In order to more accurately uncompensated care across all hospitals, the American Hospital Association calculates bad debt and charity care on a cost basis. Use the following formula as a guide to gauge uncompensated care costs within your organization:
- Uncompensated Care Charges = Bad Debt Charges + Charity Care Charges
- Cost-to-Charge Ratio = Total Expenses Exclusive to Bad Debt / Gross Patient Revenue + Other Operating Revenue
- Uncompensated Care Costs = Uncompensated Care Charges x Cost-to-Charge Ratio
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