Hospital Charity Care Programs

This practice note examines the federal legal and regulatory framework governing hospital charity care programs. It provides guidance on the requirements imposed on nonprofit hospitals under Section 501(r) of the Internal Revenue Code for establishing and maintaining a written financial assistance policy (FAP), as well as related obligations concerning public disclosure and patient eligibility. The note further addresses federal reporting requirements to the Internal Revenue Service (IRS) and the Centers for Medicare and Medicaid Services (CMS), including reporting through IRS Form 990, Schedule H, and CMS Worksheet S-10. Additionally, it addresses common challenges hospitals face in administering charity care programs, key compliance considerations, and audit risks. The note concludes with an analysis of emerging trends and the evolving scope of charity care in the healthcare sector.