HCA Holdings 2012 Annual Report Download - page 72

HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Provision for Doubtful Accounts and the Allowance for Doubtful Accounts (continued)
To quantify the total impact of and trends related to uninsured accounts, we believe it is beneficial to view
the revenue deductions related to uninsured accounts (charity care and uninsured discounts) and provision for
doubtful accounts in combination, rather than each separately. A summary of these amounts for the years ended
December 31, follows (dollars in millions):
2012 2011 2010
Charity care ..................................... $ 3,093 $ 2,683 $2,337
Uninsured discounts ............................... 6,978 5,707 4,641
Provision for doubtful accounts ...................... 3,770 2,824 2,648
Totals ...................................... $13,841 $11,214 $9,626
The sum of the provision for doubtful accounts, uninsured discounts and charity care, as a percentage of the
sum of revenues, the provision for doubtful accounts, uninsured discounts and charity care increased from 25.6%
for 2010, to 27.4% for 2011 and to 29.5% for 2012.
Days revenues in accounts receivable were 52 days, 53 days and 50 days at December 31, 2012, 2011 and
2010, respectively. Management expects a continuation of the challenges related to the collection of the patient
due accounts. Adverse changes in the percentage of our patients having adequate health care coverage, general
economic conditions, patient accounting service center operations, payer mix, or trends in federal, state, and
private employer health care coverage could affect the collection of accounts receivable, cash flows and results
of operations.
The approximate breakdown of accounts receivable by payer classification as of December 31, 2012 and
2011 is set forth in the following table:
% of Accounts Receivable
Under 91 Days 91 — 180 Days Over 180 Days
Accounts receivable aging at December 31, 2012:
Medicare and Medicaid .................... 13% 1% 1%
Managed care and other insurers ............. 22 4 4
Uninsured ............................... 18 9 28
Total ............................... 53% 14% 33%
Accounts receivable aging at December 31, 2011:
Medicare and Medicaid .................... 14% 1% 1%
Managed care and other insurers ............. 22 5 5
Uninsured ............................... 15 8 29
Total ............................... 51% 14% 35%
Professional Liability Claims
We, along with virtually all health care providers, operate in an environment with professional liability
risks. Our facilities are insured by our wholly-owned insurance subsidiary for losses up to $50 million per
occurrence, subject to a $5 million per occurrence self-insured retention. We purchase excess insurance on a
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