Hospitals across the country offer financial assistance programs, commonly known as charity care, to help patients who cannot afford medical bills. These programs typically provide free or discounted care based on income levels, with eligibility often determined by a patient’s household income. However, accessing this support can be difficult, as many patients are unaware of the available options or face complex application processes requiring bank statements, tax returns, and other documentation.
Rising Costs Drive Need for Aid Programs
Healthcare costs rising and more people losing insurance have increased the challenge. In one year, hospitals billed patients for at least $2 billion in charges they likely did not owe, according to an analysis. To address this, some states and hospitals are adopting a strategy called “presumptive eligibility,” which automatically screens patients for financial aid and erases debt when they qualify, often before any bills are sent.
Under this approach, patients may never see a medical bill if they meet criteria, though implementation varies by institution. Nearly all nonprofit hospitals now screen patients for financial assistance, with federal rules under the Affordable Care Act requiring them to identify eligible individuals before suing for unpaid bills or selling debt to collectors. In 2016, about 70% of tax-exempt hospitals proactively reduced bills for qualifying patients; by 2022, that figure rose to nearly 90%.
State Laws Expand Presumptive Eligibility
Six states—California, Delaware, Illinois, Maryland, North Carolina, and Oregon—have mandated presumptive eligibility for certain patients. These states require hospitals to automatically screen individuals who meet specific criteria, such as homelessness, enrollment in government assistance programs, or income below a set threshold. For example, Oregon now requires hospitals to screen anyone with unpaid bills over $1,500 as of 2025, with 80% of recipients receiving aid without submitting an application.
Hospitals use various methods to determine eligibility without applications. They may check public records, analyze patient addresses in high-poverty areas, or run credit and employment checks through third-party vendors. Some institutions, like Christus Health, have unique criteria, such as waiving bills for patients in religious orders who took vows of poverty. However, these rules are often buried in detailed policies, making them difficult for patients to discover. California prohibits using “propensity to pay” scores, metrics that estimate a patient’s likelihood to pay, to screen for aid, as this could lead to unfair targeting of responsible payers. Screening timing also varies: Illinois, North Carolina, and Oregon require pre-billing checks, while others screen after bills are sent but before legal action.
In 2020, these institutions saved an estimated $24 billion in taxes. States other than the six mandating presumptive eligibility let hospitals decide their own screening timing. Some institutions screen after bills arrive but before initiating collections or lawsuits. Others wait until patients have exhausted all other payment sources. Christus Health, for instance, screens only after determining no other eligibility or payment options remain available. Cook Children’s Health Care System in Texas aims to assess eligibility “as soon as sufficient information is available” rather than following fixed timing rules.
Varied Qualifying Criteria by Region
The specific groups qualifying for automatic screening differ significantly across hospital systems and states. Common categories include individuals experiencing homelessness, those enrolled in government assistance programs for housing, food, or prescriptions, and patients with household incomes below established thresholds. Some hospitals maintain unique criteria beyond standard income guidelines. Christus Health exemplifies this variation by automatically waiving bills for members of religious orders who have taken vows of poverty.
However, detailed eligibility rules frequently remain hidden within complex policies, making discovery difficult for patients. Thirteen Ascension hospitals state only that they may screen patients with “a sufficient unpaid balance,” while the health system as a whole provides minimal public information about its automatic screening practices. State-specific requirements also create different standards; Maryland mandates automatic write-offs only for patients already receiving government aid for basic needs but ineligible for Medicaid, while Illinois applies different screening rules for rural versus urban facilities.
