If a nonprofit hospital sent you to collections without first screening you for charity care, charged you more than insured patients for the same service, or never told you a financial assistance program existed, it may have broken federal law. Specifically, Section 501(r) of the Internal Revenue Code sets legally binding rules that every 501(c)(3) hospital must follow in exchange for its tax-exempt status. You have the right to report those violations to the IRS.
Quick Answer: File IRS Form 13909 online or by mail to report a nonprofit hospital that denied charity care, used illegal billing practices, or failed to post a financial assistance policy. The IRS can revoke the hospital's tax-exempt status for non-compliance. As of 2026, bipartisan Senate pressure and advocacy from groups like Dollar For are pushing the IRS toward stronger enforcement.
This guide walks you through exactly what 501(r) requires, how to spot a violation, and the precise steps to submit a complaint.
What Is Section 501(r)?
Section 501(r) was added to the tax code by the Affordable Care Act. It applies to every hospital that holds 501(c)(3) tax-exempt status, which covers roughly 2,900 facilities nationwide. In exchange for avoiding federal, state, and local taxes (a benefit worth billions per year), these hospitals must meet four core requirements.
| Requirement | What the Hospital Must Do |
|---|
| 501(r)(3) Community Health Needs Assessment | Conduct a CHNA every three years and adopt an implementation strategy |
| 501(r)(4) Financial Assistance Policy (FAP) | Write and publicize a clear charity care policy, including eligibility criteria |
| 501(r)(5) Limitation on Charges | Cap charges to FAP-eligible patients at no more than amounts billed to insured patients (AGB) |
| 501(r)(6) Billing and Collections | Screen patients for FAP eligibility before taking any extraordinary collection action |
The most commonly violated rules are (r)(4), (r)(5), and (r)(6). Those are the ones most patients run into directly.
Common 501(r) Violations Patients Experience
Understanding what counts as a violation is the first step. Here are the situations that warrant a complaint:
Failure to post or provide the financial assistance policy. The hospital must make its FAP widely available: posted on the hospital website, available on paper upon request, and provided to patients who show signs of needing assistance. If you asked for help and got nothing, that is a potential (r)(4) violation.
Charging more than insured-rate prices to uninsured patients. If you were uninsured or underinsured and the hospital billed you full chargemaster rates while it bills insured patients a negotiated (lower) rate for the same service, that exceeds the limit under (r)(5). FAP-eligible patients can only be charged up to the "amount generally billed" (AGB), which is tied to what Medicare or private insurers actually pay.
Sending to collections before screening for charity care. This is one of the most documented abuses. Under (r)(6), a hospital must make "reasonable efforts" to determine if you qualify for financial assistance before it can pursue any extraordinary collection action (ECA). ECAs include sending your account to a debt collector, filing a lawsuit, garnishing wages, placing a lien on your home, or reporting to credit bureaus. If any of those things happened before you were offered a FAP screening, that is a likely (r)(6) violation.
Not telling patients a FAP exists. The law requires hospitals to notify patients about financial assistance availability at intake and during billing. Burying a charity care policy in fine print is not compliance.
The 2024 Warren-Grassley Letter and Dollar For
In November 2024, Senators Elizabeth Warren and Chuck Grassley sent a letter to IRS Commissioner Danny Werfel demanding stronger enforcement of 501(r). The letter cited data showing that nonprofit hospitals collectively receive more in tax exemptions than they return to communities through charity care. Nearly 2,000 nonprofit hospitals hold tax-exempt status while, in some cases, aggressively suing patients, garnishing wages, and placing liens on homes.
That same month, the advocacy organization Dollar For submitted detailed guidance to the IRS recommending clearer enforcement rules and specific triggers for audits when hospitals show patterns of (r)(6) violations.
As of 2026, this pressure has not yet resulted in major IRS rule changes, but it has increased scrutiny on hospital Schedule H filings, which is the tax form where hospitals self-report their community benefit activities. The political environment for enforcement is more favorable than it has been in years.
Before you file your IRS complaint, it is worth checking your bill against what you should have been charged. The CoveredUSA Bill Analyzer compares each line on your statement against Medicare reimbursement rates and flags overcharges, duplicate charges, and charges that should have been covered under a financial assistance program. Running your bill through the CoveredUSA Bill Analyzer before filing your complaint gives you concrete dollar figures to include in your Form 13909, which significantly strengthens the referral.
How to Find Evidence of a Violation
Before you fill out the complaint form, gather documentation. The IRS asks for specifics.
