NOTE 2. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The principal components of accounts receivable are shown in the table below:

	March 31,			December 31,
	2013			2012
Continuing operations:
Patient accounts receivable	$	1,733		$	1,668
Allowance for doubtful accounts	(406		)	(396		)
Estimated future recoveries from accounts assigned to our Conifer subsidiary	91			88
Net cost reports and settlements payable and valuation allowances	(39		)	(24		)
	1,379			1,336
Discontinued operations:
Patient accounts receivable	5			11
Allowance for doubtful accounts	(1		)	(5		)
Estimated future recoveries from accounts assigned to our Conifer subsidiary	1			2
Net cost reports and settlements receivable (payable) and valuation allowances	(1		)	1
	4			9
Accounts receivable, net	$	1,383		$	1,345

Our self-pay collection rate, which is the blended collection rate for uninsured and balance after insurance accounts receivable, was approximately 28.8% and 28.9% as of March 31, 2013 and December 31, 2012, respectively. These self-pay collection rates include payments made by patients, including co-payments and deductibles paid by patients with insurance. Our estimated collection rate from managed care payers was approximately 98.1% and 98.0% at March 31, 2013 and December 31, 2012, respectively. As of March 31, 2013 and December 31, 2012, our allowance for doubtful accounts for self-pay uninsured accounts was 88.3% and 87.3%, respectively, of our self-pay uninsured patient accounts receivable. As of March 31, 2013 and December 31, 2012, our allowance for doubtful accounts for self-pay balance after insurance accounts was 55.4% and 54.5%, respectively, of our self-pay balance after insurance patient accounts receivable, consisting primarily of co-payments and deductibles owed by patients with insurance. Our self-pay write-offs, including uninsured and balance after insurance accounts, decreased approximately $9 million from $227 million in the three months ended March 31, 2012 to $218 million in the three months ended March 31, 2013 primarily due to a decrease in patient account assignments to our Conifer subsidiary. The increase in provision for doubtful accounts primarily related to the increase in uninsured patient revenues and higher insurance co-payments and deductibles in the three months ended March 31, 2013 compared to the three months ended March 31, 2012, partially offset by the impact of a 90 basis point improvement in our collection rate on self-pay accounts. As of both March 31, 2013 and December 31, 2012, our allowance for doubtful accounts for managed care accounts was 9.4% of our managed care patient accounts receivable.

The estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our self-pay patients for the three months ended March 31, 2013 and 2012 were approximately $104 million and $105 million, respectively. Our estimated costs (based on the selected operating expenses described above) of caring for charity care patients for the three months ended March 31, 2013 and 2012 were $32 million and $31 million, respectively. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. Revenues attributable to DSH payments and other state-funded subsidy payments for the three months ended March 31, 2013 and 2012 were approximately $67 million and $45 million, respectively. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels.