Nonprofit hospitals, which account for more than 50% of hospitals in the US, are legally required to provide financial assistance to patients under Section 501(r) of the Internal Revenue Code, added by the Affordable Care Act (ACA). Financial assistance, also called charity care, can be in the form of bill discounts or bill forgiveness, largely based on income. According to experts in the field, less than 30% of patients deemed eligible actually receive it — meaning there's a staggering amount of money left on the table.
What the Law Says
Section 501(r) requires that nonprofit hospitals must have a written financial assistance policy (FAP) and publish eligibility requirements for free or discounted services, how to apply, and more. Legally, this information must be available on the hospital's website, in the emergency department, and in the admission area.
Why Nobody Tells You
So, you've never heard of this, right? This isn't some kind of conspiracy; in fact, it's quite simple. Nonprofit hospitals aren't incentivized to tell you about their FAP. Legally, it must be in a few places, but no one is bound to tell you about it, whether it be your bedside nurse, doctor, or the billing department. The billing department is designed to collect, and that's it. Nurses and doctors aren't trained on, or even informed about, FAPs, much less told to tell patients about them --- one thing I'm actively working on in my unit to drive change.
Who Qualifies
Unfortunately, there's no one-size-fits-all answer for this. Each charity care policy is designed and managed by the individual hospital or hospital system, not by federal law, though various states do have some governance. Very generally, though, among hospitals that publish income criteria, the median cutoff is 200% of the federal poverty level for free care and 400% for discounted care. Again, these are generalizations; you will have to check the hospital's website for specifics (and yes, they are legally obligated to share qualification information, as well as information on how charging works). Even insured patients can apply and have bills forgiven or discounted.
The Four Things Nobody Tells You
240-Day Rule: All hospital bills less than 240 days old must be considered, even if in collections.
Refund Rule: If your application is approved after you've already paid, the hospital must refund you.
Collections: Applying for charity care pauses collection activity.
Separate Providers: Providers and groups such as radiology and anesthesia frequently bill separately from the hospital, so they don't automatically forgive medical debt; however, many do offer a discount (sometimes up to the same amount the hospital offers). You just have to ask (and it helps if you provide the approval documentation from the hospital's charity care). One thing almost nobody knows: the FAP itself must list which providers are and aren't covered by the policy, so don't guess — look for that list.
How to Actually Do It
Typically, you can find your search engine of choice and type in "[hospital name] financial assistance policy" and get to it quite quickly. Otherwise, visit the website; it should have a section on financial assistance or charity care. You can also call the hospital to request the application and ask what documents you need to gather (usually financial documents such as W-2s, bank statements, and/or insurance documents). If you are denied, you can appeal. Expect to put in a lot of effort and time, whether you're denied or just submitting your initial application; it will be well worth it if you shave off thousands, tens of thousands, or even hundreds of thousands of dollars.
Where to Get Free Help
Dollar For is a fantastic resource for both information and direct assistance in taking advantage of charity care at nonprofit hospitals. Best part? Using Dollar For is completely free, as they are funded by donors.
For Floridians
As you all know, Florida is my stomping ground. As such, I've found links to the larger hospital systems' FAPs and have them here for you (all found by clicking the first link when typing “[hospital name] financial assistance”). Of note: Please don't search FAP; type the full words...
If there's one thing that'll kill stability and lead you toward (or further down the path of) financial fragility, it's a $50,000 hospital bill. Health scares happen to us all eventually, and we shouldn't have to worry about our entire future being shot down because of it; take the time to handle the likely frustrating phone calls, emails, and faxes to help stabilize your future. If this was useful to you, subscribe — I write about the things that quietly wreck people financially, and how to see them coming.