Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would, commencing July 1, 2027, require a hospital to screen a patient to determine if they meet specific criteria, including that the patient is enrolled in CalFresh or CalWORKs, and, if they do, presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy. The bill would require a hospital to screen a patient for eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would prohibit a hospital from requiring a patient to apply for the federal Medicare program, the Medi-Cal program, or other coverage before the patient is screened for or provided with discounted payment, as specified. The bill would require a hospital to provide patients with the ability to opt out of the screening process through a specified form. The bill would authorize a hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility or to conduct screening for patients that do not meet the criteria described above. The bill would authorize certain procedures and tools for screening, including, among others, allowing a hospital to use third-party software tools or services or to contract with a third party under specified conditions. The bill would require a hospital to provide a specified written notice to those patients determined to be eligible, presumptively or otherwise, under these provisions and would prohibit any billing statements from being sent prior to the written notice. The bill would require the billing statements to reflect the adjustments made to the patients hospital charges under the hospitals charity care policy or discount payment policy.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would, commencing July 1, 2027, require a hospital to screen a patient to determine if they meet specific criteria, including that the patient is enrolled in CalFresh or CalWORKs, and, if they do, presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy. The bill would require a hospital to screen a patient for eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would prohibit a hospital from requiring a patient to apply for the federal Medicare program, the Medi-Cal program, or other coverage before the patient is screened for or provided with discounted payment, as specified. The bill would require a hospital to provide patients with the ability to opt out of the screening process through a specified form. The bill would authorize a hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility or to conduct screening for patients that do not meet the criteria described above. The bill would authorize certain procedures and tools for screening, including, among others, allowing a hospital to use third-party software tools or services or to contract with a third party under specified conditions. The bill would require a hospital to provide a specified written notice to those patients determined to be eligible, presumptively or otherwise, under these provisions and would prohibit any billing statements from being sent prior to the written notice. The bill would require the billing statements to reflect the adjustments made to the patients hospital charges under the hospitals charity care policy or discount payment policy.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would, commencing July 1, 2027, require a hospital to screen a patient to determine if they meet specific criteria, including that the patient is enrolled in CalFresh or CalWORKS, and, if they do, presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. policy. The bill would require a hospital to screen a patient for eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would prohibit a hospital from requiring a patient to apply for the federal Medicare program, the Medi-Cal program, or other coverage before the patient is presumptively determined as eligible, screened for eligibility, screened for or provided with charity care or discounted payment, as specified. The bill would require a hospital to provide patients with the ability to opt out of the screening process through a specified form. The bill would authorize a hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility or to conduct screening for patients that do not meet the criteria described above. The bill would authorize certain procedures and tools for screening, including, among others, allowing a hospital to use third-party software tools or services or to contract with a third party under specified conditions. The bill would require a hospital to provide a specified written notice to those patients determined to be eligible, presumptively or otherwise, under these provisions and would prohibit any billing statements from being sent prior to the written notice. The bill would require the billing statements to reflect the adjustments made to the patients hospital charges under the hospitals charity care policy or discount payment policy.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would would, commencing July 1, 2027, require a hospital to presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. The bill would require a hospital to screen a patient for eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would prohibit a hospital from requiring patient to apply for the federal Medicare program, the Medi-Cal program, or other coverage before the patient is presumptively determined as eligible, screened for eligibility, or provided with charity care or discounted payment, as specified. The bill would require a hospital to provide patients with the ability to opt out of the screening process through a specified form. The bill would authorize a hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility or to conduct screening for patients that do not meet the criteria described above. The bill would authorize certain procedures and tools for screening, including, among others, allowing a hospital to use third-party software tools or services or to contract with a third party under specified conditions. The bill would require a hospital to provide a specified written notice to those patients determined to be eligible, presumptively or otherwise, under these provisions and would prohibit any billing statements from being sent prior to the written notice. The bill would require the billing statements to reflect the adjustments made to the patients hospital charges under the hospitals charity care policy or discount payment policy.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would require a hospital to automatically determine a patient to be presumptively presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy, policy if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. The bill would require a hospital to prescreen screen a patient for presumptive eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would prohibit a hospital from requiring patient to apply for the federal Medicare program, the Medi-Cal program, or other coverage before the patient is presumptively determined as eligible, screened for eligibility, or provided with charity care or discounted payment, as specified. The bill would authorize a hospital to prescreen a patient at the hospitals discretion or as established in the hospitals charity care policy and discount payment policy. The bill would require hospital charges for patients determined to be eligible for charity care or discount payment programs under these provisions to be adjusted prior to sending a billing statement. hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility or to conduct screening for patients that do not meet the criteria described above. The bill would authorize certain procedures and tools for prescreening, screening, including, among others, allowing a hospital to use third-party presumptive eligibility software tools or services or to contract with a third party under specified conditions. The bill would also require a hospital to provide a written notices of determination notice to those patients determined to be presumptively eligible determined to be eligible, presumptively or otherwise, under these provisions, as specified. provisions and would prohibit any billing statements from being sent prior to the written notice. The bill would require the billing statements to reflect the adjustments made to the patients hospital charges under the hospitals charity care policy or discount payment policy.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would require a hospital to prescreen a patient for presumptive eligibility automatically determine a patient to be presumptively eligible for participation under the hospitals charity care policy and discount payment policy, if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. The bill would authorize the department to determine other programs that, if a patient is enrolled, a hospital would be required to prescreen. The bill would require a hospital to prescreen a patient for presumptive eligibility if the patient meets other specified criteria, including, among others, that the patient is uninsured. The bill would authorize a hospital to prescreen a patient at the hospitals discretion or as established in the hospitals charity care policy and discount payment policy. The bill would require hospital charges for patients determined to be eligible for charity care or discount payment programs under these provisions to be adjusted prior to sending a billing statement. The bill would authorize procedures and tools for prescreening, including, among others, allowing a hospital to use third-party presumptive eligibility software tools or services or to contract with a third party under specified conditions. The bill would also require a hospital to provide written notices of determination to those patients determined to be presumptively eligible under these provisions, as specified.

Existing law requires a hospital to provide patients with a written notice containing information about the availability of the hospitals discount payment and charity care policies, including information about eligibility and the contact information for a hospital employee or office from which a person may obtain further information about these policies. Existing law defines charity care and discount payment for these purposes. Existing law requires a hospital to provide to the Department of Health Care Access and Information a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, among other information. A violation of these provisions results in an administrative penalty, as specified.

This bill would require a hospital to prescreen a patient for presumptive eligibility for participation under the hospitals charity care policy and discount payment policy, if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. The bill would authorize the department to determine other programs that, if a patient is enrolled, a hospital would be required to prescreen. The bill would authorize a hospital to prescreen a patient at the hospitals discretion or as established in the hospitals charity care policy and discount payment policy. The bill would authorize procedures and tools for prescreening, including, among others, allowing a hospital to use third-party presumptive eligibility software tools or services or to contract with a third party under specified conditions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1312

Author:(Schiavo)

As Amended Ver:September 3, 2025

Majority vote

SUMMARY

Requires a hospital to prescreen a patient for presumptive eligibility for participation under the hospital's charity care policy and discount payment policy, if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs.

Senate Amendments

1. Require a hospital, commencing July 1, 2027, to screen a patient to determine if they meet specific criteria, including that the patient is enrolled in CalFresh or CalWORKS, and, if they do, to presumptively determine that a patient is eligible for participation under the hospitals charity care policy and discount payment policy.
2. Authorize a hospital, at its discretion or as established in its charity care policy or discount payment policy, to make presumptive determinations of eligibility for patients that do not meet the criteria described in 1) above.
3. Require hospitals to provide a written notice to patients who have been determined to be eligible, and prohibit any billing statement from being sent prior to the written notice.
4. Make other technical and clarifying changes.

COMMENTS

Fair pricing policies. AB 774 (Chan), Chapter 755, Statutes of 2006, established Hospital Fair Pricing Policies effective January 1, 2007. AB 774 required each licensed general acute care hospital, psychiatric acute hospital, and special hospital to increase public awareness of the availability of charity care, payment discounts, government-sponsored health insurance, and to standardize its billing and collections procedures. AB 774 also required the Department of Health Care Access and Information (HCAI) to collect and make available to the public a copy of each hospital's charity care and discount payment policies, eligibility procedures for those policies, review processes, and application forms.

Medical Debt. According to the California Health Care Foundation 2024 Health Policy Survey (CHCF Survey), Californians, especially Californians with low incomes, continue to be burdened by high health care costs and medical debt. Reducing what people pay for health care is one of Californians' top health care priorities for state government. More than half of Californians overall (53%), and nearly three in four Californians with low incomes (74%), say they skipped or postponed care due to cost in the past year. More than a quarter of Californians (28%), and nearly half of Californians with low incomes (46%), report trouble paying medical bills. Close to four in 10 Californians (38%), and over half of Californians with low incomes (52%), report having medical debt, and 82% of Californians say it's "extremely" or "very" important to reduce what people pay for health care, making it a top health care priority for state government.

The CHCF Survey also notes that medical debt is a significant driver of bankruptcy, poverty, and racial inequities. Over a third (38%) of Californians report having medical debt, which disproportionately impacts Black, Latino/x, and low-income people. According to a 2023 Urban Institute Issue Brief, "Most Adults with Past-due Medical Debt Owe Money to Hospitals," hospital debt makes up over 70% of medical debt, and hospital bills are generally much larger than other types of medical bills.

Decreasing charity care spending. Nonprofit hospitals must offer charity care and other community services as a condition of their exemption from income, property, and sales taxes. The facilities provide charity care to eligible uninsured and insured patients, with no expectation of payment. According to a 2020 John Hopkins University study published in the Journal of the American Medical Association, the highest-earning nonprofit hospitals in the United States provided less charity care to patients than lower-earning hospitals did, relative to the facilities' respective profits. The study also found that in states where Medicaid was expanded under the Patient Protection and Affordable Care Act (such as California), hospitals gave less charity care than hospitals in other states did: $12 versus $37.8 for uninsured patients, and $8.7 versus $11 for insured patients, measured against every $100 of net income.

According to a 2023 Lown Institute report (the report), "Fair Share Spending," non-profit hospitals, in particular, are under-delivering on their community benefit and charity care obligations. The report found that, out of 1,773 nonprofit hospitals evaluated, 77% spent less on charity care and community investment than the estimated value of their tax breaks — what they call a "fair share" deficit. The total "fair share" deficit for these hospitals amounted to $14.2 billion in 2020, enough to erase the medical debts of 18 million Americans or rescue the finances of more than 600 rural hospitals at risk of closure. According to the report, in California 71 hospitals have a "fair share deficit" of $1.4 billion, an amount large enough to wipe out 581,510 medical debts (or 18% of medical debt in the state).

According to the Author

Rising health care costs are threatening access to care and patients continue to face barriers to financial assistance. With as little as someone's full name and zip code, a hospital can quickly estimate a patient's eligibility for free or discounted care and immediately apply that financial assistance before a patient ever receives a bill. Under the Hospital Fair Pricing Act, hospitals are already required to provide free or discounted care to patients who are enrolled in Medi-Cal or CalWORKs. This bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.

Arguments in Support

Consumer, health, legal, and children's advocates, labor organizations, and advocates for LGBTQ health and a number of ethnic communities support this bill, arguing rising health care costs are threatening patients' access to care and that patients' access to care and livelihoods are further threatened by medical debt. According to Health Access California, a cosponsor of this bill, states that hospital bills are driving a medical debt crisis in California. According to Health Access California, some hospitals in California and nationwide have already implemented prescreening, which makes practical and economic sense. Health Access California argues we can quickly and easily provide eligible patients with charity care without extra hassles and red tape.

Arguments in Opposition

None.

FISCAL COMMENTS

According to the Senate Appropriations Committee, HCAI estimates ongoing General Fund costs of approximately $1.6 million beginning in 2026-27 to collect information necessary to determine compliance and assess penalties for any identified violations.

VOTES:

ASM HEALTH: 12-3-1

YES: Bonta, Addis, Aguiar-Curry, Arambula, Carrillo, Mark González, Krell, Patel, Celeste Rodriguez, Schiavo, Sharp-Collins, Stefani

NO: Chen, Flora, Sanchez

ABS, ABST OR NV: Patterson

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 51-16-12

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Caloza, Connolly, Davies, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Papan, Patel, Pellerin, Quirk-Silva, Ransom, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Wallis, Ward, Wicks, Zbur, Rivas

NO: Ávila Farías, Castillo, Chen, DeMaio, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa

ABS, ABST OR NV: Bains, Calderon, Carrillo, Dixon, Hart, Pacheco, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Valencia, Wilson

UPDATED

VERSION: September 3, 2025

CONSULTANT: Lara Flynn / HEALTH / (916) 319-2097 FN: 0001904

 THIRD READING  

Bill No: AB 1312

Author: Schiavo (D)

Amended: 9/3/25 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 8-0, 7/16/25

AYES: Menjivar, Durazo, Gonzalez, Limón, Padilla, Richardson, Rubio, Wiener

NO VOTE RECORDED: Valladares, Grove, Weber Pierson

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 51-16, 6/2/25 - See last page for vote

SUBJECT: Hospital pricing

SOURCE: California Pan-Ethnic Health Network

Health Access California

Leukemia and Lymphoma Society

Rising Communities

DIGEST:

This bill requires a hospital, beginning on July 1, 2027, to presumptively determine that a patient is eligible for charity care or discounted payment policies if the patient is experiencing homelessness or is already enrolled in a means-tested program, as specified, and also requires a hospital to screen patients in other categories that might indicate they could qualify for charity care or discounted payment policies and make a determination if the patient is eligible before sending that patient a bill for hospital services.

