MEDICAL DEBT

Note: All bolded + italicized words are defined in our glossary of terms at the top of this page.

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What is Charity Care? Tennessee law defines charity care as…

Charity care is defined as reductions in charges made by the provider of services because of the indigence or medical indigence of the patient. Tenn. Code Ann. § 68-1-109(2)

• “Medical indigence” is defined as “a status reached when a person uses or commits all available current and expected resources to pay for medical bills and is not limited to a defined percent of the Federal Poverty Guidelines.” Tenn. Code Ann. § 68-1-109(2)(A)(ii)

• The provider should apply the following guidelines for making a determination of medical indigence:

  • The provider should take into account a patient’s total resources, which include, but are not limited to, an analysis of assets, only those convertible to cash and unnecessary for the patient’s daily living, liabilities, and income and expenses.  Tenn. Code Ann. § 68-1-109(2)(A)(ii).

  • In making this analysis, the provider should take into account any extenuating circumstances that would affect the determination of the patient’s indigence.  Tenn. Code Ann. § 68-1-109(2)(A)(ii).

In plain language… 

Charity care is free or discounted medical care that is given by hospitals to people who can’t afford to pay.  Who qualifies will be based on things like: sources of income, any assets that patients have and what types of insurance patients have.

The good news about charity care…

• It includes inpatient and emergency room services.

• Hospitals must publish their financial assistance policy AND follow it when making charity care eligibility decisions.

• Even if you have health insurance, you may still qualify for charity care for the part of your hospital bill that insurance didn’t pay.

• Under the Affordable Care Act (ACA), non-profit hospitals must offer charity care to keep their non-profit status with the IRS.

• Some for-profit hospitals may offer financial help based on your ability to pay.

  • ALWAYS ask if the hospital offers financial assistance or charity care for its patients.

    • If YES, ask for a copy of the policy.  Also, ask to speak with someone who can help you apply for it.

    • If NO, ask to speak with someone about your bill using the tips found in “What To Do If You Have Medical Debt” from the menu on the left.

The not-so good news about charity care…

• It varies depending on the hospital you visit.  This includes:

  • How the application process works

  • The eligibility requirements

  • The amount of the financial assistance available

  • Hospitals do not have to automatically screen you for eligibility.

  • Hospitals are only required to post their charity care policies in a place accessible to the public. Some hospitals do a better job of informing patients than others.

  • It is not defined by a specific percentage of the Federal Poverty Guidelines.

How charity care is funded…

Hospitals pay certain licensing fees to operate in Tennessee.  These fees are deposited in the Indigent Health Care Risk Fund that is overseen by the Commissioner of Finance and Administration.  These funds are distributed to hospitals to help offset the costs of treating patients who cannot afford to pay.

The penalties for hospitals that do not comply…

Hospitals have specific reporting requirements to receive money from the Indigent Health Care Risk Fund.  Hospitals who fail to file the report are given 15 days to submit a plan to correct the problem or provide missing information.  Hospitals that fail to report are subject to disciplinary action. 

Non-profit hospitals that fail to comply with IRS billing and collection rules (Section 501(r)) can lose their tax exemptions.

How to apply for charity care…

You need to follow the hospital’s directions when applying for charity care. 

• If you were denied, but your financial situation has changed, update your application or reapply.

• Having been denied charity care in the past doesn’t necessarily mean you will be denied in the future. 

  • Your financial situation may have changed;

  • The FPL may have increased;

  • The hospital’s charity care policy may have changed in your favor.

  • Typically, you have 8 months from the date you received the bill to ask for charity care.

What you will need to apply for charity care…

Hospital applications will vary depending on the hospital.  Generally, you will need to provide the following information:

• Names, ages and the relationship of your household members to the patient applying for charity care.

  • Whether they are your legal dependents.

  • Employment status of household members.

  • Total household monthly gross income

    • Gross income is before taxes and any other money that is withheld from your check.

    • Proof of income for your household – paystubs, tax returns, Social Security Administration statement of benefits, food stamp approval letter, unemployment approval letter or other proof of government assistance.

    • Income from other sources – investments, rental property, unemployment, alimony received, child support, etc.

    • Proof of residency – government issued documents containing your current address like your driver’s license, rental agreement or utility bill.

    • Health insurance status of your family members

      • Members covered by insurance

      • Past insurance coverage (year or 6 months)

      • Members has an offer of insurance coverage from their employer

      • Past applications for public health benefits – TennCare, CoverKids, Social Security benefits, private disability benefits, etc.

      • Assets and Resources

      • Bank and checking accounts

      • 2nd home or rental property

      • Vehicles

      • Recreation vehicles- boat, camper, motorcycles, etc.

      • Retirement accounts

      • Monthly expenses

        • Rent/Mortgage

        • Home owners/renter’s insurance

        • Utilities

        • Alimony paid

        • Child support paid

        • Loans

        • Food

        • Medication

When you apply, ask the hospital what documents you need to provide to support your application for charity care.  For example, do you need to provide a copy of your latest tax return or paystubs to prove your income. They will be able to tell you. 

