Patient guide · 7-min read
Charity Care: Your Right Under 26 U.S.C. § 501(r)
If a hospital is a 501(c)(3) nonprofit, federal law requires it to maintain and widely publicise a financial-assistance policy. Most patients never hear about it. Here is how to claim it.
What 501(r) requires
Section 501(r) of the Internal Revenue Code, enacted in the Affordable Care Act, requires every 501(c)(3) hospital to (a) maintain a written financial-assistance policy ("FAP"), (b) widely publicise it (on the website, in registration packets, in plain language), (c) limit charges to FAP-eligible patients to the "amount generally billed" (AGB) to insured patients, and (d) refrain from extraordinary collection actions until eligibility has been determined.
Who qualifies
Each hospital sets its own income thresholds, but most nonprofit FAPs offer full forgiveness up to 200% of the federal poverty level (FPL) and partial discounts up to 400% FPL. Many hospitals extend eligibility to insured patients with high deductibles relative to income. Asset tests vary.
How to apply
Request the FAP application in writing from the hospital's patient financial services office. Include any income documentation they require (pay stubs, tax return, SSI award letter, etc.). The hospital must pause collection activity once an application is submitted, pending eligibility determination.
If the hospital ignores you
Failure to comply with 501(r) can cost a hospital its tax-exempt status. The IRS's Tax-Exempt and Government Entities division accepts complaints. Most hospitals respond quickly to a written request that cites 26 U.S.C. § 501(r) directly.
Frequently asked
How do I know if my hospital is a nonprofit?
Most US hospitals are. Check the hospital's "About Us" page or look up the parent organization on the IRS Tax-Exempt Organization Search (apps.irs.gov/app/eos/).
What if my bill is already paid?
You can still apply retroactively. Hospitals typically have a one-year look-back window in their FAP.