Senate Floor Amendments of 9/3/25 incorporated technical assistance from the Department of Health Care Access and Information and also addressed some stakeholder concerns, including removing the prohibition on a hospital requiring a patient to apply for Medicare, Medi-Cal, or other coverage for a person who is screened for, or provided, charity care, specifying that a hospital is required to request eligibility verification prior to billing the patient rather than before discharge, removing provisions about collecting information after the patient is discharged, and making other technical, clarifying, and conforming changes.

ANALYSIS:

Existing law:

1. Establishes Hospital Fair Pricing Policies (FPP), enforcement of which was transferred from the California Department of Public Health (CDPH) to the Department of Health Care Access and Information (HCAI) for violations occurring on or after January 1, 2024. [Health and Safety Code (HSC) §127400, et seq. and §127401]
2. Requires each hospital, under the FPP, to maintain understandable written policies on discounted payments and charity care for uninsured patients or patients with high medical costs who have income up to 400% of the federal poverty level (FPL). [HSC §127405]
3. Permits rural hospitals to establish eligibility levels for discounted payment and charity care at less than 400% of FPL as appropriate to maintain their financial and operational integrity. [HSC §127405(a)(2)]
4. Requires a hospital’s discount payment policy and charity care policy to clearly state eligibility criteria based upon income consistent with the application of the FPL. Prohibits a hospital from considering the monetary assets of the patient. Requires a hospital to limit expected payment under its discount payment policy to the amount the hospital would expect to receive for providing services from Medicare or Medi-Cal, whichever is greater. [HSC §127405(b) and (d)]
5. Requires a patient who requests a discounted payment or charity care to make every reasonable effort to provide the hospital with documentation of income and health benefits coverage. If the patient fails to provide information, the hospital may consider that failure in making its determination. Requires documentation of income to be limited to pay stubs or income tax returns, although permits a hospital to accept other forms of documentation but cannot require other forms of documentation. [HSC §127405(e)]
6. Requires eligibility for discounted payments or charity care to be determined at any time the hospital is in receipt of information, and prohibits a hospital from imposing time limits for applying for charity care or discounted payments, nor deny eligibility based on the timing of a patient’s application. [HSC §127405(e)(3)]
7. Requires each hospital to provide patients with a written notice about the availability of the hospital’s discount payment and charity care policies, including information about eligibility, and contact information for a hospital employee or office. [HSC §127410]
8. Requires a hospital, if it bills a patient who has not provided proof of coverage by a third party, to provide as part of that billing various specified statements, including a statement regarding discounted payment and charity care policies and how to apply for these policies. [HSC §127420]

This bill:

1. Defines “presumptively determine” as a determination made by a hospital that a patient who did not submit an application or documentation of income is eligible to participate in the charity care or discounted payment programs maintained by the hospital.
2. Requires a hospital, beginning on July 1, 2027, to screen patients to determine if they meet any of the following criteria, and if so, presumptively determine that a patient is eligible for participation under the hospital’s charity care or discount payment policy, subject to verification:
   1. The patient or any member of the patient’s family is enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Family (Tribal TANF), Women, Infants, and Children (WIC), California Alternative Rates for Energy (CARE), the Low-Income Home Energy Assistance Program (LIHEAP), Housing Choice Voucher (HCV) program, and any other programs as determined by HCAI and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income. Requires enrollment in any of these listed programs to be considered sufficient evidence that a patient is financially qualified for charity care or discount payment policies;
   2. The patient or a member of their family was determined to be eligible for participation under the hospital’s discount or charity care payment policy for services billed or provided during the previous 6-month period, and the patient attests that their income and insurance has not changed; or,
   3. The patient is experiencing homelessness.
3. Permits a hospital to require verification from the patient if the hospital is unable to automatically or independently verify the patient’s enrollment in one of the programs listed in 2) above. Requires the patient to make every reasonable effort to provide the requested verification and requires the hospital to assist the patient when feasible.
4. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when screening for discounted payment.
5. Defines “screening” as the process a hospital uses to identify if a patient may be eligible for charity care or discounted payment, and requires this process to serve as an alternative to requiring an application for eligibility determination.
6. Requires a hospital, beginning on July 1, 2027, to screen a patient for eligibility for participation under the hospital’s charity care or discount payment policy if the patient is any of the following:
   1. Uninsured;
   2. Enrolled in Medi-Cal with cost sharing or eligible for Medi-Cal under the Hospital Presumptive Eligibility program; or,
   3. Enrolled in a Covered California health plan.
7. Requires a hospital to inform a patient of its intent to screen the patient for eligibility and that any personal and financial information provided by the patient will be used solely for those purposes. Requires the hospital to inform the patient of their right to opt out of screening, and to provide the patient with a form to sign to opt out of screening, which is required to be placed in the patient’s medical record.
8. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when being screened for discounted payment.
9. Requires the hospital, if the screening concludes that a patient is financially qualified for charity care or discounted payment, to determine if the patient is eligible without requiring the patient to complete a separate application.
10. Permits a hospital to verify a patient’s eligibility as part of, or after, the screening to determine if a patient is financially qualified, and permits a hospital to attempt to independently verify the patient’s information before billing. If unable to independently verify eligibility, requires the hospital to request verification from the patient prior to billing. Requires the request to be in writing and include the documentation necessary to determine eligibility.
11. Permits the hospital to collect all of the information required to verify eligibility prior to discharge.
12. Specifies that this bill does not preclude a rural hospital’s ability to establish eligibility levels for charity care and discounted payment at less than 400% of FPL, as appropriate to maintain their financial and operational integrity, consistent with a specified provision of existing law.
13. Requires each hospital, effective July 1, 2027, to establish a written process for screening patients within its charity care and discount payment policies that is accessible to the public and is provided to HCAI, as specified under existing law. Requires the names of any software products and any other third-party services used to presumptively determine, or determine, eligibility for charity care and discounted payment to be disclosed with the written process.
14. Prohibits screening conducted pursuant to this bill from being considered a request or application for charity care or a discounted payment, and prohibits screening from disqualifying a patient from requesting charity care or discounted payment or submitting an application or documentation of income for the purposes of determining eligibility.
15. Permits a hospital to accept voluntary submission of information or documentation that would assist the hospital in the screening process as long as the hospital does not compel the patient to provide the information as a condition of screening.
16. Permits a hospital to use existing patient information in the screening process for the sole purpose of determining eligibility for charity care or discounted payment. Permits a hospital to incorporate the use of this information into its standard intake, registration, or billing workflows. Permits this information to include, but not be limited to:
    1. Existing patient medical or billing records;
    2. Information routinely collected during patient registration or admission;
    3. Information voluntarily supplied by the patient;
    4. Prior eligibility determination for charity care or discounted payment; and,
    5. Any other information routinely collected or maintained by a hospital that indicates financial hardship or eligibility for charity care or discount payment under the hospital’s charity care or discount payment policy.
17. Permits a hospital to use third-party software tools or services, or contract with a third party, including a public agency, to conduct screening. However, requires a hospital that elects to conduct screening using third-party software tools or services, or by contracting with a third party, to ensure:
    1. The process does not cause any negative impact on a patient’s credit score;
    2. Evaluations are based on eligibility criteria established in the hospital’s written charity care or discount payment policies, and prohibits evaluations from considering any assessment, evaluation, or score that predicts the patient’s propensity to pay;
    3. The third-party software tool or service is used in a way that is reasonable calculated to lead to an accurate result; and,
    4. In the event a third-party service or software tool fails to return information about the patient, or specifies the patient’s income is unknown, the hospital makes a good faith effort to evaluate the patient’s eligibility status based on information available to the hospital or voluntarily provided by the patient.
18. Requires a hospital to document any information or methods it utilized in 16) and 17) above to screen a patient.
19. Requires a hospital to provide a written notice to patients presumptively determined to be eligible pursuant to the presumptive eligibility provisions of this bill, or determined to be eligible under the screening provisions of this bill, for charity care or discounted payment. Permits this notice to be sent prior to, or in conjunction with, a billing notice, but prohibits a billing statement to be sent to a patient determined to be eligible prior to the issuance of this notice.
20. Requires any billing statement sent to a patient who is presumptively determined to be eligible for charity care or discounted payment, or determined to be eligible pursuant to the screening process in this bill, to reflect the adjustments made to the patient’s hospital charges under the hospital’s charity care or discount payment policies.
21. Requires a hospital to promptly provide the patient with a written notice of the hospital’s charity care policy and discount payment policy, as required under specified provisions of existing law, in the event a screening process determines that a patient may be eligible for charity care or discounted payment, but is later determined to be ineligible, or if the hospital is unable to verify a patient’s eligibility.
22. Requires written notices required by this bill to be provided in English and the language spoken by the patient, consistent with applicable law, as specified.

Comments

According to the author of this bill:

Rising health care costs are threatening access to care, and patients continue to face barriers to financial assistance. With as little as someone’s full name and zip code, a hospital can quickly estimate a patient’s eligibility for free or discounted care and immediately apply that financial assistance before a patient receives a bill. Under the FPP, hospitals are already required to provide free or discounted care to patients who are income eligible. However, we hear story after story of patients not receiving assistance they were eligible for. This bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.

Background

Background on the FPP. After several years of debate between consumer advocates and hospitals, AB 774 (Chan, Chapter 755, Statutes of 2006) established the Hospital Fair Pricing Policies Act. AB 774 did several things: it required hospitals to establish charity care and discount billing policies, and included notices about those policies; it limited the amount that uninsured patients could be charged to no more than the hospital could expect to receive for the same services from Medicare or Medi-Cal or other government sponsored benefits; it ensured that patients would additionally be screened for government-subsidized programs for which they may qualify; and, it established practices for collections on bills, including that a hospital or collection agent may not take adverse action against a consumer for at least 150 days after the initial bill. AB 1503 (Lieu, Chapter 445, Statutes of 2010) used the model of AB 774 to apply very similar discount and charity care requirements to emergency physicians who provide emergency medical services in a hospital. In the intervening years, a number of bills have modified what is now called the Hospital and Emergency Physicians Fair Pricing Policies Act. AB 1020 (Friedman, Chapter 473, Statutes of 2021) shifted enforcement of the FPP from CDPH to HCAI, increased the income threshold for eligibility from 350% of FPL to 400% of FPL, and placed limitations on medical debt collection practices. AB 2297 (Friedman, Chapter 511, Statutes of 2024) prohibited a hospital from considering the monetary assets of the patient in determining eligibility for charity care or discount payment policies, and prohibited hospitals or emergency physicians from imposing time limits for applying for charity care or discounted payments.

Medical debt. According to the 2024 California Health Care Foundation’s Health Policy Survey, nearly four in ten Californians report having any kind of medical debt, and Californians who report any kind of medical debt are more likely to report skipping care. Black (53%) and Latino (46%) are more likely to report debt than White (33%) or Asian Californians (28%). Among Californians who report medical debt, 18% owe $5,000 or more, 10% owe between $5,000 and $10,000, 4% owe between $10,000 and $25,000, and another 4% report owing more than $25,000. According to a March 2023 brief from the Urban Institute’ Health Reform Monitoring Survey, more than one in seven adults live in families with past-due medical debt, and nearly three in four with past due-medical debt report owing at least some of that debt to hospitals. Most adults with past-due hospital bills reported that a collection agency contacted them about the debt. Although nearly 36% of adults with past-due hospital bills reported working out a payment plan, only about 22% reported received discounted care. Additionally, adults with incomes below 250% of FPL were as likely as those with higher incomes to experience hospital debt collection actions and to have received discounted care.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, HCAI estimates ongoing General Fund costs of approximately $1.6 million beginning in 2026-27 to collect information necessary to determine compliance and assess penalties for any identified violations.

SUPPORT: (Verified 9/4/25)

California Pan-Ethnic Health Network (co-source)

Health Access California (co-source)

Leukemia and Lymphoma Society (co-source)

Rising Communities (co-source)

AARP

Alliance of Californians for Community Empowerment

Alliance San Diego

ALS Association

American Cancer Society Cancer Action Network, Inc.

American Federation of State, County, and Municipal Employees

Americans for Democratic Action, Southern California Chapter

APLA Health

Asian Americans Advancing Justice – Southern California

Asian Resources, Inc.

