Certified Revenue Cycle Representative (CRCR) Practice Exam

What must a provider do to qualify an account as a Medicare bad debt?

1. Pursue the account for 90 days and dismiss it

2. Pursue the account for 120 days and then refer it to an outside collection agency

3. Transfer the debt to another provider

4. Wait for the patient to respond to payment requests

The correct answer is: Pursue the account for 120 days and then refer it to an outside collection agency

To qualify an account as a Medicare bad debt, the provider needs to demonstrate appropriate efforts in pursuing the collection of that debt. Pursuing the account for 120 days is a key requirement established by Medicare guidelines. This involves making reasonable and adequate efforts to collect the debt directly from the patient. Once the period of 120 days has passed, if the debt remains uncollectible despite these efforts, the provider may then write it off and classify it as a bad debt. Referring the account to an outside collection agency is often part of the process for actively pursuing the debt before deciding it qualifies as a bad debt. This thorough attempt to collect before writing it off ensures that providers are appropriately working to recover owed amounts, which is fundamental to the compliance and proper management of Medicare claims. Collectively, this process of pursuing the account for a specified duration helps to maintain accountability in billing and reflects an effort to minimize financial losses while adhering to Medicare regulations.