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Hi, I am a Becker user and there is no bad debt in calculation of net patient revenue, however, on Ninja MCQ, it deducts the BDE from PSR, can someone help? I think it is wrong. Thanks.
Hospital, Inc., a not-for-profit entity with no governmental affiliation, reported the following in its accounts for the current year ended December 31:
Gross patient service revenue from all services provided
at the established billing rates of the hospital (note
that this figure includes charity care of $25,000) $775,000
Provision for bad debts 15,000
Difference between established billing rates and fees
negotiated with third-party payers (contractual adjustments) 70,000
What amount would the hospital report as net patient service revenue in its statement of operations for the current year ended December 31?
665,000
Incorrect B.
$680,000
C.
$705,000
D.
$735,000
You answered B. The correct answer is A.
Nongovernmental not-for-profit hospitals deduct charity services, bad debt, contractual adjustments, and policy discounts from gross patient service revenues to determine net patient service revenues.
•$775,000 – $25,000 – $15,000 – $70,000 = $665,000
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