Georgia Medicare Bad Debt Reimbursement 2026 Guide

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By Brevy Care Team · Last verified May 13, 2026

Section 1861(v)(1)(T) of the Social Security Act is one of the most consequential Medicare hospital payment provisions that almost no Medicare beneficiary knows exists. When a Medicare beneficiary admitted to a Georgia hospital cannot pay the Part A inpatient deductible, when a Medicare beneficiary in observation cannot pay the Part B coinsurance, when a dual eligible Medicare-Medicaid beneficiary at Grady Memorial Hospital or Phoebe Putney Memorial Hospital has Georgia Medicaid refuse to pay the Medicare cost-sharing, the hospital does not absorb the full loss. Section 1861(v)(1)(T) lets Medicare reimburse Georgia hospitals 65 percent of qualifying unpaid Medicare beneficiary cost-sharing amounts. That reimbursement is a financial lifeline for safety-net hospitals like Grady, rural hospitals like Phoebe Putney, and academic medical centers like Emory University Hospital and AU Medical Center whose Medicare patient mix means substantial bad debt exposure every fiscal year.

The framework was not always 65 percent. Section 4008 of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203) established Medicare bad debt reimbursement at 100 percent of qualifying bad debts. Section 4451 of the Balanced Budget Act of 1997 (Public Law 105-33) began a multi-year phase-down. Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96) finalized the current 65 percent rate effective fiscal year 2013. The rate has been stable at 65 percent for over a decade, though policy debate about whether to reduce it further, eliminate it entirely, or restore it to higher levels continues.

The eligibility rules matter as much as the rate. 42 CFR 413.89 and the Provider Reimbursement Manual Part 1 (Pub 15-1) Chapter 3 implement Section 1861(v)(1)(T) through a four-part eligibility test. A bad debt qualifies for Medicare reimbursement only if it relates to covered Medicare services, only if the provider made a reasonable collection effort (typically a minimum 120 days of documented collection activity), only if the debt is actually uncollectible, and only if the provider exercised sound business judgment in writing it off. For dual eligible Medicare-Medicaid beneficiaries, special crossover bad debt rules apply: when Georgia Medicaid refuses to pay Medicare cost-sharing because state policy caps payment below the Medicare amount, the hospital does not need to pursue the beneficiary; the state Medicaid remittance advice showing refusal substitutes for the typical reasonable collection effort.

Section 501(r) of the Internal Revenue Code, added by Section 9007 of the Affordable Care Act of 2010, layers on top of Medicare bad debt rules for tax-exempt hospitals. Section 501(r)(4) requires every tax-exempt hospital to maintain a written financial assistance policy. Section 501(r)(5) limits charges to financial-assistance-eligible patients. Section 501(r)(6) requires reasonable efforts to determine financial assistance eligibility before extraordinary collection actions. Treasury Final Regulations Section 1.501(r)-1 through 1.501(r)-7 implement these requirements in detail. Major Georgia tax-exempt hospitals (Grady, Emory, Memorial Health Savannah, AU Medical Center, Phoebe Putney, Wellstar, Piedmont, Northside, Children's Healthcare of Atlanta, and most other Georgia hospitals) navigate Section 501(r) compliance alongside Medicare bad debt rules and Georgia state medical debt protections.

This Brevy guide walks through the entire Medicare bad debt framework. We cover Section 1861(v)(1)(T), the Section 4008 OBRA 1987 establishing provision, the Section 4451 BBA 1997 phase-down, the Section 3201 Middle Class Tax Relief Act 2012 finalizing of 65 percent, 42 CFR 413.89, the Provider Reimbursement Manual Chapter 3 guidance, the four-part eligibility test, the reasonable collection effort 120-day standard, the crossover bad debt for dual eligibles, the indigent patient treatment, the Medicare Secondary Payer bad debt distinction, the cost report Worksheet E Part A and Part B filing, the Palmetto GBA Medicare Administrative Contractor bad debt audit process, the Provider Reimbursement Review Board appeals process, the Section 501(r) Internal Revenue Code requirements, the Section 9007 of the Affordable Care Act adding Section 501(r), the IRS Form 990 Schedule H reporting, the charity care interaction, six worked examples through major Georgia hospitals, 14 compliance errors that get bad debt denied, a 25-question accordion FAQ, beneficiary-facing access guidance, and a CTA with 16 contact resources for Georgia beneficiaries and hospitals navigating Medicare bad debt issues. :::

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Key Takeaways for Georgia Medicare Bad Debt Reimbursement

1. Section 1861(v)(1)(T) Social Security Act authorizes Medicare reimbursement of unpaid Medicare beneficiary cost-sharing amounts (deductibles and coinsurance) that meet specific eligibility criteria. The provision treats qualifying bad debt as a reasonable cost reimbursable by Medicare.

2. Section 4008 of OBRA 1987 (Public Law 100-203) established the Medicare bad debt provisions in statute at 100 percent reimbursement of qualifying bad debts. The Section 4451 of BBA 1997 (Public Law 105-33) began a multi-year phase-down toward 70 percent. The Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96) finalized the current 65 percent rate effective fiscal year 2013.

3. 42 CFR 413.89 is the implementing regulation. Provider Reimbursement Manual Part 1 (Pub 15-1) Chapter 3 "Bad Debts, Charity, and Courtesy Allowances" is the operational manual guidance. Together they establish the four-part eligibility test, reasonable collection effort standards, documentation requirements, and crossover bad debt rules.

4. The four-part eligibility test requires: (1) bad debt relates to covered Medicare services; (2) provider made a reasonable collection effort; (3) debt is actually uncollectible; (4) provider exercised sound business judgment in writing off. All four must be met.

5. Reasonable collection effort (RCE) typically requires a minimum 120 days of documented collection activity from the first bill, including multiple collection contacts (statements, telephone calls, letters), optional collection agency referral, and the same collection practices used for non-Medicare patients. Documentation of each collection activity is required.

6. Crossover bad debt applies to dual eligible Medicare-Medicaid beneficiaries when Georgia Medicaid refuses or partially pays the Medicare cost-sharing. The hospital bills Georgia Medicaid, receives a Medicaid remittance advice showing refusal or partial payment, and writes off the unpaid portion as crossover bad debt. The state Medicaid refusal substitutes for the typical reasonable collection effort, so the hospital does not need to pursue the beneficiary.

7. Cost report Worksheet E Part A and Part B is where hospitals file Medicare bad debt on the Form CMS-2552-10 hospital cost report. Worksheet E Part A captures Part A inpatient bad debt; Worksheet E Part B captures Part B outpatient bad debt. Hospitals maintain detailed bad debt logs available for audit.

8. Palmetto GBA is the Medicare Administrative Contractor for Georgia hospitals. Palmetto audits cost reports including bad debt, issues a Notice of Program Reimbursement with final determinations, and routes disputes to the Provider Reimbursement Review Board under 42 CFR 405.1801-405.1898. The 180-day filing window from NPR governs PRRB appeals.

9. Section 501(r) IRC, added by Section 9007 of the ACA 2010 and implemented by Treasury Final Regulations Section 1.501(r)-1 through 1.501(r)-7, requires tax-exempt hospitals to maintain a written financial assistance policy, limit charges to financial-assistance-eligible patients, and make reasonable efforts to determine financial assistance eligibility before extraordinary collection actions. Failure to comply can jeopardize tax-exempt status.

10. Major Georgia hospitals, including Grady Memorial Hospital, Emory University Hospital, Emory University Hospital Midtown, Memorial Health Savannah, AU Medical Center, Phoebe Putney Memorial Hospital, Atrium Health Floyd, Northeast Georgia Medical Center, Wellstar, Piedmont, Northside, and Children's Healthcare of Atlanta, all navigate Medicare bad debt compliance, with safety-net hospitals like Grady and rural hospitals like Phoebe Putney facing substantial bad debt exposure including significant crossover bad debt for dual eligibles. Brevy at brevy.com helps Georgia families and beneficiaries understand the bad debt framework, hospital financial assistance options, and Medicare cost-sharing protections that affect access to care. :::

The Statutory Foundation: Section 1861(v)(1)(T) of the Social Security Act

Section 1861(v)(1)(T) of the Social Security Act authorizes Medicare reimbursement of certain bad debts incurred by providers. The provision is part of the broader Section 1861(v) reasonable cost framework that defines what costs Medicare will reimburse providers for furnishing covered services to Medicare beneficiaries.

Bad debt in this context is a specific concept. It refers to unpaid amounts owed by Medicare beneficiaries for their cost-sharing obligations: Part A inpatient hospital deductibles, Part A coinsurance days 61 through 90 and lifetime reserve days, Part B coinsurance (typically 20 percent), and Part B deductibles. When a Medicare beneficiary receives covered services from a Georgia hospital and the beneficiary fails to pay the cost-sharing amount, the hospital may incur a financial loss. Section 1861(v)(1)(T) authorizes Medicare to reimburse a portion of that loss if the bad debt meets specific eligibility criteria.

The statutory text treats bad debt as a reasonable cost, meaning it falls within the scope of what Medicare reimburses under cost-based reimbursement principles. While Medicare moved largely away from cost-based reimbursement to prospective payment systems for most provider types, bad debt reimbursement persists as a separate category that operates on cost report settlement principles.

Section 1861(v)(1)(T) operates alongside but separately from prospective payment. A Georgia hospital paid under the Inpatient Prospective Payment System (IPPS) for a Medicare admission receives the IPPS Diagnosis-Related Group (DRG) payment. If the beneficiary fails to pay the Part A deductible, the hospital separately claims bad debt on the cost report. The bad debt reimbursement is in addition to the DRG payment, providing a second source of Medicare revenue for the same admission when the beneficiary defaults on cost-sharing.

