What Is an IBNR Medical Claim?

Significance Often Under Appreciated

By Dr. David Edward Marcinko; MBA, CMP™


As some Medical Executive-Post readers and subscribers are aware, hospitals that filed bankruptcy recently include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, and four hospital system Hospital Partners of America, in Charlotte.

One can only wonder about the impact of Incurred But Not Reported claims on their plight?  

IBNR Definition

According to the www.CertifiedMedicalPlanner.org, an IBNR claim is a concept that signifies healthcare services have been rendered but not invoiced or recorded by the healthcare provider, clinic, hospital, or organization.

Cause and Affect

IBNRs are usually the result of a commercial prospective payment risk contract between managed care organizations and healthcare providers, an IBNR claim refers to the estimated cost of medical services for which a claim has not been filed, or monitored by an IBNR collection systems or control sheet.

IBNR Types

More formally, IBNRs are a financial accounting of all services that have been performed but, as a result of a short period of time or “lag,” have not been invoiced or recorded. The medical services that will not be collected should be accounted for using the following accrued but not recorded (ABNR) entry:

Debit — accrued payments to medical providers or healthcare entity

Credit — IBNR accrual account


An example of an IBNR is hospital Coronary Artery Bypass Graft [CABG] surgery for a managed care plan member. Out of the capitated or prospective payment funds, the surgeon and/or healthcare organization has to pay for all related physical and respirator therapy, and rehabilitation services, as well as ancillary providers, drugs, and durable medical equipment [DME], as contractually obligated. This may also include complication diagnosis and extensive follow-up treatment.

Accordingly, the health plan will not be completely billed until several weeks, months, or quarters later or even further downstream in the reporting year after the patient is discharged. In order to accurately project the health plan’s financial liability, however, the health plan and hospital must estimate the cost of care based on past expenses.

Accounting Cost Controls

Since the identification and control of costs are paramount in financial healthcare management, an IBNR reserve fund (an interest bearing account) must be set up for claims that reflect services already delivered but, for whatever reason, not yet reimbursed.

From the accounting perspective, IBNR is accrued as an expense and is related as a short-term liability each fiscal month or accounting period.

Otherwise, the organization may not be able to pay the claim, if the associated revenue has already been spent. The proper handling of these “bills in the pipeline” is crucial for proactive providers and health organizations that are exploring arrangements that put them in the role of adjudicating claims or operating in a sub-capitated system.





IBNRs are especially important with newer patients who may be sicker than prior norms.

Recoverables that hospitals post as part of their large reserve charges are also, in many cases, IBNR losses. They may be recorded as IBNR claims on their balance sheets. Once these losses start becoming actual losses, the hospital may look to the insurer to pay a part of the claim. This causes disputes between the payor, provider, and/or healthcare organization.


Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com


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By Staff Reporters


The notion of a “no landing” scenario for the U.S. economy — as opposed to a hard or soft landing — is the latest topic to dominate discussions among economists and strategists.


According to Michael B. Kelley Editorial Director of Yahoo Finance, says that a “no landing” scenario involves the economy continuing to grow despite the Federal Reserve’s best efforts to tamp down inflation with interest rate hikes. And, what does that does it mean? “It’s all about inflation,” Bianco Research President Jim Bianco told Yahoo Finance Live.

“What they want or what they’re hoping for, both at the Fed and on the Street, is that the inflation rate is going to hit 2%,” he explained. “Well, the only way that it’s going to do that — at least the belief is — the economy has to slow. And if it doesn’t slow, then the inflation rate stays up. And if the inflation rate stays up, the Fed keeps hiking.”

CITE: https://www.r2library.com/Resource/Title/0826102549

Breaking down the 'no landing' buzz: What it means for investors


LINK: https://flo.uri.sh/visualisation/6180194/embed?auto=1

Given the implication the Fed will continue raising rates until inflation subsides — and, in turn, the economy cools off — some observers argue that there’s no such thing as a “no landing” scenario.

