Financial Assistance Policy (FAP)

A financial assistance policy is the written document every nonprofit hospital must publish explaining who qualifies for free or discounted care, how to apply, and what the hospital will and will not do to collect a bill. The requirement comes from section 501(r) of the tax code, added by the Affordable Care Act, and it applies to roughly 2,900 hospitals. The policy, a plain-language summary, and the application form must be posted on the hospital's website and available on paper at the hospital.

Three parts of the policy matter most. The eligibility table tells you the income cutoffs, usually in percentages of the federal poverty level. The "amounts generally billed" section caps what an eligible patient can be charged at what insured patients typically pay, not the chargemaster price. And the billing and collections section lists what the hospital must do before taking any extraordinary action against you, such as reporting the debt to a credit bureau, selling it, or filing a lawsuit: it must wait at least 120 days after the first bill, notify you of the policy, and give you at least 30 days' warning. I've watched a $23,000 emergency bill go to zero because a family member found the policy online and mailed in the form. The hospital had never mentioned it.

The takeaway: search the hospital's name plus "financial assistance policy" before you pay a large bill. If the hospital took a collection action against you without offering the policy, it broke federal rules, and you can raise that in writing.