Medical billing errors and charity care eligibility impact U.S. patients

Medical billing errors and unclaimed overpayments represent a significant financial issue for patients in the United States. Research indicates that approximately 80% of U.S. medical bills contain at least one error, such as duplicate charges, incorrect coding, or missing information. In some cases, hospital bills exceeding $10,000 have been found to contain overcharges averaging around $1,300.

Beyond billing errors, many patients may be eligible for financial assistance through nonprofit hospitals. An analysis by KFF Health News reported that hospitals billed patients for at least $2 billion that they likely did not owe. Under Section 501(r) of the tax code, nonprofit hospitals are required to maintain written financial assistance policies (FAP) and must make reasonable efforts to screen patients for eligibility before pursuing aggressive collections.

While these federal rules apply specifically to tax-exempt nonprofit facilities, they provide a mechanism for patients to seek discounts or free care. Failure to comply with these IRS requirements can result in the revocation of a hospital's tax-exempt status.