Bad debt rate calculator
Calculate your bad debt rate from bad-debt write-offs and gross patient service revenue — money that was owed and not collected, kept separate from contractual adjustments.
Updated
Enter your own figures to calculate your bad debt rate — the share of gross patient service revenue written off because someone who owed it did not pay.
Bad debt is not a contractual adjustment. A contractual adjustment was never collectible under your contract; bad debt was. Separate the two before you enter them, or the result moves with your payer mix instead of your collections.
Balances someone was obliged to pay and did not — usually patient balances after insurance. Exclude contractual adjustments and exclude charity care.
Total patient service revenue at gross over the same period, before deductions.
Enter your figures to see the result and a breakdown.
How it’s calculated
Bad debt ÷ Gross patient service revenue × 100
Both figures cover the same period. Bad debt here is the bad-debt deduction alone — not contractual adjustments, and not charity care. If your write-off ledger mixes the three, this calculator will divide whatever you enter, so separate them first or the result measures your payer mix rather than your collections.
What this assumes
- Both figures cover the same period, and the bad-debt figure is the bad-debt deduction alone. This calculator divides whatever you enter — it cannot tell a contractual adjustment from a bad debt.
- Charity care is a third category and belongs in neither figure. Where your organization draws the line between charity and bad debt is a policy decision, and moving that line moves this rate without a dollar of patient payment changing.
- A balance sent to a collection agency is still bad debt on the day you wrote it off; recoveries afterward are a separate figure and are not netted here.
- The result is the arithmetic on the numbers you entered. It is not compared to a benchmark, because the figure depends on patient-responsibility mix and on your own charity-care policy — and it is most useful read beside how much patient balance you are billing in the first place.
How to read the result
Read it against your own history, with your own classification rules held constant. Because the split between bad debt and charity care is a policy decision, a change in that policy moves this figure without anything changing in what patients actually paid.
A rising rate points upstream more often than it points at collections: coverage checks that did not happen, estimates never given, or payment not requested at the point of service. Read it beside how much patient responsibility you are billing in the first place — a practice with growing high-deductible volume can hold its collection effort steady and still watch this climb.
Read the full bad debt rate definition