Bet Tzedek Legal Services

Black Women for Wellness Action Project

Black Alliance for Just Immigration

Buen Vecino

California Alliance for Retired Americans

California Coverage & Health Initiatives

California Federation of Teachers

California LGBTQ Health and Human Services Network

California Low-Income Consumer Coalition

California Physicians Alliance

California Rural Legal Assistance Foundation

California State Council of Service Employees International Union

Center for Empowering Refugees & Immigrants

Centro Binacional Para El Desarrollo Indígena Oaxaqueno

Communities Access National Network

Communities Actively Living Independent & Free

County of Los Angeles

Courage California

Dollar For

First Day Foundation
Friends Committee on Legislation of California
Grace Institute - End Child Poverty in CA

Haven Neighborhood Services
Having Our Say Coalition
Health Care for All - California
Healthy Contra Costa

Healthy House Within A MATCH Coalition
Indivisible CA: Statestrong

La Cooperativa Campesina De California

Latino Coalition for a Healthy California
Mockingbird Analytics

National Health Law Program
National Multiple Sclerosis Society

Our Time to ACT
Public Counsel

Regional Pacific Islander Taskforce

San Diego Refugee Communities Coalition

San Francisco Senior and Disability Action

Sister Warriors Freedom Coalition
Small Business Majority
South Asian Network
Southeast Asia Resource Action Center

Starting Over Strong
The Cambodian Family
The Children's Partnership

Transitions Clinic Network
United Latino Voices of Contra Costa County
Vision Y Compromiso
Western Center on Law & Poverty, Inc.

Youth Alive!

Three individuals

OPPOSITION: (Verified 9/4/25)

None received

ARGUMENTS IN SUPPORT: This bill is co-sponsored by Health Access, the California Pan-Ethnic Health Network, the Leukemia & Lymphoma Society, and Rising Communities. The sponsors state that healthcare costs are primary reasons patients delay or skip treatment. Financial assistance or charity care at a hospital is supposed to ease these financial burdens, but patients continue to face barriers in receiving the aid they may be eligible for. As a result, a visit to a hospital that should be covered by existing charity care can instead result in thousands of dollars in medical bills. Sponsors state that hospital bills are driving a medical debt crisis in California, with more than 1 in 3 Californians reporting medical debt. Those who report medical debt are disproportionately high among communities that have historically faced barriers to health care, including Black, Spanish-speaking, and those with low income. The sponsors state that this bill requires hospital to screen patients to prevent medical debt. It does this by first requiring hospital to determine if patients are enrolled in an income-verified, means-tested program such as CalWORKs or WIC, among others. Patients enrolled in these programs are presumptively eligible for financial assistance by the time they receive their first medical bill. Secondly, this bill requires screening other patients, such as those on a Covered California health plan or with a medical bill of more than $500, to determine if they are eligible for financial assistance. Sponsors state that hospitals can decide how to determine eligibility and collect the needed information to make a determination. Requiring proactive screening of patients will mean more eligible patients will walk away from a hospital visit without having incurred medical debt. According to sponsors, more than half of California hospitals, including Kaiser, Providence, Dignity Health, and MLK Jr. Community Hospital, already implement presumptive eligibility policies. This bill captures these best practices and ensures that eligible patients receive the financial assistance they are entitled to by law. Numerous other organizations also support this bill, making similar arguments.

ASSEMBLY FLOOR: 51-16, 6/2/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Caloza, Connolly, Davies, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Papan, Patel, Pellerin, Quirk-Silva, Ransom, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Wallis, Ward, Wicks, Zbur, Rivas

NOES: Ávila Farías, Castillo, Chen, DeMaio, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa

NO VOTE RECORDED: Bains, Calderon, Carrillo, Dixon, Hart, Pacheco, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Valencia, Wilson

Prepared by: Vincent D. Marchand / HEALTH / (916) 651-4111

9/6/25 10:36:38

**** END ****

 THIRD READING  

Bill No: AB 1312

Author: Schiavo (D)

Amended: 7/21/25 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 8-0, 7/16/25

AYES: Menjivar, Durazo, Gonzalez, Limón, Padilla, Richardson, Rubio, Wiener

NO VOTE RECORDED: Valladares, Grove, Weber Pierson

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 51-16, 6/2/25 - See last page for vote

SUBJECT: Hospital pricing

SOURCE: Author

DIGEST:

This bill requires a hospital, beginning on July 1, 2027, to presumptively determine that a patient is eligible for charity care or discounted payment policies if the patient is experiencing homelessness or is already enrolled in a means-tested program such as CalFresh or CalWORKS, among others, and also requires a hospital to screen patients in other categories that might indicate they could qualify for charity care or discounted payment policies and make a determination if the patient is eligible before sending that patient a bill for hospital services.

ANALYSIS:

Existing law:

1. Establishes Hospital Fair Pricing Policies (FPP), enforcement of which was transferred from the California Department of Public Health (CDPH) to the Department of Health Care Access and Information (HCAI) for violations occurring on or after January 1, 2024. [Health and Safety Code (HSC) §127400, et seq. and §127401]
2. Requires each hospital, under the FPP, to maintain understandable written policies on discounted payments and charity care for uninsured patients or patients with high medical costs who have income up to 400% of the federal poverty level (FPL). [HSC §127405]
3. Permits rural hospitals to establish eligibility levels for discounted payment and charity care at less than 400% of FPL as appropriate to maintain their financial and operational integrity. [HSC §127405(a)(2)]
4. Requires a hospital’s discount payment policy and charity care policy to clearly state eligibility criteria based upon income consistent with the application of the FPL. Prohibits a hospital from considering the monetary assets of the patient. Requires a hospital to limit expected payment under its discount payment policy to the amount the hospital would expect, in good faith, to receive for providing services from Medicare or Medi-Cal, whichever is greater. [HSC §127405(b) and (d)]
5. Requires a patient who requests a discounted payment or charity care to make every reasonable effort to provide the hospital with documentation of income and health benefits coverage. If the patient fails to provide information, the hospital may consider that failure in making its determination. Requires documentation of income to be limited to pay stubs or income tax returns, although permits a hospital to accept other forms of documentation but cannot require other forms of documentation. [HSC §127405(e)]
6. Requires eligibility for discounted payments or charity care to be determined at any time the hospital is in receipt of information, and prohibits a hospital from imposing time limits for applying for charity care or discounted payments, nor deny eligibility based on the timing of a patient’s application. [HSC §127405(e)(3)]
7. Requires each hospital to provide patients with a written notice about the availability of the hospital’s discount payment and charity care policies, including information about eligibility, and contact information for a hospital employee or office. Requires the notice to be in English and other languages, and written correspondence to be in the language spoken by the patient, as specified. Requires this notice to be provided at the time of service if the patient is conscious and able to receive it at that time, or if not then at the time of discharge. [HSC §127410]
8. Requires a hospital, if it bills a patient who has not provided proof of coverage by a third party, to provide as part of that billing various specified statements, including a statement regarding discounted payment and charity care policies and how to apply for these policies. [HSC §127420]

This bill:

Provisions establishing presumptive eligibility for charity care and discounted payment:

1. Defines “presumptively determine” as a determination made by a hospital that a patient who did not submit an application or documentation of income is eligible to participate in the charity care or discounted payment programs maintained by the hospital.
2. Requires a hospital, beginning on July 1, 2027, to presumptively determine that a patient is eligible for participation under the hospital’s charity care or discount payment policy if any of the following apply:
   1. The patient or any member of the patient’s family is enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Family (Tribal TANF), Women, Infants, and Children (WIC), California Alternative Rates for Energy (CARE), the Low-Income Home Energy Assistance Program (LIHEAP), Housing Choice Voucher (HCV) program, and any other programs as determined by HCAI and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income. Requires enrollment in any of these listed programs to be considered sufficient evidence that a patient is financially qualified for charity care or discount payment policies;
   2. The patient or a member of the patient’s family was determined to be eligible for participation under the hospital’s discount or charity care payment policy during the previous 6-month period, and the patient attests that their income and insurance has not changed; or,
   3. The patient is experiencing homelessness.
3. Permits a hospital to require verification from the patient if the hospital is unable to automatically or independently verify the patient’s enrollment in one of the programs listed in 2) above. Requires the patient to make every reasonable effort to provide the requested verification and requires the hospital to assist the patient when feasible.
4. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is presumptively determined eligible for, or provided with, charity care or discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when presumptively determined eligible for charity care or discounted payment.

Provisions requiring patients to be screened for charity care and discounted payment:

1. Defines “screen” or “screening” as the process a hospital uses to identify and presumptively determine if a patient may be eligible for charity care or discounted payment, and requires this process to serve as an alternative to requiring an application for eligibility determination.
2. Requires a hospital, beginning on July 1, 2027, to screen a patient for eligibility for participation under the hospital’s charity care or discount payment policy if the patient is any of the following:
   1. Uninsured;
   2. Enrolled in Medi-Cal with cost sharing or eligible for Medi-Cal under the Hospital Presumptive Eligibility program; or,
   3. Enrolled in a Covered California health plan.
3. Requires a hospital to inform a patient of its intent to screen the patient for eligibility and that any personal and financial information provided by the patient will be used solely for those purposes. Requires the hospital to inform the patient of their right to opt out of screening, and to provide the patient with a form to sign to opt out of screening, which is required to be placed in the patient’s medical record.
4. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, charity care or discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when being screened for charity care or discounted payment.
5. Requires the hospital, if the screening concludes that a patient may be financially qualified for charity care or discounted payment, to determine if the patient is eligible for participation without requiring the patient to complete a separate application.
6. Permits a hospital to verify a patient’s eligibility after a screening concludes that a patient may be financially qualified after first attempting to independently verify eligibility through hospital records prior to discharge. If unable to independently verify eligibility, requires the hospital to request verification from the patient prior to discharge in writing and include the documentation necessary to determine eligibility.
7. Requires the hospital to make best efforts to collect all of the information required to complete the screening process prior to discharge. However, permits the hospital to continue to collect information after discharge if necessary.
8. Permits the hospital to make the eligibility determination after the patient is discharged, but requires any written notices and billing statements sent to the patient to comply with written notice requirements regarding the hospital’s charity care and discount payment policies, as specified.
9. Specifies that this bill does not preclude a rural hospital’s ability to establish eligibility levels for charity care and discounted payment at less than 400% of FPL, as appropriate to maintain their financial and operational integrity, consistent with a specified provision of existing law.
10. Requires each hospital, effective July 1, 2027, to establish a written process for screening patients within its charity care and discount payment policies that is accessible to the public and is provided to HCAI, as specified under existing law. Requires the names of any software products and any other third-party services used to presumptively determine, or determine, eligibility for charity care and discounted payment to be disclosed with the written process.
11. Prohibits screening conducted pursuant to this bill from being considered a request or application for charity care or a discounted payment, and prohibits screening from disqualifying a patient from requesting charity care or discounted payment or submitting an application or documentation of income for the purposes of determining eligibility for charity care or discounted payment.
12. Permits a hospital to accept voluntary submission of information or documentation that would assist the hospital in the screening process as long as the hospital does not compel the patient to provide the information as a condition of screening.
13. Permits a hospital to use existing patient information in the screening process for the sole purpose of determining eligibility for charity care or discounted payment. Permits a hospital to incorporate the use of this information into its standard intake, registration, or billing workflows. Permits this information to include, but not be limited to:
    1. Existing patient medical or billing records;
    2. Information routinely collected during patient registration or admission;
    3. Information voluntarily supplied by the patient;
    4. Prior eligibility determination for charity care or discounted payment; and,
    5. Any other information routinely collected or maintained by a hospital that reasonably indicates financial hardship or eligibility for charity care or discount payment under the hospital’s charity care or discount payment policy.
14. Permits a hospital to use third-party software tools or services, or contract with a third party, including a public agency, to conduct screening. However, requires a hospital that elects to conduct screening using third-party software tools or services, or by contracting with a third party, to ensure:
    1. The process does not cause any negative impact on a patient’s credit score;
    2. Evaluations are based on eligibility criteria established in the hospital’s written charity care or discount payment policies, and prohibits evaluations from considering any assessment, evaluation, or score that predicts the patient’s propensity or ability to pay;
    3. The third-party software tool or service is used in a way that is reasonable calculated to lead to an accurate result; and,
    4. In the event a third-party service or software tool fails to return information about the patient, or specifies the patient’s income is unknown, the hospital makes a good faith effort to evaluate the patient’s eligibility status based on information available to the hospital.
15. Requires a hospital to document any information or methods it utilized in 17) and 18) above to screen a patient.
16. Requires a hospital to provide a written notice to patients presumptively determined to be eligible pursuant to the presumptive eligibility provisions of this bill, or determined to be eligible under the screening provisions of this bill, for charity care or discounted payment. Permits this notice to be sent prior to, or in conjunction with, a billing notice, but prohibits a billing statement to be sent to a patient determined to be eligible prior to the issuance of this notice. Requires this written notice, for patients determined to be eligible for discounted payment, to include a statement that additional assistance may be available under the hospital’s charity care and discount payment policies.
17. Requires any billing statement sent to a patient who is presumptively determined to be eligible for charity care or discounted payment, or determined to be eligible pursuant to the screening process in this bill, to reflect the adjustments made to the patient’s hospital charges under the hospital’s charity care or discount payment policies.
18. Requires a hospital to promptly provide the patient with a written notice of the hospital’s charity care policy and discount payment policy, as required under specified provisions of existing law, in the event a screening process determines that a patient may be eligible for charity care or discounted payment, but it later determined to be ineligible, or if the hospital is unable to verify a patient’s eligibility.
19. Requires written notices required by this bill to be provided in English and the language spoken by the patient, consistent with applicable state and federal law, as specified.

