Certified Revenue Cycle Representative (CRCR) Practice Exam

How long should a provider pursue an account before it can be classified as a bad debt for Medicare?

1. 90 days

2. 120 days

3. 150 days

4. 180 days

The correct answer is: 120 days

To classify an account as bad debt for Medicare, a provider should pursue the account for a period of 120 days. This guideline is based on Medicare's policies regarding the collection of amounts owed by beneficiaries. The 120-day limit allows providers sufficient time to attempt to collect the outstanding balance before deeming it uncollectible. During these 120 days, providers should make reasonable efforts to collect the debt, which may include sending multiple statements and making attempts to contact the patient. Only after this period has elapsed without payment should the account be classified as bad debt. This classification is important for providers, as it allows them to potentially recover some losses through the bad debt reimbursement process from Medicare. In contrast, shorter timeframes like 90 days may not provide adequate opportunity to resolve the outstanding account, while longer periods like 150 or 180 days exceed the standard guidelines, making those options incorrect for Medicare's classification of bad debt.