Charity Care

Calculating Uncompensated Care Costs

October 25, 2012 11:30 am

In order to more accurately uncompensated care across all hospitals, the American Hospital Association calculates bad debt and charity care on a cost basis. Use the following formula as a guide to gauge uncompensated care costs within your organization: 

  • Uncompensated Care Charges = Bad Debt Charges + Charity Care Charges
  • Cost-to-Charge Ratio = Total Expenses Exclusive to Bad Debt / Gross Patient Revenue + Other Operating Revenue
  • Uncompensated Care Costs = Uncompensated Care Charges x Cost-to-Charge Ratio

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