The statutory authority for bad debt is broad. Section 1861(v)(1)(T) directs the Secretary of Health and Human Services to determine bad debt reimbursement consistent with reasonable cost principles. The Secretary has delegated detailed regulation to the Centers for Medicare and Medicaid Services (CMS), which has issued 42 CFR 413.89 as the implementing regulation and the Provider Reimbursement Manual Part 1 (Pub 15-1) Chapter 3 as the operational manual.

Subsequent legislative changes layered on top of Section 1861(v)(1)(T): Section 4008 of OBRA 1987 established the framework in statute; Section 4451 of BBA 1997 began the phase-down; and Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 finalized the current 65 percent reimbursement rate. Each of these provisions modified rather than replaced Section 1861(v)(1)(T), so the statutory authority remains anchored in the underlying SSA provision.

Section 4008 of the Omnibus Budget Reconciliation Act of 1987 Establishing Medicare Bad Debt

Section 4008 of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203) is the statutory provision that codified Medicare bad debt reimbursement. Before OBRA 1987, bad debt reimbursement had been a matter of CMS (then HCFA) regulatory and manual policy. Section 4008 elevated the framework to statute, providing a stable legal foundation that has supported Medicare bad debt reimbursement for nearly four decades.

The original Section 4008 provided 100 percent reimbursement of qualifying bad debts. A Georgia hospital that incurred $100,000 of qualifying Medicare bad debt in a fiscal year received the full $100,000 back from Medicare through cost report settlement. The 100 percent rate reflected the policy judgment that Medicare beneficiaries' cost-sharing obligations were Medicare's responsibility once the beneficiary defaulted, since the beneficiary's Medicare coverage was the reason the cost-sharing existed.

The 100 percent reimbursement framework persisted for a decade, from 1987 through the Balanced Budget Act of 1997. During that period, Medicare bad debt was one of the most reliable Medicare revenue streams for hospitals serving significant Medicare patient populations, particularly safety-net hospitals and rural hospitals with concentrated low-income Medicare beneficiary populations.

Section 4008 also articulated the basic eligibility framework that became codified in 42 CFR 413.89. The bad debt had to relate to covered services, the provider had to make a reasonable collection effort, the debt had to be actually uncollectible, and the provider had to exercise sound business judgment. While the regulatory text has evolved, the four-part eligibility test traces back to Section 4008.

OBRA 1987 was part of a broader Reagan-era Medicare reform package that also addressed other Medicare payment provisions. Bad debt was one component of a larger statutory framework. The political consensus at the time strongly supported bad debt reimbursement at full levels, reflecting bipartisan commitment to maintaining hospital financial sustainability in the early years of the IPPS prospective payment system.

Section 4451 of the Balanced Budget Act of 1997 Phasing Down Bad Debt Reimbursement

Section 4451 of the Balanced Budget Act of 1997 (Public Law 105-33) initiated a multi-year phase-down of Medicare bad debt reimbursement. The BBA 1997 was a major Medicare reform statute that addressed numerous Medicare payment provisions in response to budgetary pressures and policy reforms. Bad debt was one of multiple Medicare payment areas subject to reduction.

The phase-down trajectory under Section 4451 reduced bad debt reimbursement from 100 percent over multiple fiscal years. The legislation specified a schedule with different rates for different fiscal years, eventually establishing 70 percent reimbursement for most providers. The phase-down represented a substantial reduction in hospital bad debt revenue, totaling billions of dollars over the implementation period.

The policy rationale for the phase-down was budgetary. The Congressional Budget Office scored the bad debt reduction as Medicare savings. Critics argued that 100 percent reimbursement created weak provider incentives to collect from beneficiaries, since the full cost was passed through to Medicare. Defenders of bad debt argued that beneficiaries who could not pay deserved protection from collection efforts, and hospitals serving low-income beneficiaries needed the financial protection.

Different provider types received different treatment under Section 4451. Hospitals subject to IPPS received the standard phase-down to 70 percent. Skilled nursing facilities, hospitals exempt from IPPS, and other provider types had variations in their phase-down schedules. The complexity of the multi-provider framework added administrative burden.

The Section 4451 phase-down established 70 percent as the bad debt reimbursement rate for most hospitals after the transition years. That 70 percent rate persisted from the early 2000s through fiscal year 2012, when the Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 made the next reduction to 65 percent.

For Georgia hospitals during the 1997-2012 period, the bad debt reduction from 100 percent to 70 percent meant approximately $30 of lost reimbursement for every $100 of qualifying bad debt. For high-bad-debt hospitals like Grady Memorial Hospital, the reduction represented millions of dollars annually. The financial pressure intensified the operational focus on bad debt documentation, reasonable collection effort, and cost report optimization.

Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 Finalizing 65 Percent Bad Debt

Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96) finalized the current 65 percent Medicare bad debt reimbursement rate. The legislation, signed into law in February 2012 as part of a broader payroll tax and unemployment insurance package, included Medicare provisions affecting multiple Medicare payment areas.

The 65 percent rate took effect over a three-year phase-down from the prior 70 percent rate. The phase-down schedule reduced reimbursement gradually:

• Fiscal year 2013: 65 percent for most providers (with limited exceptions)
• Fiscal year 2014: continued 65 percent
• Fiscal year 2015 and forward: 65 percent (stabilized)

Certain provider types received different treatment. Sole community hospitals and other specified provider types had separate phase-down schedules under Section 3201. The legislation maintained variation across provider types while establishing 65 percent as the dominant rate.

The 5-percentage-point reduction from 70 percent to 65 percent meant a roughly 7 percent reduction in Medicare bad debt reimbursement revenue. For a Georgia hospital previously claiming $10 million in annual Medicare bad debt at the 70 percent rate ($7 million reimbursement), the reduction to 65 percent meant $6.5 million reimbursement, a $500,000 annual revenue reduction.

Aggregate national Medicare bad debt reimbursement reductions from the Section 3201 phase-down totaled approximately $6.9 billion over the 10-year budget window. The savings contributed to Medicare program savings used to offset other provisions in the broader legislation.

Since fiscal year 2015, the bad debt reimbursement rate has remained stable at 65 percent. Periodic policy discussions about further reductions or eliminating bad debt reimbursement have not produced additional legislation. The 65 percent rate has been the prevailing framework for over a decade, providing the Georgia hospital community with a stable, if reduced, bad debt reimbursement environment.

The 65 percent rate is hospital-revenue-affecting: it determines roughly how much Medicare reimburses Georgia hospitals for unpaid beneficiary cost-sharing. It is not beneficiary-affecting in the immediate sense: beneficiaries still owe their full cost-sharing obligations regardless of the reimbursement rate. However, the rate indirectly affects beneficiaries by shaping hospital financial sustainability, particularly for safety-net hospitals serving low-income beneficiary populations.

42 CFR 413.89 Implementing Regulation

42 CFR 413.89 is the Medicare bad debt implementing regulation. The regulation, codified in the Code of Federal Regulations, provides the operational rules that implement Section 1861(v)(1)(T) of the Social Security Act and the OBRA 1987, BBA 1997, and Middle Class Tax Relief Act 2012 statutory framework.

The regulation establishes the basic eligibility requirements for Medicare bad debt. Bad debts allowable for Medicare reimbursement must be related to covered services and derived from deductible and coinsurance amounts. The provider must have made reasonable efforts to collect the amounts due. The debts must be actually uncollectible when claimed as worthless. Sound business judgment must support the determination that no likelihood of recovery exists.

42 CFR 413.89(e) addresses reasonable collection effort in detail. The regulation establishes that a provider's collection effort must be similar to that of other receivables and must involve the issuance of bills, follow-up notifications, and other collection activities consistent with the provider's normal procedures. The 120-day minimum collection period emerged from regulatory and manual guidance rather than the statute directly.

The regulation distinguishes between Medicare bad debt and charity care. Bad debt arises when a provider attempts to collect from a patient and determines the debt is uncollectible. Charity care arises when a provider waives charges based on the patient's inability to pay, without pursuing collection. The two categories cannot be co-mingled, and the distinction matters for cost report treatment.

42 CFR 413.89 also addresses crossover bad debt for dual eligible Medicare-Medicaid beneficiaries. When a state Medicaid program does not pay or only partially pays Medicare cost-sharing for dual eligibles, the hospital may claim the unpaid amount as bad debt. The regulation establishes the procedural framework for crossover bad debt, which differs from standard bad debt in that the state Medicaid refusal substitutes for the reasonable collection effort.

Documentation requirements under 42 CFR 413.89 are extensive. Providers must maintain records demonstrating each collection activity, the determination of uncollectibility, and the application of the provider's bad debt policy. Records must be available for Medicare Administrative Contractor audit and for Provider Reimbursement Review Board appeals.

The regulation has been amended periodically to reflect statutory changes (the BBA 1997 phase-down, the 2012 reduction to 65 percent) and CMS clarifications. The text remains the foundation for operational bad debt management at every Georgia hospital filing a cost report.

Provider Reimbursement Manual Part 1 (Pub 15-1) Chapter 3 Bad Debt Guidance

The Provider Reimbursement Manual Part 1 (Pub 15-1) is the CMS operational manual for the Medicare provider reimbursement framework. Chapter 3, "Bad Debts, Charity, and Courtesy Allowances," provides the detailed guidance that hospitals follow when managing Medicare bad debt.

