Erlanger Health System Financial Assistance: Automatic Free Care at 200% FPL + Discounts to 300% FPL (2026 Guide)
Erlanger Health System is Chattanooga's largest hospital system, recently converted from a public hospital to a private 501(c)(3) nonprofit (July 2023). They use automatic presumptive eligibility screening to grant free care at 200% FPL with no application needed, and offer discounts up to 50% for households to 300% FPL. Tennessee law (TN Code 68-11-262) also caps uninsured charges at 175% of cost, which can slash bills dramatically.
Quick Eligibility Snapshot
Automatic Free Care: Under 200% FPL
Presumptive eligibility via third-party screening software at time of treatment. No application needed. Family of 4: up to ~$62,400/year (2025 guidelines).
Discounted Care: Up to 300% FPL
Free or discounted care (up to 50% discount) for households between 200% and 300% FPL via formal application. Family of 4: up to ~$94,350/year.
TN 175% Cost Cap Law
Tennessee law caps uninsured charges at 175% of cost (using Medicare cost-to-charge ratio). A $22K bill reduced to ~$6K using this law. Applies regardless of FA eligibility.
Insured Patients Welcome
Patients with insurance can also apply for financial assistance if out-of-pocket costs are unaffordable. You do not need to be uninsured to qualify.
Who Qualifies for Financial Assistance?
Two Paths to Free or Discounted Care
- Path 1 (automatic, no application): Patients at or below 200% FPL are screened automatically using third-party software at the time of treatment. If the software confirms eligibility, the bill is written off entirely.
- Path 2 (application required): Patients up to 300% FPL can apply for free or discounted care. Discounts up to 50% are available based on income level.
- Insured patients eligible: You do not need to be uninsured to apply. If your out-of-pocket costs after insurance are unaffordable, you can submit an application.
- 240-day retroactive window: You can apply even after a bill has been sent to collections, as long as it is within 240 days of the first billing statement.
- Covers medically necessary services at Erlanger facilities (except Western Carolina, which has a separate application).
Important: Check Your Provider List
Erlanger maintains two provider lists: physicians who ARE covered by the financial assistance policy and physicians who are NOT covered. Before assuming your entire bill is eligible, ask Patient Financial Services whether each provider on your statement is on the "covered" or "not covered" list. Providers not covered may require separate negotiation.
How to Apply (Step by Step)
Check If You Were Already Approved
If your income is at or below 200% FPL, Erlanger's third-party screening software may have already approved you for free care automatically at the time of treatment. Call Patient Financial Services at 423-778-5150 to check your status before filling out paperwork.
Request the Application
Call Patient Financial Services at 423-778-5150 or ask at any Erlanger facility admissions desk. For Erlanger Western Carolina (Murphy, NC), call 828-835-3662 for their separate application.
Gather Documents
Collect proof of income (most recent tax return, pay stubs, or unemployment documentation), proof of household size, and identification. Include any documentation of financial hardship such as job loss, disability, or high medical expenses.
Submit Your Application
Submit to Patient Financial Services. Keep a copy of everything you send. Request written confirmation of receipt and ask for an estimated processing timeline.
Follow Up and Invoke the 175% Cost Cap
You have 240 days from the first billing statement to apply, even if the account is already in collections. If denied FA, separately request the Tennessee 175% cost cap (TN Code 68-11-262) to reduce your bill to 175% of the hospital's actual cost.
Pro Tips
- Dollar For will help for free: The nonprofit dollarfor.org specifically helps patients with hospital FA applications at no cost.
- Invoke the TN 175% cost cap separately: Even if you do not qualify for charity care, uninsured patients are entitled by law to charges capped at 175% of cost. This is independent of the FA program.
- 501(c)(3) conversion strengthens your rights: Since July 2023, Erlanger is subject to IRS 501(r) rules, which are actually stronger than the old governmental hospital protections. They must offer FA, cannot use extraordinary collection actions without proper notice, and must accept applications for 240 days.
- Presumptive eligibility is automatic: If you qualify, you may already be approved without knowing it. Always call to check before assuming you owe the full amount.