Comments

According to the author of this bill:

Rising health care costs are threatening access to care, and patients continue to face barriers to financial assistance. With as little as someone’s full name and zip code, a hospital can quickly estimate a patient’s eligibility for free or discounted care and immediately apply that financial assistance before a patient receives a bill. Under the FPP, hospitals are already required to provide free or discounted care to patients who are income eligible. However, we hear story after story of patients not receiving assistance they were eligible for. This bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.

Background

Background on the FPP. After several years of debate between consumer advocates and hospitals, AB 774 (Chan, Chapter 755, Statutes of 2006) established the Hospital Fair Pricing Policies Act. AB 774 did several things: it required hospitals to establish charity care and discount billing policies, and included notices about those policies; it limited the amount that uninsured patients could be charged to no more than the hospital could expect to receive for the same services from Medicare or Medi-Cal or other government sponsored benefits; it ensured that patients would additionally be screened for government-subsidized programs for which they may qualify; and, it established practices for collections on bills, including that a hospital or collection agent may not take adverse action against a consumer for at least 150 days after the initial bill. AB 1503 (Lieu, Chapter 445, Statutes of 2010) used the model of AB 774 to apply very similar discount and charity care requirements to emergency physicians who provide emergency medical services in a hospital. In the intervening years, a number of bills have modified what is now called the Hospital and Emergency Physicians Fair Pricing Policies Act. AB 1020 (Friedman, Chapter 473, Statutes of 2021) shifted enforcement of the FPP from CDPH to HCAI, increased the income threshold for eligibility from 350% of FPL to 400% of FPL, and placed limitations on medical debt collection practices. AB 2297 (Friedman, Chapter 511, Statutes of 2024) prohibited a hospital from considering the monetary assets of the patient in determining eligibility for charity care or discount payment policies, and prohibited hospitals or emergency physicians from imposing time limits for applying for charity care or discounted payments.

Medical debt. According to the 2024 California Health Care Foundation’s Health Policy Survey, nearly four in ten Californians report having any kind of medical debt, and Californians who report any kind of medical debt are more likely to report skipping care. Black (53%) and Latino (46%) are more likely to report debt than White (33%) or Asian Californians (28%). Among Californians who report medical debt, 18% owe $5,000 or more, 10% owe between $5,000 and $10,000, 4% owe between $10,000 and $25,000, and another 4% report owing more than $25,000. According to a March 2023 brief from the Urban Institute’ Health Reform Monitoring Survey, more than one in seven adults live in families with past-due medical debt, and nearly three in four with past due-medical debt report owing at least some of that debt to hospitals. Most adults with past-due hospital bills reported that a collection agency contacted them about the debt. Although nearly 36% of adults with past-due hospital bills reported working out a payment plan, only about 22% reported received discounted care. Additionally, adults with incomes below 250% of FPL were as likely as those with higher incomes to experience hospital debt collection actions and to have received discounted care.

An October 14, 2019, Kaiser Health News report indicates that 45% of nonprofit hospital organizations are routinely sending medical bills to patients whose incomes are low enough to qualify for charity care, according to the analysis of reports, the nonprofits submit annually to the Internal Revenue Service (IRS). Those 1,134 organizations operate 1,651 hospitals. Together, the hospitals estimated they had given up collecting $2.7 billion in bills sent to patients who probably would have qualified for financial assistance under the hospitals’ own policies if they had filled out the applications. These written-off bills, known as bad debt, represented a tenth of all nonprofit hospital bad debt reported to the IRS in 2017 (the most recent year for which data is available). That sum may represent an undercount because it is based on self-reported estimates from hospitals and is not independently audited. In addition, it does not include money that financially struggling patients eventually paid. There were several California hospitals included in this analysis. Many small and rural hospitals, but also in urban Southern California regions.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, HCAI estimates ongoing General Fund costs of approximately $1.6 million beginning in 2026-27 to collect information necessary to determine compliance and assess penalties for any identified violations.

SUPPORT: (Verified 7/30/25)

California Pan-Ethnic Health Network (co-source)

Health Access California (co-source)

Leukemia and Lymphoma Society (co-source)

Rising Communities (co-source)

AARP

Alliance of Californians for Community Empowerment

Alliance San Diego

ALS Association

American Cancer Society Cancer Action Network, Inc.

American Federation of State, County, and Municipal Employees

APLA Health

Asian Americans Advancing Justice – Southern California

Asian Resources, Inc.

Bet Tzedek Legal Services

Black Women for Wellness Action Project

Black Alliance for Just Immigration

Buen Vecino

California Alliance for Retired Americans

California Federation of Teachers

California LGBTQ Health and Human Services Network

California Physicians Alliance

California Rural Legal Assistance Foundation

California State Council of Service Employees International Union

Center for Empowering Refugees & Immigrants

Centro Binacional Para El Desarrollo Indígena Oaxaqueno

Communities Access National Network

Communities Actively Living Independent & Free

Courage California

Dollar For

First Day Foundation
Friends Committee on Legislation of California
Grace Institute - End Child Poverty in CA

Haven Neighborhood Services
Having Our Say Coalition
Health Care for All - California
Healthy Contra Costa
Indivisible CA: Statestrong

La Cooperativa Campesina De California

Latino Coalition for a Healthy California
Mockingbird Analytics

National Health Law Program
National Multiple Sclerosis Society

Our Time to ACT
Public Counsel

Regional Pacific Islander Taskforce

San Diego Refugee Communities Coalition

Sister Warriors Freedom Coalition
Small Business Majority
South Asian Network
Southeast Asia Resource Action Center

Starting Over Strong
The Cambodian Family
The Children's Partnership

Transitions Clinic Network
United Latino Voices of Contra Costa County
Vision Y Compromiso
Western Center on Law & Poverty, Inc.

Youth Alive!

Three individuals

OPPOSITION: (Verified 7/30/25)

California Hospital Association (unless amended)

Dignity Health (unless amended)

ARGUMENTS IN SUPPORT: This bill is co-sponsored by Health Access, the California Pan-Ethnic Health Network, the Leukemia & Lymphoma Society, and Rising Communities. The sponsors state that healthcare costs are primary reasons patients delay or skip treatment. Financial assistance or charity care at a hospital is supposed to ease these financial burdens, but patients continue to face barriers in receiving the aid they may be eligible for. As a result, a visit to a hospital that should be covered by existing charity care can instead result in thousands of dollars in medical bills. Sponsors state that hospital bills are driving a medical debt crisis in California, with more than 1 in 3 Californians reporting medical debt. Those who report medical debt are disproportionately high among communities that have historically faced barriers to health care, including Black, Spanish-speaking, and those with low income. The sponsors state that this bill requires hospital to screen patients to prevent medical debt. It does this by first requiring hospital to determine if patients are enrolled in an income-verified, means-tested program such as CalWORKs or WIC, among others. Patients enrolled in these programs are presumptively eligible for financial assistance by the time they receive their first medical bill. Secondly, this bill requires screening other patients, such as those on a Covered California health plan or with a medical bill of more than $500, to determine if they are eligible for financial assistance. Sponsors state that hospitals can decide how to determine eligibility and collect the needed information to make a determination. Requiring proactive screening of patients will mean more eligible patients will walk away from a hospital visit without having incurred medical debt. According to sponsors, more than half of California hospitals, including Kaiser, Providence, Dignity Health, and MLK Jr. Community Hospital, already implement presumptive eligibility policies. This bill captures these best practices and ensures that eligible patients receive the financial assistance they are entitled to by law. Numerous other organizations also support this bill, making similar arguments.

ARGUMENTS IN OPPOSITION: Oppose unless amended. The California Hospital Association (CHA) is opposed to this bill unless amended. CHA states that recent amendments represent meaningful progress by significantly improving the bill through a more balanced approach. However, the bill as currently drafted goes well beyond existing requirements and reflects a meaningful shift in hospital policy and operations. To comply, hospitals would need to develop an entirely new screening process, create new financial assistance policies, assess and adjust workforce needs, and implement new intake and billing systems. CHA remains opposed unless amended.

ASSEMBLY FLOOR: 51-16, 6/2/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Caloza, Connolly, Davies, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Papan, Patel, Pellerin, Quirk-Silva, Ransom, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Wallis, Ward, Wicks, Zbur, Rivas

NOES: Ávila Farías, Castillo, Chen, DeMaio, Ellis, Flora, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa

NO VOTE RECORDED: Bains, Calderon, Carrillo, Dixon, Hart, Pacheco, Petrie-Norris, Ramos, Michelle Rodriguez, Blanca Rubio, Valencia, Wilson

Prepared by: Vincent D. Marchand / HEALTH / (916) 651-4111

8/30/25 16:45:22

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 1312 (Schiavo) - Hospital pricing

Bill Summary:

AB 1312 would make changes to hospital processes related to establishing patient eligibility for participation under the hospital’s charity care policy.

Fiscal Impact:

The Department of Health Care Access and Information (HCAI) estimates ongoing General Fund costs of approximately $1.6 million beginning in 2026-27 to collect information necessary to determine compliance and assess penalties for any identified violations.

Background:

Current law requires each hospital to maintain understandable written policies on discounted payments and charity care for uninsured patients or patients with high medical costs who have income up to 400 percent of the federal poverty level (FPL), and allows rural hospitals to establish eligibility levels for discounted payment and charity care at less than 400 percent of the FPL as appropriate to maintain their financial and operational integrity. Hospitals must provide patients with a written notice that contains information about availability of the hospital’s discount payment and charity care policies, including information about eligibility, as well as contact information for a hospital employee or office from which the person may obtain further information about these policies.

Current law requires a patient who requests a discounted payment or charity care to make every reasonable effort to provide the hospital with documentation of income and health benefits coverage. If the patient fails to provide information, the hospital may consider that failure in making its determination. Current law requires documentation of income to be limited to pay stubs or income tax returns, although a hospital may accept, but not require, other forms of documentation. Eligibility for discounted payments or charity care must be determined at any time the hospital is in receipt of information, and a hospital cannot impose time limits for applying for charity care or discounted payments, nor deny eligibility based on the timing of a patient’s application. If a patient does not submit an application or documentation of income, a hospital may presumptively determine that a patient is eligible for charity care or discounted payment based on information other than that provided by the patient or based on a prior eligibility determination.

Proposed Law:

Specific provisions of the bill would:

• Require, commencing July 1, 2027, a hospital to presumptively determine that a patient is eligible for participation under the hospital’s charity care policy or discount payment policy if any of the following apply:
  • The patient or any member of the patient’s family is enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Families (Tribal TANF), Women, Infants, and Children (WIC), California Alternate Rates for Energy (CARE), the Low-Income Home Energy Assistance Program (LIHEAP), Housing Choice Voucher (HCV) program, and any other programs as determined by the HCAI and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income.
  • The patient or a member of the patient’s family was determined to be eligible for participation under the hospital’s charity care policy or discount payment policy during the previous six-month period, as specified.
  • The patient is experiencing homelessness.
• Require, commencing July 1, 2027, a hospital to screen a patient for eligibility for participation under the hospital’s charity care policy and discount payment policy if the patient is any of the following:
  • Uninsured.
  • Enrolled in Medi-Cal with cost sharing or eligible for Medi-Cal under the Hospital Presumptive Eligibility (HPE) program.
  • Enrolled in a Covered California health plan.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Caroline Menjivar, Chair

BILL NO: AB 1312

SUBJECT: Hospital pricing

SUMMARY:

Requires a hospital to presumptively determine that a patient is eligible for charity care or discounted payment policies if the patient is experiencing homelessness or is already enrolled in a means-tested program such as CalFresh or CalWORKS, among others, and requires a hospital to screen patients in other categories that might indicate they could qualify for charity care or discounted payment policies and make a determination if the patient is eligible before sending that patient a bill for hospital services.