Chapter 3 covers the basic bad debt framework, eligibility criteria, reasonable collection effort standards, documentation requirements, and special situations including crossover bad debt and indigent patient treatment. While 42 CFR 413.89 establishes the regulatory framework, Chapter 3 provides the operational detail that translates regulatory requirements into day-to-day hospital practice.

The reasonable collection effort guidance in Chapter 3 is particularly detailed. The manual establishes that a provider's collection effort must be the same as that for non-Medicare patients. Hospitals cannot apply lesser collection effort to Medicare bad debt and then claim Medicare reimbursement; the equivalence of effort is foundational. The minimum 120-day collection period is established through Chapter 3 guidance, alongside specific expectations for the types and frequency of collection contacts.

Chapter 3 addresses documentation standards extensively. Each collection activity must be dated and described in the patient's account record. The activity log should demonstrate genuine effort: initial billing, subsequent statements (typically three to four over the 120-day period), telephone contacts, and any collection letters or collection agency activity. Without adequate documentation, the bad debt is at risk of denial during MAC audit.

The manual provides specific guidance for crossover bad debt. Chapter 3 establishes that the hospital must bill the state Medicaid program for the Medicare cost-sharing and obtain a Medicaid remittance advice. If the remittance advice shows that the state Medicaid program refuses to pay (because state policy caps payment below Medicare cost-sharing, because the beneficiary has exceeded a state-imposed annual limit, or for other reasons), the unpaid amount qualifies as crossover bad debt without further beneficiary pursuit.

Indigent patient treatment receives manual guidance. When a Medicare beneficiary is determined to be indigent under the provider's financial assistance policy, the bad debt may qualify without the typical reasonable collection effort, as long as the indigency determination is documented and aligns with the provider's sound business judgment.

Chapter 3 has been periodically updated to reflect statutory changes, regulatory amendments, and CMS clarifications. Hospitals reference the current version of the manual when developing internal bad debt policies, training collection staff, and preparing cost report bad debt detail.

The Four-Part Bad Debt Eligibility Test

Medicare bad debt must satisfy a four-part eligibility test to qualify for reimbursement under Section 1861(v)(1)(T). All four elements must be met; failure of any one results in denial. The four-part test is the cornerstone of bad debt management at every Georgia hospital.

Element 1: Related to Covered Services

The bad debt must arise from covered Medicare services. A Medicare beneficiary's unpaid coinsurance for a covered inpatient admission, a covered observation stay, or a covered outpatient procedure qualifies. Unpaid amounts from non-covered services (cosmetic procedures, items Medicare excludes from coverage) do not qualify even if the beneficiary fails to pay.

The covered services requirement aligns bad debt eligibility with the underlying Medicare benefit structure. Medicare's responsibility extends only to its benefits; non-covered service charges are private patient responsibilities outside Medicare's domain.

Hospitals must carefully classify bad debt by service type. Mixed-service accounts (where a beneficiary received both covered and non-covered services) require allocation. The covered portion may qualify; the non-covered portion does not.

Element 2: Reasonable Collection Effort

The provider must have made a reasonable collection effort to collect the unpaid amount. This is typically a minimum 120-day collection period with documented activity:

• Initial billing statement
• Subsequent billing statements (typically multiple statements)
• Telephone contact attempts
• Collection letters
• Optional collection agency referral

The collection effort must be equivalent to that applied to non-Medicare patients. A hospital that aggressively pursues self-pay non-Medicare patients but applies cursory effort to Medicare bad debt cannot claim Medicare reimbursement for the cursory cases.

Crossover bad debt for dual eligibles operates under a special rule: state Medicaid refusal substitutes for the typical reasonable collection effort. The hospital does not need to pursue the dual eligible beneficiary directly when state Medicaid refuses to pay.

Indigent patient bad debt also operates under a special rule: when a beneficiary is determined indigent under the provider's policy, the typical reasonable collection effort may be modified or waived. The indigency determination, properly documented, substitutes for traditional collection effort.

Element 3: Actually Uncollectible

The provider must determine that the debt is actually uncollectible, not merely past due. The determination requires more than the passage of time; it requires a substantive judgment that no realistic prospect of collection exists.

Factors supporting uncollectibility include exhausted collection efforts, beneficiary financial inability, beneficiary unresponsiveness despite multiple contacts, beneficiary death without an estate, and similar circumstances.

The determination must be documented. The provider's account record must reflect the determination, the date, and the basis. MAC auditors review uncollectibility determinations during bad debt audits.

Element 4: Sound Business Judgment

The provider must exercise sound business judgment in writing off the bad debt. This element overlaps with the actually uncollectible determination but adds a procedural dimension: the provider must follow its own documented bad debt policy, apply consistent standards, and not write off accounts arbitrarily or selectively.

A documented internal bad debt policy supports the sound business judgment element. The policy should specify the criteria for bad debt determination, the procedures for collection effort, the documentation requirements, and the approval process for write-offs.

Without a documented policy and consistent application, the sound business judgment element is vulnerable to MAC audit challenge. Sophisticated Georgia hospital finance departments maintain detailed bad debt policies precisely to meet this element.

Reasonable Collection Effort (RCE) Documentation Standards

Reasonable collection effort is operationally the most complex element of the four-part bad debt eligibility test. The 120-day minimum and the documentation requirements drive day-to-day bad debt practice at Georgia hospitals.

The 120-Day Collection Period

The reasonable collection effort minimum is 120 days from the first bill date. The period must include genuine collection activity, not merely the passive passage of time. A hospital that bills once and then waits 120 days without further effort has not demonstrated reasonable collection effort.

The 120-day standard is a minimum, not a maximum. Some hospitals continue collection effort beyond 120 days, particularly when accounts are being pursued through collection agencies. The 120 days is the floor below which bad debt eligibility is at risk.

Required Collection Activities

The manual and regulation expect multiple types of collection activity within the 120-day period:

• Initial billing statement: The first bill, typically sent within 30 days of service.
• Follow-up statements: Three to four statements at standard intervals (often 30 days apart).
• Telephone contacts: Documented call attempts, even if unsuccessful.
• Collection letters: Specific demand letters, often including escalating language.
• Collection agency referral: Optional but common; if used, must be documented.

The variety and frequency of contacts demonstrate genuine collection effort. A hospital that issues only mailed statements without any telephone or letter follow-up may face audit scrutiny on the adequacy of effort.

Same Practices as Non-Medicare Patients

A foundational principle is that the collection practices applied to Medicare bad debt must be the same as those applied to non-Medicare bad debt. Hospitals cannot apply lesser effort to Medicare cases and then claim Medicare reimbursement, since that would essentially shift the burden of low effort onto Medicare.

The equivalence requirement is monitored during audits. MAC auditors may sample non-Medicare accounts to assess whether the collection effort is comparable.

Documentation in the Patient Account

Every collection activity must be documented in the patient account record. The documentation should include:

• Date of activity
• Type of activity (statement, telephone call, letter)
• Outcome (if any)
• Name or initials of person performing activity

The cumulative activity log demonstrates the 120-day collection effort. Without this documentation, the bad debt cannot be supported at audit.

Crossover Bad Debt Exception

For dual eligible Medicare-Medicaid beneficiaries, the typical reasonable collection effort does not apply. The state Medicaid refusal documentation substitutes for the activity log. The procedural shift reflects the recognition that dual eligibles are often financially unable to pay, and the public Medicaid program (rather than the beneficiary) bears the secondary payer responsibility.

Indigent Patient Exception

For indigent patients (determined under the provider's documented financial assistance policy), the typical reasonable collection effort may be modified or waived. The indigency determination, properly documented, supports bad debt eligibility without the full 120-day collection period.

Crossover Bad Debt for Dual Eligible Medicare-Medicaid Beneficiaries

Crossover bad debt is a specialized bad debt category for dual eligible Medicare-Medicaid beneficiaries. The category exists because of a quirk in the Medicare-Medicaid coordination of benefits framework: state Medicaid programs may refuse to pay or only partially pay Medicare cost-sharing, leaving an unpaid balance that the hospital cannot reasonably collect from the dual eligible beneficiary directly.

Section 1862(b)(2)(B) Coordination of Benefits

Section 1862(b)(2)(B) of the Social Security Act establishes Medicare-Medicaid coordination of benefits for dual eligibles. Medicare is the primary payer for most dual eligibles. Medicaid is secondary and covers Medicare cost-sharing under specific state policies.

Most state Medicaid programs (including Georgia Medicaid) pay Medicare cost-sharing for dual eligibles, but with limitations. Common limitations include:

• "Lesser of" methodology: state pays the lesser of the Medicare cost-sharing or the difference between the Medicare payment and the Medicaid rate. When the Medicare payment exceeds the Medicaid rate, the state pays nothing.
• Annual limit on cost-sharing payment
• Limited coverage for specific service types

When state Medicaid limits result in less than full Medicare cost-sharing payment, the unpaid amount becomes crossover bad debt.

Procedural Requirements

The hospital follows specific procedural steps to qualify a crossover bad debt:

1. Bill state Medicaid: The hospital submits a claim to Georgia Medicaid for the Medicare cost-sharing.
2. Receive Medicaid remittance advice: The state's response, showing either payment, partial payment, or refusal.
3. Document refusal or partial payment: Maintain the remittance advice in the patient account file.
4. Write off as crossover bad debt: Claim the unpaid amount as bad debt without further pursuit of the beneficiary.

The Medicaid remittance advice is the critical documentation. It substantiates that the state refused to pay or paid less than the full Medicare cost-sharing, supporting the crossover bad debt designation.

