it becomes a national trend, of course, is to contend with bad debt.  CMS surveys and documentation is important.  This can have a major impact on the payments hospitals can expect to receive for services rendered.  Medical facilities should consider offering payment plans for patients who can’t afford large lump sums, and these payment plan programs should be discussed as early in the process as possible with patients.   Providers can also claim bad debt and seek reimbursement from the Medicare Program.  It is possible to get assistance with the CMS communications from those who are thoroughly trained and experienced in such matters.

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