How to Find Your Hospital's Charity Care Policy in 5 Minutes

What IRS 501(r) requires from nonprofit hospitals

The phrase "charity care" is not a casual practice — for nonprofit hospitals, it is a federal legal requirement. Under IRS Section 501(r), which was added to the tax code by the Affordable Care Act and took effect in 2016, every hospital organization that wants to maintain 501(c)(3) tax-exempt status must:

• Have a written Financial Assistance Policy (FAP) that describes who qualifies and how to apply.
• Have a written policy limiting the amounts charged to FAP-eligible patients to not more than the hospital's lowest negotiated commercial insurance rate (the Amounts Generally Billed, or AGB standard).
• Widely publicize the FAP, including posting it on the hospital's website and making paper copies available free on request in the facility.
• Provide a plain-language summary of the FAP to all patients, not just those who ask.
• Not engage in extraordinary collection actions (lawsuits, wage garnishment, credit reporting) until it has made reasonable efforts to determine whether a patient qualifies for assistance.

The penalty for violating these requirements includes loss of tax-exempt status. That means this is not just a good-faith gesture — it is something the hospital is legally motivated to do correctly. And it means the information about the program must be accessible.

Which hospitals are covered

Only nonprofit hospitals with 501(c)(3) status are required to follow 501(r). That said, nonprofit hospitals represent a large share of U.S. hospital facilities — around 58% of community hospitals, according to the American Hospital Association. For-profit hospitals are not covered, and government-run (public) hospitals have their own rules under state and local law. If you are unsure whether your hospital is nonprofit, you can check the IRS Tax Exempt Organization Search at apps.irs.gov.

Why does this matter financially? On hospital bills above $10,000, AARP and MedCost Solutions have documented average overcharges of approximately $1,300 — and that is before any financial assistance is applied. Patients pursuing both error correction and charity care simultaneously have two independent levers to reduce what they owe. (Source: AARP / MedCost Solutions.) Separately, the CFPB has found that up to 49% of medical bills contain at least one billing error, which means the starting number on your bill may already be inflated before you negotiate assistance. (Source: CFPB, 2024.)

Where to find your hospital's financial assistance policy

The hospital is required to make the policy publicly available in multiple ways. Here are the fastest paths to finding it.

The hospital website

Start here. Go to the hospital's main website and search for "financial assistance," "charity care," or "patient assistance." The policy is usually in the billing or patient resources section. Most large hospitals have a dedicated page for it, and under 501(r) they are required to post the full policy document, the plain-language summary, and the application form — all as free downloads.

If the search function is not finding it, try: [Hospital Name] + "financial assistance policy" in a search engine. The policy document is often directly linked from search results.

Ask at the admissions desk or billing office

Under 501(r), the hospital must provide a paper copy on request at no charge. If you are going in for a procedure or are in the billing office, ask for the financial assistance policy and the application form. Staff are required to provide it.

The hospital's main phone line

Call the main hospital number and ask to be connected to "patient financial services" or "billing." Ask specifically: "I'd like information on your financial assistance program and how to apply." This is a routine request and billing staff deal with it regularly.

The Form 990

Nonprofit hospitals file an annual Form 990 with the IRS, which is publicly available on ProPublica's Nonprofit Explorer. The 990 includes a schedule (Schedule H) specifically about charity care — it reports the amount of care provided and describes the FAP in summary form. This can help you understand the program before you contact the hospital.

How eligibility is calculated

This is where many patients make an incorrect assumption. The assumption is: "I'm not poor enough for charity care." But 501(r) only sets a minimum — hospitals are free to extend their programs much further up the income scale.

The federal poverty level baseline

IRS 501(r) requires nonprofit hospitals to provide free care (not just discounted care) to patients at or below 100% of the federal poverty level (FPL). In 2026, 100% FPL for a family of four is approximately $31,200. For a single individual, it is approximately $15,060. These patients must receive free care if they apply and qualify.

Discounted care at higher income levels

Most hospitals extend discounted care to households at higher income levels — 200%, 300%, or even 400% of FPL. At 400% FPL, a family of four has an income of around $124,800. That is solidly middle-class income, and many people at that level would not imagine they might qualify for charity care. But at many large nonprofit hospitals, they do — and would receive a meaningful discount on a large bill.

The sliding scale

The discount typically slides based on income. Patients at 100% FPL may receive 100% forgiveness. Patients at 200% FPL might receive 75% off. Patients at 300% FPL might receive 50% off. The specific percentages are in the hospital's FAP document and vary by hospital. Read the actual policy for the hospital you used — do not assume the terms are the same as another hospital you may have dealt with before.

Income eligibility quirks you should know

Household size matters as much as income

FPL calculations are based on household size, not just income. A single parent with two children and an income of $50,000 may fall at roughly 140% FPL — well within the range for discounted care at many hospitals. A single person with the same income would be at roughly 330% FPL. Add people in your household when calculating where you fall.