Existing law:

1. Establishes Hospital Fair Pricing Policies (FPP), enforcement of which was transferred from the California Department of Public Health (CDPH) to the Department of Health Care Access and Information (HCAI) for violations occurring on or after January 1, 2024. [HSC §127400, et seq. and §127401]
2. Requires each hospital, under the FPP, to maintain understandable written policies on discounted payments and charity care for uninsured patients or patients with high medical costs who have income up to 400% of the federal poverty level (FPL). [HSC §127405]
3. Permits rural hospitals to establish eligibility levels for discounted payment and charity care at less than 400% of FPL as appropriate to maintain their financial and operational integrity. [HSC §127405(a)(2)]
4. Requires a hospital’s discount payment policy and charity care policy to clearly state eligibility criteria based upon income consistent with the application of the FPL. Prohibits a hospital from considering the monetary assets of the patient. Requires a hospital to limit expected payment under its discount payment policy to the amount the hospital would expect, in good faith, to receive for providing services from Medicare or Medi-Cal, whichever is greater. [HSC §127405(b) and (d)]
5. Requires a patient who requests a discounted payment or charity care to make every reasonable effort to provide the hospital with documentation of income and health benefits coverage. If the patient fails to provide information, the hospital may consider that failure in making its determination. Requires documentation of income to be limited to pay stubs or income tax returns, although permits a hospital to accept other forms of documentation but cannot require other forms of documentation. [HSC §127405(e)]
6. Requires eligibility for discounted payments or charity care to be determined at any time the hospital is in receipt of information, and prohibits a hospital from imposing time limits for applying for charity care or discounted payments, nor deny eligibility based on the timing of a patient’s application. [HSC §127405(e)(3)]
7. Requires each hospital to provide patients with a written notice about the availability of the hospital’s discount payment and charity care policies, including information about eligibility, and contact information for a hospital employee or office. Requires the notice to be in English and other languages, and written correspondence to be in the language spoken by the patient, as specified. Requires this notice to be provided at the time of service if the patient is conscious and able to receive it at that time, or if not then at the time of discharge. [HSC §127410]
8. Requires a hospital, if it bills a patient who has not provided proof of coverage by a third party, to provide as part of that billing various specified statements, including a statement regarding discounted payment and charity care policies and how to apply for these policies. [HSC §127420]

This bill:

Provisions establishing presumptive eligibility for charity care and discounted payment:

1. Defines “presumptively determine” as a determination made by a hospital that a patient who did not submit an application or documentation of income is eligible to participate in the charity care or discounted payment programs maintained by the hospital.
2. Requires a hospital to presumptively determine that a patient is eligible for participation under the hospital’s charity care or discount payment policy if any of the following apply:
   1. The patient or any member of the patient’s family is enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Family (TANF), Women, Infants, and Children (WIC), California Alternative Rates for Energy (CARE), the Low-Income Home Energy Assistance Program (LIHEAP), Housing Choice Voucher (HCV) program, and any other programs as determined by HCAI and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income. Requires enrollment in any of these listed programs to be considered sufficient evidence that a patient is financially qualified for charity care or discount payment policies;
   2. The patient or a member of the patient’s family was determined to be eligible for participation under the hospital’s discount or charity care payment policy during the previous 12-month period; or,
   3. The patient is experiencing homelessness.
3. Permits a hospital to require verification from the patient if the hospital is unable to automatically or independently verify the patient’s enrollment in one of the programs listed in 2) above. Requires the patient to make every reasonable effort to provide the requested verification and requires the hospital to assist the patient when feasible.
4. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is presumptively determined eligible for, or provided with, charity care or discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when presumptively determined eligible for charity care or discounted payment.

Provisions requiring patients to be screened for charity care and discounted payment:

1. Defines “screen” or “screening” as the process a hospital uses to identify and presumptively determine if a patient may be eligible for charity care or discounted payment, and requires this process to serve as an alternative to requiring an application for eligibility determination.
2. Requires a hospital to screen a patient for eligibility for participation under the hospital’s charity care or discount payment policy if the patient is any of the following:
   1. Uninsured;
   2. Enrolled in Medi-Cal with cost sharing or eligible for Medi-Cal under the Hospital Presumptive Eligibility program;
   3. Enrolled in a Covered California health plan; or,
   4. Will owe the hospital $500 or more after all adjustments from insurance or third-party payers are made.
3. Prohibits a hospital from requiring a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, charity care or discounted payment. However, permits a hospital to require the patient to participate in a screening for Medi-Cal eligibility when being screened for charity care or discounted payment.
4. Requires the hospital, if the screening concludes that a patient is financially qualified for charity care or discounted payment, to determine the patient is eligible for participation without requiring the patient to complete a separate application.
5. Requires the hospital to make best efforts to collect all of the information required to complete the screening process prior to discharge. However, permits the hospital to continue to collect information after discharge if necessary.
6. Permits the hospital to make the eligibility determination after the patient is discharged, but requires the hospital to provide the patient with the written notice required in 19) below, prior to, or in conjunction with, any billing statement, which is required to reflect any adjustments to hospital charges imposed on the patient.
7. Permits a hospital, at its discretion or as established in its charity care or discount payment policy, to:
   1. Presumptively determine that a patient who does not meet the presumptive eligibility requirements in 1) above to be eligible for charity care or discounted payment; or,
   2. Screen a patient who does not meet the criteria for required screening in 4) above for eligibility for charity care or discounted payment.
8. Specifies that this bill does not preclude a rural hospital’s ability to establish eligibility levels for charity care and discounted payment at less than 400% of FPL, as appropriate to maintain their financial and operational integrity, consistent with a specified provision of existing law.
9. Requires each hospital, effective July 1, 2026, to establish a written process for screening patients within its charity care and discount payment policies that is accessible to the public and is provided to HCAI, as specified under existing law. Requires written policy process documentation to disclose the name of the software products and all other third-party services used to presumptively determine, or determine, eligibility for charity care and discounted payment.
10. Prohibits screening conducted pursuant to this bill from being considered a request or application for charity care or a discounted payment, and prohibits screening from disqualifying a patient from requesting charity care or discounted payment or submitting an application or documentation of income for the purposes of determining eligibility for charity care or discounted payment.
11. Permits a hospital to accept voluntary submission of information or documentation that would assist the hospital in the screening process as long as the hospital does not compel the patient to provide the information as a condition of screening.
12. Permits a hospital to use existing patient information in the screening process for the sole purpose of determining eligibility for charity care or discounted payment. Permits a hospital to incorporate the use of this information into its standard intake, registration, or billing workflows. Permits this information to include, but not be limited to:
    1. Existing patient medical or billing records;
    2. Information routinely collected during patient registration or admission;
    3. Information voluntarily supplied by the patient;
    4. Prior eligibility determination for charity care or discounted payment; and,
    5. Any other information routinely collected or maintained by a hospital that reasonably indicates financial hardship or eligibility for charity care or discount payment under the hospital’s charity care or discount payment policy.
13. Permits a hospital to use third-party software tools or services, or contract with a third party, including a public agency, to conduct screening. However, requires a hospital that elects to conduct screening using third-party software tools or services, or by contracting with a third party, to ensure:
    1. The process does not cause any negative impact on a patient’s credit score;
    2. Evaluations are based on eligibility criteria established in the hospital’s written charity care or discount payment policies, and prohibits evaluations from considering any assessment, evaluation, or score that predicts the patient’s propensity or ability to pay;
    3. The third-party software tool or service is used in a way that is reasonable calculated to lead to an accurate result; and,
    4. In the event a third-party service or software tool fails to return information about the patient, or specifies the patient’s income is unknown, the hospital makes a good faith effort to evaluate the patient’s eligibility status based on information available to the hospital.
14. Requires a hospital to document any information or methods it utilized in 16) and 17) above to screen a patient.
15. Requires a hospital to provide a written notice to patients presumptively determined to be eligible pursuant to the presumptive eligibility provisions of this bill, or determined to be eligible under the screening provisions of this bill, for charity care or discounted payment. Requires this written notice, for patients determined to be eligible for discounted payment, to include a statement that additional assistance may be available under the hospital’s charity care and discount payment policies.
16. Requires a hospital to promptly provide the patient with a written notice of the hospital’s charity care policy and discount payment policy, as required under specified provisions of existing law, in the event a screening process determines that a patient is not eligible for charity care or discounted payment, or if the hospital is unable to determine a patient’s eligibility.
17. Requires written notices required by this bill to be provided in English and the language spoken by the patient, consistent with applicable state and federal law, as specified.
18. Prohibits a billing statement to be sent to a patient who is presumptively determined to be eligible for charity care or discounted payment, or determined to be eligible pursuant to the screening process in this bill, prior to the issuance of the written notice required in 19) above.
19. Requires any billing statement sent to a patient who is presumptively determined to be eligible for charity care or discounted payment, or determined to be eligible pursuant to the screening process in this bill, to reflect the adjustments made to the patient’s hospital charges under the hospital’s charity care or discount payment policies.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, HCAI estimates General Fund costs of approximately $1.44 million annually to collect information necessary to determine compliance and assess penalties for any identified violations. HCAI's estimate includes seven staff to review the added presumptive eligibility requirements in a hospital's charity care and discount payment policies, and investigate whether the hospital met the presumptive eligibility requirements in this bill. HCAI would also investigate, through the patient complaint process, whether a hospital complied with its policies for individual patients, and assess administrative penalties if HCAI identifies violations.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, rising health care costs are threatening access to care, and patients continue to face barriers to financial assistance. With as little as someone’s full name and zip code, a hospital can quickly estimate a patient’s eligibility for free or discounted care and immediately apply that financial assistance before a patient receives a bill. Under the FPP, hospitals are already required to provide free or discounted care to patients who are income eligible. However, we hear story after story of patients not receiving assistance they were eligible for. This bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.
2. Background on the FPP. After several years of debate between consumer advocates and hospitals, AB 774 (Chan, Chapter 755, Statutes of 2006) established the Hospital Fair Pricing Policies Act. AB 774 did several things: it required hospitals to establish charity care and discount billing policies, and included notices about those policies; it limited the amount that uninsured patients could be charged to no more than the hospital could expect to receive for the same services from Medicare or Medi-Cal or other government sponsored benefits; it ensured that patients would additionally be screened for government-subsidized programs for which they may qualify; and, it established practices for collections on bills, including that a hospital or collection agent may not take adverse action against a consumer for at least 150 days after the initial bill. AB 1503 (Lieu, Chapter 445, Statutes of 2010) used the model of AB 774 to apply very similar discount and charity care requirements to emergency physicians who provide emergency medical services in a hospital. In the intervening years, a number of bills have modified what is now called the Hospital and Emergency Physicians Fair Pricing Policies Act. AB 1020 (Friedman, Chapter 473, Statutes of 2021) shifted enforcement of the FPP from CDPH to HCAI, increased the income threshold for eligibility from 350% of FPL to 400% of FPL, and placed limitations on medical debt collection practices. AB 2297 (Friedman, Chapter 511, Statutes of 2024) prohibited a hospital from considering the monetary assets of the patient in determining eligibility for charity care or discount payment policies, and prohibited hospitals or emergency physicians from imposing time limits for applying for charity care or discounted payments.
3. Medical debt. According to the 2024 California Health Care Foundation’s Health Policy Survey, nearly four in ten Californians report having any kind of medical debt, and Californians who report any kind of medical debt are more likely to report skipping care. Black (53%) and Latino (46%) are more likely to report debt than White (33%) or Asian Californians (28%). Among Californians who report medical debt, 18% owe $5,000 or more, 10% owe between $5,000 and $10,000, 4% owe between $10,000 and $25,000, and another 4% report owing more than $25,000. According to a March 2023 brief from the Urban Institute’ Health Reform Monitoring Survey, more than one in seven adults live in families with past-due medical debt, and nearly three in four with past due-medical debt report owing at least some of that debt to hospitals. Most adults with past-due hospital bills reported that a collection agency contacted them about the debt. Although nearly 36% of adults with past-due hospital bills reported working out a payment plan, only about 22% reported received discounted care. Additionally, adults with incomes below 250% of FPL were as likely as those with higher incomes to experience hospital debt collection actions and to have received discounted care.
   
   An October 14, 2019, Kaiser Health News report indicates that 45% of nonprofit hospital organizations are routinely sending medical bills to patients whose incomes are low enough to qualify for charity care, according to the analysis of reports, the nonprofits submit annually to the Internal Revenue Service (IRS). Those 1,134 organizations operate 1,651 hospitals. Together, the hospitals estimated they had given up collecting $2.7 billion in bills sent to patients who probably would have qualified for financial assistance under the hospitals’ own policies if they had filled out the applications. These written-off bills, known as bad debt, represented a tenth of all nonprofit hospital bad debt reported to the IRS in 2017 (the most recent year for which data is available). That sum may represent an undercount because it is based on self-reported estimates from hospitals and is not independently audited. In addition, it does not include money that financially struggling patients eventually paid. There were several California hospitals included in this analysis. Many small and rural hospitals, but also in urban Southern California regions.
4. Recently enacted Oregon law had a challenging roll-out. Proponents have pointed to a recently enacted law require hospitals to prescreen patients for financial assistance as part of the inspiration for this bill. This legislation was passed in 2023, and took effect on July 1, 2024. In January 2025, the Oregon Health Authority (OHA) published a report reflecting feedback from hospitals on the first three to five months of implementation. According to this report, the legislation created requirements for hospitals to screen certain patients for presumptive eligibility of financial assistance, and to apply that financial assistance to the patient’s bill prior to sending the first billing statement. The legislation also required hospitals to adopt a process to allow a patient to appeal a denial of financial assistance, and a mechanism for patients to correct financial assistance applications that have errors or missing documentation. According to OHA, hospitals reported significant challenges in implementing the new prescreening requirements. Hospitals expressed concerns about the software tools they used for prescreening, reporting that the third-party vendor tools hospitals were currently using often lead them to provide financial assistance to patient that do not qualify. OHA noted that while software screening was not required, the volume of patients that the law required hospitals to prescreen made it a practical requirement for most large hospitals, with high-volume hospitals noting that manually screening patients would be infeasible. There are two third-party vendor tools that hospitals purchased to prescreen for eligibility. One of these, by Experian, used 2020 Census data, loan applications, mortgages, credit and debt information in a waterfall method to evaluate a patient’s household size and income. The other, by Waystar, uses census data at the zip code +4 digit extension level to estimate income based on a census tract, and then employing a proprietary algorithm as a charity care scoring tool. Neither use tax returns or any other confirmed source of actual income, so they can only provide an estimate of income and household size based on secondary data, and errors occur. The law requires that if a patient is determined to be eligible based on the prescreening, the eligibility decision is required to remain in effect for nine months, whether or not the decision accurately reflected true eligibility. Hospitals reported that this extended time period exacerbates the problem of inaccurate screening. OHA reported that hospitals doing more front-end work, such as asking patients questions or prescreening prior to the time of service, reported greater success than hospitals with entirely back-end prescreening processes, though fewer hospitals were doing front-end work. Back-end processes prescreen patients by querying tools after service and prior to billing. Hospitals struggled to implement and manage the high volume of prescreenings they are required to conduct, and the increase in financial assistance awards translated into significant lost hospital revenue. Hospitals reported to OHA that the new law added a large amount of work and staff time. OHA noted that the interviews with hospitals were conducted after three to five months of prescreening implementation, and that hospitals anticipated another six to nine months of challenging implementation before the programs run smoothly.
5. Prior legislation. AB 2297 (Friedman, Chapter 511, Statutes of 2024) prohibited a hospital from considering the monetary assets of the patient in determining eligibility for charity care or discount payment policies, and prohibited hospitals or emergency physicians from imposing time limits for applying for charity care or discounted payments.
   
