A household in Fredericksburg, Virginia, filed for Chapter 7 bankruptcy in February 2024. Their bankruptcy schedule shows $478,313 in total liabilities, of which $379,261 — eighty-one percent — is medical debt. The bulk of that debt, $376,855, is owed to a single Virginia hospital system: Mary Washington Healthcare. Their monthly income, by the schedule, was $5,160. Their monthly expenses, $5,426. Their margin, before any payment toward the bankruptcy debt: negative $266 a month.
Mary Washington Healthcare is a nonprofit hospital system that participates in the federal 340B Drug Pricing Program — a program created by Congress in 1992 to provide hospitals serving low-income patients with substantial discounts on outpatient drugs.
That single household's hospital balance is roughly twenty percent of the total verified 340B-participating hospital debt we documented across two hundred seventy-five Virginia bankruptcy filings.
It is also the largest single hospital balance we have found in any of the six states we have reviewed.
When the Chapter 7 discharge enters in that Fredericksburg case, the $376,855 balance to Mary Washington Healthcare will be uncollectable as a matter of federal law. The hospital will write it off — and may, under federal hospital-reporting conventions, count the write-off toward its annual "community benefit" figure.
The question this series asks is why the patient was required to endure the eighteen months between the bill and the discharge — and whether anyone, at any point in those eighteen months, told her that the hospital she owed was a federally subsidized 340B-participating institution at all.
Over the course of 2025 and 2026, Patients Rising reviewed approximately 900 individual Chapter 7 and Chapter 13 bankruptcy filings from federal bankruptcy courts in six states: Virginia, Wisconsin, Washington, Louisiana, Colorado, and Maine.
We obtained the cases through a referral pipeline that aggregates publicly available bankruptcy petitions and forwards filings with substantial medical-debt indicators for analytical review. We read the schedules — the lists of debts and creditors that every bankruptcy filer files publicly with the federal court. We tallied which creditors are 340B-participating hospitals (cross-referenced against the federal Health Resources and Services Administration's registry) and which are not. We grouped the cases by congressional district, by hospital system, and by chapter type. We documented the numbers.
Across the six states:
The dataset is not a random sample of consumer bankruptcies in these states. The referral pipeline selects for cases with visible medical debt. The high medical-debt rates we observe — eighty to ninety percent of cases — are properties of this selection, not population estimates. That methodological note is important, and we have made it transparently across all of our state-level reporting.
What the data does show, with rigor, is that when medical debt is the dominant driver of consumer bankruptcy in these states, the hospitals most often appearing as creditors are 340B-participating nonprofit systems — the same hospitals whose federal program participation is, by statute, justified by their service to low-income patients.
The 340B program is large and growing rapidly. In 2024, the most recent year for which HRSA has released data, 340B-covered entities purchased $81.4 billion in discounted outpatient drugs under the program — a 23 percent increase over 2023, and roughly a tripling of the program in five years. Hospitals accounted for approximately $71 billion of that, or 87 percent.
Against those scales, the $6.5 million in patient-side bankruptcy debt we documented across six states across roughly a year of filings is a fraction of one percent.
The hospitals have already received the benefits. The patients are still filing bankruptcy.
The American Hospital Association — the trade association representing the same hospitals appearing on these bankruptcy schedules — regularly responds to scrutiny of the 340B program with a single headline figure: 340B hospitals provided "nearly $100 billion in community benefits" in the most recent year reported.
That figure deserves examination, because it is the central rhetorical defense of the program's current structure, and because it is built on a foundation that does not bear the weight the AHA places on it.
The figure is self-reported by the hospitals themselves. The AHA's September 2025 community-benefit report — the source of the "$100 billion" claim — analyzes IRS Form 990 Schedule H data filed by 340B-participating hospitals. The hospitals report the data. The AHA aggregates it. The AHA — a trade association that exists to advocate for those same hospitals — then publishes a report concluding that the hospitals are doing important community work. There is no independent verification of the underlying figures. There is no federal auditor reviewing what each hospital classified into which category. There is no penalty for misclassification. The hospitals report what they choose to report, and the AHA reports what the hospitals reported.
The categories are loose enough to absorb almost anything. When you look inside the $99.5 billion the AHA reports for 2023, the breakdown is:
Less than half of that total is what most people would understand as "providing care to low-income patients." A third of it is research and education — important, but not patient-side cost reduction. The Medicare shortfall is not a benefit the hospital provides; it is the difference between two existing numbers. Bad debt includes patient bankruptcy write-offs — meaning that the AHA is counting the patient bankruptcies our series documents as part of the program's "community benefit." And "community-building activities" can include — by the IRS's own Form 990 Schedule H definitions — physical improvements, economic development, community support, and coalition building. The category is broad enough to absorb sponsorships, advertising, and the kind of branded community partnerships that have no obvious connection to low-income patient care.
