Hospital discharge, Medicaid and charity-care navigator

01Problem

Discharge sets the bill, the status (inpatient vs. observation), the SNF three-midnight clock, and the charity-care window — while the patient is least able to read them. 2026 Part A deductible is $1,736 per benefit period; SNF days 21–100 cost $217/day; observation hours do not count toward the three-inpatient-midnight SNF rule. Nonprofit hospitals must run a FAP under IRC 501(r), yet families are told “we can’t help.” Medicaid can still pay bills from the three months before the application month for 2026 applications (42 CFR 435.915); that window shrinks Jan. 1, 2027.

02Intake

Important Message from Medicare (CMS-10065), follow-up IM, Detailed Notice of Discharge (CMS-10066) if a QIO appeal was filed.
MOON (CMS-10611) and any Medicare Change of Status Notice (MCSN) if inpatient was reclassified to observation.
NOMNC if home health, SNF, hospice, or CORF is ending.
Admission order, inpatient vs. observation note, expected discharge date.
Insurance: Original Medicare, MA, Medicaid, Marketplace, commercial, uninsured; QMB/SLMB status.
Household size, income, assets; whether the hospital is 501(c)(3), public, or for-profit.
FAP, plain-language summary, AGB method, application, first post-discharge bill date.
State of the hospital and of the patient’s residence.
SNF/rehab/home-health plan and whether three inpatient midnights exist.
Any collector letter or 30-day ECA warning.

03Playbook

01
Identify status before anyone leaves. Inpatient order vs. observation. Observation is outpatient: it does not start a Part A benefit period and does not count toward three consecutive inpatient midnights for SNF. If observation approaches 24 hours, demand the MOON (CMS-10611) — after 24 hours and no later than 36 hours, or sooner if discharged or admitted (42 CFR 489.20(y)). If inpatient is later reclassified to outpatient, ask for the MCSN and the QIO status-change appeal path after Alexander v. Azar.
02
Medicare discharge appeal — same day, before leaving. Deliver IM (CMS-10065) within two calendar days of admission and again not more than two days before discharge (42 CFR 405.1205). Appeal: call the BFCC-QIO printed on the IM, by midnight of the planned discharge date and before leaving (42 CFR 405.1206). Phone is enough. Coverage continues (except ordinary deductible/coinsurance) until noon the calendar day after the QIO notifies its decision. Hospital then delivers DND (CMS-10066). If the QIO agrees with the hospital, continued-stay liability starts at that noon. Miss midnight → standard (non-expedited) review; continued-stay coverage is not guaranteed.
03
Reject “we can’t help, you’re uninsured.” EMTALA still requires a medical screening exam and stabilizing treatment in a dedicated ED regardless of ability to pay. After stabilization, money is billing. Ask PFS, social work, and the case manager — by name — for Medicaid screening, FAP, and a collections hold.
04
Apply for Medicaid immediately, including for a deceased or incapacitated patient. SSA 1902(a)(34) / 42 CFR 435.915: eligibility no later than the third month before the application month if the person received covered services and would have been eligible — including if no longer alive. Stay Nov. 10–18, 2026; application Feb. 5, 2027 (under 2026 three-month rule) reaches November. File in 2026 if you can. P.L. 119-21 §71112 (July 4, 2025) shortens retroactivity for applications on/after Jan. 1, 2027: one month for ACA expansion adults; two months for everyone else (CMS WFTC deck, Nov. 2025). Dec. 31, 2026 keeps three months; Jan. 2, 2027 does not. Ask the hospital to hold and recode to Medicaid.
05
Apply for the FAP even if insured. 26 CFR 1.501(r)-4: every 501(c)(3) hospital organization must have a written FAP covering emergency and medically necessary care, publicize it (website, ED/admissions copies, LEP translations at 5%/1,000), and state AGB and ECAs. Eligibility is income-based, not uninsured-only. Copays/deductibles are often FAP-eligible — read that FAP. For-profits are outside 501(r); CA, NY, WA, IL, MD still impose statutory discounts on many or all licensed hospitals.
06
Know the 501(r) clocks. ECAs: sell the debt, report adverse credit, deny/defer medically necessary care because of a prior unpaid bill, legal process (lien, foreclosure, bank seizure, civil action, arrest, wage garnishment). Not ECAs: bankruptcy proof of claim; lien on PI-settlement proceeds. No ECA during 120 days from the first post-discharge bill; 30 days before the first ECA, written notice naming the ECAs, deadline, FAP plain-language summary, plus a reasonable oral FAP notice. Hospital must process a FAP application filed within 240 days. Complete application suspends ECAs. If approved: cap at AGB, refund amounts paid above FAP price if >$5, reverse ECAs. Incomplete: say what is missing and give reasonable time.
07
AGB is the federal ceiling for FAP-eligible emergency/medically necessary care. Look-back insurer sets (1.501(r)-5): Medicare FFS alone; Medicare FFS + all private insurers; or Medicaid alone or combined. Medicare Advantage is not Medicare FFS for look-back. Prospective: bill as Medicare FFS or Medicaid would allow. No federal FPL floor; 230% FPL is a common hospital choice, not a 501(r) requirement. State floors override if more generous.
08
Stack state charity care on top of 501(r). Use the more generous of the hospital FAP and the state statute. NY and WA apply to insured patient-responsibility. CA AB 2297: no monetary-asset test except HSA. NY: immigration is not an HFAL criterion; uniform application. IL 210 ILCS 89 is uninsured-only.
09
SNF/rehab is a status problem. Without three inpatient midnights, Original Medicare will not pay the SNF. Options: stay inpatient (QIO appeal), pay privately, use Medicaid, or go home with home health (NOMNC appeal if that is ending). IM/QIO still applies to MA inpatient discharges.
10
QMB dual-eligibles cannot be balance-billed for Medicare deductibles, coinsurance, or copays. A QMB billed the 2026 Part A deductible ($1,736) is an unlawful bill.
11
Hill-Burton is rare. HRSA listed 126 obligated facilities as of Dec. 12, 2024; many states have zero. Typical free care ≤100% FPL. Apply at the facility: https://www.hrsa.gov/get-health-care/affordable/hill-burton/facilities.
12
Apply on every bill, every episode. 240-day clock is per episode (aggregation uses the most recent first bill). Birth admission, later ED, professional anesthesia can each need a FAP application.
13
Payment plans are not a substitute for FAP. File FAP first; remainder then goes on an interest-free plan. An $80,000 bill on $100/month with a later FAP write-off is a possible outcome, not a plan.
14
After discharge, freeze collections while Medicaid and FAP pend. Written dispute + FAP + Medicaid case number to PFS and any collector. A 501(c)(3) that reports credit or sues inside 120 days, or that refuses a timely FAP application, is outside 1.501(r)-6.

04Checklists