Document Type

Briefing Paper

Publication Date



Cutler Institute, Population Health and Health Policy, USM Aging Initiative, Health and Wellness


A number of policy issues are focusing attention on the safety net role of taxexempt hospitals, including Critical Access Hospitals (CAHs), and the challenges they face in managing their charity care activities. These issues include the increasing local, state, and national attention on the charity care activities of tax-exempt hospitals; concerns about hospital billing, collection, and pricing policies; and the Affordable Care Act (ACA) amendments to the Internal Revenue Service (IRS) tax code requiring tax-exempt hospitals to establish written financial assistance and emergency care policies, limit charges to financial assistance patients, and refrain from extraordinary collection efforts unless reasonable efforts have been made to determine eligibility for financial assistance.1 Understanding these issues and the safety net roles of CAHs will inform the development of technical assistance to help CAHs to:

  • create balanced financial assistance, billing, and collections policies;
  • improve billing and collection performance;
  • use financial assistance programs to expand access to services for vulnerable populations;
  • reduce inappropriate bad debt write-offs and related community ill-will;
  • improve community benefit reporting; and
  • safeguard their tax-exempt status.


The information, conclusions and opinions expressed in this paper are those of the authors and no endorsement by FORHP, HRSA, HHS, or the University of Southern Maine is intended or should be inferred.

Funding Organization or Grant

This study was supported by the Federal Office of Rural Health Policy (FORHP), Health Resources and Services Administration (HRSA), U.S. Department of Health and Human Services (HHS) under Grant # U27RH01080.