Georgia Department of Community Health Policies

The Georgia Department of Community Health administers Georgia Medicaid, including Medicare-Medicaid crossover policies. Georgia's policies determine how state Medicaid responds to Medicare cost-sharing claims for dual eligibles, and accordingly drive crossover bad debt volumes at Georgia hospitals.

Georgia generally applies a "lesser of" methodology for inpatient services: the state pays the lesser of the Medicare coinsurance or the difference between the Medicare payment and Georgia Medicaid's inpatient rate. When Medicare's payment exceeds Georgia Medicaid's rate (common because Medicare often pays more than state Medicaid programs), the state pays nothing, leaving the entire Medicare cost-sharing as crossover bad debt.

For outpatient services, similar methodologies apply. The net effect is substantial crossover bad debt volume at Georgia hospitals serving dual eligibles, particularly safety-net hospitals like Grady Memorial Hospital and rural hospitals like Phoebe Putney Memorial Hospital.

No Reasonable Collection Effort Required

A defining feature of crossover bad debt is that the hospital is not required to pursue the beneficiary directly for the unpaid amount. The state Medicaid refusal substitutes for the typical reasonable collection effort. This is operationally important: hospitals do not engage their collection apparatus for crossover bad debt, reducing administrative cost and avoiding extraction efforts against vulnerable dual eligibles.

The exception is significant. For non-crossover bad debt, hospitals must demonstrate a 120-day collection effort with multiple contacts. For crossover bad debt, the Medicaid remittance advice is the only required documentation beyond the underlying claim.

Audit and Disputes

MAC auditors review crossover bad debt for proper documentation. Common audit issues include missing Medicaid remittance advices, claims that should have been paid by Medicaid but were classified as bad debt due to billing errors, and inconsistent treatment across the bad debt log.

Disputes over crossover bad debt may proceed to PRRB appeal. PRRB decisions have addressed numerous crossover bad debt questions, providing interpretive guidance for hospitals.

Indigent Patient Treatment for Bad Debt

Indigent patient bad debt is a special category that allows hospitals to claim bad debt for patients determined indigent under the provider's documented financial assistance policy, without the typical 120-day reasonable collection effort.

Indigent Patient Determination

A patient is indigent if the provider determines, under its financial assistance policy, that the patient cannot pay the cost-sharing obligation. The determination must be substantive, not merely procedural, and must align with the provider's published indigency criteria.

Common indigency criteria include income relative to the federal poverty level (often 200 percent of FPL or lower), asset limits, household composition, and other financial circumstances. Tax-exempt hospitals under Section 501(r) must publish their financial assistance policy and use it to make eligibility determinations.

Distinction from Charity Care

Indigent patient bad debt differs from charity care in a subtle but important way. Charity care involves waiving charges before billing or in the early billing process; the hospital determines that the patient cannot pay and writes off the charges without pursuit.

Indigent patient bad debt involves attempting collection (or going through a documented financial assistance application process), determining that the patient is indigent, and writing off as bad debt rather than charity care. The classification matters for Medicare cost report treatment and for IRS Form 990 Schedule H reporting.

Documentation Requirements

The indigency determination must be documented in the patient account. Required documentation includes:

• The financial assistance application (if applicable)
• The income/asset documentation supporting indigency
• The hospital's determination decision
• The date and basis for the determination
• Compliance with the provider's documented policy

Without this documentation, the bad debt may be classified as standard bad debt subject to the full reasonable collection effort, or may be denied entirely.

Sound Business Judgment

The sound business judgment element applies to indigent patient bad debt with particular force. The hospital must demonstrate that its indigency determinations are consistent, principled, and aligned with its policy. Arbitrary or selective indigency determinations are vulnerable to audit challenge.

Cost Report Worksheet E Part A and Part B Bad Debt Filing

The Medicare cost report (Form CMS-2552-10) is where hospitals annually report bad debt for Medicare reimbursement. Worksheet E Part A captures Part A inpatient bad debt; Worksheet E Part B captures Part B outpatient bad debt. The cost report is the financial reckoning that determines the year's bad debt reimbursement.

Form CMS-2552-10 Overview

Form CMS-2552-10 is the hospital cost report used by IPPS hospitals and most other hospital types subject to cost reporting. The form has multiple worksheets covering hospital characteristics, statistics, costs, and Medicare reimbursement calculations. The cost report is filed annually, typically within five months of the hospital's fiscal year end.

Worksheet E Part A Bad Debt

Worksheet E Part A captures Medicare Part A inpatient bad debt. The worksheet calculates allowable bad debt based on:

• Total Medicare Part A bad debt from the hospital's bad debt log
• Application of the 65 percent reimbursement rate (or applicable rate for the hospital type)
• Net allowable bad debt for cost report settlement

The Worksheet E Part A bad debt figure flows into the overall Medicare Part A settlement calculation, increasing the Medicare reimbursement owed to the hospital.

Worksheet E Part B Bad Debt

Worksheet E Part B captures Medicare Part B outpatient bad debt. The structure parallels Part A: total bad debt from the bad debt log, application of the reimbursement rate, net allowable bad debt for settlement.

Part B bad debt typically arises from outpatient services where the beneficiary owed coinsurance (commonly 20 percent of the Medicare allowable). Examples include hospital outpatient department visits, ambulatory surgery, diagnostic procedures, and observation services.

Bad Debt Listing Detail

Hospitals maintain detailed bad debt listings supporting the Worksheet E figures. The listing typically includes:

• Patient identifier
• Date of service
• Service type
• Total bad debt amount
• Documentation references

The bad debt listing is the underlying support for the cost report figures. MAC auditors review the listing during audit, sampling individual accounts for documentation adequacy.

Allocation Between Part A and Part B

Some accounts may have bad debt allocable to both Part A and Part B (an admission with both inpatient and outpatient components, for example). The allocation must follow consistent methodology, and the hospital's documented bad debt policy should address allocation principles.

Medicare Secondary Payer (MSP) Bad Debt Distinction

Medicare Secondary Payer rules (Section 1862(b) of the Social Security Act) establish that Medicare is secondary to certain other coverage: workers compensation, no-fault insurance, employer group health insurance (for active workers in groups of 20+ employees), liability insurance, and similar situations.

When MSP applies, the primary payer is responsible for the bill first, and Medicare's payment is reduced or eliminated based on the primary payer's payment. Bad debt arising from MSP situations has a distinct profile from standard Medicare bad debt.

MSP Bad Debt Treatment

When a beneficiary has MSP coverage and the primary payer should have paid, the hospital must first pursue the primary payer. If the primary payer denies coverage or pays a lower amount, the hospital may bill Medicare as secondary payer for the difference.

If the beneficiary owes cost-sharing after the primary and secondary payments, and that cost-sharing becomes uncollectible, the hospital may claim it as Medicare bad debt subject to the standard four-part eligibility test.

Documentation requirements are more complex for MSP bad debt because the hospital must document both the primary payer activity (denial, reduction) and the standard bad debt elements. Without comprehensive documentation, MSP bad debt may face audit denial.

Common MSP Errors

Common MSP errors that result in bad debt issues include:

• Failure to identify MSP situations at admission
• Inadequate pursuit of the primary payer
• Premature classification of accounts as Medicare-only when MSP applies
• Inadequate documentation of MSP determination

Sophisticated Georgia hospital revenue cycle operations include front-end MSP screening to identify and route MSP situations correctly.

Palmetto GBA Medicare Administrative Contractor Bad Debt Audit Process

Palmetto GBA is the Medicare Administrative Contractor for Georgia hospitals under the J-J MAC contract covering Part A and Part B services. Palmetto's responsibilities include processing claims, administering provider enrollment, conducting cost report audits, and managing bad debt audits.

Cost Report Filing

Georgia hospitals file cost reports with Palmetto GBA within five months of fiscal year end. The cost report includes the Worksheet E bad debt figures along with all other Medicare cost report data.

Desk Review

Palmetto initially conducts a desk review of the cost report. The desk review identifies obvious errors, calculation issues, and areas requiring further inquiry. Desk review may resolve the cost report or escalate to detailed audit.

Detailed Audit

When detailed audit is conducted, Palmetto auditors review the hospital's bad debt detail, sample individual accounts, examine documentation, and assess compliance with the four-part eligibility test and reasonable collection effort standards. Audits may be limited to bad debt or may cover broader cost report areas.

Common Audit Adjustments

Common bad debt audit adjustments include:

• Inadequate reasonable collection effort documentation
• Crossover bad debt without Medicaid remittance advice
• Inadequate indigency determination documentation
• Improperly classified non-covered service amounts
• Inconsistency in collection practices between Medicare and non-Medicare accounts
• MSP situations not properly developed

Adjustments reduce the hospital's bad debt reimbursement.

Notice of Program Reimbursement

Palmetto issues a Notice of Program Reimbursement (NPR) with final determinations after audit. The NPR specifies the bad debt allowed, any adjustments, and the resulting Medicare settlement amount. The NPR triggers the 180-day appeal window to the Provider Reimbursement Review Board.

Reopening

Cost reports may be reopened within three years for clear errors or omissions. Reopenings can result in additional bad debt allowed or additional adjustments.

Provider Reimbursement Review Board (PRRB) Appeals

The Provider Reimbursement Review Board, established under 42 CFR 405.1801 through 405.1898, is the independent administrative appeals body that hears Medicare cost report disputes including bad debt disputes.

