Does the organization report bad debt expense in accordance with Healthcare Financial Management Association Statement No. 15?

This question is asked for IRS information gathering purposes only. The IRS does not require that the Statement be adopted or that it be used in completing Schedule H.

IRS is probing whether bad debt is accounted for on the organization's financial statement. Include the footnote from the organization's financial statements on bad debt expense, if applicable, or the footnotes related to accounts receivable, allowance for doubtful accounts, or similar designations. If the hospital's financial statement does not include a footnote regarding bad debt, state that on the form and explain how the audited financial statements account for bad debt, if at all.

NARRATIVE REQUIRED: Yes. Part VI, line1, if your financials include a footnote describing bad debt expense; see line 4. The requested footnote information should be reported.

SAMPLE FOOTNOTE: Here's what the text of a footnote describing bad debt expense might look like:

The hospital reports accounts receivable for services rendered at net realizable amounts from third-party payers, patients, and others. The Hospital provides an allowance for uncollectible accounts based upon a review of outstanding receivables, historical collection information, and existing economic conditions and trends.

To access the instructions for Schedule H click here.

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