Definition
Bad Debt refers to patient or payer balances deemed uncollectible after reasonable internal and external collection efforts, which are then written off to expense. It is distinct from contractual adjustments and charity care and often stems from aged self-pay balances, unresolved denials, or insurance discovery failures. Many organizations track bad debt as a percent of net patient revenue (e.g., 1-4% in hospitals), with tighter targets for DSOs.
Why it matters
Bad debt erodes margin and masks process defects; every 1% reduction on $200M in net patient revenue frees $2M. Reducing balances that age past 120 days by even 15% can prevent seven-figure write-offs for multi-location DSOs and health systems.
How Ventus helps
Ventus reduces the balances that later become bad debt: patient portions are known before treatment from procedure-level benefits, and claim status checks catch stalled or denied claims while they can still be worked.
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