Hospital Charity Care After Death: How to Get Medical Bills Written Off

The Law Most Families Don't Know About

Under Internal Revenue Code Section 501(r), a tax-exempt Section 501(c)(3) hospital organization that operates a hospital facility must maintain a written Financial Assistance Policy (FAP) — commonly called charity care. The policy must describe the eligibility criteria and whether assistance is free or discounted; there is no single nationwide income cutoff.

This requirement doesn't end when the patient dies. For estates with limited assets, the hospital's FAP can be the single most effective tool for eliminating outstanding medical bills entirely.

IRS guidelines specifically permit nonprofit hospitals to use presumptive eligibility tools to write off balances for deceased patients with no estate. The hospital doesn't even need an application in some cases — it can determine eligibility based on publicly available information about the patient's financial situation.

The 240-Day Application Window

Hospitals must accept and process a financial assistance application submitted up to 240 days from the date of the first post-discharge billing statement. This window applies even after the patient has died.

If the first bill was issued 60 days after the death, the estate representative has until roughly 300 days after the death to submit the application. That's nearly 10 months — far longer than most families realize.

During this window, the hospital is also restricted from pursuing extraordinary collection actions (ECAs). A nonprofit hospital cannot report the balance to credit bureaus, sell the debt to a third-party collector, or file a lawsuit or estate claim until at least 120 days after the first billing statement, and only after making reasonable efforts to determine whether the patient qualifies for financial assistance.

Who Qualifies

Each hospital sets its own eligibility criteria within the FAP. Some nonprofit hospitals may use presumptive eligibility tools to write off the balance of a deceased patient with no estate. Ask the hospital how its policy applies and what information it needs; there is no single nationwide income threshold or rule about heirs' income.

How to Apply on Behalf of a Deceased Patient

1. Identify whether the hospital is nonprofit. Not all hospitals are tax-exempt. For-profit hospitals have no 501(r) obligation. You can verify a hospital's tax status on the IRS Tax Exempt Organization Search tool or by asking the hospital directly.

2. Request a copy of the FAP. Hospitals are required to make this document widely available — on their website, in their billing office, and upon request.

3. Gather documentation. The application typically requires the deceased's income information (last tax return or Social Security benefit statements), a list of estate assets, the death certificate, and your letters of administration or testamentary.

4. Submit the application within the 240-day window. Send via certified mail and keep copies. Note the submission date — the hospital must process and respond within a reasonable timeframe.

5. If approved, request written confirmation that the balance has been reduced or eliminated. This documentation protects the estate if the debt is later sold to a collector who doesn't know about the charity care determination.

What Happens If the Hospital Ignores 501(r) Requirements

If a nonprofit hospital fails to make its FAP available, refuses to accept timely applications, or initiates extraordinary collection actions before the 120-day notification window expires, it risks its tax-exempt status. The IRS can revoke 501(c)(3) status for noncompliance.

If you believe a hospital has violated its 501(r) obligations, you can report the noncompliance to the IRS using Form 13909 (Tax-Exempt Organization Complaint). You can also contact your state's Consumer Assistance Program or the state attorney general's office.

Charity Care vs. Insolvency Discharge

These two tools work in different situations:

Charity care eliminates the bill entirely based on the patient's financial need. It's most effective when the estate is minimal but the hospital bill is the dominant debt. The advantage is speed — you don't need to go through probate's full creditor-claim process.

Insolvency discharge through probate writes off unpaid medical debt when the estate's assets are exhausted by higher-priority claims. This is the path when there are multiple creditors, significant assets, and a need for court-supervised priority-based distribution.

When both tools are available — a nonprofit hospital and an insolvent estate — apply for charity care first. Reducing or eliminating the hospital bill before it enters the probate claim process frees up estate assets for other valid claims and simplifies administration.

The Health Insurance & Medical Bills After Death toolkit covers the charity care application process alongside the full bill audit workflow, so you can challenge billing errors and apply for financial assistance in parallel — maximizing the total reduction before any estate funds are committed.