N.Y. Comp. Codes R. & Regs. tit. 10 § 444.16

Current through Register Vol. 46, No. 45, November 2, 2024

Section 444.16 - Deductions from revenue account descriptions

[ 3223 ]

(a) In many instances, the hospital receives less than its full established charges for the services it renders. It is essential that reporting information reflect both the gross revenue and revenue adjustments resulting from inability to collect established charges for services provided. These revenue adjustments are called Deductions from Revenue and are of the following primary categories:

(1) Provisions for bad debts.

These deductions represent the estimated amount of current revenue that will not be realized as a result of credit losses.

(2) Contractual adjustments.

These adjustments represent the difference between full established charges for individual services and the contractual rates received or to be received from third-party payors for services rendered.

(3) Charity service.

These deductions represent the difference between full established charges and amounts received or to be received from indigent patients, voluntary agencies or governmental units on behalf of specific indigent patients.

(4) These deductions are reported under two accounts. One account is used to report those charges pertaining to compliance with the Hill-Burton Hospital and Medical Facilities Construction Plan, and another one for all other uncompensated charity care charges.

(5) Policy discounts.

These deductions represent adjustments for items such as courtesy allowances and employee discounts from the hospital's full established charges for services.

(6) Administrative adjustments.

These adjustments represent amounts of patient service revenue posted but not billed to patients because the cost of billing and collection would exceed the amounts received.

(b) The above items must be reported as deductions from gross operating revenue on an accrual basis rather than as expenses.

(c) 5900

PROVISION FOR BAD DEBTS..........................................................................................................

This account shall contain the hospital's periodic estimates of the amounts of accounts and notes receivable that are likely to be credit losses. The estimated amount of bad debts may be based on an experience percentage applied to the balance of accounts receivable or the amount of charges to patients' accounts during the period, or it may be based on a detailed aging and analysis of patients' accounts.

(d) 5910 CONTRACTUAL ADJUSTMENTS-MEDICARE ..........................................................................................................

5911 Medicare - Part A..........................................................................................................

5912 Medicare - Part B..........................................................................................................

5920 CONTRACTUAL ADJUSTMENTS-MEDICAID..........................................................................................................

5930 CONTRACTUAL ADJUSTMENTS-BLUE CROSS..........................................................................................................

5940 CONTRACTUAL ADJUSTMENTS-OTHER..........................................................................................................

(1) These accounts must be used to report the differential (if any) between the amount, based on the hospital's full established rates, of contractual patients' charges for hospital services which are rendered during the reporting period and are covered by the contract, and the amount received and to be received from third-party agencies in payment of such charges, including adjustments made at year-end, based upon Cost Reports submitted.

(2) Prior period contractual revenue adjustments, as appropriate, will also be reported in these accounts rather than in the Fund Balance or Retained Earnings accounts.

(3) Should the hospital receive more than its established rates from an agency, the differential is reported in these accounts.

(e) 5950 CHARITY/UNCOMPENSATED CARE-HILL-BURTON ..........................................................................................................

5960 CHARITY/UNCOMPENSATED CARE-OTHER..........................................................................................................

(1) These accounts are used to report the differential between the amount, based on the hospital's full established rates, of charity/uncompensated care patients' bills for hospital services and the amount (if any) to be received from such patients in payment for such services.

(2) Account 5950 shall be used to report the charges applicable to any charity/uncompensated care which is being used to comply with requirements of the Hill-Burton Hospital and Medical Facilities Construction Plan.

(3) When the hospital receives lump-sum grants or subsidies (rather than specific payments for individual patients' bills) from governmental or voluntary agencies for the care of medically indigent patients, the amount of the lump-sum grant or subsidy must be reported under "Restricted Donations and Grants for Indigent Care" (account 5970).

(f) 5970 RESTRICTED DONATIONS AND GRANTS FOR INDIGENT CARE ..........................................................................................................

This account is used to report voluntary and governmental agency grants or subsidies for the care of nonspecified medically indigent patients during the current reporting period.

(g) 5980 ADMINISTRATIVE, COURTESY AND POLICY DISCOUNTS AND ADJUSTMENTS ..........................................................................................................

This account shall be used to report write-offs of debit or credit balances in patients' accounts in which the cost of billing or refunding exceeds the amount of the account balance. In addition, reductions in the nature of courtesy allowances and employee discounts, from the hospital's established rates for services rendered, must be reported in this account.

(h) 5990 OTHER DEDUCTIONS FROM REVENUE ..........................................................................................................

Other deductions from revenue which are not included elsewhere must be reported in this account.

N.Y. Comp. Codes R. & Regs. Tit. 10 § 444.16