   SB 1061 (Limón, Chapter 520, Statutes of 2024) prohibits medical debt from being furnished to a consumer credit reporting agency, and, prohibits a person who uses a consumer credit report in connection with a credit transaction from using medical debt as a negative factor when making a credit decision.
   
   AB 1020 (Friedman, Chapter 473, Statutes of 2021) increases the income threshold for qualifying for hospital discount payment programs to 400% of FPL, transfers oversight of hospital fair pricing policies to HCAI, adds requirements on debt collectors and debt buyers (including increasing time before unpaid hospital debt can be reported to credit agencies), and makes other changes to help inform patients about charity care and discount payment requirements and avoid debt collection litigation.
   
   AB 532 (Wood, Chapter 465, Statutes of 2021) creates additional disclosure requirements on hospitals related to written notices about the availability of discounted payment and charity care policies for uninsured patients and patients with high medical costs, such as inclusion of the internet address of an organization that will help patients understand billing and payment processes, the timing of disclosures, and posting in observation units.
   
   AB 1503 (Lieu, Chapter 445, Statutes of 2010) required emergency physicians who provide emergency medical services in a hospital to provide discounts to uninsured patients, establishes limits on the expected payment for emergency medical services, limited debt-collection activities, and required hospitals to include a written description of the hospital discount policy.
   
   AB 774 (Chan, Chapter 755, Statutes of 2006) established Hospital Fair Pricing Policies, which requires every hospital to offer reduced rates to uninsured and underinsured patients who may have low or moderate income, and to provide policies that clearly state the qualifications for free care and discounted payments.
   
6. Support. This bill is co-sponsored by Health Access, the California Pan-Ethnic Health Network, the Leukemia & Lymphoma Society, and Rising Communities. The sponsors state that healthcare costs are primary reasons patients delay or skip treatment. Financial assistance or charity care at a hospital is supposed to ease these financial burdens, but patients continue to face barriers in receiving the aid they may be eligible for. As a result, a visit to a hospital that should be covered by existing charity care can instead result in thousands of dollars in medical bills. Sponsors state that hospital bills are driving a medical debt crisis in California, with more than 1 in 3 Californians reporting medical debt. Those who report medical debt are disproportionately high among communities that have historically faced barriers to health care, including Black, Spanish-speaking, and those with low income. The sponsors state that this bill requires hospital to screen patients to prevent medical debt. It does this by first requiring hospital to determine if patients are enrolled in an income-verified, means-tested program such as CalWORKs or WIC, among others. Patients enrolled in these programs are presumptively eligible for financial assistance by the time they receive their first medical bill. Secondly, this bill requires screening other patients, such as those on a Covered California health plan or with a medical bill of more than $500, to determine if they are eligible for financial assistance. Sponsors state that hospitals can decide how to determine eligibility and collect the needed information to make a determination. Requiring proactive screening of patients will mean more eligible patients will walk away from a hospital visit without having incurred medical debt. According to sponsors, more than half of California hospitals, including Kaiser, Providence, Dignity Health, and MLK Jr. Community Hospital, already implement presumptive eligibility policies. This bill captures these best practices and ensures that eligible patients receive the financial assistance they are entitled to by law. Numerous other organizations also support this bill, making similar arguments.
7. Support if amended. Los Angeles County (LAC) states that it would support this bill if amended to delay implementation until January 1, 2028. LAC states that this bill represents a meaningful step toward improving how hospitals identify patients eligible for financial assistance, however, the current deadline of July 1, 2026 provides less than six months for hospitals to comply. This is an unrealistic timeframe given the operational changes required. A phased implementation would allow hospitals to allocate resources appropriately, train staff, and coordinate with the state to ensure successful adoption.
8. Oppose unless amended. The California Hospital Association (CHA) is opposed to this bill unless it is amended to address the following provisions and concerns:
   • Guaranteed financial assistance for patients or a family member previously determined eligible for financial assistance in the last twelve months. CHA notes that a patient’s income can change within a 12-month period, and that automatically applying prior eligibility risks misdirecting limited resources to those who may not need it. CHA requests this provision be removed.
   • Financial assistance screening for any patient that will owe the hospital $500 or more after insurance adjustments. CHA states that because a patient’s exact needs and coverage is unknown upon intake, hospitals are unable to predict or calculate their out-of-pocket costs at the time of service or upon their discharge, and request this provision be removed.
   • No option for patient to opt out of screening. CHA states that as currently drafted, hospitals must screen all the patients who meet one of the specified categories, and there is no ability for a patient to decide whether or not they want to be screened. Some patients may not wish to disclose or discuss their personal finances, and so CHA requests that a patient opt-out provision be included.
   • Two-year delay. Finally, CHA request a two-year implementation delay so that hospitals have sufficient time to make the operational changes that are necessary to ensure compliance.

SUPPORT AND OPPOSITION:

Support: California Pan-Ethnic Health Network (co-sponsor)

Health Access California (co-sponsor)

Leukemia and Lymphoma Society (co-sponsor)

Rising Communities (co-sponsor)

AARP

Alliance of Californians for Community Empowerment

Alliance San Diego

ALS Association

American Cancer Society Cancer Action Network, Inc.

American Federation of State, County, and Municipal Employees

APLA Health

Asian Americans Advancing Justice – Southern California

Asian Resources, Inc.

Bet Tzedek Legal Services

Black Women for Wellness Action Project

Black Alliance for Just Immigration

Buen Vecino

California Alliance for Retired Americans

California Federation of Teachers

California LGBTQ Health and Human Services Network

California Physicians Alliance

California Rural Legal Assistance Foundation

California State Council of Service Employees International Union

Center for Empowering Refugees & Immigrants

Centro Binacional Para El Desarrollo Indígena Oaxaqueno

Communities Actively Living Independent & Free

Courage California
Dollar For

First Day Foundation
Friends Committee on Legislation of California
Grace Institute - End Child Poverty in CA

Haven Neighborhood Services
Having Our Say Coalition
Health Care for All - California
Healthy Contra Costa
Indivisible CA: Statestrong

La Cooperativa Campesina De California

Latino Coalition for a Healthy California
Mockingbird Analytics

National Health Law Program
National Multiple Sclerosis Society

Our Time to ACT
Public Counsel

Regional Pacific Islander Taskforce

San Diego Refugee Communities Coalition

Sister Warriors Freedom Coalition
Small Business Majority
South Asian Network
Southeast Asia Resource Action Center

Starting Over Strong
The Cambodian Family
The Children's Partnership
United Latino Voices of Contra Costa County
Vision Y Compromiso
Western Center on Law & Poverty, Inc.

Youth Alive!

Three individuals

Oppose: California Hospital Association (unless amended)

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1312

Author:(Schiavo)

As Amended Ver:May 1, 2025

Majority vote

SUMMARY

Requires a hospital to prescreen a patient for presumptive eligibility for participation under the hospital's charity care policy and discount payment policy, if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs.

Major Provisions

COMMENTS

Fair pricing policies. AB 774 (Chan), Chapter 755, Statutes of 2006, established Hospital Fair Pricing Policies effective January 1, 2007. AB 774 required each licensed general acute care hospital, psychiatric acute hospital, and special hospital to increase public awareness of the availability of charity care, payment discounts, government-sponsored health insurance, and to standardize its billing and collections procedures. AB 774 also required the Department of Health Care Access and Information (HCAI) to collect and make available to the public a copy of each hospital's charity care and discount payment policies, eligibility procedures for those policies, review processes, and application forms.

Medical Debt. According to the California Health Care Foundation 2024 Health Policy Survey (CHCF Survey), Californians, especially Californians with low incomes, continue to be burdened by high health care costs and medical debt. Reducing what people pay for health care is one of Californians' top health care priorities for state government. More than half of Californians overall (53%), and nearly three in four Californians with low incomes (74%), say they skipped or postponed care due to cost in the past year. More than a quarter of Californians (28%), and nearly half of Californians with low incomes (46%), report trouble paying medical bills. Close to four in 10 Californians (38%), and over half of Californians with low incomes (52%), report having medical debt, and 82% of Californians say it's "extremely" or "very" important to reduce what people pay for health care, making it a top health care priority for state government.

The CHCF Survey also notes that medical debt is a significant driver of bankruptcy, poverty, and racial inequities. Over a third (38%) of Californians report having medical debt, which disproportionately impacts Black, Latino/x, and low-income people. According to a 2023 Urban Institute Issue Brief, "Most Adults with Past-due Medical Debt Owe Money to Hospitals," hospital debt makes up over 70% of medical debt, and hospital bills are generally much larger than other types of medical bills.

Decreasing charity care spending. Nonprofit hospitals must offer charity care and other community services as a condition of their exemption from income, property, and sales taxes. The facilities provide charity care to eligible uninsured and insured patients, with no expectation of payment. According to a 2020 John Hopkins University study published in the Journal of the American Medical Association, the highest-earning nonprofit hospitals in the United States provided less charity care to patients than lower-earning hospitals did, relative to the facilities' respective profits. The study also found that in states where Medicaid was expanded under the Patient Protection and Affordable Care Act (such as California), hospitals gave less charity care than hospitals in other states did: $12 versus $37.8 for uninsured patients, and $8.7 versus $11 for insured patients, measured against every $100 of net income.

According to a 2023 Lown Institute report (the report), "Fair Share Spending," non-profit hospitals, in particular, are under-delivering on their community benefit and charity care obligations. The report found that, out of 1,773 nonprofit hospitals evaluated, 77% spent less on charity care and community investment than the estimated value of their tax breaks — what they call a "fair share" deficit. The total "fair share" deficit for these hospitals amounted to $14.2 billion in 2020, enough to erase the medical debts of 18 million Americans or rescue the finances of more than 600 rural hospitals at risk of closure. According to the report, in California 71 hospitals have a "fair share deficit" of $1.4 billion, an amount large enough to wipe out 581,510 medical debts (or 18% of medical debt in the state).

According to the Author

Rising health care costs are threatening access to care and patients continue to face barriers to financial assistance. With as little as someone's full name and zip code, a hospital can quickly estimate a patient's eligibility for free or discounted care and immediately apply that financial assistance before a patient ever receives a bill. Under the Hospital Fair Pricing Act, hospitals are already required to provide free or discounted care to patients who are enrolled in Medi-Cal or CalWORKs. This bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.

Arguments in Support

Consumer, health, legal, and children's advocates, labor organizations, and advocates for LGBTQ health and a number of ethnic communities support this bill, arguing rising health care costs are threatening patients' access to care and that patients' access to care and livelihoods are further threatened by medical debt. According to Health Access California, a cosponsor of this bill, states that hospital bills are driving a medical debt crisis in California. According to Health Access California, some hospitals in California and nationwide have already implemented prescreening, which makes practical and economic sense. Health Access California argues we can quickly and easily provide eligible patients with charity care without extra hassles and red tape.

Arguments in Opposition

The California Hospital Association (CHA) is opposed to this bill unless it is amended to address a number of concerns. CHA states that it recognizes the author's and sponsors' intent to ease the financial and emotional strain on patients who struggle or are unable to pay for medical services. However, this bill would require that hospitals pre-screen and automatically apply financial assistance before discharge to specific patient populations— including those who are uninsured, experiencing homelessness, qualify for programs and services that assist low-income families and individuals, or will owe the hospital $500 or more in out-of-pocket costs — and without the benefit of verifying charity care or discount payment eligibility. CHA argues that this bill creates a new pathway for financial assistance that bypasses hospitals' ability to verify income and offer the type of financial assistance that best suits the patient's needs and personal finances.