PRRB Jurisdiction

The PRRB has jurisdiction over disputes involving Medicare cost reports filed by providers subject to cost reporting. Jurisdictional requirements include:

• Final MAC determination (NPR)
• Amount in controversy thresholds ($10,000 for individual provider appeals, $50,000 for group appeals as of recent amounts)
• 180-day filing window from NPR

Bad Debt Appeals

Bad debt is a frequent subject of PRRB appeals. Common bad debt appeal issues include:

• Adequacy of reasonable collection effort
• Documentation sufficiency
• Crossover bad debt eligibility
• MSP bad debt classification
• Indigent patient determination adequacy
• Allocation between Part A and Part B

Appeal Process

The appeal process includes:

1. Filing: Provider files an appeal with the PRRB within 180 days of NPR
2. Preliminary determinations: PRRB issues preliminary determinations on jurisdiction and procedural matters
3. Discovery and briefing: Parties exchange documents and file briefs
4. Hearing: PRRB conducts an evidentiary hearing
5. Decision: PRRB issues a written decision
6. CMS Administrator review: Discretionary review by the CMS Administrator
7. Federal court review: Available after PRRB decision and CMS Administrator review

Group Appeals

Multiple providers with similar bad debt issues may file group appeals. Group appeals consolidate similar disputes for more efficient resolution. Group appeals have addressed numerous Medicare bad debt issues over the years, with significant impact on bad debt policy and practice.

Decisions and Precedential Value

PRRB decisions are not binding precedent in the same way as court decisions, but they provide interpretive guidance. Major PRRB bad debt decisions have shaped industry practice on reasonable collection effort, crossover bad debt documentation, and indigent patient treatment.

Section 501(r) of the Internal Revenue Code Hospital Financial Assistance Requirements

Section 501(r) of the Internal Revenue Code, added by Section 9007 of the Affordable Care Act of 2010, establishes new financial assistance and billing requirements for tax-exempt Section 501(c)(3) hospitals. Section 501(r) operates alongside Medicare bad debt rules and has significant implications for how Georgia tax-exempt hospitals manage uncollectible accounts.

Section 501(r)(1) General Requirements

Tax-exempt hospitals must meet Section 501(r) requirements to maintain their Section 501(c)(3) tax-exempt status. Failure to comply can result in additional taxes, in extreme cases revocation of tax-exempt status.

Section 501(r)(3) Community Health Needs Assessment

Tax-exempt hospitals must conduct a community health needs assessment (CHNA) every three years and adopt an implementation strategy. The CHNA requirement addresses community benefit obligations but is procedurally separate from bad debt issues.

Section 501(r)(4) Financial Assistance Policy

Tax-exempt hospitals must maintain a written financial assistance policy (FAP) covering:

• Eligibility criteria for free or discounted care
• Basis for calculating amounts charged to eligible patients
• Method for applying for financial assistance
• Actions for nonpayment
• Measures to widely publicize the FAP

The FAP requirement is the most operationally significant Section 501(r) provision for bad debt management. The FAP defines who qualifies as indigent for indigent patient bad debt purposes and shapes the financial assistance landscape that determines bad debt versus charity care classification.

Section 501(r)(5) Limitation on Charges

Tax-exempt hospitals cannot charge FAP-eligible individuals more than the amounts generally billed (AGB) to individuals with insurance. The AGB methodology is specified in Treasury regulations.

Section 501(r)(6) Reasonable Efforts Before Extraordinary Collection Actions

Tax-exempt hospitals must make reasonable efforts to determine FAP eligibility before engaging in extraordinary collection actions (ECAs). ECAs include reporting adverse information to credit agencies, selling debt to third parties, deferring care for nonpayment of prior bills, and similar aggressive collection activities.

The 240-day notification period requires that the hospital provide specific notices to the patient before initiating ECAs. The reasonable efforts requirement effectively means that tax-exempt hospitals must screen patients for FAP eligibility, provide multiple opportunities to apply, and document determinations before pursuing aggressive collection.

Treasury Final Regulations Section 1.501(r)-1 through 1.501(r)-7

Treasury Department final regulations implement Section 501(r) in detail. The regulations cover CHNA procedures, FAP requirements, AGB methodology, ECA limitations, and reporting requirements. The final regulations took effect for tax years beginning after December 29, 2015.

Section 9007 of the Affordable Care Act of 2010 Adding Section 501(r)

Section 9007 of the Affordable Care Act of 2010 added Section 501(r) to the Internal Revenue Code. The provision was part of broader ACA reforms addressing tax-exempt hospital community benefit obligations and consumer protections in medical billing.

Policy Context

Before Section 9007, tax-exempt hospital community benefit obligations were governed by a general "community benefit standard" articulated in IRS Revenue Ruling 69-545. The standard was broad and difficult to enforce, leading to concerns about tax-exempt hospital practices including aggressive collection of patient debts, lack of transparent financial assistance policies, and limited investment in community benefit beyond traditional medical care.

Section 9007 responded with specific, enforceable requirements: written financial assistance policies, charge limitations for FAP-eligible patients, reasonable efforts before extraordinary collection actions, and community health needs assessments. The requirements created a more uniform and accountable framework for tax-exempt hospital community benefit.

IRS Form 990 Schedule H

Section 9007 also expanded reporting through IRS Form 990 Schedule H. Tax-exempt hospitals file Schedule H annually, reporting:

• Community benefit (Part I)
• Community building (Part II)
• Bad debt expense, Medicare shortfall (Part III)
• Management companies (Part IV)
• Facility information (Part V)
• General information (Part VI)

Schedule H Part III specifically addresses bad debt expense, with hospitals reporting their bad debt totals, methodologies, and the portion attributable to financial assistance versus standard bad debt. The reporting provides transparency on hospital bad debt practices.

Enforcement and Compliance

IRS enforcement of Section 501(r) has been mixed since implementation. The IRS conducts compliance reviews and has authority to impose taxes or revoke tax-exempt status for noncompliance. High-profile compliance actions have addressed cases of significant non-compliance.

For Georgia hospitals, Section 501(r) compliance is a major operational focus alongside Medicare bad debt compliance. The two frameworks interact: indigency determinations under the FAP support indigent patient bad debt under Medicare; reasonable efforts before ECAs satisfy both Section 501(r) and Medicare bad debt reasonable collection effort standards.

Major Georgia Hospitals and Their Medicare Bad Debt Approach

Major Georgia hospitals each navigate Medicare bad debt compliance, with variation based on hospital type, patient mix, payer mix, and organizational sophistication.

Grady Memorial Hospital

Grady Memorial Hospital in Atlanta is Georgia's largest public hospital and a major safety-net hospital serving the Atlanta metropolitan area. Grady has substantial Medicare bad debt exposure because of its high-volume Medicare population and significant dual eligible population.

Crossover bad debt is particularly important at Grady. The hospital's dual eligible patient population, combined with Georgia Medicaid's payment methodology, generates substantial annual crossover bad debt claims. Grady's revenue cycle operations include specialized handling for crossover bad debt to ensure proper Medicaid billing, remittance advice retention, and cost report inclusion.

Grady is also a tax-exempt hospital subject to Section 501(r). The hospital maintains a published financial assistance policy and has implemented Section 501(r) compliance procedures.

Emory University Hospital and Emory University Hospital Midtown

Emory University Hospital and Emory University Hospital Midtown are major academic medical centers in Atlanta. As tax-exempt hospitals within the Emory Healthcare system, both hospitals operate under Section 501(r) financial assistance policies and Section 9007 ACA framework.

Emory's Medicare bad debt volume reflects its substantial Medicare patient base. The academic medical center patient mix includes complex cases with high overall charges, generating significant cost-sharing obligations and corresponding bad debt potential.

Memorial Health Savannah

Memorial Health Savannah serves the coastal Georgia region. The hospital's Medicare bad debt operations follow standard frameworks with attention to crossover bad debt for the dual eligible population in the region.

AU Medical Center

AU Medical Center in Augusta is the teaching hospital of the Medical College of Georgia at Augusta University. The academic medical center generates substantial Medicare bad debt, with crossover bad debt and indigent patient bad debt both significant.

Phoebe Putney Memorial Hospital

Phoebe Putney Memorial Hospital in Albany serves southwest Georgia. The hospital faces substantial bad debt exposure because of the rural, low-income population it serves. Phoebe Putney has historically faced scrutiny over its financial assistance and collection practices, contributing to broader policy attention on tax-exempt hospital bad debt practices.

Atrium Health Floyd

Atrium Health Floyd in Rome serves northwest Georgia. The hospital operates within the larger Atrium Health system and follows system-wide bad debt management protocols.

Northeast Georgia Medical Center

Northeast Georgia Medical Center in Gainesville is a major regional hospital. The hospital's Medicare bad debt operations follow standard frameworks for its size and patient mix.

Wellstar Health System

Wellstar operates multiple hospitals across the Atlanta metropolitan area. System-wide bad debt management ensures consistent application of Medicare bad debt rules and Section 501(r) compliance across the network.

Piedmont Healthcare

Piedmont Healthcare operates multiple hospitals across Georgia. As a tax-exempt system, Piedmont navigates Section 501(r) compliance alongside Medicare bad debt management.

Northside Hospital

Northside Hospital operates multiple campuses in metropolitan Atlanta and surrounding areas. Northside's bad debt management reflects its multi-campus organization and tax-exempt status.

Children's Healthcare of Atlanta

Children's Healthcare of Atlanta serves pediatric patients with lower Medicare exposure than adult hospitals. The hospital's bad debt management addresses commercial and Medicaid bad debt more substantially than Medicare, though Medicare bad debt for pediatric patients on Medicare disability or ESRD does exist.

