Exhibit 14 - Protocol for Estimating Allowance for Uncollectible Accounts

400.14 - Exhibit 14 - Protocol for Estimating Allowance for Uncollectible Accounts (Rev. 13268, Issued: 07-29-25; Effective Date: 08-28-25; Implementation Date: 08-28-25) The Federal Accounting Standards Advisory Board (FASAB) recommends through Statement of Federal Financial Accounting Standard Number 1 (Paragraphs 44&45) that losses on receivables should be recognized when it is more likely than not that the receivables will not be totally collected. The phrase "more likely than not" means more than a 50 percent chance of loss occurrence. An allowance for estimated uncollectible amounts should be recognized to reduce the gross amount of receivables to its net realizable value. The allowance for uncollectible amounts should be re-estimated on each annual financial reporting date (at a minimum) and when information indicates that the latest estimate is no longer correct. These losses should be measured through a systematic methodology. The systematic methodology should be based on analysis of both individual accounts and a group of accounts as a whole. Accounts that represent significant amounts, i.e., greater than $1 million, should be individually analyzed to determine the loss allowance. Loss estimation for individual accounts should be based on (a) the debtor's ability to pay, (b) the debtor's payment record and willingness to pay, and (c) the probable recovery of amounts from secondary sources, including liens, garnishments, cross collections and other applicable collection tools. The entire allowance for losses generally cannot be based solely on the results of individual account analysis. In many cases, information may not be available to make a reliable assessment of losses on an individual account basis or the nature of the receivables may not lend itself to individual account analysis. In these cases, potential losses should be assessed on a group basis. CMS has implemented FASAB's recommendations and has developed this protocol for Medicare contractors to follow for estimating the allowance for uncollectible accounts. The following section outlines this methodology. Protocol for Estimating Allowance for Uncollectible Accounts Medicare contractors must recognize an estimated amount for uncollectible debt in order to reduce the gross amount of receivables to its net realizable value. Medicare contractors must recognize an Allowance for Uncollectible Accounts for the Interest Fund-050720 in SGL 134701; and for the HI Fund-050961 and SMI Fund-050960 in SGL 131901, on the trial balance and the balance sheet. Medicare contractors must re-estimate the allowance for uncollectible amounts monthly at the end of each reporting period and when information indicates that the latest estimate is no longer accurate. Medicare contractors must measure potential losses due to uncollectible amounts through a systematic method. This systematic method must be based on an analysis. The analysis requires that receivables be further stratified into sub-groups (i.e., Cost Report Settlement Activity, Claims Accounts Receivable, Credit Balances, Group Health Plan (GHP) MSP, Liability MSP and Other Accounts Receivables). The subgroups are somewhat different for Group 1 - Fiscal Intermediaries, as compared to Group 2 - Carriers. Group 1 (Fiscal Intermediaries) Sub-Group 1 1. Cost Report Settlements Activity (Non MSP) 2. Claims Accounts Receivable, Credit Balances & Other Accounts Receivables (Non-MSP) Sub-Group 2 1. Group Health Plan (Data Match/Non Data Match) MSP 2. Liability MSP For Group 1, Subgroup 1, fiscal intermediaries must perform the following steps to calculate and validate the allowance for uncollectible accounts. 1. Calculate the allowance based on the historical collection percentage (see detailed instructions below) for Non-MSP as a whole. 2. Individual Account Analyses: For cost report settlement activity only, fiscal intermediaries will identify and total those provider debts that meet certain risk characteristics (i.e., bankruptcy, terminations, poor collection history, no collection activity for 6 months or more). These will be considered risk accounts, and the fiscal intermediary should total all risk accounts identified through this analysis. 