Hospital Charity Care for MRI: How Financial Assistance Actually Works

Charity care is not a favour the hospital may or may not do you. For nonprofit hospitals it is a federal tax-exemption requirement with written rules, a mandated application route, and a legal cap on what eligible patients can be charged. Here is how those rules apply to an imaging bill.

What 501(r) obliges a nonprofit hospital to do

The requirements come from the Affordable Care Act's additions to the tax code, and the IRS spells them out directly. Under Section 501(r)(4), the written financial assistance policy must include:

• Eligibility criteria, and whether assistance includes free or discounted care.
• The basis for calculating amounts charged to patients.
• How to apply for financial assistance, including required documentation.
• Billing and collection actions the hospital may take (in the FAP or a separate billing policy).
• A list of covered providers delivering emergency or medically necessary care in the facility, since the radiologist reading your MRI may bill separately.

The hospital must also “widely publicize” the policy: post it on its website with free access, offer free paper copies on request and by mail, notify visitors and the community, and produce a plain-language summary. If you cannot find a nonprofit hospital's FAP, that is itself a compliance failure; ask the billing office and they must provide it.

The AGB cap: the part that caps your MRI bill

Section 501(r)(5) limits what a FAP-eligible patient can be charged for emergency or medically necessary care to “the amount generally billed (AGB) to individuals who have insurance covering such care”, and requires charges for other covered care to be less than gross charges. Hospitals compute AGB one of two ways:

• Look-back method: gross charges multiplied by a percentage derived from the hospital's actual allowed claims (Medicare fee-for-service, Medicaid, and/or private insurers) over the prior 12 months, recalculated at least annually.
• Prospective method: pricing the care using the billing and coding the hospital would use if the patient were a Medicare fee-for-service or Medicaid beneficiary.

Why this matters for imaging: hospital MRI chargemaster prices routinely run several times the insurer-negotiated rate. If you qualify under the FAP, even at a partial-discount tier, the AGB cap pulls your bill down from the list price toward what insurers actually pay. And if you pay first and are found FAP-eligible later, the IRS rules require the excess to be refunded (amounts under $5 excepted).

Three real published policies

The IRS does not set income thresholds; each hospital does. These three published policies, retrieved in August 2026, show the realistic range. Treat them as examples of what to look for, not as a rule you can apply to your local hospital.

Thresholds as published on each system's financial assistance pages, retrieved 3 August 2026. Policies change; always confirm on the hospital's own FAP page before relying on a figure.

How to apply, step by step

1. Confirm the hospital is nonprofit and find its FAP

   Search '[hospital name] financial assistance policy'. Nonprofit hospitals must post the FAP, a plain-language summary, and the application on their website with free access. If you can't find it, call the billing office and ask for all three.

2. Check whether your MRI counts as covered care

   FAPs cover emergency and medically necessary care as the policy defines it. A physician-ordered diagnostic MRI is commonly within scope, but the policy's own definition controls, so read it or ask the financial counselling office directly before assuming.

3. Apply before the scan if you can, with income documentation

   Typical documentation is proof of household income and family size (pay stubs, tax return, benefit letters). Applying before the scan means the price you're quoted already reflects the assistance decision. Many hospitals also screen applicants for Medicaid at this stage.

4. If the bill already arrived, apply anyway

   Assistance applications are accepted after billing, and refund rules protect payments made before an eligibility decision. Do not agree to a payment plan on the full charge while an application is possible.

5. Watch the separate radiologist bill

   The reading radiologist may bill independently of the hospital. The FAP must list which providers are covered by it; check the list so a covered scan doesn't come with an uncovered professional fee surprise.

Sources used on this page

• IRS, Financial assistance policy and emergency medical care policy, Section 501(r)(4) (retrieved 3 August 2026)
• IRS, Limitation on charges, Section 501(r)(5) (retrieved 3 August 2026)
• Atrium Health, Financial Assistance (retrieved 3 August 2026)
• UCHealth, Financial assistance (retrieved 3 August 2026)
• Cleveland Clinic, Financial Assistance (retrieved 3 August 2026)

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