ClearchargeHow hospital financial assistance works
Almost every nonprofit hospital in the country is legally required to help patients who can't afford their bill — but almost nobody asks. Here's who has to offer it, and how to actually get it.
Nonprofit hospitals are legally required to have a policy
Under Internal Revenue Code Section 501(r), added by the Affordable Care Act, every nonprofit hospital that wants to keep its federal tax-exempt status must have a written Financial Assistance Policy (FAP), publicize it, and — for patients who qualify — limit what it charges to no more than what insured patients typically pay for the same care, rather than full chargemaster rates.1 Nonprofit hospitals must also make reasonable efforts to determine FAP eligibility before referring a bill to debt collection or reporting it to a credit bureau.
This requirement doesn't apply the same way to government-owned or for-profit hospitals — see the breakdown below for what to expect from each. Every hospital's page on this site shows which category it falls into.
| Ownership type | What this generally means |
|---|---|
| Nonprofit (private, other, or church-affiliated) | Legally required under IRC 501(r) to have a written financial assistance policy and to limit charges for patients who qualify. |
| Government-owned (local, state, federal, hospital district, VA, DoD) | Not bound by the federal 501(r) rule, but many public hospitals have their own charity-care obligations under state or local law — worth asking directly. |
| For-profit / proprietary | No federal requirement to offer financial assistance, though some still do voluntarily — always worth asking. |
What financial assistance can actually cover
- A full write-off for patients below a low-income threshold (often around 200% of the federal poverty level, though every hospital sets its own).
- A discounted rate — often the same rate the hospital gets paid by insurers, not the much higher list price — for patients in a broader income band above that.
- Interest-free payment plans, even for patients who don't qualify for a discount.
Eligibility is usually based on household income relative to the federal poverty level, not on whether you have insurance — plenty of insured patients with high deductibles qualify too.
How to actually apply
- Ask the hospital's billing department directly for their "financial assistance policy" or "charity care application" — by law, nonprofit hospitals must make this easy to find, often on their website and in your admission paperwork.
- Apply before the bill goes to collections if at all possible — nonprofit hospitals are required to screen for FAP eligibility first, but asking early avoids the stress of a collections process altogether.
- If you're not sure whether a bill already reflects financial assistance, ask — it isn't always applied automatically even when you'd qualify.
Sources
- IRC Section 501(r) (added by the Affordable Care Act, 26 U.S.C. § 501(r)) — the federal requirement that tax-exempt nonprofit hospitals maintain a written financial assistance policy, limit charges for FAP-eligible patients, and follow specific billing/collection rules. See the IRS's summary at irs.gov/charities-non-profits/charitable-hospitals-section-501r.
- CMS Hospital General Information dataset — the source of each hospital's ownership type (nonprofit, government, for-profit) shown on this site's hospital pages. See data.cms.gov/provider-data.