3. Compute the total delinquencies exceeding 180 days. 4. Compare the three estimated amounts calculated in Steps 1, 2 & 3 and identify the amount that ensures that the net receivable is reported at its realizable value. For Group 1, Subgroup 2, the fiscal intermediary must perform the following steps to calculate and validate the allowance for uncollectible accounts. 1. Calculate the allowance based on the historical collection percentage (see detailed instructions below) for MSP as a whole. 2. Compute the total delinquencies exceeding 180 days. 3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount that ensures that the net receivable is reported at its realizable value. Historical Collection Percentage Calculation A - Determine Total Receivables Eligible for Collection. Required Formula: Note: Amounts are from the TROR Supporting Reports TROR Line Item HIGLAS Detail Activity Report/Register Line A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance (2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES (3) Accruals (+) (New Interest Receivables) Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT (5) Adjustments (A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT (B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT (C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT (D) Foreclosure Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT (E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT (6) Amounts Written-Off (-) (A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT (B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT Equals: Total Receivables Available to be Collected B - Determine Rate of Collections Line 4a, At Agency plus Line 4b, At Third Party plus Line 4c, Asset Sales plus Line 4d, Collections by Treasury through Offset and Cross Servicing plus line 4e, Collections by Sales After Foreclosures plus Line 4f, Collections by Department of Justice plus Line 4g, Other – must footnote divided by Total Receivables Available to be Collected (number calculated from Step A) multiplied times 100 determines the rate of collections percentage. C - Determine the Allowance Rate 1.00 minus the percentage determined from Step B, equals the allowance rate D - Average the Percentage Calculated in Step C with a 5-year Historical Allowance Rate (if available, if not available, maintain statistical data to develop historical rate, and proceed to Step E). E - Calculate the Allowance Multiply the allowance rate from Step C or Step D by the sum of Line 7, Ending Balance less Line 2b, Accrued Receivables. Group 2 (Carriers) Sub-Group 1 1. Claims Accounts Receivable, Credit Balances & Other Accounts Receivables (Non-MSP) Sub-Group 2 1. Group Health Plan (Data Match/Non Data Match) MSP 2. Liability MSP For Group 2, Subgroup 1, the carrier must perform the following steps to calculate and validate the allowance for uncollectible accounts. 1. Calculate the allowance based on the historical collection percentage (see detailed instructions below) for Non-MSP as a whole. 2. Compute the total delinquencies exceeding 180 days. 3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount that ensures that the net receivable is reported at its realizable value. For Group 2, Subgroup 2, the carrier must perform the following steps to calculate and validate the allowance for uncollectible accounts. 1. Calculate the allowance based on the historical collection percentage (see detailed instructions below) for MSP as a whole. 2. Compute the total delinquencies exceeding 180 days. 3. Compare the two estimated amounts calculated in Steps 1 & 2 and identify the amount that ensures that the net receivable is reported at its realizable value. Historical Collection Percentage Calculation A. Determine Total Receivables Eligible for Collection. Required Formula: Note: Amounts are from the TROR Supporting Reports TROR Line Item HIGLAS Detail Activity Report/Register Line A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance (2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES (3) Accruals (+) (New Interest Receivables) Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT (5) Adjustments (A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT (B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT (C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT (D) Foreclosure Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT (E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT (6) Amounts Written-Off (-) (A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT (B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT Equals: Total Receivables Available to be Collected B - Determine Rate of Collections Line 4a, At Agency plus Line 4b, At Third Party plus Line 4c, Asset Sales plus Line 4d, Collections by Treasury through Offset and Cross Servicing plus line 4e, Collections by Sales After Foreclosures plus Line 4f, Collections by Department of Justice plus Line 4g, Other – must footnote divided by Total Receivables Available to be Collected (number calculated from Step A) multiplied times 100 determines the rate of collections percentage. C. Determine the Allowance Rate. 1.00 minus the percentage determined from Step B, equals the allowance rate D. Average the percentage calculated in Step C with a 5-year historical allowance rate (if available, if not available, maintain statistical data to develop historical rate, and go proceed to Step E). E. Calculate the Allowance Multiply the allowance rate from Step C or Step D (Group 2, Carriers Section) by Line 7, Ending Balance. Medicare contractors are required to compare the results of the estimated allowance based on the protocol and report the amount that ensures that the net receivable is reported at its realizable value. The Medicare contactors are required to maintain supporting documentation that includes the assumptions used to calculate the allowance amount reported. The documentation must be available for review by CMS, OIG, GAO or other parties as required. Note: Medicare contractors may apply the same method of results of the principal comparison (Col. D, Example 400.14.3) to estimate the interest allowance amount (Col. E, Example 400.14.3) to be reported. For example, the method of results for the Non-MSP principal is delinquencies exceeding 180 days. The Medicare contractor has the option to report on the allowance matrix for interest (Sub-Group 1, Col. E) the amount equal to the delinquencies exceeding 180 days from the interest column. The method of results for the MSP principal is the historical collection percentage. The Medicare contractor has the option to report on the allowance matrix for interest (Sub-Group 2, Col. E) the amount equal to the same percentage calculated for MSP principal, multiplied by the interest balance from the CMS AR Overpayment report. The method selected by the Medicare contractor used to estimate the interest allowance shall ensure that the net interest receivable is reported at its realizable value. Each Medicare contractor must complete the Allowance for Uncollectible Accounts Matrix (Attachment I or Attachment II) monthly. The Allowance for Uncollectible Accounts Matrix is due on the 5th business day following the close of the respective month and should be submitted with the CFO certification packages. If the 5th business falls on a weekend of holiday, the Allowance for Uncollectible Accounts Matrix is due the next business day. Please submit your matrix(s) via email to ALLOWMATRIX@cms.hhs.gov. Contractor Name: MAC XX A XXXXX Exhibit 1 Period Ending September 30, 20XX Allowance for Uncollectible Accounts Matrix Col E Col F Col G Col H Col I Col J HI Principal HI Principal SMI Principal SMI Principal General Fund General Fund Fund TROR Note: Amounts are from the TROR Supporting Reports MSP NON-MSP MSP NON-MSP MSP NON-MSP Total Report TROR Line Item HIGLAS Detail Activity Report/Register Line A (1) Beginning FY Balance CMS Beginning Balance Report / (1) Beginning FY Balance 30,210 15,796,306 6,042 6,624,202 0 127,235 22,583,995 22,583,996 (2) New Receivables (+) CMS Transaction Register / LINE 2 NEW RECEIVABLES 87,127 319,224,892 95,780 114,366,311 0 0 433,774,110 433,774,110 (3) Accruals (+) (New Interest Receivables) 0 1,673,182 1,673,182 1,673,183 Transaction Register (support line 3) CMS Transaction Register / LINE 3 ADJUSTMENT 0 1,464,682 1,464,682 CMS Adjustment Register (support line 3) CMS Adjustment Register / LINE 3 MSP/NONMSP ADJUSTMENT 0 208,500 208,500 (5) Adjustments 0 (10,027,828) (223.000) (2,057,328) 0 856,490 (11,228,889) (11,228,889) (A) Reclassified/Adjusted Amounts (+ or -) CMS AR Adjustments Register / LINE 5A MSP/NONMSP ADJUSTMENT 0 (12,570,769) (223) (2,746,858) 0 (172,509) (15,490,359) (15,490,359) (B) Adjustments Due to Sale of Assets (+ or -) CMS AR Adjustments Register / LINE 5B MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0 (C) Consolidations (+ or -) CMS AR Adjustments Register / LINE 5C MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0 (D) Forcloser Adjustments (+ or -) CMS AR Adjustments Register / LINE 5D MSP/NONMSP ADJUSTMENT 0 0 0 0 0 0 0 0 (E) Written-Off Debts Reinstated for Collections (+) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT 0 2,542,941 0.000 689,530 0 1,028,999 4,261,470 4,261,470 (6) Amounts Written-Off (-) 0 (1,169,402) 0 (1,467,386) 0 (97,315) (2,734,103) (2,734,103) (A) Currently Not Collectible (-) CNC - CMS Adjustment Register / LINE 6A MSP/NONMSP ADJUSTMENT 0 (1,169,346) 0 (1,466,863) 0 (97,303) (2,733,512) (2,733,512) (B) Written-Off and Closed Out (-) CMS AR Adjustments Register / LINE 5E MSP/NONMSP ADJUSTMENT 0 (56) 0 (523) 0 (12) (591) (591) Receivable Available to Be Collected 117,337 323,823,968 101,599.000 117,465,799 0 2,559,592 444,068,295 444,068,297 B (4) Collections on Receivables (-) CMS AR Applied Collections 80,869 304,736,381 94,518.000 109,341,714 0 2,391,946 416,645,428 416,645,428 (A) At Agency (80,869) (304,354,835) (94,518) (108,922,507) 0 (2,311,324) (415,764,053) (415,764,053) (B) At Third Party 0 0 0 0 0 0 0 0 (C) Asset Sales 0 0 0 0 0 0 0 0 (D) Collections by Treasury through Offset and Cross-Servicing (-) 0 (381,546) 0 (419,207) 0 (80,622) (881,375) (881,375) (E) Collections by Sales After Foreclosure (-) 0 0 0 0 0 0 0 0 (F) Collections by Department of Justice (-) 0 0 0 0 0 0 0 0 (G) Other - must footnote (-) 0 0 0 0 0 0 0 0 Collection Percentage 68.92% 94.11% 93.03% 93.08% n/a 93.45% 93.82% 93.82% C Allowance Percentage (1-collection %) 31.08% 5.89% 6.97% 6.92% n/a 6.55% 6.18% 6.18% LEGEND Warning: There could be an issue but there may not be. Issue: There is an issue such as missing data that needs to be resolved. This cell requires manual input D Average 41.80% 13.73% 20.43% 14.14% n/a 6.55% Current Period: Sep 30, 20XX 31.08% 5.89% 6.97% 6.92% Sep 30, 2015 67.34% 30.55% 71.35% 34.58% Sep 30, 2014 40.08% 7.03% 0.00% 8.21% Sep 30, 2013 46.33% 10.42% 17.19% 8.80% Sep 30, 2012 24.16% 14.78% 6.65% 12.19% E (7) Ending Balance (TROR/Activity Registers) CMS AR Overpayments Report 36,468 19,074,029 7,081 8,137,641 0 167,648 27,422,867 27,422,870 Cost Report Settlements 0 10,414,230 0 2,459,012 0 139,825 13,013,067 13,013,066 Claims Accounts Receivable 0 3,490,148 0 1,369,240 0 18,633 4,878,021 4,878,021 Credit Balances 0 0 0 0 0 0 0 0 Other (if cost reports issues include with cost reports) 0 5,169,651 0 4,309,389 0 9,190 9,488,230 9,488,231 Physician/Supplier 0 0 0 0 0 0 0 0 Beneficiary 0 0 0 0 0 0 0 0 PIP Accrual 0 0 0 0 0 0 0 0 GHP(Data/non-Data Match) 0 0 0 0 0 0 0 0 MSP Prov/Phys/Supp/Bene 36,468 0 7,081 0 0 0 43,549 43,549 MSP Beneficiary (Liability) 0 0 0 0 0 0 0 0 Other MSP (Liability) 0 0 0 0 0 0 0 0 Check 0 -13558 0 13556 0 2 0 1 (X1) Allowance Amount (Collection Percentage) 15,243 2,619,796 1,447 1,150,599 n/a 10,980 3,798,066 (X2) Individual Account Analysis-Not Applicable for Carriers (Part B) (X3) Delinquencies Exceeding 180 Days CMS AR Overpayment Report where parameter "Allowance Calc(Over 180 Days Delinquent))"=Y 29,706 923,841 5,841 225,380 0 65,653 1,250,421 1,250,420 Cost Report Settlements[180] 0 923,841 0 224,500 0 65,623 1,213,964 1,213,963 Claims Accounts Receivable[180] 0 0 0 880 0 30 910 910 Credit Balances[180] 0 0 0 0 0 0 0 0 Other (if cost reports issues include with cost reports)[180] 0 0 0 0 0 0 0 0 Physician/Supplier[180] 0 0 0 0 0 0 0 0 Beneficiary[180] 0 0 0 0 0 0 0 0 PIP Accrual[180] 0 0 0 0 0 0 0 0 GHP(Data/non-Data Match)[180] 0 0 0 0 0 0 0 0 MSP Prov/Phys/Supp/Bene[180] 29,706 0 5,841 0 0 0 35,547 35,547 MSP Beneficiary (Liability)[180] 0 0 0 0 0 0 0 0 Other MSP (Liability)[180] 0 0 0 0 0 0 0 0 F Estimated Allowance Amount ALLOWANCE USING THE MOST CONSERVATIVE AMOUNT 29,706 2,619,796 5,841 1,150,599 0 65,653 3,798,066 Amount Reported on Trial Balance per Allowance Matrix (Using the conservative amount): Amount HI MSP Allowance Amount (29,706) HI NON-MSP Allowance Amount (2,619,796) HI