Hospitals should check patients for financial aid before sending a bill

Most nonprofit hospitals already have a way to find patients who qualify for free or discounted care without making them fill out a form. Around 90% reported proactively reducing bills for eligible patients in 2022, up from 72% six years earlier, according to an RTI International analysis cited by Tradeoffs and KFF Health News¹. The tools exist. The question is when hospitals use them.

Too often, the answer is after the bill. Tradeoffs reviewed the financial assistance policies of 166 nonprofit hospitals in Texas and found that nearly every one can screen patients and reduce bills on its own. Yet nearly half say they will bill patients before screening them, and only about 8% require screening before a bill is sent.

The order matters. Roughly two in three of those hospitals say patients who pay before being approved for aid will not get a full refund, and about 40% say they will not tell patients when a balance has been cleared. Experts told Tradeoffs that federal refund rules do not cover patients approved through automatic screening. The patients who lose are the ones who pay promptly. Before Oregon required screening, insured patients at Oregon Health & Science University (OHSU) often did not apply for help and simply paid their share, Tradeoffs reported², and many people who pay hospital bills use credit cards or loans from family to do it.

We think a nonprofit hospital should screen uninsured patients and Medicaid enrollees for financial aid before it sends them a bill, refund anything a qualifying patient has already paid, and tell patients in writing when a balance is erased.

Oregon shows what that order uncovers. After its screening rules took effect in July 2024, hospitals there with federal data more than doubled their spending on free and discounted care in the first full year, on average. At OHSU, 12% of patients received aid before the law. The hospital later estimated that about 57% likely had incomes that qualified. Much of that gap is help that existed on paper and did not reach people while the burden of applying was theirs.

The cost argument

Hospitals say this is expensive at a bad time, and they have a point. Tradeoffs notes an estimate that 14 million more people nationally will be uninsured in 2034 because of federal policy changes and the end of enhanced marketplace subsidies. An executive vice president of the Hospital Association of Oregon told Tradeoffs he expects the state's uninsured rate to reach 10% or higher, from about 3% before the law. Screening tools also make mistakes: 64% of OHSU patients received aid in the law's early months, more than the share the hospital estimated were likely eligible. In Texas, Anna Stelter, vice president of policy at the Texas Hospital Association, argued that aid before billing could let insurers off the hook, and called charity care "the relief of last resort."

Those concerns argue for a careful rule, not for billing first. Oregon adjusted rather than retreating. In April 2026, lawmakers raised the single-visit amount that triggers screening for other patients to $1,500, from $500, and kept the requirement for uninsured and Medicaid patients. Hospitals reported that screening was less accurate for higher-income patients, so a rule that starts with the poorest patients puts it where it works best.

The public also pays for this help already. Nonprofit hospitals receive tax exemptions in return for benefiting their communities, and KFF estimated³ that those exemptions were worth about $28 billion in 2020, more than the roughly $16 billion those hospitals spent on charity care. Federal rules already require a hospital to make reasonable efforts to learn whether a patient qualifies for aid before taking extraordinary collection actions, and they allow⁴ a hospital to decide eligibility presumptively from other information. Screening before the first bill moves that check to the point where it prevents debt instead of cleaning it up.

How deductibles are designed is a fair debate, but a separate one. A patient without coverage, or on Medicaid, should not have to wait for it to be settled.

What Texas should do

The Texas Legislature convenes on Jan. 12, 2027⁵. State Rep. Tom Oliverson, whose 2025 bill to require screening before billing failed, has said he plans to reintroduce it. Lawmakers should pass it and add the two protections the Texas policies show are missing: full refunds for patients who qualify after paying, and written notice when a balance is cleared. Six states will require automatic screening for some patients by July 2027. Legislatures in the rest should write the same rule into law: screen first, bill second.