Hospital Charity Care in Texas: The Application Window Is a Floor

Ask the hospital for its financial assistance policy and apply, even if the bill is months old and even if the account has already been sent to a collection agency, because the window a nonprofit hospital must keep open is a floor rather than a cut-off. Section 501(r) of the Internal Revenue Code requires a 501(c)(3) hospital to have a written financial assistance policy, and the period during which it must accept an application ends on the later of several dates, one of which is the 240th day after the first post-discharge billing statement¹ (checked 30 July 2026). Read that word “later” slowly. It is the difference between a door and a deadline.

I write the eligibility and billing pages here as a Certified Application Counselor, and the reason this page exists in the form it does is a phone call I could not make sense of at the time. A woman brought me a stack of letters about a hospital admission from the previous autumn, wanting help with a Marketplace application, and the collection notice in the middle of the pile was the thing she had stopped opening. She had assumed the transfer to an agency was the end of the process, the way a court judgment would be. It was not. The hospital’s own policy had a longer window than she believed, she applied, and the account was reduced. What decided it was not cleverness. It was that somebody told her the door was still open, which nobody had.

Nothing here is legal advice, and no hospital’s own financial assistance policy is reproduced on this page: policies differ hospital by hospital, and the hospital must give you a copy on request. Nothing here is a determination of your case either. Every figure below carries the date it was checked.

What is hospital charity care, and what is it not?

It is a discount or a write-off granted under a hospital’s own written financial assistance policy, decided on your household income and household size, and it is a separate thing from a payment plan, a prompt-pay discount, or a negotiated settlement. People use “charity care” loosely, and the looseness costs money, because the four things sit in a strict order and only one of them reduces what you owe before you have promised to pay it.

The scale of the problem it exists inside is worth stating once. People in the United States owe at least $220 billion in medical debt, with about 14 million adults (6%) owing more than $1,000 and about 3 million adults (1%) owing more than $10,000² (KFF analysis of the 2021 Survey of Income and Program Participation, 2021 data, checked 30 July 2026). That vintage matters: it is the most recent figure in this site’s verified set, and it is five years old. Texas carries more of that weight than its size implies, because 16.7% of Texans were uninsured in 2024 against 8.2% nationally, the highest rate in the country, roughly one in six people and about 5.2 million of us³ (2024 data, checked 30 July 2026).

Charity care is also not the county indigent health care program, which is a county payment program under a different statute with its own application and its own office. Those two are worth running in parallel rather than in sequence: see county indigent health care program.

Where this step sits in the whole sequence is set out in medical bills in Texas. The short version is that it comes second, after the itemized bill and before anything else at all.

Which hospitals does section 501(r) reach?

501(c)(3) hospital organizations, and nobody else. Section 501(r) is a condition of federal tax exemption, so it binds the hospitals that hold that exemption. It does not reach for-profit hospitals, it does not reach public hospital districts that are not themselves 501(c)(3), and it does not reach the physician groups that bill separately from inside the same building¹ (checked 30 July 2026).

That last exclusion is where careful people get caught, and it is worth a paragraph of its own. A hospital admission commonly generates several bills from several legal entities: the facility, the emergency physician group, the anesthesia group, the radiologist who read the images, the pathologist who read the specimen. The hospital can write off its own charge in full and the emergency physician’s bill will arrive a month later completely untouched, because a different company sent it and that company is under no 501(r) obligation at all.

So the first question about any medical bill is not “how much” but “which entity sent this”. Sort the envelopes by sender before you do anything else, and expect to make more than one application. Many physician groups do operate a hardship or financial assistance process even though no federal rule obliges them to, and the only way to find out is to ask the number on the statement.

A hospital that is not a 501(c)(3) is not therefore a dead end. It is a hospital with no federal floor under its policy, which means the answer depends entirely on what it has chosen to do. Ask anyway, and ask in writing.

The four things section 501(r) requires

A community health needs assessment, a written financial assistance policy, a limit on what an eligible patient can be charged, and limits on collections before the hospital has made reasonable efforts to work out whether you qualify. In the statute’s own structure¹ (final regulations apply to tax years beginning after 29 December 2015, checked 30 July 2026):

Provision	What it requires
§ 501(r)(3)	A community health needs assessment, conducted and adopted on a recurring basis.
§ 501(r)(4)	A written financial assistance policy and a written emergency medical care policy.
§ 501(r)(5)	A limitation on charges: a person eligible under the policy may not be charged more than the amounts generally billed to insured patients.
§ 501(r)(6)	Limits on extraordinary collection actions before reasonable efforts are made to determine whether the patient is eligible under the policy.

Two of those are directly usable by a patient on the phone. The written policy under 501(r)(4) is a document you can demand and read, and it contains the income bands, the documents required, and the discount tiers that actually decide your case. The limitation on charges under 501(r)(5) is the sentence to quote when a hospital offers a discount off a gross charge that no insurer has ever paid: an eligible individual may not be charged more than the amounts generally billed to insured patients, so “amounts generally billed” is a term of art worth using by name when you write.

