How to Appeal a Hospital Financial Assistance Denial

Nonprofit hospitals operating under Section 501(r) of the tax code are legally required to have written financial assistance policies and to make them available to patients. If your financial assistance application was denied, the denial is not necessarily final.

Understanding why applications are denied

Common reasons for denial include missing documentation, income that exceeds the program's threshold on paper but does not reflect actual financial hardship, applications submitted after the deadline, and errors in the application itself.

Some denials are based on a snapshot of your financial situation that does not account for unusually high expenses in the year of the medical service, multiple family members' medical bills, or recent changes in income.

What the law requires

IRS regulations require nonprofit hospitals to provide financial assistance that includes free or discounted care to patients who qualify based on the hospital's written policy. They must also ensure that they do not charge amounts greater than the amounts generally billed to insured patients for patients eligible for assistance.

The written financial assistance policy must be available on the hospital's website and in paper form upon request. If you have not reviewed the policy, obtain a copy before appealing. Know the exact income thresholds and documentation requirements.

How to appeal

Request a formal appeal of the denial in writing. Address it to the patient financial services supervisor or director. Include the original application reference number and the date of denial.

In your appeal letter, address the specific reason for denial. If documentation was missing, provide it. If your income appears to exceed the threshold but your actual financial situation involves extraordinary circumstances, document those circumstances in detail. Medical debt that exceeds a meaningful percentage of annual income is itself grounds for reconsideration at many hospitals even when income technically exceeds program thresholds.

Sliding scale and partial assistance

Many hospital programs offer sliding scale assistance that provides partial reductions even for patients who do not qualify for full write-off. If your initial application was for complete forgiveness, ask whether partial assistance is available.

State attorney general oversight

Nonprofit hospitals' financial assistance programs are subject to state attorney general oversight in most states. If you believe a hospital is not complying with its own written policy or with 501(r) requirements, a complaint to the state attorney general's charitable trust division is appropriate.

Hospitals take attorney general complaints seriously because nonprofit status and state tax exemptions depend on compliance with charitable mission requirements.

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Bill Advantage is a document literacy tool. Nothing in this article constitutes legal or medical advice.