Look up the hospital's financial assistance policy. Search the hospital's name plus "financial assistance policy" or "charity care." By law the FAP must be on their website. If it is not, that is itself a violation. Download it and note the date.
Pull the hospital's Form 990, Schedule H. This is the tax return nonprofit hospitals file with the IRS. It is public record. Go to ProPublica's Nonprofit Explorer (nonprofits.propublica.org) and search the hospital's name. Schedule H shows how much the hospital reported spending on charity care versus what it collected in tax benefits. A hospital reporting tiny charity care numbers while holding tax-exempt status is a red flag you can cite.
Collect your bills and any collection notices. Document dates: when you first received a bill, when you first asked about financial assistance, when the hospital sent the account to collections. Sequence matters for (r)(6) violations.
Request an itemized bill. You have the right to a line-by-line itemized bill. Compare specific charges to Medicare rates. The CoveredUSA Bill Analyzer can do this automatically.
Save all written communications. Letters, emails, portal messages, anything. If you were verbally denied help, write a memo to yourself dated the same day.
Step-by-Step: Filing IRS Form 13909
Form 13909 is the official IRS referral form for reporting tax-exempt organization misconduct. Here is how to complete and submit it for a 501(r) complaint.
Step 1: Download Form 13909
Go to irs.gov and search "Form 13909" or go directly to the form at irs.gov/pub/irs-pdf/f13909.pdf. The current version is dated November 2023 and is valid for use as of 2026.
Step 2: Fill Out the Organization Information (Lines 1-7)
Enter the hospital's legal name exactly as it appears on its 501(c)(3) registration, not its marketing name. Include the full address of the specific facility where the violation occurred.
For the Employer Identification Number (EIN), look it up on the hospital's Form 990 (findable on ProPublica Nonprofit Explorer). You can also call the hospital's finance office and ask directly. The EIN is a nine-digit number in the format XX-XXXXXXX.
Step 3: Describe the Violation (Lines 8-12)
This is the most important section. The IRS specifically asks for: names, actions, amounts, dates, and the nature of any evidence.
Write a factual, dated narrative. Example structure:
- What happened: "On [date], I presented to [hospital name] for emergency care. I was billed $[amount] on [date]. I asked about financial assistance on [date] and was told [response]. On [date], I received a collections notice from [agency name]."
- What law was violated: "The hospital did not screen me for FAP eligibility before initiating extraordinary collection action, in violation of Section 501(r)(6)." Or: "The hospital charged me $[amount] for [service], which exceeds the Medicare rate of $[amount], in violation of Section 501(r)(5)."
- Evidence you have: Bills, collection letters, screenshots of the website showing no FAP, your itemized bill.
Be specific. Vague complaints are harder for the IRS to act on.
Step 4: Check the Applicable Boxes
Form 13909 lists categories of alleged misconduct. For 501(r) complaints, check "Engaged in activities not consistent with exempt purpose" and/or "Other" with a note referencing Section 501(r).
Step 5: Add Your Identifying Information (Lines 13-20)
You can file anonymously by entering "Anonymous" on line 13. Anonymous complaints are accepted but are slightly harder for the IRS to follow up on.
If you provide your name, check the box if you are concerned about retaliation. The IRS cannot disclose your identity in connection with any enforcement action.
Step 6: Submit the Form
You have three submission options:
| Method | Where to Send |
|---|
| Email | eoclass@irs.gov (attach Form 13909 and supporting documents as PDFs) |
| Mail | IRS TEGE Classification, Mail Code 4910DAL, 1100 Commerce Street, Dallas, TX 75242-1027 |
| Online | irs.gov/charities-non-profits/irs-complaint-process-tax-exempt-organizations |
Email is the fastest and creates a record.
Step 7: Watch for an Acknowledgement Letter
If you provided your name and address, the IRS will mail an acknowledgement. Federal law prohibits the IRS from telling you what action it took. The complaint still goes into IRS tracking and contributes to audit targeting decisions.
Filing with Your State Attorney General
The IRS is not your only option. State attorneys general have direct authority to enforce nonprofit hospital obligations in most states, and several have used it aggressively.
Washington State Attorney General Bob Ferguson secured more than $20 million in refunds plus $137 million in debt erasure from Providence Health in 2024 for overcharging low-income patients and using illegal collections tactics. That case started with exactly the type of violation described here.
To find your state AG's office, search "[your state] attorney general charity care complaint" or "[your state] attorney general nonprofit hospital." Most states have a dedicated charitable trust or nonprofit oversight division.
