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Healthcare Information Division - Hospital Fair Pricing Policies
Public Frequently Asked Questions
AB 774 (Chapter 755, Statutes of 2006) added Hospital Fair Pricing (Charity Care) Policies to the California Health and Safety Code commencing with Section 127400. These statutes were amended by SB 350 (Chapter 347, Statutes of 2007) which became effective January 1, 2008. The replies to the following FAQs were based on our interpretation of the statutory requirements and adopted regulations.
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- PQ1. How can I obtain a copy of a hospital's charity care and discount payment policies, and eligibility procedures?
- PQ2. Is OSHPD the only place where a hospital is required to post notices of its charity care and discount payment policies?
- PQ3. What is the difference between a charity care policy and a discount payment policy?
- PQ4. Will OSHPD adopt regulations that specify the charity care and discount payment policies a hospital must develop?
- PQ5. Does AB 774 require hospitals to provide charity care or payment discounts for non-emergency services, such as elective surgeries and long-term care?
- PQ6. What forms of income will be used to determine eligibility for charity care or a payment discount? Does this include alimony and child support?
- PQ7. Can a non-California resident qualify for charity care or a payment discount under AB 774?
- PQ8. How large of a payment discount can a financially qualified patient expect to receive?
- PQ9. Are hospitals required to post and/or submit their policies in languages other than English?
PQ1. How can I obtain a copy of a hospital's charity care and discount payment policies, and eligibility procedures?
A. OSHPD has created a web-based system that will allow users to search, compare, and view each hospital’s submitted charity care policy, discount payment policy, eligibility procedures, review process, and application form. Access OSHPD’s Hospital Fair Pricing Search system at: www.oshpd.ca.gov/fairpricing.
PQ2. Is OSHPD the only place where a hospital is required to post notices of its charity care and discount payment policies?
A. No. Effective January 1, 2007, AB 774 requires each hospital to post notices in clear and conspicuous locations about the availability of charity care and payment discounts. These notices must be posted in the emergency department, admissions office, patient billing office, and other outpatient settings. The State Department of Public Health Licensing and Certification Division will be monitoring these posting requirements.
All complaints alleging violations of AB 774 should be referred to the Department of Public Health Licensing and Certification's District Offices.
PQ3. What is the difference between a charity care policy and a discount payment policy?
A. Although "charity care" is not defined in AB 774, the manner in which it is used in the law describes full charity care, where the patient is not expected to pay any amount for provided services, based on the hospital's determination that the patient is unable to pay for that care. Many hospitals use the term "charity care" to describe full charity care or free hospital care.
The term "discount payment" describes a situation where the hospital has determined that the patient does not qualify for full charity care (free care) but is eligible for a discount and is expected to pay only a part of the bill. Under AB 774, a qualifying patient would not be expected to pay more than the amount paid by Medicare, Medi-Cal, Healthy Families, or other government-sponsored health programs, whichever is greater. Other commonly used terms to describe this discount include "partial charity care," "financial discount," "sliding fee schedule" and "reduced payment plan."
PQ4. Will OSHPD adopt regulations that specify the charity care and discount payment policies a hospital must develop?
A. No, the law does not provide authority to OSHPD to determine the contents of a hospital's charity care policy and discount payment policy. It does authorize OSHPD to specify how information about these policies is to be provided to OSHPD.
PQ5. Does AB 774 require hospitals to provide charity care or payment discounts for non-emergency services, such as elective surgeries or long-term care?
A. The law offers no guidance with respect to covered services for eligible patients. Each hospital will need to determine its scope of covered services and decide how to address this issue in its charity care and discount payment policies.
Q6. What forms of income will be used to determine eligibility for charity care or a payment discount? Does this include alimony and child support payments?
A. The definition of "income" for eligibility purposes will vary by hospital. The hospital's application form and policies for charity care or payment discount may indicate how income is being defined. We suggest that you obtain a copy of the application form and/or policies, or contact a hospital representative.
PQ7. Can a non-California resident qualify for charity care or a payment discount under AB 774?
A. Residency requirements are not mentioned in the law, so it is anticipated that the hospital policies will vary on this topic. It is advised that you contact the hospital to explain its eligibility criteria or to obtain its charity care and discount payment policies. As a general rule, an eligible patient must first apply for charity care or a discount payment, including submitting required documentation, before a hospital can determine if the patient is financially qualified.
A. Qualified patients are not expected to pay a hospital any more than the amount paid by Medicare, Medi-Cal, Healthy Families, or other government-sponsored health insurance. Payment discount amounts for qualified patients will vary by hospital, depending on how the hospital is administering this aspect of the law. The hospital's discount payment policy should explain how expected payment amounts are determined. Based on 2005 data submitted to OSHPD, a qualified patient might expect to receive a 65% to 85% discount from the hospital's full-established rates.
A. The law requires each hospital to provide patients with a written notice that contains information about the availability of the hospital's charity care and discount payment policies and related eligibility procedures in non-English languages. Written correspondence to the patient must also be in the language spoken by the patient. These language requirements apply if a patient does not speak English or is unable to communicate effectively in English because it is not their native language, and the patient is a member of a group that comprises 5% or more of the people served by that hospital.
For OSHPD reporting purposes, each hospital will be required to submit the English version of its policies, procedures, and application. When submitting this information to OSHPD over the Internet, each hospital will be able to indicate the availability of submitted documents in non-English languages and contact information on how to obtain copies directly from the hospital.