Glossary · Operations
Glossary · OperationsBad Debt
Patient or payer balances written off after collection efforts have been exhausted. Distinct from charity care, which is written off based on inability to pay rather than failure to collect.
Definition
Bad Debt.
Patient or payer balances written off after collection efforts have been exhausted. Distinct from charity care, which is written off based on inability to pay rather than failure to collect.
Industry benchmark
Industry median bad-debt rate ranges 1.5% to 4% of net patient revenue.
Sources
Primary references for this entry.
- HFMA Patient Financial Communications standards.
- AHA Annual Survey.
Related terms
Other terms in Operations.
- Operations
A/R Aging
A report that classifies outstanding patient and payer balances by the number of days since the date of service: 0–30, 31–60, 61–90, 91–120, and 120+.
Open entry - Operations
CARC (Claim Adjustment Reason Code)
A standardized code on a payer remittance advice that explains why a claim or service line was adjusted. Maintained by the X12 standards committee. Common examples: CO-16, CO-50, CO-97, CO-197.
Open entry - Operations
Charity Care
Free or discounted care provided to patients who meet financial-need criteria under the practice's financial assistance policy. Distinct from bad debt, which results from failure to collect from patients who could pay.
Open entry - Operations
Claim Adjudication
The payer's process of reviewing a submitted claim and deciding to pay, deny, or partially adjust it based on coverage, medical necessity, and contractual rules.
Open entry - Operations
ERA / EOB (Electronic Remittance Advice / Explanation of Benefits)
The payer document explaining how a claim was adjudicated. ERA is the electronic version (X12 835); EOB is the paper or PDF version sent to providers and patients.
Open entry - Operations
Timely Filing
The maximum time after a date of service within which a claim must be submitted to the payer to be eligible for payment. Varies by payer (Medicare: 365 days; commercial: typically 90 to 180 days).
Open entry
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