To understand how much charity care falls through the gaps each year, Dollar For reviewed hospital tax filings and publicly available studies. Affordable Care Act (ACA) regulations require nonprofit hospitals to adopt charity care policies, yet charity care is not applied to many eligible patient accounts.
We found that hospitals fail to provide at least $14 billion annually in charity care to patients, instead recording unpaid, unaffordable bills as “bad debt.”
This research relied on two sources: hospital self-reported numbers from their tax filings and a first-of-its-kind study in Maryland that matched patient billing records to their income filings. After extrapolating hospital self-reported amounts (charity care and bad debt) in their tax filings, we found that approximately $7 billion per year in charity care eligible amounts end up as bad debt. However, the Maryland data suggests that hospitals self-report less than half of their charity care-eligible bad debt, so the actual amount is likely twice that number.