Rural Georgia Hospitals

Multiple rural Georgia hospitals face proportionally higher bad debt exposure than urban hospitals because of patient mix, payer mix, and limited revenue diversification. Section 501(r) compliance challenges and Medicare bad debt management both stretch rural hospital administrative capacity. Brevy at brevy.com tracks rural hospital financial pressures alongside Medicare bad debt policy developments because of their direct impact on rural Georgia eldercare access.

Worked Example 1: Grady Memorial Hospital Bad Debt

Consider a hypothetical fiscal year scenario for Grady Memorial Hospital. The hospital generates substantial Medicare bad debt including both standard bad debt and crossover bad debt for dual eligibles. Assume the following:

• Total Medicare Part A bad debt: $8,500,000
• Total Medicare Part B bad debt: $2,300,000
• Crossover bad debt portion: $4,200,000 (49 percent of total)
• Indigent patient bad debt portion: $1,800,000
• Standard bad debt portion: $4,800,000

Under the 65 percent reimbursement rate, the hospital's gross bad debt reimbursement would be:

• Part A: $8,500,000 × 0.65 = $5,525,000
• Part B: $2,300,000 × 0.65 = $1,495,000
• Total gross: $7,020,000

Audit adjustments are common at high-volume hospitals like Grady. Assume Palmetto GBA disallows 8 percent of the claimed bad debt due to documentation issues:

• Disallowed: $10,800,000 × 0.08 = $864,000
• Net allowable bad debt: $10,800,000 − $864,000 = $9,936,000
• Net reimbursement: $9,936,000 × 0.65 = $6,458,400

This represents substantial annual Medicare revenue from bad debt reimbursement, alongside the hospital's IPPS payments, DSH payments, IME and DGME payments, 340B revenue, and other Medicare revenue streams.

The crossover bad debt portion is operationally distinct: each crossover account requires a Medicaid remittance advice as documentation. The hospital's revenue cycle staff specialize in billing Georgia Medicaid for dual eligible cost-sharing, retaining the remittance advices, and assembling the crossover bad debt log.

Worked Example 2: Crossover Bad Debt for a Dual Eligible Beneficiary

Consider a specific dual eligible scenario. A 78-year-old Georgia Medicare beneficiary, also enrolled in Georgia Medicaid as a dual eligible, is admitted to a Georgia hospital for a covered Medicare inpatient stay. Assume the following:

• Medicare DRG payment to hospital: $12,400
• Medicare Part A inpatient deductible (FY 2026): $1,696
• Beneficiary's responsibility: $1,696

Because the beneficiary is a dual eligible, the hospital bills Georgia Medicaid for the $1,696 deductible. Georgia Medicaid applies its "lesser of" methodology:

• Medicare allowed payment (including deductible): $14,096
• Georgia Medicaid would have paid for this admission: $11,200
• The state pays the lesser of $1,696 (deductible) or $14,096 − $11,200 = $2,896
• Result: state pays $1,696 OR nothing if the formula yields a negative

In many Georgia cases, the Medicare payment alone exceeds the Georgia Medicaid rate, yielding a zero or low state payment under "lesser of" methodology. Assume Georgia Medicaid pays zero in this scenario.

The hospital receives the Medicaid remittance advice showing $0 payment for the Medicare deductible. The hospital writes off the $1,696 as crossover bad debt without pursuing the beneficiary.

Under the 65 percent reimbursement rate, the hospital recovers:

• $1,696 × 0.65 = $1,102.40

Across thousands of dual eligible admissions annually, the crossover bad debt totals substantial revenue. For safety-net hospitals like Grady with concentrated dual eligible populations, crossover bad debt is a significant Medicare revenue stream.

Worked Example 3: Phoebe Putney Rural Bad Debt

Consider a hypothetical scenario for Phoebe Putney Memorial Hospital, serving southwest Georgia. Rural Georgia patient populations include significant Medicare beneficiaries, dual eligibles, and indigent patients. Assume the following annual bad debt:

• Total Medicare Part A bad debt: $3,200,000
• Total Medicare Part B bad debt: $850,000
• Crossover bad debt portion: $1,800,000
• Indigent patient bad debt portion: $620,000
• Standard bad debt portion: $1,630,000

Under the 65 percent rate:

• Total bad debt: $4,050,000
• Gross reimbursement: $4,050,000 × 0.65 = $2,632,500

Audit adjustments at a rural hospital may be slightly lower as a percentage if documentation is well-maintained. Assume 5 percent adjustment:

• Disallowed: $4,050,000 × 0.05 = $202,500
• Net allowable: $3,847,500
• Net reimbursement: $3,847,500 × 0.65 = $2,500,875

The bad debt reimbursement contributes meaningfully to Phoebe Putney's overall financial sustainability, alongside DSH payments, low-volume hospital adjustments, sole community hospital status (if applicable), and other revenue.

For rural hospitals facing chronic financial pressure, every dollar of bad debt reimbursement matters. The 65 percent rate (down from 100 percent before BBA 1997) has constrained rural hospital revenue at a time when rural hospital closures have accelerated nationally.

Worked Example 4: Emory University Hospital Bad Debt

Consider a hypothetical scenario for Emory University Hospital. As a large academic medical center, Emory generates substantial Medicare bad debt across its complex case mix. Assume:

• Total Medicare Part A bad debt: $6,800,000
• Total Medicare Part B bad debt: $2,100,000
• Crossover bad debt portion: $2,700,000
• Indigent patient bad debt portion: $1,200,000
• Standard bad debt portion: $5,000,000

Gross reimbursement at 65 percent:

• Total bad debt: $8,900,000
• Gross reimbursement: $8,900,000 × 0.65 = $5,785,000

Assume 6 percent audit adjustment:

• Disallowed: $8,900,000 × 0.06 = $534,000
• Net allowable: $8,366,000
• Net reimbursement: $8,366,000 × 0.65 = $5,437,900

Emory's bad debt operations include sophisticated documentation, integrated revenue cycle technology, and dedicated bad debt management staff. The hospital's tax-exempt status requires Section 501(r) compliance, which aligns with bad debt management for indigent patient and reasonable collection effort considerations.

Worked Example 5: AU Medical Center Bad Debt

Consider AU Medical Center in Augusta. As an academic medical center serving a mixed urban-rural population in eastern Georgia, AU Medical Center has a distinct bad debt profile. Assume:

• Total Medicare Part A bad debt: $4,500,000
• Total Medicare Part B bad debt: $1,400,000
• Crossover bad debt portion: $2,100,000
• Indigent patient bad debt portion: $850,000
• Standard bad debt portion: $2,950,000

Gross reimbursement at 65 percent:

• Total bad debt: $5,900,000
• Gross reimbursement: $5,900,000 × 0.65 = $3,835,000

After audit adjustment (7 percent):

• Disallowed: $5,900,000 × 0.07 = $413,000
• Net allowable: $5,487,000
• Net reimbursement: $5,487,000 × 0.65 = $3,566,550

AU Medical Center's bad debt reimbursement supports the academic medical center's financial sustainability alongside IME, DGME, DSH, and other Medicare revenue.

Worked Example 6: Indigent Patient Bad Debt

Consider a specific indigent patient scenario. A 72-year-old Georgia Medicare beneficiary, not a dual eligible but with household income below 200 percent of the federal poverty level, is admitted to a Georgia hospital for a covered Medicare inpatient stay. Assume:

• Medicare DRG payment: $9,800
• Medicare Part A deductible owed by beneficiary: $1,696

The beneficiary applies for the hospital's financial assistance program. The hospital reviews the application, confirms income below 200 percent of FPL, and determines the beneficiary is FAP-eligible. Under the hospital's FAP, the beneficiary qualifies for a write-off of the Medicare cost-sharing as bad debt under the indigent patient category.

The hospital documents:

• The FAP application
• Income verification
• The FAP-eligibility determination
• The bad debt write-off under indigent patient category

No 120-day reasonable collection effort is required because the indigency determination substitutes for typical collection effort.

The hospital recovers:

• $1,696 × 0.65 = $1,102.40

This worked example illustrates how Section 501(r) FAP compliance, indigent patient bad debt, and Medicare reimbursement interact. The hospital's tax-exempt obligations and Medicare bad debt rules reinforce each other in this category.

Beneficiary Access and Practical Implications

Medicare bad debt rules primarily affect hospitals, not beneficiaries directly. However, beneficiaries are affected indirectly through several channels.

Hospital Financial Sustainability

Medicare bad debt reimbursement contributes to hospital financial sustainability, particularly for safety-net hospitals and rural hospitals. When bad debt reimbursement is reduced (as during the BBA 1997 phase-down and the 2012 reduction to 65 percent), hospital financial pressure increases. This affects beneficiaries through hospital closures, service reductions, and changes in patient experience.

For Georgia, rural hospital closures have been a particular concern. While Georgia has not experienced the rural hospital closure crisis seen in some states, rural hospitals remain financially fragile, and bad debt reimbursement is one factor in their financial picture.

Section 501(r) Protections

Section 501(r) provides beneficiaries with specific consumer protections at tax-exempt hospitals. Written financial assistance policies, limitations on charges to FAP-eligible individuals, and reasonable efforts before extraordinary collection actions all benefit beneficiaries facing inability to pay cost-sharing.

Beneficiaries should know they can apply for financial assistance at tax-exempt hospitals and that the hospital is required to make reasonable efforts to determine their FAP eligibility before pursuing aggressive collection. The 240-day notification period gives beneficiaries time to apply and have their application reviewed.

Dual Eligible Protections

Dual eligible beneficiaries benefit from crossover bad debt rules in a unique way. Because the hospital does not pursue the dual eligible beneficiary directly for the Medicare cost-sharing when state Medicaid refuses to pay (assuming the standard "lesser of" methodology applies), dual eligibles are protected from collection pressure on Medicare deductibles and coinsurance.

