To guide staff through the complexities of charity care and discount determination, a healthcare provider's charity care policy should address more than just income and asset criteria.

In addition to financial eligibility criteria, charity care policies should also address:

  •   Eligibility determinations when there is insufficient information provided by the patient to fully evaluate all the criteria, and the ability to pay cannot be reliably determined.
  •   The extent of verification necessary for eligibility determinations.
  •   Any modification of a determination already made if subsequent information indicates the information relied upon was in error.
  •   The time frame within which patients are eligible for charity care.
  •   The frequency of evaluation of the adequacy of the charity care allowance.
  •   Discounts for low-income, uninsured patients who have the ability to pay a small portion of their bill.
  •   The criteria for a collection to be reasonably assured under GAAP.


Excerpted from "P&P Board Statement 15: Valuation and Financial Statement Presentation of Charity Care and Bad Debts by Institutional Healthcare Providers, HFMA, December 2006.


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Publication Date: Thursday, June 05, 2008