Bad Debt Under The False Claims Act And The FTC's New Policy Statement

Federal Case Highlights Medicare Bad Debt Regulatory Requirements

Recent federal case law highlights the regulatory requirements, and potential liabilities, imposed on Medicare providers seeking federal reimbursement for certain fees when Medicare beneficiaries fail to pay. Under 42 C.F.R. § 413.89, the United States Centers for Medicare & Medicaid Services ("CMS") will reimburse Medicare providers if a Medicare beneficiary fails to make required deductible or coinsurance payments for covered services ("bad debts"). However, to be reimbursed for bad debt by CMS, Medicare providers must have first made reasonable efforts to collect those debts.

42 C.F.R. § 413.89 lists the criteria that Medicare providers must satisfy to establish the reasonableness of their collection efforts. For example, such collection efforts must be similar to those employed to collect bad debt from non-Medicare patients and must last at least 120 days after the issuance of the original