Hospital and other health care organizations provide services knowing that they
ID: 2354961 • Letter: H
Question
Hospital and other health care organizations provide services knowing that they will collected from third-party payers, such as insurance companies, considerably less than their established billing rates. In addition, they provide services to unisured patients aware that they will collect either none or only a small portion of the amounts to be billed. Respond to the following:1. Assess how these organzations distinguish between charity care, bad debts, and contractual adjustments.
2. Determine how each one affects the amount of revenue from patient care that they should report.
Explanation / Answer
1. Charity carre policy is a policy describing how the organization will provide charity care which means that free or discounted health services provided to persons who meets the organizations criteria for financial assistance and arfe unable to pay for all or a portion of the services.Charity care does not include bad debts, and contractual adjustments with any third party payers. 2. Health care organizations to discontinue the practice of reporting gross revenuje and deductions from revenue. Because revenue must be reported as an amount that someone has an obligation to pay.Related Questions
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