Hospital charity care is a program nonprofit hospitals are required by federal law to run, offering free or steeply discounted care to patients who can’t afford their bills. If your household income is at or below 200% of the Federal Poverty Level, most nonprofit hospitals will write off the balance entirely; higher incomes often qualify for partial discounts on a sliding scale. You have to apply, and you have at least 240 days from your first bill to do it. The hospital is barred from aggressive collections while your application is pending.
Which Hospitals Have to Offer It
Section 501(r) of the Internal Revenue Code requires every tax-exempt hospital to maintain a written Financial Assistance Policy, usually called a FAP. A hospital that ignores the rules risks its tax-exempt status. Roughly 60% of U.S. hospitals operate as nonprofits, so the odds are decent that yours has a program.
For-profit hospitals have no federal obligation to offer financial assistance. Some do anyway, either voluntarily or because their state requires it, but the programs tend to be less generous. To check whether your hospital is a nonprofit, search the IRS Tax Exempt Organization Search tool at irs.gov for organizations recognized under Section 501(c)(3).
Separately, the Emergency Medical Treatment and Labor Act (EMTALA) requires every Medicare-participating hospital with an emergency department, nonprofit or not, to screen and stabilize patients regardless of ability to pay. Hospitals cannot delay emergency treatment to ask about insurance.
Who Qualifies
Eligibility is built around household income as a percentage of the Federal Poverty Level, which updates each year. For 2026, the figures in the 48 contiguous states are:
- 1 person: $15,960
- 2 people: $21,640
- 3 people: $27,320
- 4 people: $33,000
Most nonprofit hospitals provide free care at or below 200% of the FPL. For a family of four in 2026, that’s a household income of $66,000 or less. Patients with higher incomes often qualify for partial discounts on a sliding scale extending up to 300% or 400% of the FPL, depending on the hospital and state law. A family of four earning $132,000 (400% FPL) might still receive a meaningful discount at hospitals in states with broader mandates.
Some programs also cover patients whose out-of-pocket medical expenses exceed a set share of their annual income, often around 10%, regardless of whether their income falls within the standard thresholds. This catches people who technically earn too much for the income test but are drowning in medical costs.
Immigration status does not disqualify you. Hospitals may request pay stubs or bank statements to verify your finances, but they cannot deny charity care based on citizenship or documentation status. Underinsured patients — those with coverage but unaffordable deductibles or copays — commonly qualify as well. A few programs consider savings and other assets, but income remains the primary measure.
What Charity Care Covers
A nonprofit hospital’s FAP must cover all emergency and medically necessary care provided at that facility: inpatient stays, emergency room visits, and necessary outpatient procedures. Elective procedures, cosmetic treatments, and services from physicians who aren’t employed by the hospital (even if they treated you inside the hospital) are typically excluded.
There’s a billing protection baked into the law. For any care covered under the FAP, a hospital cannot charge a financial-assistance-eligible patient more than the “amounts generally billed” (AGB) to insured patients for the same services. The hospital calculates its AGB by looking at what insurers actually paid over the prior year or by using Medicare rates. This prevents the common problem of uninsured patients being hit with inflated “chargemaster” prices that no insurer would ever pay.
The Deadlines That Matter
You don’t have to apply before receiving care. Federal regulations create two overlapping windows that both start on the date of your first billing statement after discharge.
- 120-day notification period. The hospital cannot initiate any extraordinary collection actions for at least 120 days after sending your first post-discharge bill. During this window, the hospital must notify you about the FAP and how to apply.
- 240-day application period. You have at least 240 days from the first billing statement to submit a complete application. If you submit an incomplete one, the hospital must tell you what’s missing and give you a reasonable chance to fix it.
Even after the 240-day window closes, the hospital must send you written notice at least 30 days before starting any collection action. That notice has to identify the specific actions planned, include a plain-language summary of the FAP, and set a deadline no earlier than 30 days out. In practice, the effective protection often stretches well beyond 240 days.
You can also seek pre-approval for planned non-emergency procedures before receiving care, which is worth doing if you know you’ll need surgery or an extended stay.
How to Apply
Start by getting the hospital’s FAP and application form. Federal law requires nonprofit hospitals to make both documents publicly available on their website and to provide paper copies on request. Look for a “Financial Assistance” or “Billing” section, or call the patient financial services office. A billing advocate or financial counselor at the hospital can walk you through the process.
Your application will need supporting documents. Expect to gather:
- Recent pay stubs, your most recent tax return, or documentation of benefits like Social Security or disability payments
- Bank statements, usually the most recent two to three months
- Proof of residence, such as a utility bill or lease
- Documentation of enrollment in Medicaid, SNAP, or other government benefits, if applicable
- A written hardship explanation if you have little or no income, describing how you’re currently meeting basic needs
Submit the completed package by mail, in person, or through an online portal if the hospital has one. Keep a copy of everything and note the date you submitted. That date establishes that your application is pending, which triggers collection protections.
