Six states require hospitals to auto-screen patients for charity care
- Six states require hospitals to auto-screen some patients for financial assistance.
- Nearly 90% of tax-exempt hospitals screened patients and cut bills proactively as of 2022.
- Hospitals billed patients at least $2 billion they likely didn’t owe in one year.
- About 80% of Oregon patients who got financial help never filled out an application.
WASHINGTON, D.C., UNITED STATES — Six U.S. states now require hospitals to automatically screen certain patients for financial assistance and skip the application, as states and hospitals test “presumptive eligibility” to keep patients out of medical debt.
The states are California, Delaware, Illinois, Maryland, North Carolina and Oregon.
At least 11 states require hospitals to wipe out bills for low-income patients, though income cutoffs vary.
Auto-screening instead of applications
Under presumptive eligibility, hospitals screen patients to see whether they qualify for free or discounted care and wipe out the debt when they do, sometimes before a bill is sent, KFF Health News reported.
The approach targets a long-standing gap: many patients do not know hospitals offer financial help, and complex applications that demand bank statements, pay stubs or tax returns leave others stuck.
In a single year, hospitals and health systems billed patients at least $2 billion that they likely did not owe, one analysis found.
“They don’t make it easy,” said Neale Mahoney, a Stanford University economist who studies medical debt.
Screening has spread, but rules vary
In the first year after Affordable Care Act rules took effect in 2016, about 70% of tax-exempt hospitals said they screened patients and proactively reduced bills, rising to nearly 90% by 2022, according to an analysis by RTI International.
The federal rule does not apply to for-profit and public hospitals.
Hospitals typically use public records, information patients have shared before, or tools from consumer credit companies to estimate who qualifies.
Some also weigh a patient’s “propensity to pay,” a practice California and Oregon prohibit.
In Oregon, roughly 80% of patients who got financial help with bills in 2025 never filled out an application, based on data from the first 26 hospitals to report it.
Illinois, North Carolina and Oregon require hospitals to screen certain patients before sending any bills, and California hospitals will have to do the same starting in 2027.
“Charity care is the relief of last resort,” said Anna Stelter, vice president of policy for the Texas Hospital Association.
KFF estimates nonprofit hospitals avoided $24 billion in income, sales and property taxes in 2020.
For hospitals, presumptive eligibility shifts work from patients to back-office teams that must pull data, screen accounts and document decisions before billing.
That screening sits inside the revenue cycle management (RCM) and healthcare outsourcing functions many systems already hand to partners.
Hospitals comparing vendors among the top U.S. healthcare outsourcing companies can ask how each one runs financial-assistance screening.
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- U.S. hospitals turn to offshore RCM as margin pressure peaks · 31 Mar
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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