Note 6. Accounts Receivable, Net

The HHS’ accounts receivable as of September 30, 2007 and 2006, are summarized below:

The Hospital Insurance (HI) Trust Fund accrues a receivable from the Railroad Retirement Board (RRB) for amounts transferred through a financial interchange between the HI Trust Fund and the RRB.  The transfer is intended to place the HI trust fund in the same position it would have been had railroad employment been covered by the Federal Insurance Contributions Act.  Of the Intragovernmental Accounts Receivable, Net, as of September 30, 2007 and 2006, $484 million and $473 million were owed by the RRB, respectively.

Medicare Secondary Payer (MSP) receivables are composed of paid claims in which Medicare should have been the secondary payer rather than the primary payer.  Claims that have been identified to a primary payer are included in the MSP receivable amount.

For Medicare receivables, the HHS calculates the allowance for uncollectible accounts receivable based on the collection activity and the age of the debt for the most current fiscal year, while taking into consideration the average uncollectible percentage for the preceding five years.  The Medicaid accounts receivable has been recorded at a net realizable amount based on historic analysis of actual recoveries and the rate of disallowances found in favor of the States. 

Report Date: November 15, 2007

AFR Section II Links:

• Message from the Chief Financial Officer
• Office of Inspector General Transmittal
• Independent Auditor's Reports
• Financial Statements and Notes
• Required Supplementary Stewardship Information
• Required Supplementary Information