Arizona Hospitals Provide Crucial Financial Relief Amid Rising Costs
Facing an unexpected hospital bill of over $8,000 for kidney stone treatment, 44-year-old Anthony Robinson found himself contemplating significant lifestyle changes to manage the debt. Unaware of available hospital financial assistance programs, often referred to as charity care, Robinson reached out to his hospital network, Dignity Health, to inquire about potential aid. After applying for financial assistance, he was relieved to find his entire bill waived by January. “To get 100% of a bill is a blessing,” Robinson expressed.
Nonprofit hospitals like Dignity Health are mandated under Section 501(r)(4) of the Internal Revenue Code to have written financial assistance policies for essential services. This requirement came into effect with the Affordable Care Act in 2010 and was further detailed in 2014.
In Arizona, hospitals forgave over $324 million in charity care in 2024, according to an Arizona Health Care Cost Containment System report detailing the fiscal performance of state hospitals. This charity care is part of the broader category of uncompensated care, which has been increasing, with a $213.2 million rise from 2015 to 2024, as highlighted in previous reports.
With impending Medicaid changes, more Arizonans may seek hospital financial assistance, according to James Hodge, a professor at Arizona State University’s Sandra Day O’Connor College of Law. “We’re going to be needing considerably greater charity care for the long term if we’re even remotely going to provide care for Arizonans,” Hodge noted.
Charity care is offered by nonprofit hospitals and many for-profit ones for uninsured or under-insured patients who qualify. Eligibility is typically determined by factors such as income, household size, and the age of the bill. Often, patients must first exhaust other financial aid options. Eligibility criteria, including residency and citizenship status and whether the care was in-network, are outlined in each hospital’s financial assistance policy. Hospitals may then forgive the medical debt partially or in full if a patient is approved.
Ann-Marie Alameddin, president and CEO of the Arizona Hospital and Healthcare Association, stated that the ACA has standardized charity care for nonprofit hospitals, but providing care at reduced or no cost has long been part of hospital missions. “It’s really a part of the hospital’s mission to care for their communities, no matter someone’s ability to pay,” she said.
Despite federal requirements for hospitals to “widely publicize” their financial assistance programs, a 2023 survey by Dollar For revealed that 51% of potentially eligible patients did not apply for assistance, often due to lack of awareness. Jared Walker, founder of Dollar For, pointed out that many patients leave hospitals without knowledge of financial assistance programs, suggesting that hospitals could do more to educate patients about their options.
Alameddin warns of a “perfect storm” for Arizona hospitals due to funding losses and Medicaid cuts, predicting an increase in uninsured individuals following the expiration of ACA enhanced premium tax credits and new Medicaid work requirements. The reduction of Medicaid’s State-Directed Payments, a crucial funding source for many hospitals, exacerbates the issue. “Hospitals’ ability to absorb those costs of care is going to be constricted going forward,” Alameddin explained.
Hodge cautioned that small, rural hospitals might face tough choices due to increasing patient needs and decreasing revenues. “They start cutting the services they can that are the least profitable or least serviceable possible,” he said, mentioning services like labor and delivery as potential cuts. “They can’t operate like that long term. They know it. They’re cutting costs. Last resort – they close doors.”
Walker reported an uptick in inquiries from nonprofits seeking to assist patients with hospital bills. “I always tell people, ‘It’s so easy to see if you’re eligible. It’s so easy to check,’” Walker said, noting that many people wrongly assume they are ineligible and disqualify themselves prematurely.
This article first appeared on Cronkite News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
