Hospitals record bad debt more accurately

Recent changes to how hospitals must report uncompensated care have resulted in more accurate reporting of net revenue, Fitch Ratings said in its Thursday report. Fitch revealed that hospitals still are providing high levels of uncompensated care as the nation recovers from the weak economy due to high unemployment, more uninsured patients and increasing patient responsibility for healthcare costs. Under the Accounting Standards Update requirement, hospitals since Dec. 15, 2011 began recording bad debt as a reduction to net revenue, as opposed to operating expense. According to Fitch, the new reporting system boosts operating margins but does not affect operating income. Announcement

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