Health Center Regulatory Issues, Uncategorized

Medicare Proposes Rule on Bad Debt Reductions

By: Susan Sumrell

The July 11 Federal Register includes a proposed rule from the Centers for Medicare and Medicaid Services (CMS) on reductions in bad debt collections for all Medicare providers.  This proposed rule is a result of Section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012, which was passed into law in February of this year.  This proposed rule essentially does as its title indicates, reduces the amount of bad debt that Medicare providers can collect over the next several years.  Currently, FQHCs are eligible to collect 100% of their Medicare bad debt from their patients, granted they meet all of the requirements necessary to collect bad debt.   This proposed rule will phase in new reimbursement levels, and the new FQHC percentages are noted below.

FY2012 FY2013 FY2014 FY2015   and beyond
Percentage  of Medicare bad debt FQHCs can collect 100% 88% 76% 65%

NACHC is reviewing the proposed rule and will be preparing comments for submission.   We recommend that you take a look at the proposed rule and assess the impact of these new collection percentages and let us know how it might impact your centers.   We also encourage PCAs and health centers to submit their own comments on the proposed rule.  Comments will be August 31, 2012 and can be submitted at

If you have any additional questions please don’t hesitate to contact me.