Hospitals Have a Little-Known Tool To Prevent Medical Debt. Here’s How It Works.

If you have medical debt, there’s a good chance you owe money to a hospital. One way patients can avoid medical debt is through hospital financial assistance, also known as charity care. Most of the nation’s hospitals offer free or discounted medical care to patients with very high medical debt or low incomes. Getting financial assistance, however, can be challenging. Many patients don’t know that hospitals offer financial help, surveys show, and complex application forms leave others stymied. Hospitals often demand that applicants turn over bank statements, pay stubs, tax returns, divorce filings, or other materials, and submit their applications in person, by mail, or by fax. “They don’t make it easy,” said Neale Mahoney, a Stanford University economist who studies medical debt. Such hurdles leave many patients with unpaid bills they should never have had to pay in the first place. In a single year, hospitals and health systems billed patients for at least $2 billion that they likely didn’t owe, one analysis found. As healthcare costs climb and more people lose their coverage, states and hospitals are testing an emerging approach to fix this problem: automatically screening patie...