For hospitals,contractual adjustments to 3^rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustments (a contra-revenue account)and a credit to an allowance for contractual adjustments.

Question

Quizplus · Accepted Answer

This is the standard accounting practice for recording contractual adjustments in hospitals. The contra-revenue account of Contractual Adjustments is used to reduce the gross revenue to the net revenue, while the allowance for contractual adjustments serves as an estimation of the amount that the hospital is expected to write off for contractual adjustments.

For Hospitals,contractual Adjustments to 3rd Party Payers,such as Insurance Companies,are

For Hospitals,contractual Adjustments to 3^rd Party Payers,such as Insurance Companies,are