Assembly Health Committee Hearing is Long on Rhetoric, Short on Facts on Charity Care Bill

SACRAMENTO, Calif., April 22, 2014 /PRNewswire-USNewswire/ --  The California Hospital Association (CHA) today released a Fact Check to correct inaccurate claims made by proponents of Assembly Bill 1952, a measure that would impose a 5 percent mandate for charity care on most not-for-profit hospitals. The bill would create a one-size-fits-all charity care requirement across diverse communities in California.

"This bill mandates that hospitals meet prescriptive program requirements that take away from a hospital's ability to meet the unique needs of its community," said CHA President/CEO C. Duane Dauner. "It's concerning that proponents are using misleading information that seeks to create a solution for which no problem exists."

FACT CHECK

CLAIM: Hospitals are not required to provide charity care to the communities they serve.

FACT: Current law (AB 774, 2006) requires every hospital in California to have detailed charity care and discount payment policies. California hospitals provide more than $13 billion annually in unreimbursed care, including charity care, to meet the needs of local communities. No one is ever turned away from a hospital emergency room. Claims that hospitals spend, on average, only 1.1 percent of their budgets on improving community health grossly understate the actual investment.                                             

CLAIM: Hospitals need to "do their part" to provide care to residents in the communities they serve.                   

FACT: Hospitals are complying with all applicable federal and state laws, and they are doing their part.  Hospitals treat every patient regardless of their ability to pay. Proponents of AB 1952 have failed to provide one example where eligible individuals are not receiving charity or discounted care. California hospitals are meeting the needs of the communities they serve through transparent, publicly developed community benefit plans. Existing law (SB 697, 1994) holds not-for-profit hospitals accountable. Not-for-profit hospitals are proud of the work they do to serve individuals and meet community needs. Hospital community benefit reports are filed each year with the Office of Statewide Health Planning and Development (OSHPD) and are publicly available.

CLAIM: AB 1952 would not interfere with the implementation of the Affordable Care Act (ACA).

FACT: This bill is a major step backwards from national efforts by Medicare, the IRS and the ACA to standardize the definitions of charity care and community benefit. The bill would force hospitals to cut back certain services to meet the 5 percent mandate at a time when more Californians are getting coverage under the ACA and will need hospital services.  The need for charity care will be reduced automatically as low-income patients qualify for ACA coverage.

CLAIM: The State Auditor has said that there is no reliable or transparent way to ensure not-for-profit hospitals are providing sufficient community benefit.  

FACT: Proponents continue to misuse information from the California State Auditor, who concluded that not-for-profit hospitals are complying with all applicable federal and state laws regarding their tax-exempt status. Proponents continue to misrepresent the report, which did not call for any change to current law absent legislative prerogative.

"Our health care system is undergoing the most significant change since the creation of Medicare and Medicaid nearly 50 years ago," Dauner noted.  "Hospitals across the state are facing enormous challenges as they strive to ensure adequate access to high-quality care while coping with more than $23 billion in federal payment cuts. AB 1952 is an unjustified burden on hospitals.  Three governmental definitions of charity care already exist.  Adding a fourth definition does nothing to improve access or quality, or to reduce hospital costs."

Given its passage in the Assembly Health Committee earlier this month, AB 1952 is expected to be heard by the Assembly Appropriations Committee in May.            

SOURCE California Hospital Association