Sorry, you need to enable JavaScript to visit this website.

Title: Section 442.13 - Deductions from operating revenue

442.13 Deductions from operating revenue. (1330) (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.

(b) These revenue adjustments are called Deductions from Revenue and are of the following primary categories:

(1) Provision for bad debts. These deductions represent the estimated amount of current revenues 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) Policy discounts. These deductions represent adjustments for items such as courtesy allowances and employee discounts from the hospital's full established charges for services.

(5) 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.

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


VOLUME C (Title 10)