1

Why are health care organizations motivated to track the actual costs of services?

Both GASB and FASB require it.

They must report their actual expenses so that third-party payors will reimburse them.

Third-party payors contract with the organization to reimburse a set amount, and the organization risks a loss if costs are greater than the amount reimbursed.

Any amount not reimbursed by a third-party payor or paid by the patient must be included in the amount reported as charity care.

2.

The controller for Bloomingfield Regional Hospital estimated that the uncollectible patient accounts have increase by $152,000. The controllers journal entry included a debit to bad debt expense and a credit to allowance for uncollectible receivables. Based on this, Bloomingfield Regional Hospital is

An investor-owned health care organization.

A nongovernmental not-for-profit health care organization.

A governmental not-for-profit health care organization.

Properly recording the estimate for uncollectible accounts under the FASB and GASB standards.