Can a hospital turn me away for failing to pay my medical debt?

Here are a few things to know:

• Under the Emergency Medical Treatment and Active Labor Act (EMTALA), a hospital CANNOT refuse to treat you in their emergency department.

• In certain situations, hospital may decide to stop providing services to you for unpaid medical debt owed to them.

• If you have requested charity care from a non-profit hospital, the hospital CANNOT deny you care until a decision has been reached a decision on your charity care application.

• Owing money to a different hospital(s) should not prevent you from receiving services from other healthcare providers.

For help with debt collection companies, click on “How To Deal With Debt Collectors” at the top menu.

Note: All bolded + italicized words are defined in our glossary of terms at the top of this page.

Are you sure you owe that medical bill?

Healthcare providers and insurance companies are run by people, and people are prone to make mistakes.  This happens more often than you think because medical billing and coding are complex tasks.

• Medical coding takes a doctor’s diagnosis and links it to the appropriate code. For every injury, diagnosis, and medical procedure, there is a corresponding code.

• Medical billing takes the information from the medical code and makes a bill.

  • If the bill is sent to an insurance company, it is called a called a claim.

Start by getting organized… 

Take a close look at your medical bill.  If you don’t understand it, call your healthcare provider and ask them to explain it to you.  Here are some questions to ask:

• Does the medical billing and coding sound like the care or treatment that you received?

• If not, should it have been coded and billed differently?

• If coded and billed differently, would health insurance cover the bill?

• If insurance does cover the bill, what is the balance (if any) that you will owe?

If you have private health insurance…

• Compare the bill with the “Explanation of Benefits” (EOB) statement from your insurance company.  The EOB is not a bill.

  • The EOB provides details about your insurance claim:

    • How much was paid by the insurance company to the healthcare provider; and

    • How much (if any) you owe the healthcare provider.

    • Any portion of the medical expense not covered by the insurance company, such as a deductible or a co-pay, is owed to the provider.

• If you don’t understand why you owe money; or you are having trouble reading the EOB, call your insurance company and ask them to explain it to you.

• Generally, the healthcare provider will send you a bill for the amount not covered by your insurance.

  • Usually, this bill comes after the healthcare providers knows how much your insurance company will pay.

  • Payment should be paid directly to the provider – not your insurance company.

If you have TennCare…

• TennCare should cover medically necessary treatment or medication prescribed by your doctor.  What is “medically necessary” can be complicated. 

  • If TennCare won’t pay for a treatment or medicine prescribed by your doctor, we may be able to help.  Just fill out our “TJC Intake” form by clicking here.

  • Usually, a payment by TennCare to a provider is considered payment in full for the care you received. 

    • This means a healthcare provider cannot bill you for the portion of the bill that TennCare didn’t pay.  This is called, “Balance Billing”. 

    • If your healthcare provider incorrectly billed you for the balance of the bill that TennCare didn’t pay, we may be able to help.  Just fill out our “TJC Intake” form by clicking here.

If you have CoverKids…

• CoverKids is available to pregnant women and children under the age of 19.  CoverKids typically pays for:

  • Preventive healthcare which is free. 

  • Hospital stays, sick visits and medication that have very low copays. 

  • Children under 19 also get dental and vision benefits.

  • Pregnant women get prenatal, delivery and 60 days postpartum care.

• What is “medically necessary” can be complicated. 

  • If CoverKids won’t pay for a treatment or medicine prescribed by your doctor, we may be able to help.  Just fill out our “TJC Intake” form by clicking here.

If you have Medicare…

• Unfortunately, Medicare does NOT pay for everything.  Medicare coverage for many tests, items, and services may depend on whether you have original Medicare, an advantage plan or a PPO.

  • To find out if your test, item, or service is covered, click here.

  • For help with Medicare questions, contact the State Health Insurance Program (SHIP).  SHIP is a national program that provides free and objective one-on-one counseling, information and help to people with Medicare, people who may need Medicare, and people looking into Medicare for someone else.

    • For more information about SHIP, call 1-877-801-0044.

• If you need help paying your out-of-pocket Medicare costs, you may qualify for a Medicare Savings Program.  We can help you find out if you qualify.  Just fill out our “TJC Intake” form by clicking here.

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If you are in the Qualified Medicare Beneficiary Program...

• If you’re among the 7.5 million people in the Qualified Medicare Beneficiary (QMB) Program, doctors, suppliers, and other providers SHOULD NOT bill you for services and items covered by Medicare, including deductibles, coinsurance, and copayments.

• Learn more by clicking here.

If this information helped you fix a problem with medical debt, we want to hear from you.  Please take a few minutes and tell us about it.  We would like to know your story!

• To tell us about your medical debt, click here.

If you still have medical debt, go to “What To Do If You Have Medical Debt” for more options.