This protection is important for low-income dual eligibles who often cannot afford even modest cost-sharing amounts. The crossover bad debt mechanism effectively shields them from direct billing pressure while allowing the hospital to recover a portion through Medicare reimbursement.

Medical Debt and Credit Reporting

Recent reforms have addressed medical debt's impact on consumer credit. In 2022, major credit bureaus removed medical debt under $500 from credit reports. Other reforms have addressed how medical debt is collected and reported. These changes benefit beneficiaries by reducing the long-term credit consequences of unpaid medical bills.

For Georgia beneficiaries, state law adds additional consumer protections. Georgia's medical debt rules interact with federal Section 501(r) requirements and Medicare bad debt rules to create a multi-layered consumer protection framework.

Information and Advocacy

Beneficiaries who face inability to pay Medicare cost-sharing should:

1. Apply for the hospital's financial assistance program
2. Request information about charity care eligibility
3. Discuss payment plans
4. For dual eligibles, ensure Medicaid eligibility is current
5. Seek help from Atlanta Legal Aid (404-377-0701), Georgia Legal Services Program (1-800-498-9469), Medicare Rights Center (1-800-333-4114), or GeorgiaCares SHIP (1-866-552-4464) for advocacy assistance

Recent CMS Rulemaking and Policy

CMS periodically addresses Medicare bad debt through rulemaking and sub-regulatory guidance. While the basic statutory framework has been stable since the 2012 finalization at 65 percent, operational details continue to evolve.

Annual IPPS Final Rule

The annual IPPS final rule occasionally addresses bad debt issues, particularly when statutory or regulatory changes require implementation guidance. Most years, however, the bad debt framework is not significantly modified in the IPPS rule.

Manual Updates

The Provider Reimbursement Manual Part 1 Chapter 3 receives periodic updates reflecting CMS clarifications on documentation, crossover bad debt, indigent patient treatment, and other operational matters. Hospitals reference the current manual version for compliance.

MAC Bulletins and Guidance

Palmetto GBA and other MACs issue bulletins, FAQs, and guidance addressing bad debt audit issues, documentation standards, and procedural requirements. Hospital finance staff monitor MAC guidance to maintain compliance.

Policy Debate

Periodic policy debate over Medicare bad debt continues. MedPAC has analyzed bad debt reimbursement over the years, with recommendations ranging from further reductions to maintaining the current 65 percent rate. The AHA has consistently advocated for maintaining or increasing bad debt reimbursement, citing hospital financial sustainability.

No major legislative changes to Medicare bad debt have occurred since the 2012 finalization at 65 percent. The framework has been stable for more than a decade.

Bad Debt and Charity Care Interaction

The interaction between bad debt and charity care is operationally and legally significant. Both are mechanisms for handling patient inability to pay, but they receive different treatment under Medicare and IRS rules.

Definitions

• Bad debt: charges that the hospital pursued for collection but determined to be uncollectible
• Charity care: charges that the hospital waived based on patient inability to pay, without pursuing collection

The distinction often turns on the timing and procedural posture of the patient's financial assistance determination.

Medicare Treatment

Medicare treats bad debt and charity care differently. Bad debt qualifies for Medicare reimbursement under Section 1861(v)(1)(T) if it meets the four-part eligibility test. Charity care does not qualify for Medicare reimbursement; the hospital absorbs the charity care cost without Medicare offset.

IRS Form 990 Schedule H Treatment

The IRS Form 990 Schedule H separately tracks bad debt and charity care. Charity care is reported as community benefit (Part I), supporting the hospital's tax-exempt status justification. Bad debt is reported separately (Part III) and generally is not counted as community benefit.

Conversion Restrictions

Hospitals cannot freely convert charity care to bad debt or vice versa. Specific rules govern how an account is classified, and the classification typically follows from the procedural treatment at the time of the underlying transaction.

Strategic Implications

The classification choice has strategic implications. For tax-exempt hospitals, charity care supports community benefit reporting. For Medicare reimbursement, bad debt provides cash recovery. Hospital revenue cycle and finance teams structure their financial assistance programs and collection processes to optimize across both frameworks within the constraints of applicable rules.

Compliance and Audit Best Practices

Compliance and audit best practices for Medicare bad debt include:

1. Documented bad debt policy: written internal policy specifying determination criteria, collection effort procedures, documentation requirements, and approval processes.

2. Activity logs: comprehensive collection activity documentation in each patient account, including dates, types, and outcomes of all collection contacts.

3. Crossover bad debt protocol: specific procedures for billing state Medicaid for dual eligibles, retaining remittance advices, and classifying crossover bad debt.

4. Indigent patient determination: documented financial assistance applications, income/asset verification, eligibility determinations, and policy compliance.

5. Reasonable collection effort consistency: same collection practices for Medicare and non-Medicare accounts, monitored for compliance.

6. MSP screening: front-end identification of MSP situations and proper development.

7. Section 501(r) compliance: FAP maintenance, AGB calculation, ECA limitations, and required notices.

8. Cost report bad debt detail: comprehensive bad debt log with patient-level detail.

9. Audit preparation: maintained documentation readily available for MAC audit.

10. Appeals readiness: process for identifying audit adjustments warranting PRRB appeal.

11. Staff training: regular training on bad debt requirements, Section 501(r) requirements, and documentation standards.

12. Internal monitoring: periodic internal review of bad debt compliance.

13. External advisor engagement: cost report consultants and bad debt specialists for complex situations.

14. Industry engagement: participation in industry bad debt discussions, AHA bad debt advocacy, and policy monitoring.

Common Bad Debt Errors and How to Avoid Them

Common errors that result in Medicare bad debt denial or reduction include:

1. Inadequate collection effort documentation: failing to maintain dated activity logs in patient accounts

2. Missing Medicaid remittance advices for crossover bad debt: claiming crossover without documentation of Medicaid refusal or partial payment

3. Inconsistent collection practices between Medicare and non-Medicare accounts: applying lesser effort to Medicare cases

4. Inadequate indigency determination documentation: claiming indigent patient bad debt without proper FAP application and determination records

5. Improper classification of non-covered service amounts: claiming bad debt for non-covered services that are not eligible

6. Premature uncollectibility determination: writing off as bad debt before the minimum 120-day collection period has elapsed for non-crossover cases

7. MSP situations not properly developed: failing to pursue primary payers in MSP situations

8. Allocation errors between Part A and Part B: improper splitting of mixed accounts

9. Inconsistent application of internal bad debt policy: arbitrary or selective bad debt determinations

10. Section 501(r) compliance gaps: ECAs initiated without reasonable efforts to determine FAP eligibility

11. Cost report reporting errors: math errors, transposition errors, or improper line items

12. Failure to update for statutory or regulatory changes: applying outdated rates or rules

13. Missing PRRB appeal deadlines: failing to file within 180 days of NPR

14. Inadequate audit response: not providing requested documentation timely

Frequently Asked Questions

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What is Medicare bad debt under Section 1861(v)(1)(T)?

Medicare bad debt under Section 1861(v)(1)(T) of the Social Security Act is unpaid Medicare beneficiary cost-sharing (deductibles and coinsurance) that the hospital is unable to collect. Medicare reimburses hospitals 65 percent of qualifying bad debts that meet the four-part eligibility test.

What is the current Medicare bad debt reimbursement rate?

Most providers receive 65 percent reimbursement of qualifying bad debt, finalized by Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012 effective fiscal year 2013. Certain provider types may have different rates.

What is the four-part bad debt eligibility test?

Bad debt must (1) relate to covered Medicare services, (2) reflect a reasonable collection effort, (3) be actually uncollectible, and (4) reflect sound business judgment in the write-off determination. All four elements must be met.

What is reasonable collection effort?

Reasonable collection effort typically requires a minimum 120 days of documented collection activity from the first bill, including multiple collection contacts (statements, telephone calls, letters) and the same collection practices used for non-Medicare patients.

What is crossover bad debt?

Crossover bad debt is unpaid Medicare cost-sharing for dual eligible Medicare-Medicaid beneficiaries when state Medicaid refuses to pay or only partially pays. The state Medicaid remittance advice documenting refusal substitutes for the typical reasonable collection effort.

Do I have to pay Medicare cost-sharing if I am a dual eligible Medicare-Medicaid beneficiary?

For most services, no direct billing pressure applies to dual eligibles because of crossover bad debt rules. The hospital bills state Medicaid; when state Medicaid refuses, the hospital writes off as crossover bad debt without pursuing the dual eligible beneficiary directly.

What is Section 501(r) of the Internal Revenue Code?

Section 501(r), added by Section 9007 of the Affordable Care Act of 2010, requires tax-exempt hospitals to maintain a financial assistance policy, limit charges to FAP-eligible individuals, and make reasonable efforts to determine FAP eligibility before extraordinary collection actions.

What is a financial assistance policy (FAP)?

A FAP is the written policy that tax-exempt hospitals must maintain under Section 501(r)(4). It specifies eligibility criteria for free or discounted care, the application process, charge limitations, and actions for nonpayment.

How do I apply for financial assistance at a Georgia hospital?

Tax-exempt Georgia hospitals must publicize their FAPs. You can request the FAP and application from the hospital's financial counseling office, billing office, or website. Each hospital has its own application process and eligibility criteria.

What are extraordinary collection actions (ECAs)?

ECAs include reporting adverse information to credit agencies, selling debt to third parties, deferring care for prior nonpayment, and similar aggressive collection activities. Tax-exempt hospitals must make reasonable efforts to determine FAP eligibility before initiating ECAs.