Tennessee State Protections for Medical Debt
Tennessee has one of the strongest uninsured cost cap laws in the country, plus other protections that apply regardless of whether you qualify for Erlanger's financial assistance program.
175% Cost Cap (TN Code 68-11-262)
Uninsured patients cannot be charged more than 175% of the hospital's cost (calculated using the Medicare cost-to-charge ratio). This can reduce bills by 60-75%. A $22K bill was reduced to ~$6K using this law.
6-Year Statute of Limitations
Tennessee has a 6-year statute of limitations on written contracts (which includes most medical debt). After 6 years without a payment or lawsuit, the debt is time-barred and cannot be collected through the courts.
Homestead Exemption
Tennessee provides a $5,000 homestead exemption ($7,500 if combined for married couples). While modest compared to some states, it offers baseline protection. Wages have a 75% protection from garnishment (only 25% can be taken).
How to Use the 175% Cost Cap
Write to Erlanger's billing department citing TN Code 68-11-262 and request that your charges be reduced to 175% of cost. Request the hospital's cost-to-charge ratio (publicly available in Medicare cost reports). This is a legal right for uninsured patients, not a favor. The hospital is required to comply.
Learn more: See our Tennessee Medical Bill Rights Guide for a complete overview of state protections.
Covered Facilities
Erlanger Health System Hospitals
Erlanger provided approximately $22.4M in charity care (2009 data), representing roughly 80% of all free care in the Chattanooga area.
Western Carolina (Murphy, NC) Has a Separate Application
If you received care at Erlanger Western Carolina in Murphy, North Carolina, you need a separate financial assistance application. North Carolina state protections and eligibility criteria may also differ. Contact 828-835-3662 for the correct application.
Public-to-Private Conversion: What It Means for You
July 2023: Erlanger Became a Private 501(c)(3) Nonprofit
Erlanger was previously a public (governmental) hospital. In July 2023, it converted to a private 501(c)(3) nonprofit. This is actually good news for patients because IRS 501(r) rules now apply, which provide stronger and more specific patient protections than the old governmental structure.
- Must offer a written financial assistance policy with clear eligibility criteria
- Must accept applications for 240 days from the first billing statement
- Cannot use extraordinary collection actions (lawsuits, wage garnishment, liens, credit reporting) without first making reasonable efforts to determine FA eligibility
- Must provide 30-day written notice before any extraordinary collection action
- Must limit charges to amounts generally billed (AGB) for FA-eligible patients
Collections Policy
Moderate Collections Approach (Amber Rating)
Erlanger uses outside collection agencies but there is no evidence of mass patient lawsuits. They also offer an Online Dispute Resolution (ODR) program as an alternative to traditional collections. The 501(c)(3) conversion means they must now follow stricter 501(r) notice requirements before taking any extraordinary collection action.
Collection Timeline
- 0-120 days: Internal billing with financial assistance information included on statements
- After 120 days: May refer to outside collection agency
- 240-day window: You can still apply for financial assistance within 240 days of the first bill, even if already in collections
- 30-day ECA notice: Must provide 30-day written warning before any extraordinary collection action (required under 501(r))
- ODR program: Online Dispute Resolution available as an alternative to traditional collections disputes
Notable Legal History
- DOJ False Claims Act (July 2024): Department of Justice filed suit alleging Stark Law violations for paying physicians above fair market value. Potential damages exceed $100M. Case is in active litigation.
- $40M prior settlement (2005): Previous Stark Law settlement for similar physician compensation issues.
- Concurrent surgery whistleblower (settled April 2025): Whistleblower case regarding overlapping surgeries.
- CEO departure (2019): CEO Kevin Spiegel departed amid a vote of no confidence over patient safety concerns, receiving a $964K separation package.
