Is it Bad Debt?
Should insurance write-offs due to untimely filing be included in management reports as bad debt?
Question: Should insurance write-offs due to untimely filing be included in management reports as bad debt?
Answer: There's no rule per se, but write-offs due to time-of-filing are normally included as bad debt. For example, the Medical Group Management Association includes the following in its definition for bad debt:
- Losses on settlements for less than the billed amount.
- Accounts written off as not collectible (this includes timely filing denials).
- Accounts assigned to collection agencies.
- In the case of accrual accounting, the provision for bad debts.
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