CHA points to the Hospital Fair Billing Program, under which hospitals provide a written notice at the time of service explaining the discount payment/charity care policies, including information about eligibility and how to apply. If a patient is unconscious at the time of service, a hospital will provide the information at discharge. If the patient is not admitted, the written notice is given when the patient leaves the facility. If the patient leaves without receiving the information, a hospital mails it to the patient within 72 hours. In addition, notices about financial assistance are posted in clear and conspicuous locations throughout hospital facilities, including in the emergency department and outpatient settings. Each hospital website also includes information about financial assistance with a link to the hospitals' charity care and discount payment policies. CHA contends that hospitals offer many touch points informing patients about financial assistance —creating a program that presumes eligibility not only discounts those efforts, but also denies a patient's right to choose whether they want to inquire about and/or receive financial assistance. CHA voices concerns that this bill also contemplates the use of income-verifying software tools, which are costly to purchase, expensive to maintain, and charge a fee on a per-patient basis. CHA concludes that California has been a national leader in adopting requirements to protect low-income, uninsured, and underinsured Californians from potentially devasting medical bills. Identifying ways to make it easier for eligible patients to receive financial assistance should not be to the detriment of accuracy or patient choice.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, HCAI estimates General Fund costs of approximately $1.44 million annually to collect information necessary to determine compliance and assess penalties for any identified violations. HCAI's estimate includes seven staff to review the added presumptive eligibility requirements in a hospital's charity care and discount payment policies, and investigate whether the hospital met the presumptive eligibility requirements in this bill. HCAI would also investigate, through the patient complaint process, whether a hospital complied with its policies for individual patients, and assess administrative penalties if HCAI identifies violations.

VOTES

ASM HEALTH: 12-3-1

YES: Bonta, Addis, Aguiar-Curry, Arambula, Carrillo, Mark González, Krell, Patel, Celeste Rodriguez, Schiavo, Sharp-Collins, Stefani

NO: Chen, Flora, Sanchez

ABS, ABST OR NV: Patterson

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: May 1, 2025

CONSULTANT: Lara Flynn / HEALTH / (916) 319-2097 FN: 0000833

Date of Hearing: May 14, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 1312

Author:(Schiavo) – As Amended Ver:May 1, 2025

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

Requires a hospital to prescreen a patient for presumptive eligibility for participation in the hospital’s charity care policy and discount payment policy, if the patient meets specific criteria, including that the patient is uninsured or enrolled in any of specified assistance programs that would reasonably reflect the approximate patient household income.

Specifically, this bill:

1. Requires a hospital to determine a patient presumptively eligible for participation under the hospital’s charity care policy and discount payment policy if the patient: (a) will owe the hospital $500 or more, or (b) is uninsured, experiencing homelessness, enrolled in Medi-Cal or eligible for Medi-Cal under the Hospital Presumptive Eligibility (HPE) program, or meets any of specified criteria, including enrollment in programs as determined by the Department of Health Care Access and Information (HCAI), or additional programs determined by each hospital that would reasonably reflect the approximate patient household income; or as specified.
2. Requires, effective July 1, 2026, each hospital to establish a written process for prescreening patients within its charity care policy and discount payment policy that is accessible to the public and is provided to HCAI. Requires written policy process documentation to disclose the name of the software products and all other third-party services used to evaluate a patient for presumptive eligibility.
3. Requires a hospital to complete prescreening for presumptive eligibility prior to patient discharge and make any resulting adjustments to hospital charges imposed on the patient prior to sending the patient a billing statement.
4. Requires a hospital, prior to taking any other prescreening actions, to determine if, during the previous 12-month period, the patient has requested charity care, discounted payment, or other assistance and the hospital has determined that the patient is eligible for assistance based on documentation provided by the patient. Requires, if the hospital has determined that the patient qualified for assistance, the patient to receive an adjustment to charges prior to receiving a billing statement.
5. Authorizes a hospital to provide the patient an opportunity to verify information and involve the patient in the prescreening process, but prohibits a hospital from denying a patient charity care or discounted payment, or refusing to consider any information on the basis that it was not verified by the patient. Authorizes a hospital to accept voluntary submission of information or documentation that would assist the hospital in the prescreening process as long as the hospital does not compel the patient to provide the information as a condition of prescreening.
6. Authorizes a hospital to use existing patient data in the prescreening process, as specified.
7. Authorizes a hospital to use third-party presumptive eligibility software tools or services, or contract with a third party, including a public agency, to conduct the prescreening, under specified conditions, including that the patient’s credit score not be negatively affected.
8. Requires a hospital to document any methods it utilized to prescreen a patient.
9. Requires a hospital to notify a patient in writing of the results of the prescreening process, for all outcomes, as specified.
10. Requires a hospital provide a written notice of determination of presumptive eligibility for patients determined to be presumptively eligible for charity care or discounted payment. If a patient is presumptively eligible for discounted payment, requires the notice include a statement that additional assistance may be available under the hospital’s charity care and discount payment policies.
    
11. Requires a hospital, if the prescreening process determines that a patient is not eligible, or the the hospital is unable to determine eligibility, to notify the patient of the hospital’s charity care and discounted payment policies.

FISCAL EFFECT:

HCAI estimates General Fund costs of approximately $1.44 million annually to collect information necessary to determine compliance and assess penalties for any identified violations. HCAI’s estimate includes seven staff to review the added presumptive eligibility requirements in a hospital’s charity care and discount payment policies, and investigate whether the hospital met the presumptive eligibility requirements in this bill. HCAI would also investigate, through the patient complaint process, whether a hospital complied with its policies for individual patients, and assess administrative penalties if HCAI identifies violations.

COMMENTS:

1. Purpose. This bill is sponsored by California Pan-Ethnic Health Network, Health Access California, Leukemia and Lymphoma, and Society Rising Communities. According to the author:

Rising health care costs are threatening access to care and patients continue to face barriers to financial assistance. With as little as someone’s full name and zip code, a hospital can quickly estimate a patient’s eligibility for free or discounted care and immediately apply that financial assistance before a patient ever receives a bill. Under the Hospital Fair Pricing Act, hospitals are already required to provide free or discounted care to patients who are enrolled in MediCal or CalWORKs. [This bill] will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.

1. Background. Existing law requires nonprofit hospitals offer charity care and other community services as a condition of their exemption from income, property, and sales taxes. The hospitals provide charity care to eligible uninsured and insured patients, with no expectation of payment. According to a 2020 study, the highest-earning nonprofit hospitals in the U.S. provided less charity care to patients than lower-earning hospitals did, relative to the facilities’ respective profits. The study also found that in states where Medicaid was expanded under the Patient Protection and Affordable Care Act (such as California), hospitals gave less charity care than hospitals in other states did: for uninsured patients, Medicaid expansion states provided $12 of charity care for every $100 of net income, while hospitals in non-expansion states provided $37.8 for every $100 of net income. For insured patients, hospitals in expansion states provided $8.7 of charity care for every $100 of net income, while hospitals in non-expansion states provided $11 for every $100 of net income.
   
   According to a 2023 Lown Institute report, non-profit hospitals, in particular, are under-delivering on their community benefit and charity care obligations. The report found that, out of 1,773 nonprofit hospitals evaluated, 77% spent less on charity care and community investment than the estimated value of their tax breaks — referred to as “fair share deficit”. According to the report, in California 71 hospitals have a combined fair share deficit of $1.4 billion.
   
2. Oppose Unless Amended. The California Hospital Association (CHA) opposes this bill unless amended to address a number of concerns. CHA states this bill would require hospitals pre-screen and automatically apply financial assistance, without verifying eligibility for charity care or discounted payment. CHA argues this bill creates a new pathway for financial assistance that bypasses hospitals’ ability to verify income and offer the type of financial assistance that best suits the patient’s needs and personal finances.
   
   CHA points to the Hospital Fair Billing Program, under which hospitals provide a written notice at the time of service explaining the discount payment and charity care policies, including information about eligibility and how to apply. CHA contends hospitals offer many touch points informing patients about financial assistance, and creating a program that presumes eligibility not only discounts hospitals’ ongoing efforts, but also denies a patient’s right to choose whether they want to inquire about and receive financial assistance.
   
   CHA further expresses concern that this bill contemplates the use of income-verifying software tools, which it asserts are costly to purchase, expensive to maintain, and charge a fee on a per-patient basis. CHA reports Oregon hospitals have reported less than satisfactory results from the software, including inaccurately identifying some individuals as eligible and disqualifying others who are eligible.
   

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 29, 2025

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 1312

Author:(Schiavo) – As Introduced Ver:February 21, 2025

SUBJECT: Hospital pricing.

SUMMARY: Requires a hospital to prescreen a patient for presumptive eligibility for participation under the hospital’s charity care policy and discount payment policy, if the patient meets specific criteria, including, among others, that the patient is enrolled in CalFresh or CalWORKs. Specifically, this bill:

1. Requires a hospital to prescreen a patient for presumptive eligibility for participation under the hospital’s charity care policy and discount payment policy if the patient is any of the following:
   1. Uninsured;
   2. Enrolled in Medi-Cal or eligible for Medi-Cal under the Hospital Presumptive Eligibility (HPE) program;
   3. Enrolled in a Covered California plan and has a household income at or below 400% of the federal poverty level;
   4. Enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Families (TANF), Women, Infants, and Children (WIC), California Alternate Rates for Energy (CARE), the Low-Income Home Energy Assistance Program, Housing Choice Voucher program, and any other programs as determined by the Department of Health Care Access and Information (HCAI) and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income;
   5. Experiencing homelessness; or,
   6. Will owe the hospital five hundred dollars ($500) or more after all adjustments from insurance or third-party payers, if applicable, have been made.
2. Authorizes a hospital to prescreen a patient who does not meet any of the criteria listed in 1) above at the hospital’s discretion or as established in the hospital’s charity care policy and discount payment policy.
3. Specifies, when prescreening a patient for presumptive eligibility, the provision described in 2) above do not preclude a rural hospital’s ability to establish eligibility levels for charity care and discounted payment at less than 400% of the federal poverty level, as appropriate to maintain their financial and operational integrity.
4. Requires, effective July 1, 2026, each hospital to establish a written process for prescreening patients within its charity care policy and discount payment policy that is accessible to the public and is provided to HCAI. Requires written policy process documentation to disclose the name of the software products and all other third-party services used to evaluate a patient for presumptive eligibility.
5. Prohibits the prescreening process and presumptive eligibility determination from:
   1. Being considered a request or application for charity care or a discounted payment;
   2. Disqualifying a patient, or patient’s legal representative from requesting charity care or discounted payment; and,
   3. Disqualifying a patient, or patient’s legal representative from submitting an application or documentation of income for the purposes of determining eligibility for charity care or discounted payment.
6. Requires a hospital to complete prescreening for presumptive eligibility prior to patient discharge and make any resulting adjustments to hospital charges imposed on the patient prior to sending the patient a billing statement.
7. Requires a hospital, prior to taking any other prescreening actions, to determine if, during the previous 12-month period, the patient has requested charity care, discounted payment, or other assistance and the hospital has determined that the patient is eligible for assistance based on documentation provided by the patient. Requires, if the hospital has determined that the patient qualified for assistance, the patient to receive an adjustment to charges prior to receiving a billing statement.
8. Authorizes a hospital to provide the patient an opportunity to verify information and involve the patient in the prescreening process, but prohibits a hospital from denying a patient charity care or discounted payment, or refusing to consider any information on the basis that it was not verified by the patient. Authorizes a hospital to accept voluntary submission of information or documentation that would assist the hospital in the prescreening process as long as the hospital does not compel the patient to provide the information as a condition of prescreening.
9. Authorizes a hospital to use existing patient data in the prescreening process, including, but not limited to, all of the following:
   1. Existing patient records;
   2. Information routinely collected during patient registration or admission;
   3. Information voluntarily supplied by the patient; and,
   4. Previous eligibility determination for charity care or discounted payment.
10. Authorizes a hospital to use third-party presumptive eligibility software tools or services or contract with a third party, including a public agency, to conduct the prescreening, if all of the following conditions are met:
    1. The process does not cause any negative impact on a patient’s credit score;
    2. Evaluations are based on eligibility criteria established in the hospital’s written charity care policy and discount payment policy. Prohibits evaluations from considering any assessment, evaluation, or score that predicts the patient’s propensity or ability to pay; and/or,
    3. The third-party software tool or service is used in a way that is reasonably calculated to lead to an accurate result.
11. Requires, in the event a third-party service or software tool fails to return information about the patient, or specifies the patient’s income is unknown, the hospital to make a good faith effort to evaluate the patient’s presumptive eligibility status based on information available to the hospital.
12. Requires a hospital to document any methods it utilized to prescreen a patient.
13. Requires a hospital to notify a patient in writing of the results of the prescreening process, for all outcomes, including, but not limited to:
    1. The patient is presumptively eligible for charity care;
    2. The patient is presumptively eligible for discounted payment;
    3. The patient is not presumptively eligible for charity care or discounted payment; or,
    4. The hospital is unable to determine presumptive eligibility.
14. Requires a hospital, if the prescreening process determines that a patient is not eligible or the patient is only eligible for a discounted payment, or the hospital is unable to determine eligibility, to notify the patient within five business days of the results in writing that the patient may still apply for charity care, discounted payment, or additional assistance pursuant to each hospital’s charity care policy and discount payment policy.