Non-compliance can cost a hospital its tax-exempt status, which is why the billing office takes a written request about section 501(r) more seriously than a phone complaint about a total.

Three clocks, and why 240 days is a floor

There are three separate periods inside the billing and collections rule, readers confuse them constantly, and the confusion always runs in the direction of giving up too early.

Clock	What it actually means
At least 120 days	Under 26 CFR 1.501(r)-6(c), the hospital refrains from extraordinary collection actions for at least 120 days from the date it provides the first post-discharge billing statement1.
At least 240 days	Under 26 CFR 1.501(r)-1(b)(3), the application period ends on the later of several dates, one of which is the 240th day after that first post-discharge billing statement1.
At least 30 days	The deadline the hospital sets in its written notice must be no earlier than the later of 30 days after that notice or the 240 day date1.

The regulation defines the application period as “the period during which a hospital facility must accept and process an application for financial assistance under its FAP submitted by an individual in order to have made reasonable efforts to determine whether the individual is FAP-eligible”¹ (checked 30 July 2026). It begins on the date the care is provided, and it ends on the later of the 240th day after the first post-discharge billing statement, a deadline set in the hospital’s own written notice, or the end of a reasonable period under the presumptive eligibility provisions.

Because the period ends on the later of those dates, the 240th day is a minimum, not an expiry. A hospital can be obliged to accept an application after day 240, and many hospital policies are more generous than the regulation requires. Never treat “you have 240 days and then it is too late” as the rule, and be suspicious of any article that states it that way, because it is the single most common error written about hospital billing.

The plain-language version, and the one worth carrying around: collections should not start for around four months, you can still apply for assistance for around eight months and often longer, and an account already in collections is not a closed door.

Applying after the bill has gone to collections

This is the part almost nobody is told, so it deserves its own instruction: apply anyway, in writing, and say in the application that you are asking for retroactive consideration of an account that has already been placed with an agency.

The handoff to a collection agency changes who is calling you. It does not, by itself, change whether the hospital’s financial assistance policy still reaches the account. The hospital owns the assistance decision. The agency does not, and an agency representative telling you the account is “with us now” is describing a routing arrangement, not a legal bar.

Practically, that means four things.

1. Write to the hospital, not to the agency. Address the hospital’s billing office or patient financial services, name the account number, attach the application, and keep a dated copy of everything.
2. Ask in the same letter for the account to be placed on hold while the application is pending. It is not automatic, and asking costs nothing.
3. Do not make a payment to establish good faith before the decision, because a payment can complicate what you are asking to be written off, and in the debt world generally, activity on an old account is rarely a neutral act.
4. Ask what happens to the agency placement if the application succeeds, and get that answer in writing too.

What a collector may and may not do while all this is happening, and what to send when the answers stop making sense, is covered in medical bill collections in Texas. The separate question of what any of it does to a credit report is in medical debt and your credit, where the short answer is that the federal rule which would have removed medical debt from credit reports never took effect.

What Texas chapter 311 adds, and the percentage that is not a rule

Texas requires nonprofit hospitals to meet a community benefit standard, but there is no single Texas charity care percentage, and any page that quotes one is wrong. Health and Safety Code section 311.045 gives a nonprofit hospital or hospital system three alternative standards, and it satisfies the statute by meeting any one of them⁴ (checked 30 July 2026):

1. The reasonableness standard. Charity care and government-sponsored indigent health care are provided “at a level which is reasonable in relation to the community needs”.
2. The tax-exempt benefits standard. Charity care and government-sponsored indigent health care are provided “in an amount equal to at least 100 percent of the hospital’s or hospital system’s tax-exempt benefits”.
3. The net patient revenue standard. Charity care and community benefits together reach “at least five percent” of net patient revenue, provided that charity care and government-sponsored indigent health care reach “at least four percent of net patient revenue”.

So “Texas hospitals must spend 4% on charity care” is not the rule. It is one component of the third of three alternatives, and a hospital electing the first or the second carries no percentage obligation at all.

And every one of those standards is an obligation on the hospital’s total spending rather than an entitlement for you. Your actual rights come from the hospital’s own written financial assistance policy and from section 501(r) above. Say that to yourself before you quote chapter 311 at a billing office, because quoting a spending standard as though it were a personal entitlement is a fast way to lose the room.

What chapter 311 does give an individual is a paper trail. Section 311.046 requires an annual statement to the Center for Health Statistics, filed by 30 April, in which “charity care shall be reported as a separate item from other community benefits”⁴ (checked 30 July 2026). If you want to know what a specific hospital told the state it provided, that filing is the thing to ask about by name.

What to put in the application

Household size, household income with proof, the account numbers, and a short factual statement of what changed. The policy decides on the first two. The last one matters more than people expect, because assistance policies commonly have a hardship or catastrophic route alongside the income bands, and a reviewer cannot apply a route you have not described.

