Press Release

RNs Welcome Updated Legislation to Hold Non-Profit Hospitals Accountable on Charity Care

The California Nurses Association/National Nurses United today welcomed the 2014 introduction of legislation to hold non-profit hospitals more accountable on meeting their charity care and community benefit obligations.  
AB 503, jointly authored by Assembly member Bob Wieckowski of Fremont and Assembly member Rob Bonta of Oakland, addresses what CNA calls a rampant abuse of what the hospitals report in how they provide charity care and community benefit programs in exchange for maintaining their tax exempt status.
CNA/NNU is the sponsor of the bill. The Greenlining Institute and the California Rural Legal Assistance Foundation are initial co-sponsors.
A similar bill last year narrowly fell short on the Assembly floor after ferocious lobbying by California’s wealthy hospital industry which has waged a heavy pressure campaign on legislators to avoid greater public transparency, responsibility and accountability in their provision of charity care.
With more than 800,000 additional Californians signed up for private insurance through Covered California, the Affordable Care Act’s state exchange, “it is more important than ever that California non-profit hospitals fulfill the obligation they have through taxpayer support to provide the appropriate level of charity care,” said CNA Co-President Deborah Burger, RN.
“With the huge tax breaks these hospitals receive, the public has a right to expect good corporate citizenship and accountability, especially as our healthcare crisis continues to escalate and more of our state’s residents enter the health care system,” said Burger.
A 2012 CNA report found that California non-profits were accumulating nearly $2 billion a year in public subsidies, tax exempt benefits, beyond what they were returning in charity care – while rolling up record profits and paying scores of top executives pay packages in excess of $1 million a year. The California State Auditor’s office has also expressed concern in two reports in recent years over the lack of consistent reporting requirements.
AB 503 seeks more uniform standards in California. It would:

  • Clearly define what constitutes charity care which must be the direct provision of care to the uninsured or underinsured, not promotional activities, marketing, cost containment, or other activities more intended to generate profit.
  • Sets restrictions on the definition of “community benefit” programs.
  • Improve reporting requirements for greater public transparency in how hospitals are meeting their charity care and community benefit obligation.
  • Community representation, from underserved populations and a public health department, on each hospital or system’s community benefits planning committee.

Children’s hospitals, county hospitals, other public facilities, and small rural hospitals are exempted.