Medicare Bad Debt

Medicare Bad Debt (MBD) is a significant revenue opportunity for many hospitals. However, claiming these payments is complicated. Hospitals must accurately identify potential coinsurance and deductible amounts, eliminate non-eligible amounts, and cross-match the remaining amounts against the hospital’s own bad debt write-off information.

HPS works with hospitals to maximize MBD reimbursement using our STINGRAY™ platform. STINGRAY automates the MBD review process: identifying coinsurance and deductible amounts from Medicare claims, cross-referencing that information against state Medicaid paid claims information, eliminating non-allowable deductible and coinsurance amounts, and reconciling the remaining amounts against the hospital’s own encounter and transaction data. STINGRAY’s unique processing and integration capabilities integrates this disparate data and delivers accurate findings in a format that can be easily submitted to CMS.


The STINGRAY Medicare Bad Debt Module has been Peer Reviewed by HFMA, and Healthcare Payment Specialists is the only firm to receive HFMA Peer Reviewed Designation for Medicare Reimbursable Bad Debt Review.

HPS Solution

  • Utilizes sophisticated regressive analysis to match information from Medicare claims against state Medicaid paid claims lists to determine which crossover bad debts are allowed to be claimed as Medicare Bad Debt
  • Eliminates ineligible coinsurance and deductible amounts
  • Matches the allowable coinsurance and deductible amounts back to the encounter and transaction data to mirror what the hospital actually recorded as a bad debt write-off
  • Analyzes the hospital’s accounting and transaction codes to provide in-depth analysis to find bad debts that are reimbursable but may have been missed by the hospital
  • Delivers results with the full documentation required for submission to Medicare
  • Delivered as either a consulting service (with HPS performing the analysis) or as a SaaS solution with HPS implementing STINGRAY for the hospital to use to perform its own analysis

Case Study

200+ Bed Hospital — Recovered $1.9MM for one year reviewed

Southeastern 200+ bed independent community hospital that admits more than 15,500 inpatients per year.

Opportunity / Challenge

The hospital’s reimbursement team had identified and submitted bad debt claims using internal processes. However, verifying eligibility and tracking payments can be complex.  In certain cases, claims eligible for reimbursement were hard to find because a patient did not provide complete information upon admission. Additionally, compiling the documentation needed to support claims through audit was a time-consuming and onerous task. Their Medicare auditor would reject the claims that the hospital’s staff spent so much time and energy tracking and submitting due to missing information. This complexity was heightened for this   hospital due to turnovers in reimbursement personnel and changes in accounting processes. While a national accounting firm had been engage to analyze the hospital’s MBD, the project wasn’t completed, so the hospital asked HPS to review all of their Inpatient and Outpatient accounts.


Using HPS’s proprietary bad debt tool, STINGRAY™ (HFMA’s only Peer Reviewed Medicare Bad Debt solution), HPS screened every patient accounts to identify bad debt reimbursement opportunities. STINGRAY compared data feeds – such as the detailed Medicare PSR, the Medicaid Claims listing, multiple collection agency data, and historical bad debt logs to the hospital’s patient transaction and demographic information. Through a series of regressive comparisons and analyses, HPS reconciled 100% of the Medicare deductible and coinsurance to identify the ultimate disposition of each inpatient and outpatient claim while identifying eligible charity, crossover, and self-pay bad debt accounts. HPS provided a complete reconciliation of outstanding account balances that should have been written off as Medicare bad debt. HPS continued to track unpaid accounts to fully support the additional claims as they moved through the collection, write-off, submission, and audit process until the bad debt was reimbursed by Medicare.


  • Recovered more than $1.9MM for one year of bad debt recovery
  • Completed the project within 60 days of data delivery

Client Testimonial

“We compared HPS to other vendors and chose them as the national leader that could best support our organization. While performing due diligence, I discovered that many of my colleagues throughout the Midwest also chose HPS. All of them spoke very highly of their experiences, and success, and offered their recommendations. The technical support and customer service have been stellar. Your diligence and thoroughness is to be highly commended.” Neil Kadlec, Director of Reimbursement, Essentia Health