Finding 393763 (2021-002)

Internal Controls over Collecting Patient Accounts Receivables and Evaluating Bad Debts MATERIAL WEAKNESS Criteria: The Organization is required to maximize collections and reimbursements under Medicaid, Medicare, or any other public assistance program or private health insurance program. The Organization is also required to have a financial control system in place to evaluate and collect on patients’ accounts. Condition: The methodology for estimating the allowance for doubtful accounts was not followed. Management does not follow written policies and procedures relative to bad debt write-offs. Effect: The allowance for doubtful accounts was based on net collections realized subsequent to year end and cannot be relied upon to project future collections, which should question the effectiveness and efficiency the collection process on past due patient accounts. Cause: The Organization is not able maximize its collections and reimbursements and to evaluate its receivables based on its documented policies and/or procedures. Questioned Costs: Undeterminable Recommendation: Recruit and develop staff to implement a collection and review policy, to include but not limited to, improved technology in the billing/collecting process. Also, enforce guidelines on reviewing and making appropriate adjustments on a quarterly basis to the Bad Debt Allowance.