Lawmakers Mull New Charity Care Bills
New bills pending in the California Legislature would provide guidelines for not-for-profit acute care facilities to provide certain levels of charity care in order to preserve their tax-exempt status has raised the hackles of the hospital sector once more.
AB 1952, authored by Assemblyman Richard Pan, D-Sacramento, would require not-for-profit hospitals to spend 5% of their revenue on charity care.
AB 503, authored by Assemblyman Robert Wieckowski, D-Fremont, would tighten community benefits guidelines to ensure that non-profit hospitals and community clinics are providing them uniformly statewide and are targeting specific populations considered to be vulnerable.
Both bills essentially recapitulate AB 975, which was defeated in the Legislature last year. And as with 975, both bills are opposed by the California Hospital Association, the leading lobbyist for inpatient providers in the state.
The bills are being pushed in the wake of the Internal Revenue Service reformulating guidelines for hospitals regarding community benefits. The agency had claimed that some hospitals were claiming tax-exempt status
CHA officials claim that California already provides high levels of charity care, and the reporting guidelines are already clear. Hospitals are already mandated to provide community benefit reports to the Office of Statewide Health Planning and Development, many of which are hundreds of pages long.
“We think that the current community benefits laws work very well. They have worked well for 20 years,” said CHA spokesperson Jan Emerson-Shea.
Last year, the CHA hired former Congressman and California FInance Director Tom Campbell to prepare a report highlighting the financial strictures AB 975 would inflict on hospitals. Emerson-Shea said the report would be applicable to the two pending bills.
According to the Campbell report, the imposition of tighter charity care reporting and allocation guidelines would take revenue away from caring for patients and deprive the state of tens of millions of dollars in tax revenues.
