Cost Reports

Review Bad Debt Listing

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Review Bad Debt Listing

Bad debts are unrecovered costs due to uncollectible deductible and coinsurance amounts. Allowable bad debt for cost reporting purposes only applies to services paid under reasonable cost (or developed from reasonable cost, such as a PPS). Refer to Section 1861 (v)(1)(a) of the Social Security Act, as implemented in the regulations at 42 CFR Section 413.89.

Bad debts for uncollected deductible and coinsurance amounts relating to outpatient services that are reimbursed under a fee schedule payment are not allowable for Medicare cost reporting purposes.

When determining “allowable” bad debt for cost reporting, it is essential that you be able to differentiate between deductibles and coinsurance related to outpatient services paid according to a fee schedule, and other non-fee schedule services as reflected in FISS.

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Identifying Fee Schedule Services

The following information describes how providers can identify fee schedule services in the FISS system. This outline presumes the provider has access to the FISS/DDE online system.

If you use the FISS/DDE online system you can review the following screens to verify whether a service was paid on a fee schedule and whether there was coinsurance or deductible applied. In the inquiry mode, locate the claim in question

  • Go to Claim Page 02 (MAP 1712) to see the revenue/HCPCS codes that were billed. Usually, but not always, you will notice a rate filled in the rate column when a service has had a fee schedule applied.
  • Go to MAP 171A (press from Claim Page 02 to view this MAP) to review each line in the claim. The provider can access the line specific information by paging up (F5) or down (F6) within the line item detail view.
  • Locate any lines that have a status indicator “A.” Identify any coinsurance or deductible associated with this line as belonging to fee schedule service.
  • Do not include those amounts on your bad debt log.

Use the following FISS screen examples as a resource for determining allowable/non-allowable bad debts:

The first MAP 171A screen example shows that the service has a status indicator “A,” which would be paid on a fee schedule. However, since it is a clinical diagnostic laboratory service, there would be no deductible or coinsurance reflected on the line item.

This second MAP 171A screen example shows the line item deductible and coinsurance amounts, however, the service has a status indicator “X” indicating that it was not paid on a fee schedule and therefore may be eligible for bad debt.

For providers to properly claim a bad debt and be reimbursed under the Medicare Program, you must follow all of the Criteria for Allowable Bad Debt set out at 42 CFR. §413.89(e) For clarification of Medicare bad debt policy related to accounts at a collection agency see MLN Matters article SE0824.

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Fee Schedules Included in Bad Debt Policy

CMS uses different fee schedules for various provider types. If you are generally reimbursed under the OPPS, refer to Addendum B of the Federal Register Final Rule (published annually by CMS) for a list of services that are paid with a status indicator “A” (denoting fee schedule services).

Services that may be paid on a fee schedule (depending on your provider type) include:

  • Ambulance
  • CORFoutpatient rehabilitation facility
  • MPFS
  • DMEPOS
  • Certain drugs
  • Certain clinical diagnostic laboratory
  • Certain screening services

If you provide services reimbursed under any of these fee schedules, please ensure that bad debts are not claimed for any unpaid deductible and coinsurance.

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Related Content

Cost Report Contacts:

IL, MN, WI, All FQHC:

Bobbi Jo Luciano, Manager
Office: South Portland, ME

Sharon Townsend
Office: South Portland, ME

J6_Cost_Report_Filing@anthem.com

Mailing Address for USPS:
National Government Services
Attn: Cost Report Unit
P.O. Box 7040
Indianapolis, IN 46207-7040

FEDEX or courier only:
National Government Services, Inc.
Attn: Cost Report Unit
220 Virginia Ave
Indianapolis, IN 46204

Form(s) you'll need:

Cost Report Forms
CMS-Approved Cost Report Vendors

Cost Report Contacts:

CT, ME, MA, NH, NY, RI, VT:

Bobbi Jo Luciano, Manager
Office: South Portland, ME

Sharon Townsend
Office: South Portland, ME

JK_Cost_Report_Filing@anthem.com

Mailing Address for USPS:
National Government Services
Attn: Cost Report Unit
P.O. Box 7040
Indianapolis, IN 46207-7040

FEDEX or courier only:
National Government Services
Attn: Cost Report Unit
220 Virginia Ave
Indianapolis, IN 46204

Form(s) you'll need:

Cost Report Forms
CMS-Approved Cost Report Vendors