The Hospital's Best-Kept Secret: Charity Care
There is a powerful legal tool that most Americans are unaware of: Hospital Financial Assistance Policies, commonly known as 'Charity Care.'
Under Section 501(r) of the Internal Revenue Code, any hospital that operates as a non-profit (which includes about 60% of US hospitals) must offer financial assistance to patients who meet certain income criteria. If you are eligible, the hospital must provide care for free or at a significantly reduced rate.
Are You Eligible for Financial Assistance?
Eligibility is primarily based on two factors:
- Your Household Income: Most hospitals use multiples of the Federal Poverty Level (FPL).
- Your Family Size: A family of four with an income of $90,000 may qualify for substantial assistance in many states.
The Key Rule: Hospitals are not required to tell you that you qualify. You must proactively ask for the 'Financial Assistance Policy' (FAP) and the 'FAP Application Form.'
State-Level Protections to Know
While federal law sets the baseline, several states have passed even stronger protections for medical debtors:
California
California's Hospital Fair Pricing Act requires hospitals to offer discounts to patients with incomes below 400% of the FPL. It also prohibits hospitals from using wage garnishments or home liens to collect medical debt.
New York
New York law requires hospitals to provide financial assistance to patients with incomes up to 300% of the FPL. The state also has strict limits on how long hospitals can wait to file collection lawsuits.
Illinois
The Illinois Hospital Uninsured Patient Discount Act mandates significant discounts for uninsured patients earning up to 600% of the FPL in some jurisdictions.
Steps to Apply for Financial Assistance
- Get the Form: Call the billing office or check the 'Financial Assistance' link at the bottom of the hospital's website.
- Gather Documentation: You will typically need your most recent tax return, last two pay stubs, and recent bank statements.
- Write a Hardship Letter: Briefly explain your financial situation and why the bill is a burden.
- Submit and Follow Up: Once submitted, the hospital is required to pause all collection activities while they review your application.
What if My Bill is Already in Collections?
It is never too late to apply for Charity Care. Even if your bill was sent to a collections agency months ago, if you were eligible for assistance at the time the service was provided, the hospital can (and often must) pull the debt back from collections once your application is approved.
Using BillArmor as Your First Line of Defense
Before applying for financial assistance, it is critical to ensure the amount you are being asked to pay is correct. Applying for charity care on a bill that contains $2,000 in errors is inefficient.
Use BillArmor to audit your bill first. Ensure the charges are legitimate, then use the audited total as the basis for your financial assistance application.
Knowledge is power. Don't let medical debt define your future.
Don't Overpay for Healthcare
If this article helped you identify potential errors, let our CMS-certified engine scan your bill for free. Most audits are completed in 60 seconds.
Upload Your Bill