EXISTING LAW:

1. Establishes HCAI in the California Health and Human Services Agency to expand equitable access to quality, affordable health care for all Californians through resilient facilities, actionable information,  and the health workforce each community needs. [Health and Safety Code (HSC) § 127000, et seq.]
2. Requires a hospital to provide a person without health coverage with a written estimate of the amount the hospital will require the person to pay for the health care services, procedures, and supplies that are reasonably expected to be provided to the person by the hospital, based upon an average length of stay and services provided for the person’s diagnosis. Allows the hospital to provide this estimate during normal business office hours. Requires the hospital to provide information about its financial assistance and charity care policies and contact information for a hospital employee or office from which the person may obtain further information about these policies. Requires the hospital to also provide the person with an application form for financial assistance or charity care. Excludes emergency services from these requirements. [HSC § 1339.585]
3. Requires each hospital to maintain an understandable written policy regarding discount payments for financially qualified patients as well as an understandable written charity care policy. Makes uninsured patients or patients with high medical costs who are at or below 400% of the federal poverty level (FPL) level eligible to apply for participation under a hospital’s charity care policy or discount payment policy. Requires the written policy regarding discount payments to include a statement that an emergency physician who provides emergency medical services in a hospital that provides emergency care is also required to provide discounts to uninsured patients or patients with high medical costs who are at or below 400% of FPL. [HSC § 127405]
4. Prohibits a hospital from selling patient debt to a debt buyer unless all of the following apply:
   1. The hospital has found the patient ineligible for financial assistance or the patient has not responded to any attempts to bill or offer financial assistance for 180 days;
   2. The hospital includes contractual language in the sales agreement in which the debt buyer agrees to return, and the hospital agrees to accept, any account in which the balance has been determined to be incorrect due to the availability of a third-party payer, including a health plan or government health coverage program, or the patient is eligible for charity care or financial assistance;
   3. The debt buyer agrees to not resell or otherwise transfer the patient debt, except to the originating hospital or a tax-exempt organization, or if the debt buyer is sold or merged with another entity;
   4. The debt buyer agrees not to charge interest or fees on the patient debt; and,
   5. The debt buyer is licensed as a debt collector by the Department of Financial Protection and Innovation. [HSC § 127425]
5. Requires a hospital to provide a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, as well as a copy of its debt collection policy to HCAI. Requires the information to be provided at least biennially on January 1, or when a significant change is made. Requires HCAI to make this information available to the public on its internet website. Prohibits a patient from being denied financial assistance that would be available pursuant to the policy published on HCAI’s internet website at the time of service. [HSC § 127435]
6. Establishes Covered California as California’s health benefit exchange for individual and small business purchasers as authorized under the ACA. [Government Code (GOV) §§ 100500 - 100522]
7. Establishes the Medi-Cal Program, administered by DHCS, to provide comprehensive health benefits to low-income individuals who meet specified eligibility criteria. [Welfare and Institutions Code (WIC) § 14000 et seq.]
8. Prohibits a provider of health care services rendered to a Medi-Cal beneficiary, who obtains a label or copy from the Medi-Cal card or other proof of Medi-Cal eligibility, from seeking reimbursement or attempting to obtain payment for the cost of covered health care services from the eligible applicant or recipient, or a person other than DHCS or a third-party payor who provides a contractual or legal entitlement to health care services. [WIC § 14019.4]
9. Exempts from 8) above the Medi-Cal spend down of excess income owed by a Medi-Cal beneficiary, unless the beneficiary’s spend down of excess income has been met for the month in which services were rendered (allows billing of individuals who have not met their “share of cost” obligation, which allows the individual to establish eligibility for Medi-Cal in a given month). [Ibid.]
10. Subjects providers who do not comply with the requirements in 8) above to penalties, as specified. [Ibid.]

FISCAL EFFECT: Unknown. This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, rising health care costs are threatening access to care and patients continue to face barriers to financial assistance. With as little as someone’s full name and zip code, a hospital can quickly estimate a patient’s eligibility for free or discounted care and immediately apply that financial assistance before a patient ever receives a bill. Under the Hospital Fair Pricing Act, hospitals are already required to provide free or discounted care to patients who are enrolled in Medi-Cal or CalWORKs. The author concludes that this bill will ensure that income-eligible patients actually receive the care they deserve without the heavy burden of medical debt.
2. BACKGROUND.
   1. Fair pricing policies. AB 774 (Chan), Chapter 755, Statutes of 2006, established Hospital Fair Pricing Policies effective January 1, 2007. AB 774 required each licensed general acute care hospital, psychiatric acute hospital, and special hospital to increase public awareness of the availability of charity care, payment discounts, government-sponsored health insurance, and to standardize its billing and collections procedures. AB 774 also required HCAI to collect and make available to the public a copy of each hospital’s charity care and discount payment policies, eligibility procedures for those policies, review processes, and application forms.
   2. Medical Debt. According to the California Health Care Foundation 2024 Health Policy Survey (CHCF Survey), Californians, especially Californians with low incomes, continue to be burdened by high health care costs and medical debt. Reducing what people pay for health care is one of Californians’ top health care priorities for state government. More than half of Californians overall (53%), and nearly three in four Californians with low incomes (74%), say they skipped or postponed care due to cost in the past year. More than a quarter of Californians (28%), and nearly half of Californians with low incomes (46%), report trouble paying medical bills. Close to four in 10 Californians (38%), and over half of Californians with low incomes (52%), report having medical debt, and 82% of Californians say it’s “extremely” or “very” important to reduce what people pay for health care, making it a top health care priority for state government.

The CHCF Survey also notes that medical debt is a significant driver of bankruptcy, poverty, and racial inequities. Over a third (38%) of Californians report having medical debt, which disproportionately impacts Black, Latino/x, and low-income people. According to a 2023 Urban Institute Issue Brief, “Most Adults with Past-due Medical Debt Owe Money to Hospitals,” hospital debt makes up over 70% of medical debt, and hospital bills are generally much larger than other types of medical bills.

• 1. Decreasing charity care spending. Nonprofit hospitals must offer charity care and other community services as a condition of their exemption from income, property, and sales taxes. The facilities provide charity care to eligible uninsured and insured patients, with no expectation of payment. According to a 2020 John Hopkins University study published in the Journal of the American Medical Association, the highest-earning nonprofit hospitals in the United States provided less charity care to patients than lower-earning hospitals did, relative to the facilities’ respective profits. The study also found that in states where Medicaid was expanded under the Patient Protection and Affordable Care Act (such as California), hospitals gave less charity care than hospitals in other states did: $12 versus $37.8 for uninsured patients, and $8.7 versus $11 for insured patients, measured against every $100 of net income.

According to a 2023 Lown Institute report (the report), “Fair Share Spending,” non-profit hospitals, in particular, are under-delivering on their community benefit and charity care obligations. The report found that, out of 1,773 nonprofit hospitals evaluated, 77% spent less on charity care and community investment than the estimated value of their tax breaks — what they call a “fair share” deficit. The total “fair share” deficit for these hospitals amounted to $14.2 billion in 2020, enough to erase the medical debts of 18 million Americans or rescue the finances of more than 600 rural hospitals at risk of closure. According to the report, in California 71 hospitals have a “fair share deficit” of $1.4 billion, an amount large enough to wipe out 581,510 medical debts (or 18% of medical debt in the state).

1. SUPPORT. Consumer, health, legal, and children’s advocates, labor organizations, and advocates for LGBTQ health and a number of ethnic communities support this bill, arguing rising health care costs are threatening patients’ access to care and that patients’ access to care and livelihoods are further threatened by medical debt. According to Health Access California, a cosponsor of this bill, states that hospital bills are driving a medical debt crisis in California. According to Health Access California, some hospitals in California and nationwide have already implemented prescreening, which makes practical and economic sense. Health Access California argues we can quickly and easily provide eligible patients with charity care without extra hassles and red tape.
2. OPPOSE UNLESS AMENDED. The California Hospital Association (CHA) is opposed to this bill unless it is amended to address a number of concerns. CHA states that it recognizes the author’s and sponsors’ intent to ease the financial and emotional strain on patients who struggle or are unable to pay for medical services. However, this bill would require that hospitals pre-screen and automatically apply financial assistance before discharge to specific patient populations— including those who are uninsured, experiencing homelessness, qualify for programs and services that assist low-income families and individuals, or will owe the hospital $500 or more in out-of-pocket costs — and without the benefit of verifying charity care or discount payment eligibility. CHA argues that this bill creates a new pathway for financial assistance that bypasses hospitals’ ability to verify income and offer the type of financial assistance that best suits the patient’s needs and personal finances.

CHA points to the Hospital Fair Billing Program, under which hospitals provide a written notice at the time of service explaining the discount payment/charity care policies, including information about eligibility and how to apply. If a patient is unconscious at the time of service, a hospital will provide the information at discharge. If the patient is not admitted, the written notice is given when the patient leaves the facility. If the patient leaves without receiving the information, a hospital mails it to the patient within 72 hours. In addition, notices about financial assistance are posted in clear and conspicuous locations throughout hospital facilities, including in the emergency department and outpatient settings. Each hospital website also includes information about financial assistance with a link to the hospitals’ charity care and discount payment policies. CHA contends that hospitals offer many touch points informing patients about financial assistance —creating a program that presumes eligibility not only discounts those efforts, but also denies a patient’s right to choose whether they want to inquire about and/or receive financial assistance.

CHA voices concerns that this bill also contemplates the use of income-verifying software tools, which are costly to purchase, expensive to maintain, and charge a fee on a per-patient basis. CHA concludes that California has been a national leader in adopting requirements to protect low-income, uninsured, and underinsured Californians from potentially devasting medical bills. Identifying ways to make it easier for eligible patients to receive financial assistance should not be to the detriment of accuracy or patient choice.

1. PREVIOUS LEGISLATION.
   1. AB 2297 (Friedman), Chapter 511, Statutes of 2024, authorizes an emergency physician to grant eligibility for a discount payment policy to patients with incomes over 400% of the FPL. Prohibits a hospital from considering the monetary assets of the patient when determining eligibility for both charity care and discount payment policies. Prohibits a hospital or emergency physician from using liens on any real property as a means of collecting unpaid hospital or emergency physician bills, and prohibits a collection agency from conducting a sale of any real property owned by a patient, or placing a lien on any real property as a means of collecting unpaid hospital or emergency physician bills.
   2. AB 1020 (Friedman), Chapter 473, Statutes of 2021, prohibits a hospital from selling patient debt to a debt buyer, unless specified conditions are met, including that the hospital has found the patient ineligible for financial assistance or the patient has not responded to attempts to bill or offer financial assistance for 180 days. Prohibits a debt collector from collecting consumer debt that originated with a hospital without first communicating with the debtor in writing, and including the name and address of the hospital and information on how to obtain an itemized hospital bill. Revises eligibility requirements for charity care or discount payments from a hospital, redefines "high medical costs" and requires a hospital to display a notice of the hospital's policy for financially qualified and self-pay patients on the hospital's internet website. Requires HCAI, commencing on January 1, 2024, to impose an administrative penalty against a hospital that improperly bills a patient, as specified, and to establish an appeals process by regulation.
2. SUGGESTED AMENDMENTS. In order to more clearly delineate screening and eligibility requirements for charity care and discounted payment policies under this bill, the author is proposing to amend this bill as follows:
   1. To require a hospital to automatically determine, rather than “prescreen” a patient, as eligible for participation in charity care and discount payment policies if the patient is currently enrolled in various public assistance programs or experiencing homelessness before the patient is discharged; 
   2. To require a hospital to automatically screen a patient for eligibility for charity care and discount payment policies if the patient is: uninsured, enrolled in Medi-Cal with cost-sharing or eligible for Medi-Cal under the existing Hospital Presumptive Eligibility program, is enrolled in a Covered California health plan, or, will owe the hospital $500 dollars or more after all adjustment from insurance or third-party payers are made, as applicable; and to require the hospital to collect necessary information for screening before the patient is discharged, but allow the hospital to make the determination before the bill is sent and require all applicable adjustments be applied to the bill; and,
   3. To require a hospital to provide a written notice of determination of eligibility for patients eligible for charity care or discounted payment pursuant to this bill.
   4. To require, if the patient is eligible for discounted payment policies, the hospital to also include a statement that additional assistance may be available under the hospital’s charity care policy.
3. POLICY COMMENT. This bill requires hospitals to prescreen individuals enrolled in or presumptively eligible for Medi-Cal, for presumptive eligibility for participation in charity care and discount payment policies. However, state law prohibits a provider, including a hospital, from billing most Medi-Cal enrolled individuals for the cost of services covered by Medi-Cal, including inpatient services. If an individual is not being billed for services, it is unnecessary to assess them for eligibility for charity care or discount payments. The author is encouraged to clarify how a hospital should handle such cases, to ensure an efficient process and prevent unnecessary administrative work.

REGISTERED SUPPORT / OPPOSITION:

Support

California Pan-ethnic Health Network (cosponsor)

Health Access California (cosponsor)

The Leukemia & Lymphoma Society (cosponsor)

Rising Communities (formerly Community Health Councils) (cosponsor)

AARP

APLA Health

Asian Americans Advancing Justice-southern California

Buen Vecino

California LGBTQ Health and Human Services Network

California Physicians Alliance

California State Council of Service Employees International Union (SEIU California)

Communities Actively Living Independent & Free

Courage California

Dollar For

Friends Committee on Legislation of California

Having Our Say Coalition

Healthy Contra Costa

Latino Coalition for a Healthy California

Public Counsel

The Black Alliance for Just Immigration

The Children's Partnership

Vision Y Compromiso

Western Center on Law & Poverty

One individual

Opposition

None on file

Analysis Prepared by: Lara Flynn / HEALTH / (916) 319-2097