Total Allowance (2,649,502) Fund Acct# 05961 SGL#131901 SGL# 131901 - Allow For Loss on REC-PRINC (2,649,502.26) SMI MSP Allowance Amount (5,841) SMI NON-MSP Allowance Amount (1,150,599) SMI Total Allowance (1,156,440) Fund Acct# 05960 SGL#131901 SGL# 131901 - Allow For Loss on REC-PRINC (1,156,440.42) General Fund MSP Allowance 0 General Fund NON -MSP Allowance (65,653) General Fund Total Allowance (65,653) Fund Acct# 050720 SGL#134701 SGL# 134701 - Allow For Loss on REC-INT (65,653.00) Note: HIGLAS Interest is not split between HI/SMI but MSP/non-MSP. Therefore, contractors shall compare the current interest collection percentage vs. the over 180 days delinquent amounts. NOTES: Average of Allowance (current instruction require Medicare contractors to use five year historical allowance rate *The above amounts are the allowance estimates for loss on receivable for the period-to-date. **Therefore, the estimated amounts are the calculated ending balances to be reported on the Summary 2 Trial Balance by SGL account by fund (Ending Balance Column). ***When Line A1, Receivables Available to be Collected by component is less then or equal to zero (0) the component estimated allowance amount must equal zero (0). Contractor Name: MAC XX A XXXXX Exhib it 2 Contractor Number: Period Ending : September 30, 20XX 400.14 - Exhibit 14 - Protocol for Estimating Allowance for Uncollectible Accounts Fiscal Intermediary - Group 1 Allowance for Uncollectible Accounts Matrix Part A (HI) Col. A Col. B Col. C Col. D Col. E Sub-Group 1 (Non- MSP) Cost Report Settlements, Claims A/R, Credit Balance & Other Accounts Receivable Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimated Allowance for Uncollectible A/R (Interest Only) Justific ation for amount recorde d on Summ ary 2 Trial Balanc e NONMSP $ 2,619,796 $ - $ 923,841 $ 2,619,796 $ 65,653 Total $ 2,619,796 $ - $ 923,841 $ 2,619,796 $ 65,653 Sub-Group 2 (MSP) Group Health Plan (Data- Match & Non-Data Match), Liability Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimated Allowance for Uncollectible A/R (Interest Only) Justific ation for amount recorde d on Summ ary 2 Trial Balanc e MSP $ 15,243 $ - $ 29,706 $ 29,706 $ - Total $ 15,243 $ - $ 29,706 $ 29,706 $ - Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimated Allowance for Uncollectible A/R (Interest Only) Justific ation for amount recorde d on Summ ary 2 Trial Balanc e Sub-Group 1 (Non- MSP) Cost Report Settlements, Claims A/R, Credit Balance & Other Accounts Receivable $ 2,619,796 $ - $ 923,841 $ 2,619,796 $ 65,653 Sub-Group 2 (MSP) Group Health Plan (Data- Match & Non-Data Match), Liability $ 15,243 $ - $ 29,706 $ 29,706 $ - Total Part A (HI) $ 2,635,039 $ - $ 953,547 $ 2,649,502 $ 65,653 Contractor Name: MAC XX A XXXXX Exhib it 2 Contractor Number: Period Ending : September 30, 20XX 400.14 - Exhibit 14 - Protocol for Estimating Allowance for Uncollectible Accounts Fiscal Intermediary - Group 1 Allowance for Uncollectible Accounts Matrix Part B/A (SMI) Col. A Col. B Col. C Col. D Col. E Sub-Group 1 (Non- MSP) Cost Report Settlements, Claims A/R, Credit Balance & Other Accounts Receivable Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimat ed Allowan ce for Uncollec tible A/R (Interest Only) Justific ation for amount recorde d on Summa ry 2 Trial Balanc e NONMSP $ 1,150,599 $ - $ 225,380 $ 1,150,599 $ - Total $ 1,150,599 $ - $ 225,380 $ 1,150,599 $ - Sub-Group 2 (MSP) Group Health Plan (Data-Match & Non-Data Match), Liability Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimat ed Allowan ce for Uncollec tible A/R (Interest Only) Justific ation for amount recorde d on Summa ry 2 Trial Balanc e MSP $ 1,447 $ - $ 5,841 $ 5,841 $ - Total $ 1,447 $ - $ 5,841 $ 5,841 $ - Historical Collection % Total Individual Account Analysis Delinquencies Exceeding 180 days total Estimated Allowance for Uncollectible A/R Estimat ed Allowan ce for Uncollec tible A/R (Interest Only) Justific ation for amount recorde d on Summa ry 2 Trial Balanc e Sub-Group 1 (Non- MSP) Cost Report Settlements, Claims A/R, Credit Balance & Other Accounts Receivable $ 1,150,599 $ - $ 225,380 $ 1,150,599 Sub-Group 2 (MSP) Group Health Plan (Data-Match & Non-Data Match), Liability $ 1,447 $ - $ 5,841 $ 5,841 Total Part B/A (SMI) $ 1,152,046 $ - $ 231,221 $ 1,156,440 $ -