CHA News Article

Governor Signs Bill Revising Charity Care Law

Governor Brown has signed SB 1276 (chapter 758, statutes of 2014), revising the existing law for hospital fair pricing policies. The bill changes the definition of a person with high medical costs to include those who have third-party coverage. While current charity care and discount payment policies provide hospitals and patients with the flexibility to negotiate the terms of a payment plan, this bill requires hospitals to consider the patient’s family income and essential living expenses. The bill also requires hospitals to agree to a default “reasonable payment plan” that is not more than 10 percent of a patient’s income, excluding deductions for essential living expenses, in the event the hospital and patient cannot agree on the terms of a payment plan. This bill goes into effect Jan. 1, 2015.

CHA encourages hospitals to work with their legal counsel when updating their charity care and discount payment policies. The bill is attached.