Case Study

How Cloudmed's Medicare Experts Recovered $13M in Medicare Bad Debt



Medicare Bad Debt (MBD) can be a significant source of revenue leakage for hospitals; in fact, U.S. hospitals claim more than $3 billion in MBD annually. And in the past three years, the amount of bad debt coming from insured patients has risen more than five-fold.

Cloudmed’s team noticed a pattern with several Midwestern and Northeastern clients reporting to the same Medicare Administrative Coordinator (MAC). After a Medicare Cost Report has been completed, hospitals have three years to reopen that report. When it came to MBD, these clients kept getting the same answer – No. Their MAC denied every request to reopen MBD requests, though other MACs across the nation allow reopenings.

Millions of dollars were at stake just for Cloudmed’s clients. To make any progress, the team knew they’d have to go directly to the Centers for Medicare & Medicaid Services (CMS).


Cloudmed’s Government Navigation Suite team is made up of multiple former Medicare Administrative Contractors, auditors, and policy experts – people with an intimate knowledge of the system. The Cloudmed team knew the time it would cost the client to solve the problem, so they stepped up to advocate.

A face-to-face meeting with CMS was essential. Working with legal experts, Cloudmed outlined a case based on evidence of continued denials over time. They bargained for a meeting while simultaneously building an argument on behalf of the client.

Cloudmed’s team of subject matter experts carefully collected evidence to demonstrate how commonly MACs allow for MBD reopenings. Their case proved the arbitrary nature of the denied requests from this particular MAC, since hospitals elsewhere benefitted from reopening these negotiations.


Cloudmed’s government reimbursement team, along with legal experts and affected hospital representatives, met with CMS, prepared with data on the impacts of MBD for hospital finance. CMS listened with interest, and at the conclusion of meeting, said they would review the situation internally. Several months later, the MAC agreed to accept all future MBD reopenings. Now Cloudmed’s clients have recovered $13 million in leaked revenue.

The efforts in advocating for these clients has brought value to other hospitals too. Much of the industry relies on CMS as the standard, so changing regulations can impact all hospitals. In this case, Cloudmed’s advocacy and partnership – working to draw unnoticed issues to CMS’s attention – set the standard for other healthcare systems across multiple states in that MAC’s jurisdiction.

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