There is no federal definition of "community benefit" that compels uniform reporting. Two 340B hospitals in the same state, treating similar patient populations, can — and routinely do — report the same expenditure in different categories, or report different expenditures in the same category. The IRS Form 990 Schedule H instructions describe what may be reported, not what must be. Hospital-by-hospital classification varies considerably. The AHA's aggregate number is the sum of those varying classifications.
This is the figure the AHA cites every time the 340B program is questioned. It is a number assembled by the trade association of the hospitals being scrutinized, from data those hospitals self-report under definitions the federal government has never standardized, in categories broad enough to include the very patient bankruptcies the program is supposed to prevent.
It is not a measure of what the program does for patients. It is a public-relations figure dressed in the language of accountability.
If "community benefit" is loose, the patient-facing rules of the program are looser still.
There is no federal statutory definition of a "340B patient." Congress never wrote one. HRSA tried to define it through 1996 guidance, and in November 2023 a federal court struck down that guidance as unenforceable. The current operating standard is, in effect, whatever the hospital says it is — and a major drug manufacturer is now suing the federal government to force a narrower definition. In current practice, 340B-participating hospitals routinely classify patients as 340B-eligible after the fact, combing patient records days or weeks after a prescription is filled to maximize program revenue. The patient is never told they were classified.
There is no federal statutory definition of "charity care." Each hospital sets its own eligibility threshold — sometimes 100 percent of the federal poverty line, sometimes 200 percent, sometimes 400 percent, sometimes by application only. Two hospitals in the same city can have charity-care policies that differ by a factor of four, and neither is doing anything wrong under federal law.
There is no federal requirement that any patient at a 340B-participating hospital be told, at the point of care, that the hospital is a 340B participant — or what that means for them.
There is no federal requirement that any patient be told what charity-care policy the hospital maintains, what the eligibility threshold is, or how to apply.
The patients on the bankruptcy schedules in this series may have been 340B patients at their treating hospitals. They were never told. They were never told what the hospital's charity-care policy was. They were never told they might have qualified. The bill came. Then the collections letters. Then the bankruptcy.
The hospital will write the balance off when the bankruptcy discharge enters.
The hospital may count the write-off toward "community benefit."
The patient gets seven to ten years of credit damage and the federal court record of having filed.
This is the program as it currently operates.
Over the next several weeks, Patients Rising will publish state-level analyses for each of the six states in this series, alongside selected case studies that illustrate the patterns we documented. The Virginia synthesis publishes this week. Wisconsin, Washington, Louisiana, Colorado, and Maine will follow on a rolling cadence. The closing piece will name specific reforms the patterns in the data support.
Each state's analysis names the hospital systems most frequently appearing as creditors, documents the verified 340B debt totals, and places the findings against each state's hospital market structure. We have stripped all personally identifying information — names, addresses, case numbers, employer names, and similar — from the published material. The privacy approach is consistent across the series.
We are asking three things of readers of this series.
First, that you read the state-level analyses as they publish and look at the data on its own terms. The evidence is documentary. The schedules are public records. The patterns are visible to anyone who reviews them carefully.
Second, that if you or someone you know is among the patients on one of these schedules — or anywhere in the broader population of Americans who have filed medical bankruptcy with debt to a nonprofit hospital — you consider sharing your story. Patients Rising is collecting accounts directly from filers who are willing to talk publicly. The patterns documented in this series are stronger when the people inside them are heard.
Third, that policymakers — Congress, HRSA, state hospital associations, and the boards of the nonprofit systems named in our reporting — answer two questions raised by this evidence:
The trade association of the hospitals on these schedules will respond, as it always does, with some version of "$100 billion in community benefits." That number was assembled by the industry, from data the industry self-reports, under definitions the federal government has not written.
The bankruptcy schedules in our series were not assembled by the industry. They were filed by the patients, under penalty of perjury, in federal court.
We have read them.
This is the first piece in the Patients Rising Medical Bankruptcy in America series. The series complements Patients Rising's ongoing Patient's Right to Know campaign for 340B program reform. State-level analyses for Virginia, Wisconsin, Washington, Louisiana, Colorado, and Maine will publish in the coming weeks. Methodology available on request.