Current through Supplement No. 394, October, 2024
1. Bad debts for
charges incurred on or after January 1, 1990, and fees paid for the collection
of those bad debts, are allowable, provided all the requirements of this
subsection are met.
a. The bad debt must
result from nonpayment of the payment rate or part of the payment
rate.
b. The facility shall
document that reasonable collection efforts have been made, the debt was
uncollectible, and there is no likelihood of future recovery. Reasonable
collection efforts include pursuing all avenues of collection available to the
facility, including liens and judgments. In instances where the bad debt is
owed by a person determined to have made a disqualifying transfer or assignment
of property for the purpose of securing eligibility for medical assistance
benefits, the facility shall document that it has made all reasonable efforts
to secure payment from the transferee, including the bringing of an action for
a transfer in fraud of creditors.
c. The collection fee may not exceed industry
standards for collection agencies and the amount of the bad debt.
d. The bad debt may not result from the
facility's failure to comply with federal and state laws, state rules, and
federal regulations.
e. The bad
debt may not result from nonpayment of a private room rate in excess of the
established rate, charges for special services not included in the established
rate, or charges for bed hold days not billable to the medical assistance
program under subsections 3, 4, 5, and 6 of section
75-02-06-14.
f. The facility shall have an aggressive
policy of avoiding bad debt expense that limits potential bad debts. The
facility shall document that the facility has taken action to limit bad debts
for individuals who refuse to make payment.
2. Allowable bad debt expense may not exceed
one hundred eighty days of resident care per rate year or an aggregate of three
hundred sixty days of resident care for any one individual.
3. Finance charges on bad debts allowable
under subsections 1 and 2 are allowable only if the finance charges have been
offset as interest income.
