State attorneys general are targeting nonprofit hospitals for failing to provide the free and discounted care they are legally required to offer as a condition of their tax-exempt status. Federal law mandates that nonprofit hospitals operate for public benefit and provide financial assistance to patients who cannot afford care, but enforcement has been uneven—prompting attorneys general to pursue settlements that force hospitals to change how they handle charity care requests and debt collection. The surge in enforcement marks a shift. Hospitals have long operated with minimal oversight of their charity care practices, and Congress and the HHS Inspector General have intensified scrutiny since 2024, creating pressure on states to close a gap between what the law requires and what patients actually receive.
Table of Contents
- The Legal Obligation Hospitals Are Missing
- How Hospitals Deny Eligible Patients Relief
- State Enforcement Actions Forcing Change
- What This Means for Your Rights
- Frequently Asked Questions
The Legal Obligation Hospitals Are Missing
Nonprofit hospitals maintain their tax-exempt status in exchange for a public benefit—which includes providing charity care to uninsured and low-income patients. This is not optional. Yet for decades, hospitals have been able to define and limit that obligation with little external review. A Congressional Research Service analysis from March 2026 documents that enforcement by the Internal Revenue Service has been inconsistent, leaving hospitals free to set minimal charity care thresholds and decline applications without clear accountability.
The gap between law and practice has been substantial. According to a CBS News analysis of nonprofit hospital debt collection, over 400 hospitals attempted to collect more than $800 million in 2019 from patients who qualified for charity care but were never notified or received approval. The same analysis found approximately $2.7 billion in hospital debt that year originated from patients who were ineligible to pay.
How Hospitals Deny Eligible Patients Relief
Hospitals use several tactics that keep eligible patients unaware of charity care. Some do not publicize their charity care policies. Others make applications deliberately difficult—lengthy forms, confusing eligibility thresholds, or requirements for documentation patients cannot easily provide.
Many hospitals send bills and pursue collection against patients before completing a charity care review. The result is predictable: patients who qualify never know it, and by the time they find out, they have already been sued or reported to a collection agency. A Star Tribune and KFF Health News investigation found that 62 of Minnesota's 123 general hospitals devoted less than 0.5% of their operating budgets to charity care between 2020 and 2024, suggesting the obligation is treated as a cost center to minimize rather than a legal duty.
State Enforcement Actions Forcing Change
Minnesota and Washington have led state enforcement efforts. Minnesota Attorney General Keith Ellison settled with Mayo Clinic in March 2025, requiring changes including a prohibition on most medical debt lawsuits and a streamlined charity care application process. This settlement signals that even major health systems are not exempt from enforcement.
Washington went further with multiple actions. In December 2025, the Washington Attorney General announced a settlement with Confluence Health requiring refunds to thousands of low-income patients who had been approved for charity care since 2021 but never reimbursed; in April 2026, the state filed suit against Capital Medical Center for withholding charity care from eligible patients. These actions make clear that state oversight is expanding.
What This Means for Your Rights
If you received a hospital bill you cannot pay, you have a right to request a charity care review, regardless of whether the hospital actively promoted that option. The enforcement actions above are already changing how some hospitals handle those requests—applications are becoming faster, and hospitals face consequences for denying eligible patients. You should act before your account goes to collection.
Contact your hospital's financial assistance office (or your state's attorney general if the hospital refuses to engage) and request an income-based charity care review. Bring proof of income, tax returns, or benefit statements. If you have already been billed or sued, keep copies of all correspondence and contact your state's attorney general or a local legal aid office—the enforcement trend suggests your state may have specific remedies for patients harmed by hospital charity care violations.
Frequently Asked Questions
Can a hospital still sue me for debt if I qualify for charity care?
Hospitals are legally required to provide charity care to uninsured and low-income patients. The recent Minnesota settlement specifically prohibited Mayo Clinic from suing for medical debt in most circumstances, and this requirement is spreading to other states through attorney general enforcement.
How do I know if I qualify for hospital charity care?
Charity care is income-based. Contact your hospital's financial assistance office and ask to apply. You will typically need to provide proof of income (pay stubs, tax returns, or benefit statements). If your income falls below the hospital's threshold, you should qualify for reduced or free care.
What should I do if a hospital refuses my charity care application?
Ask for a written explanation of the denial and why you did not qualify based on income. If you believe you were wrongly denied, contact your state's attorney general office or a local legal aid organization—the enforcement trend suggests your state may have an interest in reviewing the decision.