By Nick McLaughlin, Founder and CEO of Breez Health
For years, one of the most persistent challenges in hospital financial assistance has been a painfully simple one: patients who qualify for help don’t ask for it.
They assume the programs aren’t for them. They assume the paperwork will be overwhelming. They assume that having insurance, even insurance that barely covers anything, disqualifies them. And so, they struggle with what they can’t afford, ignore bills they can’t face, and end up in collections for balances that a charity care determination would have erased.
Presumptive charity screening was designed, in part, to solve that problem. By using third-party data to estimate a patient’s household size and income relative to the federal poverty level, hospitals can identify potential charity candidates before a bill ever goes out. In states where the practice is now mandated — and that list is growing — it’s also a compliance reality, not just an operational option.
The intent is right and the regulatory momentum is real. But hospitals that treat presumptive scores as a final determination, rather than an informed estimate, are carrying a risk that rarely shows up until it’s already done its damage.
Why Presumptive Charity Scores Miss the Mark, and Who Pays for It
Presumptive charity scores are often built from credit bureau data and census-based neighborhood income estimates. Both inputs have real value, and both have real limitations.
Credit-profile income modeling often works by estimating household income from monthly debt obligations: mortgage payments, car notes, recurring credit lines. The logic is that debt loads can serve as a proxy for earnings. While that logic may fit many situations, there are many other common real-world scenarios where it breaks down.
A renter may generate no mortgage signal. A retiree with a paid-off home may appear nearly invisible on a credit profile. A self-employed worker or debt-disciplined household may look, to a model, like they have far less income than they actually do.
Census-based neighborhood estimates have their own gaps. A zip code median is just that: a median. Income is often underreported, household sizes vary significantly, and nonresponse bias can also skew estimates. They can be directionally useful, but rarely provide the level of precision desired for a determination of a household’s true financial situation.
The result can be false positives: accounts approved for charity care even when the patient’s actual financial picture may not support the determination. At scale, and without a validation step, those errors can turn into automatic write-offs.
Bad debt and charity care are rising nationally, up 10% year over year and 40% higher than in 2022, according to recent industry data. At the same time, nonprofit hospital leaders consistently point to a 3% operating margin as the threshold for financial health — the level needed to service debt, invest in facilities and maintain stability. Against that pressure, avoidable write-offs don’t need to be large to create real strain. When margins are already thin, even small revenue losses can make a manageable financial challenge harder to absorb.
Presumptive Screening Isn’t the Problem. Treating It as Final Is.
When hospitals discover that presumptive screening is hitting cash collections harder than expected, the typical response is to shut the program off, or in states where that’s not an option, absorb the impact without a clear path to fixing it. One Oregon health system executive recently noted that new presumptive screening requirements boosted the share of patients receiving financial assistance from 12% to 64% — a shift that, however compliant, represents an enormous financial variable to absorb without a validation mechanism in place.
In states where financial screening before billing is legally required, hospitals don’t get to simply opt out because the model is imprecise. They’re obligated to screen, and they’re also obligated to ensure that their financial assistance programs are administered accurately and equitably.
The answer isn’t to abandon presumptive charity screening. It surfaces patients who may never self-identify, reduces administrative burden and gets real help to real people faster. The answer is to stop treating it as the final word.
A Validation Step Before Write-Off Changes the Equation
The most direct fix to an income estimation problem is, not surprisingly, patient-provided income information.
When a hospital’s presumptive screening flags an account as a likely charity candidate, there’s a window, before the write-off is posted, to give that patient a brief, low-friction opportunity to share their actual household size and income. If they confirm what the model estimated, the determination proceeds. If they provide information that changes the picture, the hospital has protected itself from an inaccurate write-off.
This isn’t a collections call or a demand for documentation. Done well, through compliant SMS or email outreach and plain-language communication, it’s a simple invitation for patients to participate in their own financial assistance determination.
For hospitals, the challenge isn’t adding another burdensome review process. It’s creating a brief, respectful pause between an estimated determination and a permanent financial action. The right validation step should be simple for patients, compliant for hospitals and meaningful enough to separate true need from incomplete data.
That’s the idea behind Presumptive+, Breez Health’s validation layer for hospitals that rely on presumptive charity screening. It’s not a standard step in every financial assistance workflow, and it’s not designed to be. But for health systems, particularly those operating in states where presumptive screening is mandated, it addresses a specific, real, and costly problem that the screening model itself cannot solve.
Accuracy in Financial Assistance Isn’t Just a Revenue Issue. It’s a Program Integrity Issue.
There’s a dimension to this conversation that gets less attention than the revenue one but matters just as much.
Financial assistance programs exist to help patients who genuinely cannot afford care. When determinations are based on incomplete estimates, hospitals risk approving accounts that may not qualify while straining the resources meant for patients who do. The goal of validation is not to make assistance harder to access. It is to make the process more accurate, equitable and trustworthy.
Charitable care costs have sharply accelerated since the pandemic, and some hospitals have seen their charity care costs nearly double since 2022. That trend is real, and much of it reflects genuine need. But buried within it, at hospitals using automated presumptive screening without a validation step, is a portion that reflects process error rather than patient hardship.
Separating those two things isn’t just a financial discipline. It’s an operational one, a compliance one, and ultimately an ethical one.
Presumptive screening should stay. It should be faster and more accessible than ever. And it should also be smarter, which means building in the tools to catch what the models miss before a write-off becomes permanent.
Breez Health builds financial assistance solutions that help hospitals make the process easier to access, easier to manage, and easier to trust. Learn more at breezhealth.com.
