Hospitals Urged to Disclose Charity Care, Price Concessions

New revenue recognition guidance calls for hospitals and other healthcare facilities to separately account for and disclose three types of uncompensated care.

The Healthcare Financial Management Association has released updated guidance to incorporate the language used in the new revenue recognition rules and to ensure consistent disclosure and accounting practices across the industry.

The new accounting standard, ASC 606, wiped away industry-specific rules and altered what goes into an important line item for hospitals—bad debt, an expense that drove earnings and also served as a measure of affordability.

Under the new rules, bad debt refers narrowly to payments that ...