Charity Care Policy
Written policy describing how a hospital or health system provides free or discounted care to patients meeting financial eligibility criteria; required for 501(c)(3) nonprofit hospitals under IRC 501(r).
1 min read · Last reviewed May 23, 2026
At a glance
- Category
- Compliance Program
- Primary sources
- 1
- Workspace handoff
- compliance binder →
Where this comes up
Compliance committees and practice managers operate at this level — written policy, workforce training, sanction policy, monitoring and auditing cadence, response and corrective action. The seven elements of an effective compliance program (OIG) are the scaffolding; this term lives somewhere on that scaffold.
Full definition
What it is in practice
IRS 501(r) requires nonprofit hospitals to maintain a written Financial Assistance Policy, an Amounts Generally Billed limit for FAP-eligible patients, and limit on extraordinary collection actions.
How it shows up in your practice
Publish the FAP. Train collection staff and any third-party collection vendor on FAP screening before extraordinary collection actions.
Sources
- IRS — 501(r) Requirements for Nonprofit Hospitalshttps://www.irs.gov/charities-non-profits/charitable-hospitals-general-requirements-for-tax-exemption-under-section-501r
Maintain the FAP in the Compliance Binder
Open compliance binder →Related terms
- PayerSelf-Pay PatientA patient who pays for healthcare services directly, either because they are uninsured or because they elect to pay without using insurance.
- PayerGood Faith Estimate (GFE)Under the No Surprises Act, the written estimate of expected charges providers must give to uninsured and self-pay patients prior to scheduled services.
- Compliance ProgramIRS 501(r)Internal Revenue Code section establishing additional requirements for 501(c)(3) nonprofit hospital tax exemption.
D3rx is a healthcare-billing and compliance research aid maintained by D3rx Inc. Articles are drafted by an LLM (Anthropic Claude) against primary HHS, OCR, CMS, eCFR, NIST, and state-regulator publications, and reviewed for restraint and source fidelity by the D3rx team.
Reviewer status: a named credentialed reviewer (CHC, CHPC, or healthcare attorney) is being engaged. Until that engagement is finalized, this page does not claim credentialed review.
Related across the archive
- GlossaryIRS 501(r)Internal Revenue Code section establishing additional requirements for 501(c)(3) nonprofit hospital tax exemption.
- GlossaryGood Faith Estimate (GFE)Under the No Surprises Act, the written estimate of expected charges providers must give to uninsured and self-pay patients prior to scheduled services.
- GlossarySelf-Pay PatientA patient who pays for healthcare services directly, either because they are uninsured or because they elect to pay without using insurance.
- BillingWhat to Do When a Payer Says You're UnderbillingGot a letter saying you're underbilling? Here's what it actually means, whether you should worry, and what action to take.
- ComplianceAmbulatory Surgery Center Compliance: CMS + State + Infection Control42 CFR Part 416 Conditions for Coverage, CMS State Operations Manual Appendix L, the ASC Infection Control Surveyor Worksheet, and where state ASC licensure tightens the standard.
- ComplianceAnnual HIPAA Training Curriculum (What to Cover + How to Document)A 2026 annual HIPAA training curriculum for small healthcare practices — eight required modules under 45 CFR 164.530(b) and 45 CFR 164.308(a)(5), with documentation templates.
- ComplianceAnti-Kickback Statute: What Medical Practices Actually Need to Know (42 USC § 1320a-7b(b))The federal Anti-Kickback Statute is intent-based, criminal-grade, and the most common fraud-and-abuse theory in OIG enforcement. Here is what AKS actually prohibits, how the safe harbors function, and where practices get caught.
- ComplianceBehavioral Health Compliance: 42 CFR Part 2 + HIPAA TogetherHow SAMHSA's 42 CFR Part 2 framework for substance use disorder records overlays HIPAA after the 2024 final rule alignment, and what behavioral health practices must document.
This glossary entry is a research aid for billing and compliance staff. It does not provide legal, medical, or financial advice and does not replace counsel. References cited link to primary sources at HHS, OCR, CMS, eCFR, NIST, and the relevant payer or industry body.