week 2 peer response

Discussion response - your response to the discussion question should be between 150 - 300 words. 

Peer responses - Must be a minimum of 100 - 200 words and a maximum of 300 words for peer responses.

Must provide a minimum of at least one (1) reference in your discussion and peer responses.

There are two (2) required peer responses due per week.

Discussion Week 2- Charity Care vs. Bad Debt #6

Created by Liquanna Chapman on Jan 19, 2016 6:07 PM

What is a key difference between charity care and bad debt? How is each handled on the income statement?

Charity care is medical care given at free or low-cost to low income or uninsured patients. Bad debt is care given to patients who has an ability to pay but is unwilling to settle their claim. The difference between the two is that the patient applies for charity on the bases of their inability to pay due to financial hardship, and bad debt is a choice made not to pay resulting in collections. Charity care is reported as an expense subtracted from net revenue. The amount of charity care must be disclosed and is usually done in the footnotes. This is written off as a fulfillment of the provider’s charity care and community service section of their mission statement. July 2011, FASB issued a new GAAP stating that bad debt should be deducted from the gross patient revenue as part of the calculation of the net patient revenue.

Week 2 Created by Nasim Karimian Sichani on Jan 21, 2016 11:49 PM

What is the difference between patient service revenue and other revenue?

The difference between patient service revenue and other revenues is that the PSR revenue the health center generates from treating the patients. 

For Examples the payments from Medicaid, Medicare, and commercial insurers such as BCBS and etc. Based on Bureau Primary Health Care (BPHC) Patient services revenue is a “Program Income.” Patient service revenue represents 50 to 70% of a health center’s total revenue and generates transactions on a daily basis. The patient service revenue demands the largest and most frequent focus from the finance department, which is complicated by different reimbursement systems.

Other Revenues such as Gross revenue represents the total gross charges for all services provided by the center.  Another Revenue is the Net revenue which is the amount the health center expects to receive for services, and is equal to gross charges less contractual allowances and sliding fee discounts.

Degenfelder, C. (n.d.). Recording Revenue in the General Ledger. Retrieved from