Hospital financial assistance: what nonprofit hospitals must do
Nonprofit (tax-exempt) hospitals must follow federal rules called section 501(r). They must have a written financial assistance policy, sometimes called charity care, and must give you time to apply before they take serious collection steps. These federal rules do not apply to for-profit or government hospitals, but your state law may.
Checked against official sources: October 30, 2026.
The policy every nonprofit hospital must have
- Each nonprofit hospital must have a written financial assistance policy (FAP).
Law: 26 U.S.C. 501(r)(4); 26 CFR 1.501(r)-4
- The hospital must post the policy, the application form and a plain-language summary on its website, give free paper copies on request and in the emergency room and admissions areas, offer the summary at intake or discharge, and print a notice about financial assistance with a phone number and web address on its bills.
Law: 26 CFR 1.501(r)-4(b)(5)
- The policy documents must be translated into the language of each group with limited English that makes up 1,000 people or 5 percent of the community the hospital serves, whichever is less.
Law: 26 CFR 1.501(r)-4(b)(5)(ii)
- Once you are found eligible, the hospital cannot charge you more than the amounts generally billed (AGB) to people with insurance for emergency or other medically necessary care, and must charge less than its full gross charges for other covered care.
Law: 26 U.S.C. 501(r)(5); 26 CFR 1.501(r)-5
- The hospital must have a policy to give emergency care without discrimination, whether or not you qualify for financial assistance.
Law: 26 CFR 1.501(r)-4(c)
Collection actions and the waiting times
- Extraordinary collection actions (ECAs) include selling your debt, reporting it to credit bureaus, delaying or refusing needed care because of an unpaid bill, and legal steps such as a lawsuit, a lien on your property, taking money from your bank account, wage garnishment or arrest.
Law: 26 U.S.C. 501(r)(6); 26 CFR 1.501(r)-6(b)
- Before any ECA, the hospital must tell you about financial assistance and wait at least 120 days from the first bill sent after you left the hospital.
Law: 26 CFR 1.501(r)-6(c)(3)
- At least 30 days before starting an ECA, the hospital must send you a written notice that financial assistance is available, which ECAs it plans to take and the deadline, with a plain-language summary of the policy.
Law: 26 CFR 1.501(r)-6(c)(4)
- You can apply for at least 240 days from the first bill sent after you left the hospital.
Law: 26 CFR 1.501(r)-1(b)(3)
- If you apply during the application period, even with an incomplete application, the hospital and its collectors must stop starting or continuing ECAs until the hospital decides, or until you fail to send requested information within a reasonable time.
Law: 26 CFR 1.501(r)-6(c)(8)
If the hospital finds you eligible
- If you qualify, the hospital must tell you in writing, refund what you paid above your share (unless less than $5), and take reasonable steps to undo collection actions, such as vacating a judgment, lifting a lien and removing negative information from your credit report.
Law: 26 CFR 1.501(r)-6(c)(6)
- The hospital is responsible for the ECAs of collection agencies and debt buyers it uses.
Law: 26 CFR 1.501(r)-6(c)(10)
- A signed form saying you don't want to apply does not count as a decision that you are not eligible.
Law: 26 CFR 1.501(r)-6(c)(9)
Emergency care
- If you come to a hospital emergency department that takes Medicare, it must give you a medical screening exam and, if you have an emergency condition, stabilizing treatment or an appropriate transfer.
Law: 42 U.S.C. 1395dd(a), (b), (h) (EMTALA)
States with a charity-care law and the highest income level in it
- California: 400%
- Colorado: 250%
- Connecticut: 250%
- Delaware: 400%
- Illinois: 600%
- Maine: 200%
- Maryland: 300%
- Massachusetts: 300%
- New Jersey: 500%
- New York: 400%
- Ohio: 100%
- Oregon: 400%
- Rhode Island: 300%
- Vermont: 400%
- Washington: 400%
The percentage is of the federal poverty level. Each hospital decides using its own policy.
Quick answers
What must a nonprofit hospital's financial assistance policy do?
Each nonprofit hospital must have a written financial assistance policy (FAP).
How long must a hospital wait before collection actions?
Before any ECA, the hospital must tell you about financial assistance and wait at least 120 days from the first bill sent after you left the hospital.
How long do I have to apply?
You can apply for at least 240 days from the first bill sent after you left the hospital.
Can collection pause while my application is pending?
If you apply during the application period, even with an incomplete application, the hospital and its collectors must stop starting or continuing ECAs until the hospital decides, or until you fail to send requested information within a reasonable time.
Free help
Free help can look at your bill and your letters. Legal aid groups, state insurance departments and the federal help desk do not charge for this.