Uncollectable accounts has many problematic effects on businesses and its operations. Mainly this is due to full payments of what is owed is not being received from customers, which at the end, the company has to adjust these accounts under uncompensated care. Uncompensated care comprises of two categories, bad debt and charitable care. Although there has been a lot of confusion as to what kind of patient would be categorized into charity care, vice versa, but it all comes down to examining the income of the patient and correlating that to the federal poverty guidelines.
