Charity care: the financial assistance nonprofit hospitals must offer, and rarely mention

Roughly half of U.S. hospitals are nonprofits. In exchange for not paying taxes, federal law (Internal Revenue Code 26 U.S.C. § 501(r)) requires each of them to run a written Financial Assistance Policy (FAP). Most patients never hear about it, because nothing on the bill points to it.

What 501(r) actually requires

• Every 501(c)(3) hospital must have a written policy stating who qualifies for free or discounted care, and how to apply.
• The hospital must widely publicize it: on its site, in the facility, and in plain language.
• It cannot bill a qualifying patient more than the amounts generally billed (AGB) to insured patients.
• It must pause aggressive collections while an application is pending.

Who qualifies

Thresholds vary by hospital, but income is usually measured against the Federal Poverty Level (FPL). Many hospitals offer 100% free care up to 200% to 300% of FPL and sliding-scale discounts well above that, some to 400% or higher. A household earning far above “poverty” can still qualify for a substantial discount. Read the specific hospital's FAP; don't assume you earn too much.

How to apply

• Search “[hospital name]financial assistance policy” or ask billing for the FAP and application by name.
• Apply even if the bill already went to collections; 501(r) protections can still apply, and you can request the account be pulled back.
• Gather proof of income (pay stubs, tax return) and submit before any deadline stated in the policy.
• If you were already charged, ask for a refund of anything above the amount generally billed.