A proposed change to the state’s charity care law is pitting hospitals against patient advocates, with the former saying it’s needed to curb rising costs while the latter warn it could burden thousands of people with medical debt.
The change considered by the Oregon Legislature is tucked into an umbrella bill that includes several dozen separate health care-related provisions.
The proposal, House Bill 4040, would trim the number of people who get screened for help. Right now, hospitals have to screen anyone with a bill of $500 or more for eligibility for financial assistance. The bill would change that to $1,500 for each hospital encounter. The proposal would not change other aspects of Oregon’s charity care law, which states that people who earn up to 400% of the federal poverty level — about $64,000 a year for an individual and $132,000 for a family of four — qualify for some financial assistance while those earning up to 200% of the federal poverty level — about $32,000 a year for an individual and $66,000 a year for a family of four — can get their bill fully paid.
The change would lighten the load hospital staff face in screening patients for aid, something health system representatives say has become untenable.
Sean Kolmer, external affairs director for the Hospital Association of Oregon, said that when the law setting a $500 minimum passed in 2023, hospital leaders figured they could automate the screening process by using existing commercial tools. But he said they don’t work as well as expected, putting a burden on staff.
“The tools currently available to hospitals to screen patients for presumptive eligibility cannot accurately and reliably identify who is eligible for financial assistance,” Kolmer wrote.
Patient advocates acknowledge the financial aid determination process might be more complicated than backers of the law originally thought, but they say lawmakers should look for solutions to the screening process rather than raising the $500 threshold. Eli Rushbanks, general counsel and policy director for Dollar For, a nonprofit that helps people navigate the hospital charity care process, said the way the bill is worded a patient with a big bill might not be screened.
“If you have three hospital encounters on a single bill for $1,400 apiece then this probably wouldn't trigger an obligation to screen, whereas if you had three hospital encounters at $400 apiece under the current model it would because you'd have more than $500 owed on the invoice,” Rushbanks told The Lund Report.
The proposal comes at a difficult financial time for many hospitals. Health care costs are soaring and the population is aging, leading to an increase in chronic and acute conditions. A 2024 report from the hospital association found that nearly half of the state’s hospitals were losing money and that those bringing in enough revenue to cover costs had profits less than 3% of their operating revenue. And hospital executives have repeatedly said that increased charity costs are partly to blame.
In January 2024, for instance, an Oregon Health & Science University executive wrote in a memo that the law was boosting costs by at least $50 million a year, adding that “the new presumptive screening process has resulted in 64% of OHSU’s patients receiving financial assistance, compared to 12% previously.” OHSU’s charity care has grown from nearly $73 million in 2021 to more than $165 million in 2025, according to a spokesperson.
The hospital association supported the 2023 bill when it passed, but Kolmer said it has ended up placing “substantial pressure on Oregon’s health care system.” He said the state needs to consider financial assistance within the bigger picture of health care costs.
“When the state plans for the future, a critical component of the plan should be how hospital financial assistance fits into the bigger picture of affordable health care,” Kolmer wrote. “Efforts should be made to ensure the law helps patients and families without unintended benefits to others, such as insurance companies, at the expense of the sustainability of hospital services and jobs.”
Assistance rises, debt drops
Oregon was the first state in the country to require hospitals to screen for financial aid, setting a standard nationwide, Rushbanks said. California passed a similar law last year and today, even though the proposal is only a few lines long, eyes are on Oregon, he said.
“There are people working in this policy space from across the country that are watching to see how Oregon goes,” Rushbanks said.
Oregon’s charity care provisions, part of “community benefit” requirements that nonprofit hospitals have to meet to keep their tax-exempt status, have been several years in the making. In 2019, the Legislature passed House Bill 3076, which established a floor for community benefit spending and set income tiers for assistance. It also required hospitals to report their charity care spending and the number of patients referred to collections.
The bill took effect in 2020, the year that charity care peaked in Oregon at nearly $280 million. Financial assistance fell over the next three years to about $230 million in 2023. That year, House Bill 3320 tightened the law, requiring hospitals to screen uninsured patients or those with a bill of at least $500.
The Oregon Health Authority has not yet finalized charity care spending for 2024. But a study published in January found that Oregon’s charity care requirements have led to lower medical debt than in other states.
Published by JAMA Network, a publication of the American Medical Association, researchers compared charity care spending by about 40 Oregon hospitals with more than 500 other hospitals across the country. It found that the Oregon nonprofits spent relatively more than their counterparts elsewhere on financial assistance and that the proportion of medical debt decreased as the aid took effect.
“State efforts like that of Oregon’s have the potential to alleviate medical debt, especially in light of federal policy changes that are likely to exacerbate the medical debt crisis,” the study said.
The problem before the law was passed, patient advocates say, is that people often didn’t know they were eligible for aid or found the process of applying too onerous. Rushbanks said the spike in assistance shows that the law has been working for patients and not taking money from hospitals.
“Most of these bills from low- and middle-income patients don’t get paid anyway,” Rushbanks said. “If you don't forgive it to charity care, it's just going to make its way to a debt collector in the form of bad debt. So let's just forgive it to charity care because we're not actually taking any money away from hospitals. We're removing debt that would otherwise plague patients.”
Patient advocates said in testimony that the Legislature is taking the wrong approach to the problem and instead of changing the screening threshold, should look at making the screening process easier.
“Concerns about the efficacy of charity care in Oregon should not focus on who qualifies, but rather on a targeted conversation about how to improve the quality of the data hospitals use to screen individuals for charity care,” 12 patient advocacy groups, including AARP Oregon, the Cancer Action Network of the American Cancer Society, American Lung Association and Oregon Health Equity Alliance, wrote in testimony.
Hospital representatives say the screening tools they’ve been using, including from Experian, the credit card rating company, are only accurate 85% of the time and that they flag more people than are actually eligible for assistance. Rushbanks said he’s suggested a solution.
“I've written memos for the hospital association outlining for them how they can train their hospitals to obtain patients’ tax returns from the state of Oregon for free,” he said. “They don't seem interested in actually doing that.”
Hospital association leaders did not respond to questions from The Lund Report, referring a reporter to its written testimony. It also didn’t respond to a follow-up question about the income data. Four hospital systems, including Samaritan, St. Charles and Salem Health, also didn’t respond to a request for comment. A Legacy spokesperson referred The Lund Report to Kolmer’s statement.
A Providence spokesperson said that Oregon has “some of the most generous policies in the nation” and that the proposed change would “reduce error rates associated with an imperfect screening tool and ease administrative burden on health care providers.”
Rushbanks said that instead of trying to change the threshold, the hospital association and lawmakers should focus on a better screening system.
“Their main grievance is that these tools don't work very well,” he said. “It doesn't hold water to me, though, because this solution they're proposing does nothing to address that.”
He said the Legislature appears to only be considering hospitals — not the impact on patients.
“On one side of the scale, if this bill passes, thousands and thousands of patients are going to end up back on debt collection dockets,” Rushbanks said. “On the other side of the scale, it doesn't look like hospital revenue will be measurably impacted one way or the other.”
Editor Nick Budnick contributed reporting to this story.