Self-employed and irregular income

If your income is irregular — seasonal work, freelance, contract, or recent job loss — hospitals generally look at current income rather than last year's tax return. If you had a difficult year or a recent income drop, document it. A letter explaining your current financial situation, supported by recent pay stubs or bank statements, is usually acceptable.

Assets and savings

Some hospitals consider assets (savings, investments, home equity) in addition to income. Others look only at income. If you have significant assets but limited income — say, you are retired and living on Social Security — the asset-based evaluation can work against you at some hospitals. Read the FAP carefully to see what the hospital considers, and ask patient financial services if you have questions.

Insured patients

Most charity care programs are targeted at uninsured patients, but some hospitals allow insured patients to apply for assistance with their remaining out-of-pocket balance. If you have insurance but face a large deductible or coinsurance amount, it is worth asking. The answer depends entirely on the specific hospital's policy.

How to apply step by step

Step 1: Download and read the policy

Before you fill out anything, read the financial assistance policy document. It tells you exactly what income levels qualify, what documentation you need, how the discount is calculated, and how long you have to apply. This prevents surprises and helps you gather the right documents from the start.

Step 2: Gather your income documentation

Standard documents: most recent federal tax return (1040), recent pay stubs (typically 30–90 days), and documentation of other income (Social Security statements, disability income, self-employment records). If your income recently changed, note that in a cover letter.

Step 3: Complete the application

Fill out the application completely. Incomplete applications are the most common reason for delays and denials. If a section does not apply to you (for example, "other household income"), write "N/A" rather than leaving it blank.

Step 4: Submit before paying

Do not pay the bill while your application is pending. Under 501(r), a nonprofit hospital cannot engage in extraordinary collection actions (lawsuits, credit reporting) while a charity care application is under review. Paying acknowledges the full amount and removes that protection. You can ask the billing department to put the account on hold while the application processes.

Step 5: Follow up

Applications typically take 2–4 weeks. If you have not heard back, call patient financial services and ask for a status update. Keep a copy of everything you submitted. If you receive a decision, ask for it in writing.

What if the bill is already in collections?

Many patients discover charity care programs only after their bill has been sent to a collection agency. The good news: it is often not too late.

Under 501(r), hospitals must screen before collecting

The law requires hospitals to make a "reasonable effort" to determine whether a patient qualifies for financial assistance before taking extraordinary collection actions. A hospital that sends a bill to collections without properly notifying patients of the FAP or giving them a chance to apply may be in violation of 501(r). If you believe this happened to you, it is worth raising with the hospital.

Retroactive applications

Many hospitals allow retroactive charity care applications — meaning you can apply after the bill has gone to collections. If approved, the hospital may reduce the balance, and the collection agency's authority to collect is typically based on the balance the hospital assigned to them. A reduced or eliminated balance from a successful retroactive application can resolve the collection.

State laws may give additional time

Some states have laws that give patients additional time to apply for charity care — even after collections or legal action has begun. California, for instance, has its own charity care laws that go beyond federal 501(r) requirements. Check your state's laws or consult a consumer law attorney if you believe you were denied access to assistance improperly.

If medical debt has already hit your credit report, see our guide on medical debt and your credit score in 2026 for what the current rules say about reporting and how to dispute entries.

What to do if you're denied

Ask for the reason in writing

A denial without explanation is not very useful. Ask the hospital to put the reason for the denial in writing. Common reasons: income over the threshold, missing documentation, or application submitted after a deadline. Each of these has a potential response.

Appeal with additional documentation

If you were denied for missing documents, gather what was missing and reapply. If you were denied because your income was over the threshold but has since changed (job loss, medical crisis, new dependent), explain the change and reapply. Many hospitals have a formal appeal process for FAP denials.

Look for state and county programs

Even if the hospital's own program does not cover you, your state may have additional programs. Medicaid is the largest, but some states have their own hospital financial assistance programs, and many counties have general assistance programs for medical expenses. A hospital social worker can often point you toward these resources.

Negotiate a payment plan

If you do not qualify for charity care, the hospital should still offer a payment plan. Under 501(r), the hospital cannot charge interest or fees to FAP-eligible patients on payment plans — and many hospitals extend interest-free payment plans to patients who apply, even if they do not qualify for full charity care. Ask specifically for an interest-free plan.

Review the underlying bill for errors first

Before you pay anything — through charity care, a payment plan, or any other method — make sure the bill is correct. A bill with errors inflates the balance you are trying to reduce. Getting a CPT-level itemized bill and reviewing it for duplicate charges, upcoding, or misapplied codes can reduce your balance independently of any financial assistance program. These are separate levers, and both are worth pulling. Read our overview of why ER bills are so high if your bill is from an emergency visit.