Presumptive Eligibility
Some hospitals qualify you automatically without a full application if you already participate in certain programs. Enrollment in Medicaid, SNAP, WIC, or other means-tested government benefits can serve as proof that your income is below the threshold. Patients experiencing homelessness or those who are deceased with no estate may also qualify presumptively. If you’re enrolled in any government assistance program, mention it immediately when you contact the billing office. It may shortcut the entire process.
What the Hospital Cannot Do While You Apply
Federal law prohibits nonprofit hospitals from taking “extraordinary collection actions” (ECAs) until they’ve made reasonable efforts to determine whether you qualify for financial assistance. ECAs include:
- Selling your debt to a collection agency or debt buyer
- Reporting the debt to credit bureaus
- Withholding future care by denying or delaying medically necessary treatment because of an unpaid bill from a previous visit
- Legal action such as filing a lawsuit, garnishing wages, placing a lien on your home, seizing bank accounts, or pursuing a court judgment
None of these are permitted during the 120-day notification period, and the hospital must give at least 30 days’ written notice before starting any of them afterward. If you submit a complete application during the 240-day window, the hospital must process it and determine your eligibility before taking any collection action at all.
Two narrow exceptions exist. Filing a claim in your bankruptcy proceeding does not count as an ECA, and a lien on the proceeds of a personal injury settlement (where a third party caused the injury the hospital treated) is also not considered an ECA.
Debt sales get special treatment. A hospital can sell your debt to a third party without first checking your FAP eligibility, but only if the buyer signs a legally binding agreement not to pursue any ECAs, to accept the debt back if you’re later found FAP-eligible, and to charge no more than the hospital could have charged under its FAP.
If You’re Denied
Many FAPs include an internal appeal process, and it’s worth asking about one even if the denial letter doesn’t mention it. Start by understanding exactly why you were denied. Common reasons are an incomplete application, income slightly above the threshold, or missing documentation. An incomplete application is the easiest to fix; resubmit with the missing pieces within the 240-day window.
If the denial is based on income and you believe the hospital miscalculated, or if your circumstances have changed, submit a written request for reconsideration with updated documentation. Some hospitals will negotiate a partial discount even if you don’t qualify for full charity care.
When internal options are exhausted, you still have a payment plan option. Hospitals commonly offer extended payment plans that cap monthly payments at a small percentage of your income, making even a large remaining balance manageable.
Filing a Complaint
If a nonprofit hospital refuses to follow its own FAP, denies you access to the application, or pursues collections before the required waiting periods expire, report the violation to the IRS. Use Form 13909 (Tax-Exempt Organization Complaint), available on irs.gov. Submit it by mail to IRS TEGE Classification, 1100 Commerce Street, MC 4910 DAL, Dallas, TX 75242, or by email to eoclass@irs.gov. The IRS uses these complaints to determine whether the hospital has violated federal tax law, which can threaten its tax-exempt status. You can also file a complaint with your state attorney general’s office, which often has a consumer protection or healthcare division that handles hospital billing disputes.
Taxes on Forgiven Bills
The IRS generally treats canceled debt as taxable income, but hospital charity care programs are typically structured as charitable gifts, which are excluded from that rule. If your hospital simply reduces your bill through its FAP rather than forgiving a debt already sent to collections, you’re unlikely to receive a 1099-C or owe additional tax.
It gets more complicated if a debt was already in collections before being forgiven, or if you negotiated a settlement outside a formal charity care program. The insolvency exclusion may protect you: if your total debts exceeded your total assets when the debt was canceled, you can exclude the forgiven amount from income by filing Form 982 with your tax return. If you receive a 1099-C for forgiven medical debt and believe it shouldn’t be taxable, a tax professional is worth the cost.
Medical Debt and Your Credit
As of 2026, medical debt can appear on your credit report. The CFPB issued a rule in January 2025 that would have banned medical debt from credit reports, but a federal court vacated that rule in July 2025, finding it exceeded the agency’s authority under the Fair Credit Reporting Act. The rule carries no legal force.
That makes applying for charity care before a bill goes to collections even more important. Once a hospital reports the debt or sells it to a collector who reports it, the damage to your credit is done and difficult to reverse. The 120-day notification period and the ban on ECAs during a pending application exist partly to give you time to apply before any reporting happens.
The statute of limitations for a collector or hospital to sue you over unpaid medical debt varies by state, generally three to ten years. Making a partial payment or acknowledging the debt in writing can restart that clock in many states, so be careful how you communicate with collectors if a bill has been unpaid for a while.