File with both the IRS and your state AG. They are separate processes and both are worth pursuing.
What Happens After You File
The IRS reviews referrals and uses them to prioritize audits. A single complaint rarely triggers immediate action, but patterns of complaints against the same hospital will. The IRS examines Schedule H data, compares reported charity care to the hospital's financial size, and investigates whether policies were actually implemented.
Enforcement outcomes can include:
- Required repayment to patients who were overcharged
- Mandatory changes to billing and FAP policies
- Excise taxes on non-compliant facilities
- Revocation of 501(c)(3) status (rarely used, but on the table)
In practice, most enforcement resolves through required corrective action rather than revocation. But public referrals, especially coordinated ones, create reputational pressure that moves hospitals faster than the audit process alone.
Before You File: Check Your Bill for Overcharges
A well-documented complaint is more effective than a general one. If you believe you were charged more than the legal limit under 501(r)(5), you need specific numbers. Upload your hospital bill to the free CoveredUSA Bill Analyzer at coveredusa.org/medical-bill-analyzer to find errors, overcharges, and charity care options in 30 seconds. The tool compares each charge to Medicare benchmark rates and identifies which line items appear inflated. Those figures can go directly into your Form 13909 complaint and strengthen the IRS referral significantly.
Frequently Asked Questions
What is Section 501(r) and why does it matter?
Section 501(r) is the federal law that nonprofit hospitals must follow to keep their 501(c)(3) tax-exempt status. It requires them to maintain written charity care policies, limit charges to FAP-eligible patients, and screen patients for assistance before taking any collection action. It was added to the tax code by the ACA in 2010 and applies to all 501(c)(3) hospitals as of 2026.
Can I file a 501(r) complaint anonymously?
Yes. Form 13909 allows you to enter "Anonymous" for your name. The IRS will accept the complaint but cannot send you an acknowledgement letter. If you are worried about retaliation from the hospital, anonymous filing is a valid option.
What is IRS Form 13909 and where do I get it?
Form 13909 is the "Tax-Exempt Organization Complaint (Referral)" form. Download it at irs.gov/pub/irs-pdf/f13909.pdf or file online at the IRS complaint portal. It is the standard form for reporting any suspected abuse of tax-exempt status, including 501(r) violations by hospitals.
What qualifies as an extraordinary collection action (ECA) under 501(r)(6)?
The IRS defines ECAs as: selling debt to a third party, reporting adverse information to a credit bureau, taking legal action (lawsuits, judgments, liens), wage garnishment, and placing liens on real property. A hospital cannot take any of these actions until it has made reasonable efforts to screen the patient for financial assistance.
How do I find a hospital's financial assistance policy?
Check the hospital's website first. By law it must be publicly posted. Search for "financial assistance," "charity care," or "FAP." If it is not findable online, call the billing department and ask for a paper copy. If they refuse or it does not exist, that is itself a 501(r)(4) violation worth reporting.
What is the "amount generally billed" (AGB) limit under 501(r)(5)?
AGB is the benchmark that caps what a nonprofit hospital can charge FAP-eligible patients. It is calculated as the ratio of what the hospital actually receives from Medicare and private insurers to what it billed, applied to the standard charges for the service. In practice, it means FAP-eligible patients should pay roughly what insured patients pay, not chargemaster (list) prices. Chargemaster prices can be three to ten times the AGB.
Does the IRS actually enforce 501(r)?
The IRS has enforcement authority but has historically been slow to use it. The 2024 Warren-Grassley letter highlighted that the agency has rarely revoked a hospital's tax-exempt status for 501(r) violations. However, IRS examinations have increased, and state attorneys general have filled the gap with more aggressive enforcement. Filing both an IRS complaint and a state AG complaint is the most effective approach.
What if the hospital already sent me to collections?
If collections started before the hospital screened you for financial assistance, that is a direct 501(r)(6) violation. Document the dates. Then contact the collections agency in writing and cite that the debt was placed in violation of IRC Section 501(r)(6). Request validation of the debt under the Fair Debt Collection Practices Act. Also contact your state AG. You may have grounds to have the collection action reversed.
Can a group of patients file a complaint together?
Yes. Multiple individuals can submit separate Form 13909 complaints about the same hospital, or you can submit a single joint complaint with multiple complainants listed. Dollar For and similar advocacy organizations sometimes coordinate group filings, which carry more weight. Check dollarfor.org for resources on organized complaint campaigns.
