Charity care & financial assistance

Charity care — your right to financial assistance at non-profit hospitals

About 60% of US hospitals are non-profit 501(c)(3) entities. Federal tax law requires every one of them to maintain a written Financial Assistance Policy and to offer charity care to patients below specific income thresholds. The application takes about 30 minutes. The discount, when applied, can be 50% to 100% of the bill.

Last reviewed May 2026 · MediBill Saver Editorial Team

Federal basis

ACA §501(r) — Charitable Hospital Requirements

26 USC §501(r) / 26 CFR §1.501(r)-3 to -6

Read the source →

What this looks like in practice

Section 501(r) of the Internal Revenue Code, added by the Affordable Care Act in 2010, conditions a hospital's tax exemption on four specific community-benefit standards. The most patient-relevant: every 501(c)(3) hospital must (1) maintain a written Financial Assistance Policy (FAP) describing eligibility criteria and the application process, (2) widely publicize the FAP, (3) limit charges for FAP-eligible patients to the 'amounts generally billed' (AGB) to insured patients (typically 30–50% of chargemaster), and (4) refrain from extraordinary collection actions until the patient has had a reasonable opportunity to apply.

FAP eligibility is generally tied to a multiple of the Federal Poverty Level (varies by hospital — 200% to 400% FPL is common). Many hospitals offer 100% free care up to a lower threshold and sliding-scale discounts above it. The patient applies; the hospital reviews; eligibility is granted or denied with explanation.

How to spot it on a bill

  • 01.The hospital is registered as 'Voluntary non-profit' (private or church) — visible on CMS Hospital Compare.
  • 02.Total household income is below 200–400% of the Federal Poverty Level for your household size.
  • 03.The bill is from an unscheduled or emergency service.
  • 04.You haven't already applied — most hospitals' FAPs are not auto-applied; you have to opt in.

What to write — ready-to-paste language

Replace the bracketed fields with your specific details. Send by certified mail with return receipt, or via the hospital’s patient portal if it offers documented messaging. Keep a copy.

I'm writing to request a copy of [hospital]'s Financial Assistance Policy and the application form, as required by 26 CFR §1.501(r)-4. I am unable to pay the full balance of $[amount] on the bill dated [date]. My household income is $[income] for a family of [size], which is approximately [N]% of the Federal Poverty Level. Please (1) send the FAP and application within 10 business days, (2) suspend any collection activity on this account during my application review per §1.501(r)-6, and (3) confirm receipt of this request in writing.

This is a starting point, not legal advice. Your specific situation may warrant additional details. Our audit drafts this letter automatically with your bill’s specifics filled in.

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Related scenarios

Common questions

How do I find out if a hospital is non-profit?
CMS Hospital Compare lists 'Hospital Ownership' for every Medicare-certified hospital — 'Voluntary non-profit - Private' or 'Voluntary non-profit - Church' indicates likely 501(c)(3). Verify federal tax-exempt status via the IRS Tax Exempt Organization Search at apps.irs.gov/app/eos/.
What's 'amounts generally billed' (AGB)?
Under §501(r), FAP-eligible patients can't be charged more than the amounts the hospital 'generally bills' to insured patients for the same service. Most hospitals calculate AGB as a percentage of chargemaster (30–50% is common). The hospital must publish its AGB calculation method.
What if the hospital denies my charity care application?
Get the denial in writing with the specific reason. Most FAPs include an internal appeals process. If the denial appears to violate §501(r) (e.g., the income threshold was applied incorrectly, or the hospital's FAP wasn't followed), the IRS Tax Exempt and Government Entities division enforces compliance. You can also file a complaint with your state attorney general's office of consumer protection.
What if I already paid the bill?
Some hospitals will retroactively apply charity care for up to 240 days after the bill (per §501(r) collection rules). Submit the FAP application; if approved, request a refund of any overpayment.

P.S. The dispute language above is a starting point. Bills with this pattern often have additional issues alongside it — coding errors stacked with markup, surprise bills stacked with charity- care eligibility. The scan finds all of them in one pass. Start the audit →

P.P.S. Federal law gives you these rights regardless of how the bill arrived. Insured, uninsured, in-network, out-of-network — the underlying patient-protection statutes apply.

P.P.P.S. Bills are time-sensitive. Most insurance appeals must be filed within 180 days. Charity-care discounts at non-profit hospitals are most easily applied within 240 days of the original bill. Acting earlier costs less.