Tennessee Protections Against Collections
- 175% cost cap: Uninsured patients are legally entitled to charges capped at 175% of cost
- 75% wage protection: Only 25% of disposable earnings can be garnished
- 6-year SOL: After 6 years without a payment or lawsuit, the debt is time-barred
- 501(r) protections: Erlanger must now follow IRS nonprofit hospital rules before pursuing collections
Already in collections? Read our full 7-step collections playbook for strategies to resolve medical debt, dispute errors, and negotiate settlements.
What If You Are Denied?
1. Invoke the Tennessee 175% Cost Cap
Even if denied financial assistance, uninsured patients are legally entitled to charges capped at 175% of cost under TN Code 68-11-262. This is separate from the FA program and can reduce your bill by 60-75%. Cite the law in writing and request the reduced amount.
2. Request Reconsideration
If denied for missing documents, ask if you can supplement your application. If your financial situation has changed since your tax return was filed, provide updated documentation of current income or hardship.
3. Check the Provider List
If your denial is because the treating provider is on the "not covered" list, contact that provider's billing office directly. Many physician groups have their own financial assistance programs or will negotiate separately.
4. Get Free Help
- Dollar For (dollarfor.org): Free nonprofit advocacy for hospital FA applications
- TennCare (Tennessee Medicaid): May retroactively cover bills up to 3 months prior to application
- Legal Aid of East Tennessee: Free legal help for low-income patients facing collections
Let CareRoute Bill Defense Help
If your application was denied or you need help negotiating your Erlanger bill, CareRoute Bill Defense can review your case and negotiate on your behalf at no upfront cost.
Get Help with Your BillContact Information
Patient Financial Services (Main)
Phone: 423-778-5150
System: Erlanger Medical Center, East, North, Children's, Behavioral Health
Location: Chattanooga, TN
Western Carolina (Murphy, NC)
Phone: 828-835-3662
Note: Separate financial assistance application required
Location: Murphy, North Carolina
Frequently Asked Questions
How does presumptive eligibility work at Erlanger?
Erlanger uses third-party screening software that automatically checks your financial information at the time of treatment. If the software determines your income is at or below 200% FPL, your bill is written off as free care with no application required from you. You may not even know this happened until you receive a zero-balance statement.
What is the Tennessee 175% cost cap and how do I use it?
TN Code 68-11-262 prohibits hospitals from charging uninsured patients more than 175% of the hospital's actual cost for services. The cost is determined using the Medicare cost-to-charge ratio. Write to billing and cite this law. For example, if the cost-to-charge ratio is 0.28, a $22,000 bill has an actual cost of ~$6,160, and the maximum you can be charged is ~$10,780 (175% of cost). In practice, many patients see even larger reductions.
Can I apply after my bill goes to collections?
Yes. Under IRS 501(r) rules (which now apply to Erlanger as a 501(c)(3) nonprofit), you have 240 days from the first billing statement to apply for financial assistance. If approved, the hospital must recall the account from collections and apply the write-off. The account should also be removed from your credit report.
I have insurance. Can I still apply?
Yes. Erlanger's financial assistance program is not limited to uninsured patients. If your out-of-pocket costs after insurance (deductibles, coinsurance, non-covered services) are unaffordable relative to your income, you can and should apply.
What about the DOJ lawsuit against Erlanger?
In July 2024, the Department of Justice filed a False Claims Act lawsuit alleging Stark Law violations (paying physicians above fair market value for referrals). This case involves potential damages over $100M and is in active litigation. This does not affect your right to financial assistance or the 175% cost cap. However, it is worth noting as context about the system's legal situation.
Related Resources
Need Help with Your Erlanger Health System Bill?
CareRoute Bill Defense can review your medical bills, identify savings opportunities (including the TN 175% cost cap), and negotiate with Erlanger on your behalf. No upfront cost.
Start Your Free Case ReviewThis guide is for informational purposes only and does not constitute legal or financial advice. Information is based on publicly available Erlanger Health System financial assistance policies and Tennessee state law as of 2026. Eligibility requirements, income thresholds, and application processes may change. Erlanger converted from a public to private 501(c)(3) nonprofit in July 2023. Always verify current requirements directly with Erlanger Patient Financial Services at 423-778-5150.