Hospitals have come under increased pressure to justify their tax-exempt status under new IRS requirements to report charity care and bad debt separately. Medlytix provides a custom “presumptive charity care” solution that has assisted hospitals in reporting charity care contributions totaling over $800 million while reducing bad-debt write-offs, minimizing costs of downstream quote02collections, and limiting the number of misclassified charity patients. In addition, Medlytix’s solution is objective and unbiased, providing a sound defense in the event of an audit or legal challenge.

Getting started

In the development of charityiqSm‘s custom presumptive charity-care solution, Medlytix begins by analyzing up to two years of historical data from the health system’s patient population. This historical data is used to develop and validate the best possible custom solution for assigning presumptive charity while limiting downstream impact to cash. This hindsight analysis is a critical step because it is impossible to measure potential revenue losses once a solution has been implemented.

The incorrect assignment of patients to charity care accounts has a serious impact on the collection of cash downstream in the revenue cycle. Therefore, the end goal of the charityiqSm solution is to correctly classify charity accounts prior to bad debt assignment. This facilitates the correct assignment of charity to patients who will never be able to afford or pay their medical bills and allows bad debt collection efforts to be focused on those who are able to pay, thus limiting any impact to net cash.

Data derived from multiple sources

charityiqSm deploys the healthcare industry’s most advanced predictive analytical methodologies. Information is evaluated from three primary sources:

  • Credit data;
  • Demographic data;
  • The healthcare system’s own internal financial accounts.

Utilizing such an extensive and wide breadth of data sources ensures the most accurate and reliable results.


Once the charityiqSm custom strategy is developed, Medlytix continues to work closely with the provider, incorporating its solution into the existing workflow system of the client’s business office operations.

Upon full implementation of the Charity iQ solution, the provider may establish a regular periodic evaluation of its uninsured patient accounts by Medlytix on a weekly, bi-weekly or monthly basis. With each review, Medlytix returns a customized strategy indicator to direct and further fine-tune the provider’s business-office workflow systems.

charityiqSm Advantages

  • Increase your hospital’s charity care assignments while simultaneously reducing bad debt write-offs and enhancing your bottom line.
  • Help maintain your hospital’s tax-exempt status.
  • Provide better defense of charity care policy under today’s environment of increased scrutiny by governments and consumer watchdog organizations.