Hospital Charity Care: Help With a Nonprofit Hospital Bill

A hospital bill can feel scary. This page explains, in plain words, the federal rules that nonprofit hospitals must follow about help with bills. That help is often called charity care or financial assistance.

General information only — not legal or tax advice.

1. Which hospitals these rules cover

Federal tax law has a part called Section 501(r) of the Internal Revenue Code.

It sets rules that a nonprofit hospital must follow to keep its tax-exempt status. A nonprofit hospital is a 501(c)(3) hospital.

For-profit hospitals are not covered by these particular rules. A for-profit hospital is a business run for profit. It does not have to follow Section 501(r).

State laws may add more rules. Those state rules are separate from the federal rules on this page.

2. The hospital must have a written policy

A nonprofit hospital must have a written Financial Assistance Policy. People shorten it to FAP.

The hospital must also have a written emergency medical care policy.

The hospital must make the FAP easy to find. That means:

  • Free paper copies, if a person asks.
  • The FAP posted on the hospital's website.
  • A plain-language summary of the FAP. This is a short version in simple words.
  • The application form for help, also on the website and in paper form.

A person does not have to pay for these papers.

3. The hospital's own policy is the one that decides

The FAP itself states who can get help. It also states how much help: free care or discounted care.

Each hospital sets its own income rules inside the federal frame. One hospital's rules can be different from another hospital's rules.

Only the hospital decides, under its own policy. This page cannot say who qualifies for help, and no website can decide that for a hospital.

That is why the hospital's own FAP is the document that matters most. Read it, or ask the hospital to explain it.

4. A limit on what the hospital may charge

If a person qualifies under the FAP, there is a cap on charges.

For emergency care or other medically necessary care, the hospital may not charge that person more than the "amounts generally billed" to people with insurance for the same care.

The hospital also may not use full gross charges for a person who qualifies under the FAP. Gross charges are the full, undiscounted prices on the hospital's price list.

5. Collections: two clocks that protect time to apply

Before a hospital may use strong collection steps, it must first make reasonable efforts to find out whether the patient qualifies for help under the FAP.

Those strong steps are called extraordinary collection actions, or ECAs. ECAs include:

  • Selling the debt to another party.
  • Reporting the debt to credit bureaus.
  • Placing a lien on property.
  • Filing a lawsuit.
  • Garnishing wages — taking money from a paycheck by court order.

Two time periods matter. Both start with the first post-discharge billing statement — the first bill sent after the patient leaves the hospital.

120 days Notification period

ECAs may not begin during the first 120 days after that first bill.

240 days Application period

During the first 240 days after that first bill, the hospital must accept and process a complete FAP application.

If a complete application comes in during that window, ECAs must pause while the hospital processes it.

If the person is found eligible under the FAP, the hospital must undo ECAs where the rules require. It must also refund overpayments — money paid above the amount the person owes as a person found eligible.

6. Steps a person can take

These are general steps. They are information, not advice for any one person's case.

  1. Call or visit the hospital's billing office. Ask for the hospital's Financial Assistance Policy and the application form.
  2. Ask for the plain-language summary too. It is the short, simple version.
  3. Apply even if you are not sure you qualify. The hospital makes the decision under its own policy. Not applying means the hospital cannot make that decision.
  4. Keep copies and dates. Keep a copy of the application, and write down the date it was sent and the names of people spoken to.
  5. If a bill went to collections, ask whether a FAP application is still inside the 240-day window. Count from the first post-discharge billing statement.

7. State laws and sources

Some states have their own charity-care laws, and those state laws can be stronger than the federal rules.

The facts on this page come only from official federal sources:

• Internal Revenue Service (IRS), Section 501(r) — the IRS pages on the financial assistance policy, the limitation on charges, and billing and collections, at irs.gov.

• 26 CFR 1.501(r) — the Treasury regulation text for Section 501(r) (final regulations, T.D. 9708).

Checked November 2026.

General information only — not legal or tax advice. Only the hospital decides who gets help, under its own Financial Assistance Policy.