Assemble it once and photocopy it, because you will probably file more than one application to more than one entity:

• Identity and address. Photo identification and something showing where you live.
• Household income for everyone in the household. Recent pay stubs, a benefits letter, a tax return, a Social Security or unemployment award letter, or a signed self declaration if you are paid in cash.
• Household size, defined the way the hospital’s policy defines it, which is not always the way a tax return does. Ask.
• The itemized bill for each account, requested separately and in writing: reading an itemized bill.
• Any HHSC or Marketplace denial notice, because a policy sometimes asks whether you have applied for coverage, and a denial is proof that you did.
• A dated cover letter listing what is enclosed, which is the document that later proves what you sent and when.

Most hospital policies express their income bands as a percentage of the federal poverty guidelines, which for 2026 in the 48 contiguous states run to $15,960 a year for a household of one and $27,320 for a household of three⁵ (checked 30 July 2026). Those figures are reissued every January, so a policy quoting a percentage will move with them and a policy quoting fixed dollars may lag. Ask which year’s guidelines the hospital is applying to your application, and write the answer down with the name of the person who gave it.

If the hospital’s income bands turn out to sit above your household income, apply for coverage too rather than instead: one application at HHSC is screened against several programs, and the route is in applying through YourTexasBenefits. How income is counted there is its own subject: what counts as income in Texas.

If the application is refused

Ask for the refusal in writing, ask which criterion you failed, and ask what the hospital’s internal review process is, in that order. A refusal letter that names the criterion is a document you can act on. A phone call that says “you did not qualify” is not.

Three routes are usually still open after a no.

• Reapply on corrected facts. Household size counted differently, an income figure that included a one-off payment, or a missing document are the three most common reasons an application fails on paper rather than on merit.
• Ask for the hardship or catastrophic route by name, if the refusal was on the income bands alone. Many policies have one and few applicants ask.
• Escalate inside the hospital, to the patient advocate or ombudsman, in writing, with the dates.

A refused hospital assistance application is not an HHSC decision, so the state fair hearing route does not reach it. The HHSC appeal process, which is a different thing entirely and carries its own 90 day clock, is in appealing a denial in Texas.

What sits alongside charity care

Three other things reduce a hospital bill, and none of them is a payment plan.

• The price the hospital publishes. Hospitals have been required to publish prices online since 1 January 2021, as a comprehensive machine-readable file of all items and services and a consumer-friendly display of shoppable services, and CMS audits a sample of hospitals, investigates complaints, and can impose civil monetary penalties; enforcement of the updated requirements finalized in the CY 2026 OPPS and ASC final rule started 1 April 2026⁶ (checked 30 July 2026). See hospital price transparency.
• The self-pay or cash rate, asked for explicitly and before the service where the service is planned: cash prices and self-pay discounts.
• The county program, where your income is very low. Your county’s indigent health care program may pay toward hospital care for eligible residents, subject to a county liability cap per eligible resident per state fiscal year of 30 days of hospitalization or $30,000, whichever occurs first⁷ (checked 30 July 2026). Call 2-1-1 to find who administers it at your address⁸.

Only after all of that does a payment plan belong in the conversation, and the reasons are set out in payment plans and what to avoid. A plan is an acknowledgement that the full amount is owed, so signing one before an assistance decision can be treated as closing the question the application was meant to open.

One thing about emergency bills, since that is where the largest ones come from. Under EMTALA a Medicare-participating hospital that offers emergency services must provide a medical screening examination and stabilizing treatment “regardless of an individual’s ability to pay”⁹ (CMS page last modified 10 March 2026, checked 30 July 2026). All three limits belong in the same breath: it is not free care and a bill follows, it reaches those hospitals rather than clinics, urgent care or physician offices, and it covers screening and stabilization rather than the ongoing treatment the emergency reveals you need. The bill is next week’s problem: EMTALA and the emergency room. Go anyway.

Why this page cannot tell you what your hospital will do

Because section 501(r) sets a floor and every hospital writes the rest of its own policy, and an averaged answer would be wrong at most addresses. This site publishes no table of Texas hospital income thresholds, no typical discount percentage, and no lookback maximum, because none of those is in its verified figure set and a confident wrong number here does specific damage: it stops somebody applying for a write-off they would have received.

What is verified, and what you can walk in holding, is narrower and more useful. The application period ends on the later of the listed dates, so at least 240 days and often longer¹. Extraordinary collection actions should not begin for at least 120 days from the first post-discharge billing statement¹. An eligible individual may not be charged more than the amounts generally billed to insured patients¹. And Texas gives nonprofit hospitals three alternative community benefit standards rather than one percentage⁴. All four checked on 30 July 2026.

For where the bill came from, see health coverage in Texas, and for care you can afford before the next one, getting care without insurance in Texas.

Texas Care Map publishes independently. We hold no relationship with the State of Texas, the Texas Health and Human Services Commission, the Texas Department of Insurance or the Centers for Medicare and Medicaid Services, we do not administer any hospital’s financial assistance policy, and we cannot approve or refuse anyone for anything. Ask the hospital for its policy in writing; it has to give you a copy.