What is the difference between bad debt and charity care?

Bad debt arises when the hospital pursued collection and determined the debt uncollectible. Charity care arises when the hospital waived charges based on inability to pay without pursuing collection. The two have different Medicare and IRS treatment.

How is Medicare bad debt reported on the cost report?

Hospitals report Medicare bad debt on Worksheet E Part A (Part A bad debt) and Worksheet E Part B (Part B bad debt) of Form CMS-2552-10. Detailed bad debt logs support the reported figures.

Who audits Medicare bad debt for Georgia hospitals?

Palmetto GBA is the Medicare Administrative Contractor for Georgia hospitals. Palmetto audits cost reports including bad debt, issues Notices of Program Reimbursement, and processes audit appeals through the Provider Reimbursement Review Board.

What is the PRRB?

The Provider Reimbursement Review Board, established under 42 CFR 405.1801 through 405.1898, is the independent administrative appeals body hearing Medicare cost report disputes including bad debt disputes.

How long do hospitals have to appeal to the PRRB?

Hospitals must file PRRB appeals within 180 days of the Notice of Program Reimbursement from the MAC.

What is indigent patient bad debt?

Indigent patient bad debt is bad debt for patients determined indigent under the provider's documented financial assistance policy. The indigency determination substitutes for the typical 120-day reasonable collection effort.

What is Medicare Secondary Payer (MSP) bad debt?

MSP bad debt is bad debt from situations where Medicare is a secondary payer (after workers compensation, no-fault, employer group health, etc.). Hospitals must pursue the primary payer first and document the MSP development before claiming Medicare bad debt.

How does Section 9007 of the ACA affect Georgia hospitals?

Section 9007 added Section 501(r) to the IRC, imposing financial assistance, billing, and community benefit requirements on tax-exempt hospitals. Georgia tax-exempt hospitals must maintain FAPs, limit charges to FAP-eligible patients, and follow Section 501(r) procedures.

What is IRS Form 990 Schedule H?

Schedule H is the IRS form on which tax-exempt hospitals report community benefit, bad debt expense, Medicare shortfall, and other information annually. Part III specifically addresses bad debt.

Has medical debt been removed from credit reports?

In 2022, major credit bureaus removed medical debt under $500 from credit reports. Additional reforms have addressed how medical debt is collected and reported.

What protections does Georgia state law provide for medical debt?

Georgia state law provides various consumer protections for medical debt, including disclosure requirements, billing practices regulations, and limits on certain collection practices. Specific protections may apply depending on the situation.

How does crossover bad debt interact with Georgia Medicaid policy?

Georgia Medicaid generally applies a "lesser of" methodology for Medicare-Medicaid crossover claims, often resulting in zero or low state payment when Medicare's payment exceeds the Georgia Medicaid rate. The unpaid portion qualifies as crossover bad debt for the hospital.

What major Georgia hospitals have substantial Medicare bad debt?

Grady Memorial Hospital, Emory University Hospital, Emory University Hospital Midtown, Memorial Health Savannah, AU Medical Center, Phoebe Putney Memorial Hospital, Atrium Health Floyd, Northeast Georgia Medical Center, Wellstar, Piedmont, Northside, and Children's Healthcare of Atlanta all manage Medicare bad debt at varying scales. Safety-net hospitals and rural hospitals typically have proportionally higher bad debt exposure.

Can a beneficiary be sued for Medicare cost-sharing in Georgia?

Generally, hospitals can pursue legal action for unpaid medical bills under standard collection law, subject to Section 501(r) limitations on extraordinary collection actions for tax-exempt hospitals. Hospitals must make reasonable efforts to determine FAP eligibility before extraordinary collection. Beneficiaries should apply for financial assistance and seek legal advocacy if facing aggressive collection.

Where can Georgia families get help with Medicare cost-sharing and bad debt issues?

GeorgiaCares SHIP (1-866-552-4464), Atlanta Legal Aid (404-377-0701), Georgia Legal Services Program (1-800-498-9469), Medicare Rights Center (1-800-333-4114), Medicare (1-800-MEDICARE), and the Eldercare Locator (1-800-677-1116) all provide assistance with Medicare cost-sharing, financial assistance applications, and bad debt issues. :::

How Brevy Helps Georgia Families Navigate Medicare Bad Debt and Financial Assistance

Brevy at brevy.com helps Georgia Medicare beneficiaries, families, and caregivers understand the Medicare bad debt framework, hospital financial assistance options, and Section 501(r) consumer protections. While Medicare bad debt is primarily a hospital finance issue, beneficiaries are affected through hospital financial sustainability, financial assistance program access, dual eligible protections, and consumer rights in collection.

Our team monitors annual IPPS rulemaking, Provider Reimbursement Manual updates, MAC bulletins, PRRB decisions, Section 501(r) compliance developments, and policy debate over bad debt reimbursement rates. We translate technical rules into plain-language guidance for Georgia families navigating hospital billing, financial assistance applications, and dual eligible Medicare-Medicaid coordination.

Brevy maintains comprehensive Georgia state guides covering Medicaid (including Medicare-Medicaid coordination), Medicare benefits, hospital payment programs, and consumer protections. When a Georgia family encounters hospital billing issues, our guides explain the underlying framework, identify resources, and point toward advocacy organizations that can help.

For dual eligible beneficiaries, Brevy emphasizes the crossover bad debt protections that shield dual eligibles from direct billing pressure for Medicare cost-sharing. For all Medicare beneficiaries at tax-exempt Georgia hospitals, Brevy explains Section 501(r) financial assistance policy rights and the procedural protections before extraordinary collection actions.

Disclaimers

This guide describes the Medicare bad debt framework, including Section 1861(v)(1)(T) of the Social Security Act, Section 4008 of OBRA 1987, Section 4451 of BBA 1997, Section 3201 of the Middle Class Tax Relief and Job Creation Act of 2012, 42 CFR 413.89, Provider Reimbursement Manual Part 1 Chapter 3, and related rules as of May 2026. Statutory provisions, regulatory text, and CMS guidance change over time. Verify current rules with Medicare (1-800-MEDICARE), CMS (cms.gov), Palmetto GBA (palmettogba.com), the Georgia Department of Community Health (dch.georgia.gov), or qualified professional advisors.

The worked examples are hypothetical and illustrative. Actual hospital bad debt amounts, audit adjustments, and Medicare reimbursement vary based on specific facts, hospital type, fiscal year, and audit findings. Cost report figures are subject to MAC audit and PRRB appeal.

Section 501(r) compliance involves complex IRS and Treasury Department regulations. Tax-exempt hospitals should consult qualified tax counsel for specific compliance questions.

This guide is not legal, financial, or tax advice. Beneficiaries facing hospital billing issues should contact Medicare, GeorgiaCares SHIP, Atlanta Legal Aid, Georgia Legal Services Program, the Medicare Rights Center, or a qualified attorney for specific situations. Hospitals seeking Medicare bad debt guidance should consult qualified cost report consultants, attorneys, or industry advisors.

::: cta

Get Help with Medicare Cost-Sharing, Bad Debt, and Hospital Financial Assistance

If you are a Georgia Medicare beneficiary or family member dealing with hospital bills, financial assistance applications, or bad debt issues, these resources can help. Brevy at brevy.com provides comprehensive Georgia state guides on Medicare, Medicaid, and hospital payment programs.

Medicare and Medicaid

• Medicare: 1-800-MEDICARE (1-800-633-4227)
• Palmetto GBA Customer Service: 1-866-238-9650
• CMS Provider Enrollment: 1-866-484-8049
• Georgia DCH Medicaid Member Services: 1-866-211-0950

Beneficiary Assistance and Advocacy

• GeorgiaCares State Health Insurance Assistance Program (SHIP): 1-866-552-4464
• Medicare Rights Center: 1-800-333-4114
• Atlanta Legal Aid: 404-377-0701
• Georgia Legal Services Program: 1-800-498-9469
• 211 Georgia: dial 211 from any Georgia phone
• Eldercare Locator: 1-800-677-1116

Federal Consumer Protection

• Consumer Financial Protection Bureau (CFPB): 1-855-411-2372
• Federal Trade Commission (FTC): 1-877-FTC-HELP (1-877-382-4357)

Tax and Regulatory

• IRS Tax-Exempt and Government Entities Division: 1-877-829-5500
• Georgia Department of Insurance: 1-800-656-2298

Major Georgia Hospital Patient Financial Services

• Grady Memorial Hospital Patient Financial Services: 404-616-1000 (main); patient financial services available through main number
• Emory Healthcare Patient Financial Services: 404-778-7318

If you cannot pay your Medicare cost-sharing or other hospital charges, ask the hospital about financial assistance immediately. Tax-exempt hospitals are required under Section 501(r) of the Internal Revenue Code to maintain financial assistance policies and make reasonable efforts to determine your eligibility before pursuing aggressive collection. If you are a dual eligible Medicare-Medicaid beneficiary, crossover bad debt protections generally mean you should not be directly pursued for Medicare cost-sharing when Georgia Medicaid does not pay. Contact GeorgiaCares SHIP or legal services for advocacy assistance if needed. :::

Related Brevy Guides

• Georgia Medicaid Overview
• Medicare Cost Report (Georgia)
• Medicare Disproportionate Share Hospital (Georgia)
• Medicare Hospital Readmissions Reduction Program (Georgia)
• Medicare Hospital Value-Based Purchasing (Georgia)
• Medicare Hospital Inpatient Benefit (Georgia)
• Medicare 340B Drug Pricing (Georgia)