“Because we’re in this highly volatile environment, and because there is so much uncertainty, we’ve now seen a number of different ways to interpret or call what we’re seeing in the economy,” EY Parthenon Chief Economist Gregory Daco told Yahoo Finance this week.

“No landing does not make any sense, because it essentially means the economy continues to expand, and it’s part of an ongoing business cycle and it’s not an event — it’s just ongoing growth,” Daco added. “Doesn’t that entail that the Fed will have to raise rates more, and doesn’t that increase the risk of a hard landing?”



Thank You


ORDER: https://www.routledge.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283


PODCAST: What is a Quality-Adjusted Life Year?

NOT A Generic Obscure Measure

By Dr. David E. Marcinko MBA CMP


The quality-adjusted life year or quality-adjusted life-year (QALY) is a generic measure of disease burden, including both the quality and the quantity of life lived.

It is used in economic evaluation to assess the value for money of medical interventions. One QALY equates to one year in perfect health. If an individual’s health is below this maximum, QALYs are accrued at a rate of less than 1 per year.

LINK: https://www.amazon.com/Dictionary-Health-Insurance-Managed-Care/dp/0826149944/ref=sr_1_4?ie=UTF8&s=books&qid=1275315485&sr=1-4



ASSESSMENT: To be dead is associated with 0 QALYs. QALYs can be used to inform personal decisions, to evaluate programs, and to set priorities for future programs

MORE: http://www.msn.com/en-us/money/healthcare/obscure-model-puts-a-price-on-good-health-and-drives-down-drug-costs/ar-AAJP8Nm?li=BBnbfcN

VIDEO: https://www.youtube.com/watch?v=OTmXnv2RAHw


Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com


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What is a Federally Qualified Health Center?


By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

I worked at several FQHCs as a medical student and intern, back in the day, both in urban and suburban settings. But, I never was sure what this entity was, exactly. Probably because I was from an under served area, myself.


A Federally Qualified Health Center (FQHC) is a reimbursement designation from the Bureau of Primary Health Care and the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services. This designation is significant for several health programs funded under the Health Center Consolidation Act (Section 330 of the Public Health Service Act).

It is a community-based organization that provides comprehensive primary care and preventive care, including health, oral, and mental health/substance abuse services to persons of all ages, regardless of their ability to pay or health insurance status.

Thus, they are a critical component of the health care safety net. FQHCs are called Community/Migrant Health Centers (C/MHC), Community Health Centers (CHC), and 330 Funded Clinics. FQHCs are automatically designated as health professional shortage facilities.

CMS: https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center

FQHC.org: https://www.fqhc.org/what-is-an-fqhc/

Your thoughts are appreciated.

ORDER: https://www.amazon.com/Dictionary-Health-Insurance-Managed-Care/dp/0826149944/ref=sr_1_4?ie=UTF8&s=books&qid=1275315485&sr=1-4

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/



PRIVATE EQUITY: In Cancer Oncology Care


By Ola Abdelhadi

By Richard Scheffler

University California at Berkley



Despite increases in private equity acquisition of oncology practices, little is known about the effect on market competition, prices, and quality.

CITE: https://www.r2library.com/Resource/Title/0826102549

This research team will examine the changes in health care quality and prices following private equity acquisition of oncology practices and explore whether these acquisitions exacerbate health disparities among racial groups. This work may be relevant to policymakers and antitrust regulators assessing private equity deals.

Increasing Private Equity Investment in Cancer Care: What is the Effect on Prices and Quality of Care?



Thank You


ORDER: https://www.amazon.com/Hospitals-Healthcare-Organizations-Management-Operational/dp/1439879907/ref=sr_1_4?s=books&ie=UTF8&qid=1334193619&sr=1-4


Discover the Best [Financial Planning and Investing] Practices of Leading Certified Medical Planners®

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 Our New Texts – “Take a Peek Inside – Now Available

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)

Front Matter with Foreword by Jason Dyken MD MBA




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