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Article: Determining an allowance for bad debt.
- Article from:
- Healthcare Financial Management
- Article date:
- April 1, 1991
- Author:
CopyrightCOPYRIGHT 1991 Healthcare Financial Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Determining an allowance for bad debt
Once a healthcare facility has developed policies for bad debt and charity care, its next task is to settle on a method for estimating a bad debt allowance.
Although several approaches can be taken to estimate bad debt, very little has been written about an overall method. Sampling of bad debts is important to determine bad debt allowances and to point out ways that a facility's patient accounting staff could have better handled certain cases. But this information may not always be available.
Unfortunately, some facilities do not approach the question of bad debt allowances until late in the fiscal year, when ...